Hospitality Business Strategy

This report analyses the macro and micro environment of Holiday Inn, evaluates competitive forces, and suggests appropriate strategies for improving competitive edge. It also evaluates different strategic directions available to Holiday Inn using Porter's Generic Strategies and Ansoff's Growth Matrix.

HOSPITALITY BUSINESS
STRATEGY

Table of Contents
INTRODUCTION...........................................................................................................................3
PART A...........................................................................................................................................3
Impact and influence of the macro environment of Holiday Inn.................................................3
Analysing the macro environment of hospitality industry by informing strategic management
systems.........................................................................................................................................6
Analysing the internal environment of Holiday Inn by using VRIO Framework.......................6
Evaluating the strengths and weaknesses of organizationals skills sets and structures..............7
Evaluating competitive forces of the hospitality organization....................................................7
Appropriate strategies for improving competitive edge..............................................................8
PART B............................................................................................................................................8
Evaluating different strategic directions available to Holiday Inn by using Porter's Generic
Strategies......................................................................................................................................8
Most appropriate growth strategies for the organization through Ansoff's growth matrix.........9
Strategic planning for Holiday Inn with the strategic planning process of the businesses........10
Strategic management plan with tactical and tangible objectives and priorities.......................11
Interpreting data by applying environment and competitive analysis for producing a set of
valid strategic directions............................................................................................................11
CONCLUSION..............................................................................................................................11
REFERENCES..............................................................................................................................13

INTRODUCTION
A business strategy is referred as specific set of plans and objectives which are beneficial
for organizations in order to enhance their performance and gain better competitive advantage in
the industry. The current report will be based on Holiday Inn which is a popular hospitality chain
in the UK having a significant market share in the industry. The organization provides high
quality services to their customers consistently.
The report will include an analysis of the macro and micro environment of the hospitality
organization with the help of appropriate models and frameworks Such as SWOT and PESTLE
analysis, evaluating the competitive forces of Holiday Inn with the help of Porter's Five Forces
Model. The different strategic decisions, appropriate growth strategies with the application of
Ansoff's Growth Matrix, applying different theories models and concepts that have a positive
impact on the business, strategic management plan and environmental and competitive analysis
of the business.
PART A
Impact and influence of the macro environment of Holiday Inn
Holiday Inn is a popular hospitality organization which is operating at a global level
having a significant presence in the markets. The macro environment of the company is analysed
with the help of effective strategic frameworks such as PESTLE and SWOT analysis which
enables an organization to identify the major aspects that have an influence on the performance
of the business in the industry.
PESTLE Analysis
This is an effective strategic framework which is useful in analysing the external business
environment for further strategic planning and policy formulation process (PESTLE ANALYSIS,
2022). The elements in this model are as follows:
Political factor-
Different factors such as tax rate, trade policy, political stability etc. are critical political
factors that have a significant impact on the business in the industry. Fluctuations in these rates
may create issues for the Holiday Inn to manage the work appropriate and achieve better results.
The political environment may influence the business through various factors. Due to these

political factors, the business may face several issues in successfully operating in the competitive
business environment of the UK.
Economic factor-
The major changes in the exchange rates, economic policies and procedures have a
massive impact on the economic stability of a business in the hospitality industry. Factors like
recession, inflations, etc. have a major impact on the businesses and decrease its stability in the
market. It may cause a deep impact on the profitability of the business which is inappropriate in
order to achieve better results.
Social factor-
The current trends are favourable for the overall development of the organization in the
hospitality industry. The popularity of social media is useful for the business to enhance the
engagement of their customers and acquire a better market share in the industry (Akindayomi,
Aktas and Amin, 2020). It helps the business to enhance their competitive advantage in the
industry and develop better opportunities.
Technological factor-
Technological advancements are beneficial for the hospitality organizations as they
provide better protection and security services for the customers. The use of CCTV cameras,
online ticket booking and payments systems etc. have facilitated the management of these
organizations appropriately. With the help of these technological factors, the businesses are able
to enhance their performance and gain better advantage in the industry.
Legal factor-
The laws and restrictions that are imposed by the governments plays a vital role in
reducing the ability of these organizations to perform in the industry. The labour laws, customers
protection acts etc. may create pressure on the organization. These aspects may have a negative
impact on the business by reducing its productivity in the hospitality industry. It can create issues
for the business to remain productive in the industry and enhance their overall performance.
Environmental factor-
Countries having difficult weather conditions may face less attraction from the customers
which may have a negative impact on the Holiday Inn. The carbon footprint which is left by
hospitality organizations in the environment may have a negative impact on the business.

