Hospitality Business Strategy: Impact of Macro Environment, Internal Analysis, and Strategic Directions

This report analyzes the impact of macro environment on UK Holiday Group Ltd and its strategies using PESTLE and SWOT analysis. It also evaluates the internal environment using VRIO and McKinsey's 7s Framework and applies Porter's Five Forces model to evaluate competitive forces. The report further evaluates different strategic directions available to the organization using Bowman's Strategic Clock.

HOSPITALITY
BUSINESS STRATEGY

Table of Contents
INTRODUCTION ..........................................................................................................................1
MAIN BODY...................................................................................................................................1
PART A...........................................................................................................................................1
Analyse the impact and influence of the macro environment on a given hospitality
organisation and its strategies by applying appropriate frameworks such as PESTLE and
SWOT analysis............................................................................................................................1
Analyse the internal environment and capabilities of a given hospitality organisation using
appropriate frameworks such as the VRIO Framework or McKinsey’s 7s Framework..............4
Applying Porter’s Five Forces model, evaluate the competitive forces of a given market sector
for a hospitality organisation.......................................................................................................6
PART B............................................................................................................................................7
Evaluate the different types of strategic directions available to the organisation........................7
Justify and recommend the most appropriate growth platform and strategies through the
application of Ansoff’s Product/Market Growth Matrix. ...........................................................8
Applying a range of theories, concepts and models, interpret and devise strategic planning for
a given hospitality organisation. .................................................................................................9
CONCLUSION ...............................................................................................................................9
REFERENCES..............................................................................................................................10

