Hospitality Business Strategy

This report discusses the importance of business strategy in the hospitality industry, focusing on the organization Rosewood Hotel. It includes a PESTLE and SWOT analysis, analysis of the competitive environment using Porter's Five Forces model, and different strategic directions available to the organization. It also recommends the most appropriate growth platform and strategies for the organization.

Hospitality Business
Strategy

INTRODUCTION...............................................................................................................................3
PART A................................................................................................................................................3
PESTLE and SWOT analysis of the organization and an analysis of its capabilities.........................3
Analysis of the competitive environment using Porter’s Five Forces model.....................................7
PART B................................................................................................................................................7
Different types of strategic directions available to the organization..................................................7
Justify and recommend the most appropriate growth platform and strategies....................................8
Strategic Management Plan...............................................................................................................9
CONCLUSION..................................................................................................................................11
REFERENCES..................................................................................................................................12

INTRODUCTION
Business strategy is important part of an organisation because it provide assistance in
accomplishing goals and objectives. Although, business strategy is defined as working plan
which assist in enhancing financial position of company. In simple term it can be said that
business strategy act as an backbone of business firm because it help in making effective
decision related to management (Roma, Panniello and Nigro, 2019). In addition to this, there
are several steps which involved in making effective business strategy such as determining
vision, mission, goals and objectives.
For this report chosen organisation is Rosewood which is part of hospitality industry
founded in 1979 and founder was Caroline Rose Hunt. They are serving at worldwide level
and headquartered at New World Tower 1, 18 Queen’s Road, Hong Kong. Respective report
will going to analyse the impact of macro environment on working of hospitality company
along with there internal environment as well as capabilities. Moreover, by using Porter’s
Five Force model company will analyse competitive environment. Moreover, strategic
management plan will design along with strategies, objectives and tactics.
PART A
PESTLE and SWOT analysis of the organization and an analysis of its capabilities
PESTEL analysis is framework which provide assistance in influencing several macro
environmental factors in relation of business firm. It is an tool which generally used by
company for analyzing impact of external factors on their working within effective manner.
Here, PESTEL stands for political, economic, social, technology, environmental and legal.
Explanation of these in relation of Rosewood Hotel are as follows :-
 Political Factors – The United Kingdom runs under the influence of a parliamentary
system and is considered to be a politically stable country (Walsh and Dodds, 2017).
Thus, political factor don’t have any negative impact on working of Rosewood Hotel
in UK.
 Economic Factors – The UK is economically strong country in comparison of others
as compared to other countries and has a high GDP as well as large population
allowing even small businesses to be successful.

 Social Factors – There are several social factors which result in negative impact on
working of Rosewood Hotel such as increasing dependency ratio, education costs and
many more.
 Technological Factors – Technology advancement is taking place day by day which
provide assistance to Rosewood Hotel in conducting their activities through latest
technology in effective manner for gaining better outcomes.
 Legal Factors – It is important for business firm to follow legal factors in proper
manner so they will be able to conduct operations in proper manner (Aithal and
Aithal, 2016). Such as companies who are operating in the UK are expected to follow
the Employment Act 2010 and several other legislations.
 Environmental Factors – There are several environmental factors such as pollution
and many other issues which come along and result in negative impact on working of
company.
SWOT analysis
It is an strategic tool which an business firm use for identifying their strength,
weakness, opportunities and threats. SWOT include both internal and external factors such as
strength and weakness are internal whereas, opportunity and threat are external factor. SWOT
analysis of Rosewood Hotel are as follows :-
Strength Weakness
 Rosewood is luxury hotel as well as
have 15 hotels at global level.
 Respective Hotel won the restaurant
prize of Hotel Cateys 2018: Hotel
Restaurant Team of the year –
Holborn Dining Room, Rosewood
London.
 Central reservation system is also
strength of Rosewood Hotel because
with the assistance of this it can
connect to the global Rosewood
Group hotel to known about there
hotel guest preferences previously.
 On eof the major weakness is that
Rosewood London have low brand
awareness within competitive luxury
hotel industry.
 Hotel is not focusing on advertising
as well as they are also focusing on
individual brand strategy.
 In comparison of same level
competitors respective company
have low cross-property usage.