Governments of different nations may impose sanctions on the company which may have a
negative impact on its market share in the overall hospitality industry.
SWOT Analysis
SWOT analysis is an appropriate tool which is used by businesses to evaluate their
strengths, weaknesses, threats and opportunities in order to prepare effective strategies for
growth.
Strengths
Holiday Inn has a high brand recognition in the market due to effective advertising
practices that are conducted by them. The organization is entering into newer market consistently
which has a positive impact on its overall development. It offers a range of attracting options and
offers for their customers which is necessary for their development.
Weaknesses
The customer review of Holiday Inn is a major weakness for the business as the
unsatisfied customers may put negative comments on the internet (Aladag and et.al., 2020).
These aspects may have a negative impact on their sustainability in the competitive business
environment. Hackers have attacked the business which has a negative impact on their overall
success in the business.
Opportunities
The organization can grow its market share in the existing and new markets by improving
their efforts towards the development of the business. There are different investors which have
increased their interest in giving their input in the hospitality industry and gain better profits.
Threats
Holiday Inn is facing a major threat from their competitors such as Premier Inn, Comfort
Inn, Fairfield Inn etc. which are popular hospitality organizations having a significant impact on
the business. Higher markets share of these businesses in the UK market reduces the competitive
advantage of the business.

Analysing the macro environment of hospitality industry by informing strategic management
systems
The macro environment of Holiday Inn is dynamic which imposes pressure on the
business to improve their decision-making process and take smarter steps towards the
development of their organization. The organization may prepare effective strategies in order to
reduce the negative impact of these macro factors on the productivity of the business
(Damnjanović, Lončarić and Dlačić, 2020). The organizations may make effective changes in
their strategic management decisions for increasing their efficiency and gaining better advantage
in the industry. The business environment may have a negative influence upon the success of the
organization in the competitive business environment.
Analysing the internal environment of Holiday Inn by using VRIO Framework
The internal business environment of the organization is analysed with the help of an
effective framework which is the VRIO model used for the overall development of the business
in the industry (VRIO Framework: What it is, Tips & Advantages, 2022). The steps of this model
are as follows:
Value
Holiday Inn provides their customers with a variety of rooms and services to choose from
which is helpful for the business to increase its competitive advantage in the industry. With the
availability of these options, the business is able to acquire more customers and enhance their
interest in the services which are provided by the organization. A positive environment is
provided by the business to their customers which helps in increasing their loyalty towards the
brand and engaging them towards the products and services that are offered by the business.
Rarity
The services of the organization are not that rare in the hospitality industry as the other
competitors are also providing their customers with a similar type of experience. Due to this
aspect the business may lack at the competitive dominance in the industry which may reduce its
brand image in the industry. There are similarities between the offering of the business and their
competitors which increases the buyer power to shift at other alternatives.
Imitability

It is easy for the competitors to imitate the services and additional benefits that are
offered by the hospitality organization to their customers (Elkhwesky, 2022). The business may
introduce new and effective offerings for their customers in order to increase their engagement
towards the brand and gain better advantage in the industry.
Organization
Holiday Inn is a large organization which is operating from a significant period in the
hospitality industry. It has advanced management systems for organizing their work and
improving the productivity of the organization to provide the maximum customer satisfaction in
the industry. It will be costly and difficult for its competitors to establish these systems which
may provide better advantage to the business in the industry.
Evaluating the strengths and weaknesses of organizationals skills sets and structures
The organization has experienced candidates which are provided with appropriate
training and development by the business. This is helpful for them in order to enhance their
performance in the industry and gain better advantage. With the help of these aspects the
businesses are able to increase their effectiveness in the industry which has a positive impact on
its overall development in the industry. Less rarity in their services is a major weakness which
provides better opportunities to its competitors to reduce the market share of Holiday Inn in the
hospitality industry.
Evaluating competitive forces of the hospitality organization
The competitive environment of Holiday Inn is analysed with the help of Porter's Five
Forces analysis which is an effective framework for improving the overall success of the
business in the competitive environment. The factors under this model are
Competitive rivalry
This force has high power due to the intense competition in the hospitality industry. Hotel
chains such as Premier Inn, Hilton, Hyatt etc. have a significant market share in the industry
which may have a negative impact on the competitive advantage of the business. These
businesses may provide the customers with attractive offers and benefits which may have a
negative influence over the business.
Threat of new entrants