Opportunity Threats
 Rosewood London have potential
for further improving their cross-
property usage.
 By cooperating with luxury brands
Rosewood can enhance their brand
image and result in creating hotel
brand values.
 RoseWood rarely conduct
advertsisng which result in creating
difficulties for company to enhance
popularity.
 There are several other luxury hotels
in market which result in generating
high level competition for
Rosewood Hotel.
VRIO Analysis
Resources Valuable Rare Inimitable Organized
Products ✓
Hotel Locations ✓ ✓
Patents ✓ ✓ ✓
Employees ✓ ✓ ✓ ✓
Valuable
 For an organization valuable resources are those which provide assistance in gaining
competitive advantages against their competitors. In addition to this there are several
valuable resources for Rosewood Hotel such as Patents, employees, location of Hotel
and products.
 For company products are valuable because these are high different in comparison of
competitors (Boella and Goss-Turner, 2019). With the assistance of such products
company receive value among customer is very high. Along with this, hotel location
is also valuable because it provide assistance in attracting large number of customers.
 Location also have contribution to overall differentiation of brand as well as patent is
also valuable resource for company because with the assistance of this company can
sell there products and services to customers without customer interference. This
assist in increasing profitability and licensing revenue of company.
 Employees are also valuable resources of company because of there skills, training
and experience. They provide assistance to company in accomplishing goals and
objective in better manner.

Rare
 Rare resources are those which help an business firm in standing out of the
competition because their resources are not founded by every organization. The
product are rare because same kind of goods cannot be offered through competitors
for gaining advantage.
 Location of Hotel is rare because their computers cannot operate in that particular
location (de Brito and Terzieva, 2016). The Exotic location selected by Rosewood
hotel cannot be found easily by their competitors.
 Staff of respective Hotel is also there because they are highly skilled as well as trained
which help them in accomplishing their goals and serving customers in better manner.
 Patent are also rare resource because they are not easily available as well as computer
cannot process the same pattern as Rosewood Hotel have full stop because of this
respective hotel use their patent without any interference of computers available
within market area.
Inimitable
 Inimitable resources are those which cannot be copied in easy manner or imitable at
reasonable price. Thus, inimitable resources of Rosewood Hotel are patent and staff.
While product as well as hotel location is imitable resources.
 There are some products of respective hotel which are not imitable because products
which company manufacture as well as produced will not copied by anyone.
 Location of Hotel are imitable because at the location where Rosewood has settled up
their hotel can be found anywhere else (Ginesta, 2017). Whereas, patent of Rosewood
Hotel is inimitable because they cannot be copied in legal manner.
 Employees of respective hotel are inimitable because staff working there have special
skills and knowledge which may not be founded in employees of other company.
Organized
These are those resources that must be composed now and again inside an association.
An association must arrange its assets so as to increase an upper hand against others and
subsequently hang out in the market. Assets that must be composed are workers by giving
them compelling preparing. Then again, assets that don't should be sorted out are items,
licenses just as lodging areas.

Analysis of the competitive environment using Porter’s Five Forces model
Porters five force is framework which an organization use for analyzing competition
in effective manner. Respective framework was developed by Michael Porter as well as it
include five forces which have impact on overall functioning of company. In relation of Rose
wood Hotel Porter’s five force are as follows :-
 Threat of New Entrants – In hospitality sector new entrants come with innovation in
products and services along with low price in comparison of Rosewood hotel without
any compromise in quality (González-Rodríguez and et. al., 2018). This result in
shifting of existing customer towards new entrants and it result in wide impact on
overall profitability. Because customers like innovation in products and services,
respective company should focus more on its research and development. Thus. Threat
of new entrants is a strong force.
 Bargaining Power of Suppliers – Organization conducting their business in the
hospitality sector generally buy raw material from the numerous of suppliers for their
products. This shows that supplier contain dominant position at respective industry as
well as due to this company face high power of them. They will use their power in
market according to which they can change price according to company for
generating revenue.
 Bargaining Power of Buyers – It is also considered as strong force as the customers
or buyers of Rosewood hotel wants premium quality products as well as services in
the low price. This creates pressure for the firm as they need to offer products at low.
In this respect respective hotel need to pay more attention to the developing and
maintaining small base of customers at few areas or location as this will help in
reducing power of negotiation condition.
 Threat of Substitute Products – In respective market when competitive company
launch new products, services or facilities then it will directly impact on the business.
But in case of Rosewood hotel threat of substitute products is low because there are
more focused on the product and services which are offered to customers. Moreover,
respective company also enhances the cost of switching for customer.
 Rivalry among Existing Competitors – The competitive rivalry of respective
company is high because there are number of other firms which are operating in the
same industry as well as they also offer similar kind of products and services. So it is

essential for Rosewood hotel to adopt new strategies and plan for gaining competitive
advantage.
PART B
Different types of strategic directions available to the organization
Four different business strategies has been suggested by Michael porter which
organization of different size can adopt within all industries. These four strategies are referred
as Porter’s Generic Strategies which help an business firm in identifying potential customer
base in which they can gain competitive advantages (Porter's Generic Strategies, 2020).
Explanation of these in relation of Rosewood Hotel are as follows :-
 Cost Leadership – This strategy business firm attempts for gaining market share for
aim of becoming lowest cost producer in sector. This can be accomplished by creating
items in mass amount wherein the expenses can be cut at different phases of item
advancement (Jogaratnam, 2017). This permits associations to sell items that are
estimated underneath the normal expense in the market. In setting to Rosewood, to
draw in more clients, it can reduce down expenses on a portion of the items and
administrations in certain areas.
 Differentiation – The fundamental focal point of associations that embrace this
technique is on separating their items and making them mineral appealing in order to
increase an upper hand against contenders. In setting to Rosewood, while structuring
its items, the organization centers around different measures that clients inside the
business think to be significant like usefulness, highlights, administrations, benefits,
quality and so forth.
 Cost Focus – This system can be characterized as associations that post for building
up a minimal effort advantage inside a little market portion. The items that are offered
by associations are typically essential and like the ones that are being offered in the
market. With this procedure, associations can comprehend the market elements just as
necessities of clients. On the off chance that Rosewood receives this system, it should
lay essential spotlight on the expense of its items and administrations.
 Differentiation Focus – In differentiation strategy focus of company is on
differentiating their products but in small market segment. For success of
differentiation strategy company have to identify customer base with their unique

need in comparison of wide population. Along with this, they have to ensure that no
other company is offering same products.
After going through above analysis, it has been seen that Rosewood Hotel has implement
strategy of differentiation for gaining competitive advantages within hospitality sector.
Justify and recommend the most appropriate growth platform and strategies
Ansoff’s Growth Matrix is explained as strategic framework which business firm
attempt to grow as well as expand depends on it market new or existing products within new
or existing market. In relation of Rosewood Hotel explanation of Ansoff Growth Matrix are
as follows :-
 Market Penetration – Within this strategy business firm utilize their existing
products in an existing market for enhancing market share (Bowie and et. al., 2016).
Market penetration done in several manner such as decreasing price of products as
well as attracting existing and new customers. Thus, Rosewood hotel can reduce cost
per night stay in room as well as enhance promotional activities in relation of same.
 Product Development – In the item improvement technique, the organization grows new
items to be provided food into another market. It includes profound innovative work for the
development of the new items. This procedure is generally applied when an association has a
solid comprehension of the market it is right now working in and in this way gives one of a
kind and creative item to the clients. On the off chance that Rosewood Hotel receives this
methodology, it should improve its administrations for clients who look for extravagance.
 Market Development – In this technique, an association enters another market with
existing items. A market improvement system can help the organization in extending
its business among new portions of clients, areas and geologies. This procedure can
be useful when clients inside the new commercial center are productive (Chan and
Hsu, 2016). There are number of manners by which this system can be embraced like
obliging a totally extraordinary portion of clients, entering an outside or local market.
 Diversification – This is the most hazardous procedure in light of the fact that in this
an association enters another market with another item. This is on the grounds that
showcase just as item advancement is required in this. There are two sorts of
expansion, related and random. Hilton can make new items so as to develop and grow
its business in a totally unique market just as clients.