The threat of new entrants is low in the sector as setting up a hotel chain business
requires a significant amount of capital which is not easy for many businesses. Due to this factor
the business may be in a better position in the market and have fewer threats from the new
entries in the hospitality industry.
Threat of substitutes
This force possesses low threats to Holiday Inn as there are fewer options available for
the customers which are alternatives to the comfort of hotels (González-Serrano and et.al., 2020).
The aspects like zostels and rented rooms are some options which are less popular among the
customers having a better advantage in the industry.
Bargaining power of suppliers
There are large number of suppliers in the industry which have a significant impact on
the company as the hospitality businesses are subjected to the trained staff, labour etc. which are
in demand in the industry. The aspects may have a negative influence over the business that is
inappropriate for its overall development.
Bargaining power of buyers
Buyers have high power in the hospitality industry due to the availability of many hotels
to explore which may have a significant impact on the overall success of the business in the
industry. This aspect may reduce the profitability of the business in the hospitality industry.
Appropriate strategies for improving competitive edge
The organization can increase their competitive advantage by introducing new and
attractive services for their customers. It can provide them with better assistance to engage their
customers towards their services and have a better brand image in the market. With these efforts,
the business will be able to gain better competitive advantage in the hospitality industry.
PART B
Evaluating different strategic directions available to Holiday Inn by using Porter's Generic
Strategies
The strategic decisions of Holiday Inn will be assessed with the help of Porter's Generic
Strategies which is an appropriate framework that is useful in determining the direction strategies
that are appropriate for the business. It consists of four strategies which are as follows:

Cost leadership strategy
The organization is able to expand its market share in the hospitality industry with the
help of this strategy that explains the keeping the price low can benefit the business in order to
achieve success in the industry. With the help of this strategy the business may be able to target a
broader market which is effective in order to increase the customers' engagement towards the
services that are provided by the business to them.
Differentiation strategy
This strategy explains that the business can develop new and attractive features in their
products and services in order to provide the customers with a unique experience (Li and Singal,
2019). This is helpful for the business to make improvements in their products and services and
increase the loyalty of their customers towards their brand.
Cost focus strategy
According to this strategy, the business can target niche markets by analysing different
market segments and focusing on the customer needs and wants. It helps the business to maintain
low costs and achieving better success in the hospitality industry by acquiring more customers
and providing them with better value.
Differentiation focus strategy
The business can provide new and attractive products and services to niche market
segments with the help of this strategy. This strategy is beneficial for the business to enhance the
loyalty of their customers in different niche markets and gaining a significant competitive
advantage among their competitors.
Most appropriate growth strategies for the organization through Ansoff's growth matrix
Ansoff's Product/Market Growth Matrix is an appropriate strategic management model
which is helpful in developing better strategies and plans for improve the growth of a business in
the industry. This model consists of 4 different strategies such as market penetration, market
development, product development, diversification which helps a business to choose a clear path
for achieving growth. The diversification strategy of this matrix is appropriate for the business in
order to enhance their services and gain better advantage in the industry.
This strategy is useful for the business to develop new and unique services to offer in the
foreign markets which is helpful in gaining advantage in the competitive business environment

of the hospitality industry. It is crucial for the business to offer something new to the customers
in the foreign markets which will help them to differentiate between the other brand and Holiday
Inn. This strategy may help the businesses to explore new developing nations which have
suitable conditions for expansion in order to increase their effectiveness and gain better
advantage in the industry (Martínez-Martínez and et.al., 2019). Appropriate R&D may be
required by the management in order to diversify their services and provide the customers with
higher value. This aspect will help them to gain better knowledge about the external markets and
expand their services appropriately for achieve growth in the hospitality industry globally.
Strategic planning for Holiday Inn with the strategic planning process of the businesses
The blue ocean strategy is an effective model which is helpful for the business to
facilitate their strategic planning process. This strategy provides assistance to the business in
order to capture a suitable uncontested market which will help it to increase its customer base.
Holiday Inn can enhance the experience of their customers by creating new and better demand of
their services in the newer markets which is helpful for them to gain competitive advantage in
the industry (WHAT IS BLUE OCEAN STRATEGY?, 2022). The market boundaries are not
defined under this model and it has a significant impact on the development of the business
practices effectively.
The another framework is the balanced score card model (BSC) which is useful to
identify the different internal operations of business. It consists of four factors which are as
follows:
Business process
This aspect can be analysed by the way through which services are prepared and
delivered to the customers. There are different tools such as wastage of resources, service gaps
and shortage of resources which is used by the business in order to gain better advantage in the
industry.
Customer
The perspective of customers towards the services provided are helpful in gaining a better
understanding of their satisfaction levels which is helpful for the business to enhance their
services and provide them with better value (Njoroge, Anderson and Mbura, 2019). The
feedbacks that are received by the customers are helpful in understanding their needs and wants.