After going through above analysis, Rosewood Hotel is adopting the market development
strategy because it is already recognized by people at global level.
Strategic Management Plan
Strategic planning is the procedure in which an business firm define there strategies as
well as take effective decision through allocation of resources in proper manner. Strategic
planning of Rosewood Hotel are as follows :-
Mission – This is an statement which describe that why an business firm exists as well as
there goals and objectives also. Mission statement of rosewood Hotel is to become
memorable and lasting experience hospitality organization.
Objectives – There are some objectives of Rosewood Hotel explanation of these are as
follows:- To start hotel operations in Monaco within 6 months in order to enhance sales by 20%
through offering existing products and services. To cut down unnecessary costs by 15% within 8 months of grabbing attention of new
customers within the market.
Strategies – There are several strategies which Rosewood Hotel use for attracting large
number of customers and serving them in effective manner. Explanation of these are as
follows:-
Bowman’s Strategy Clock - This model is used in marketing in for analysing company
competitive position in comparison to competitors. Description are as follows :-
 Low Price and Low Value Added – This position is not considered to be very
competitive because the products are not differentiated and customers also perceive
very less value despite low price.
 Low Price – Within this position business firm seek to be low-cost leaders in market
as well as develop a strategy for cost minimization.
 Hybrid – In this position combination of low price as well as product differentiation
included. Main aim of hybrid is to persuade the customers.
 Differentiation – The main motive of this strategy is to offer products to customers
which are of highest perceived value.
 Focused Differentiation – In this strategy, products and services are placed at high
price levels wherein the customers purchase them because of their high value.

 Risky High Margins – This positioning strategy involves a high risk wherein
organizations set high prices so that high profits can be generated.
 Monopoly Pricing – This strategy is involves giving only two options to the
customers, either buying or not buying the products.
 Loss of Market Share – In this business firm set a middle-range or standard price for
the products with a low perceived value.
STP Model – It is an model which provide assistance to business firm in targeting there
customers within effective manner. Here, STP stands for segmentation, targeting and
positioning. Explanation of these in Relation of Rosewood Hotel are mention below :-
 Segmentation – Rosewood Hotel should segment their customers on the basis of
preferences and unique needs. There are different types of segmentation such as
demographic, psychographic and behavioral.
 Targeting – This is the strategy for selecting the target customers so, Rosewood will
target those customers who are looking for luxury and premium experience.
 Positioning – There are several positioning strategies which respective Hotel adopt
such as advertising, branding, social media promotions and many more. This will help
in generating awareness among the customers in the new market.
Tactics - It can be characterized as rules that are given to a business so as to complete
its activities in a powerful way. Strategies that Hilton can receive can incorporate checking
marketable strategy just as administrations offered to the clients consistently. The association
can likewise create organization with inn marks that have been performing adequately in the
market. Ultimately, all workers ought to be given preparing with the goal that they gain all
the important abilities and information.
CONCLUSION
After going through entire discussion, it has summarised that it is important for an
company to design strategy in proper manner because it provide assistance in accomplishing
goals and objectives of company. Along with this, there are several strategic models which an
organisation can use for analysing impact of several external factors such as PESTEL, SWOT
and many more. Along with this, it has been recommended to Rosewood Hotel that strategy

of market development wherein it will have to sell existing product within new market for
enhancing overall share in market area.

REFERENCES
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Online
Porter's Generic Strategies. 2020. [Online]. Available through:<
https://www.mindtools.com/pages/article/newSTR_82.htm>.