Learning and growth
These aspects are helpful for the business to analyse the training and knowledge
requirements of the business. The effective use of these resources by the employees helps the
organization in gaining better competitive advantage in the industry.
Financial
The financial records of the business such as expenditures, sales and cash flows are
beneficial for understanding the performance of the brand in different markets. These helps the
business to prepare better strategies and improve its competitive advantage.
Strategic management plan with tactical and tangible objectives and priorities
Strategic management plan of the business includes the following steps:
Determining the strategic position- This helps the business to evaluate their market position
and setting out plans and objectives for achievement.
Prioritizing objectives- Setting achievable goals in accordance with the vision, mission and
performance of the business in the industry.
Developing a strategic plan- Setting deadlines for achieving the goals under a specific time
frame and increasing the efficiency of the business (Senbeto and Hon, 2020).
Executing the plan effectively- Managing the plans effectively by taking specific actions for the
overall development of the hospitality organization.
Reviewing the plan- Tracking and monitoring the plan is a vital step which helps in achieving
the goals appropriately.
Interpreting data by applying environment and competitive analysis for producing a set of valid
strategic directions
Holiday Inn is operating in a business environment which is highly competitive and has
various established companies that have a significant market share in the business. The
diversification business strategy is useful for the business in order to provide new services to the
external markets and increasing its market share in the industry.
CONCLUSION
According to the above report, it has been concluded that the business has been able to
identify the key factors that have an influence over the performance of the business in the

hospitality industry. By analysing these factors the business has been able to prepare better
strategies for achieving growth in the industry and increasing its market share. Different business
frameworks have been used by the business which are specific for the overall development of the
organization in the business environment. These factors have been useful for the organization to
gain a significant market share in the industry and make effective changes in their current
approach towards the business practices.

REFERENCES
Books and journals
Akindayomi, A., Aktas, E. and Amin, M.R., 2020. Business Strategy and CEO Compensation:
Evidence From the Hospitality and Tourism Industry. Available at SSRN 3539942.
Aladag, O.F. and et.al., 2020. Strategy implementation research in hospitality and tourism:
Current status and future potential. International Journal of Hospitality
Management. 88. p.102556.
Damnjanović, V., Lončarić, D. and Dlačić, J., 2020. TEACHING CASE STUDY: Digital
marketing strategy of Accor Hotels: shaping the future of hospitality. Tourism and
hospitality management. 26(1). pp.233-244.
Elkhwesky, Z., 2022. A systematic and major review of proactive environmental strategies in
hospitality and tourism: Looking back for moving forward. Business Strategy and the
Environment.
González-Serrano, L. and et.al., 2020. A big data approach to customer relationship management
strategy in hospitality using multiple correspondence domain description. Applied
Sciences. 11(1). p.256.
Li, Y. and Singal, M., 2019. Capital structure in the hospitality industry: The role of the asset-
light and fee-oriented strategy. Tourism Management. 70. pp.124-133.
Martínez-Martínez, A. and et.al., 2019. Environmental knowledge strategy: Driving success of
the hospitality industry. Management Research Review.
Njoroge, M., Anderson, W. and Mbura, O., 2019. Innovation strategy and economic
sustainability in the hospitality industry. The Bottom Line.
Senbeto, D.L. and Hon, A.H., 2020. Market turbulence and service innovation in hospitality:
examining the underlying mechanisms of employee and organizational resilience. The
Service Industries Journal. 40(15-16). pp.1119-1139.
Online
PESTLE ANALYSIS. 2022. [Online]. Available Through:<https://pestleanalysis.com/>
VRIO Framework: What it is, Tips & Advantages. 2022. [Online]. Available
Through:<https://www.questionpro.com/blog/vrio-framework/>

WHAT IS BLUE OCEAN STRATEGY?. 2022. [Online]. Available
Through:<https://www.blueoceanstrategy.com/what-is-blue-ocean-strategy/>