INTRODUCTION
Business strategy means those operations which is used for conducting business within an
organization. These strategies are applicable within various business activities leads towards
development of hospitality services as per demands produced by customers. The concept of
business strategy relates with preferences of consumer, technological advancement and
competitive edge that holds importance regarding business development. Hospitality sector acts
as backbone for economic growth of organization within particular market. The sectors through
business strategy is able to develop positive business environment that makes workplace more
effective in nature. The selected hospitality organization is UK holiday Group Ltd that has been
established in the year 1983 and has its headquarters in Norwich, United Kingdom. This part of
report covers about internal and external factors which has been explained through PESTLE and
SWOT analysis. Then VRIO analysis is explained with Porter's Five Force model to understand
about competitive forces.
MAIN BODY
PART A
Analyse the impact and influence of the macro environment on a given hospitality organisation
and its strategies by applying appropriate frameworks such as PESTLE and SWOT
analysis.
PESTLE analysis:
PESTLE evaluation means framework that has been developed in order to analyse
external factors impacting business directly. The analysis relates with developing understanding
about various kinds of factors related to development of business within hospitality sector(Choi
and Seo, 2021). Further PESTLE relates with political, economical, social, technological, legal
and environmental factors which has lead towards development of business within hospitality
sector on large scale. In relation to UK holiday group Ltd PESTLE analysis has been done as
follows:
 Political elements: These elements are based over various regulations that has been
formed by government of UK to makes business organizations operate on large scale.
Under the factor tax and trade policies are majorly covered. Political factors are diverse
factors which impacts growth of business organization in UK market. In relation to UK
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holiday group Ltd those regulations have drastic impact due to the fact trade inside
regulations leads over lowering performance inside running of personnel and staff. As
according to the trade in regulations of current time because of COVID 19 modifications
in regulations lead over making loss confronted in enterprise of UK holiday group Ltd
 Economic elements: The element is based over economic growth of an country and
organization. Under it aspects like inflation rates, trade rates, hobby rates, import fee and
export rate is covered. In relation to hotel UK holiday group Ltd, the factors has played
important role in its development and growth of profit effectively. UK holiday group Ltd
must focus over making changes within economic policies which allows trade of services
done across glob which makes revenue generation high.
 Social elements: The element related with social factors like preferences and taste
existing within society(Criscione-Naylor and Fagan, 2019). Under this factor elements
like culture, fashion and flavour of human beings residing inside society is observed by
an organization. This element makes UK holiday group Ltd analyse their customer
preferences within United Kingdom. Also social elements made effective effect over UK
holiday group Ltd hotel that made clients appeal with growth possible. Also social
elements makes UK holiday group Ltd apprehend approximately tendencies making hotel
unfold through out the glob.
 Technological elements: These factors are based over various kinds of technological
development that takes place on daily basis. It is used for increasing efficiency of
business organization within its various operations. In relation to UK holiday group Ltd
technology has important perspective to play since they help in performing online with
ease. UK holiday group Ltd in this modern era uses technology to make its operations
more digitalized in nature in order to make online delivery more effective in nature. Thus
the organization is able to make its existence developed within hospitality sector by
selling services to its customers.
 Legal troubles: These are those factors which is based over various kinds of legal
legislations that has been developed by law makers present within country. The element
has been managing diverse factors primarily based totally over legislation and legal
guidelines present inside us of a. In UK criminal necessities have accelerated so one can
make exchange sports performed extra efficaciously. This makes legal guidelines utilized
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by an UK holiday group Ltd for accomplishing its features in criminal manner. After
BREXIT diverse legal guidelines has been modified making UK holiday group Ltd
confronted problems in adapting them. Through criminal elements diverse troubles in the
business enterprise has been solved extra efficaciously however BREXIT has created
trouble in running if criminal process.
 Environmental elements: These are the factors which is based over various kinds of
aspects which deal with environment and issues existing within it(Gajjar and Okumus,
2018.). The factor is based over protecting environment through bringing awareness
within individuals. UK holiday group Ltd is able to use the factors over dealing with
issues like pollution and waste management used for creating sustainability within
environment. UK holiday group Ltd has used the thing for developing environmental
protection packages making business enterprise famous in-phrases of surroundings
pleasant business enterprise. The thing makes boom supported through developing
sustainability inside an business enterprise. Another problem that business enterprise has
address that carbon footprints which has been solved through growing clean price modes
through on line.
SWOT framework
SWOT evaluation is that kind of tool which is used for providing organization assistance
about internal factors of an organization making organization's business environment improved.
Under this analysis strength, weakness, threat and opportunities are discussed to perform internal
business operations(Gamage and Tajeddini, 2022). SWOT acts as tool which makes productivity
within employees enhance. Through identifying weakness and threat organization is able to
work for employees benefit and its growth. In context of UK holiday group Ltd SWOT is
accomplished below:
Strengths Weaknesses
 Brand value of UK holiday group Ltd is
high which makes it more popular
within UK. This is biggest strength
posses by hotel.
 The organization has variety of services
which are provided to customers
 Population in UK and outer place
believes UK holiday group Ltd as a non
modern-day shop for adults and young
adults in case of clothings.
 Company use older strategies to offer
their products due to which their
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visiting hotel. This is an important
strength making organization more
popular in nature.
products are priced pretty in evaluation
with the charges which is probably
offered with the useful resource of the
use of rival organisations.
Opportunities Threats
 The hotel has made expansion possible
within various aspects making
organization become global entity. This
become biggest opportunity for growth
of hotel.
 Company is able to spend high amount
of money for improving various
elements. It becomes opportunity as it
makes operations of business ease
down.
 The biggest threats are rivals like
Holiday inn and Easyhotel that makes
competition tough which creates
problem for consumer base of UK
holiday group Ltd by reducing it.
 Changing political environment due to
worldwide industrial corporation
operation can acts as a downside with
within the effectiveness of company.
Analyse the internal environment and capabilities of a given hospitality organisation using
appropriate frameworks such as the VRIO Framework or McKinsey’s 7s Framework.
Strategic skills and their key components:
Strategic skills are based over various kinds of techniques that has been developed in
order to enhance skills over techniques of business organizations making competitive advantage
achieved effectively(Guzzo, Abbott and Madera, 2020). These strategic talents have six essential
additives which can be strategic purpose, key goals, movement planning, gear for evaluation,
values and vision. These additives benefits the enterprise business enterprise with in the usage of
their performed method in an excessive first-class manner.
VRIO Analysis
VRIO assessment is abbreviated as value, rarity, limitability and business enterprise
enterprise business enterprise. It is a strategical tool that is used by companies to apprehend their
available assets and internal talents. This will help them in sporting out immoderate competitive
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advantage over fighters. In context with UK holiday group Ltd VRIO assessment is mentioned
below:
 Valuable: It is essential for the manager in UK holiday group Ltd to properly utilise their
treasured assets absolutely so difficult competition to fighters can be given in a proper
manner. If an business enterprise enterprise business enterprise posses some treasured
assets, they might earn immoderate earnings from it(Altin and et. al., 2018). For ex,
treasured beneficial useful useful resource for UK holiday group Ltd is their employees,
distribution and supply chain management.
 Rareness: This detail advantages a enterprise business enterprise in information if the
product which is prepared manner of method of them is unusual or now not. Rare
products offered method of UK holiday group Ltd will help them in gaining patron
loyalty due to which their earnings and earnings will growth in a giant manner. Rare
products of business enterprise manufacturing and production machines. UK holiday
group Ltd believes in providing unique and modern products to their customers due to
which enterprise business enterprise rareness.
 Imitable:UK holiday group Ltd is had to offer those products which can not be copied
manner of method of rival companies. If products offered method of UK holiday group
Ltd can be copied then fighters can offered them in a remarkable deal loads plenty much
less amount due to which humans will now not determine upon to buy those services of
products which may be offered method of UK holiday group Ltd. Raw fabric for
producing food item and clothes are imitable assets for business enterprise.
 Organisation: It is crucial for business business enterprise enterprise business enterprise
companies which consist of UK holiday group Ltd to manipulate their gift assets in a
complex manner(Iskandar and Tukiran, 2022). If assets and materials of a business
enterprise enterprise business enterprise will now not be finished in systematic manner
it'll effects in extra rate of business enterprise enterprise business enterprise. This will
reduce earnings for business enterprise enterprise business enterprise due to which
competing in competition to fighters may additionally moreover have become a hard
task. Different assets in this context are employees, suppliers, buyers and stakeholders of
business enterprise enterprise business enterprise.
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Applying Porter’s Five Forces model, evaluate the competitive forces of a given market sector
for a hospitality organisation.
The version of Porter's 5 forces allows organization in figuring out and comparing
aggressive forces that shapes enterprise via ascertaining its strengths and weaknesses. Porter's 5
forces version is defined as follows on the subject of UK vacation organization Ltd:
 Competitive competition: It is taken into consideration with variety of competition in
enterprise and their impact on an organization(Kallmuenzer, 2018). Threat of aggressive
competition is high for UK vacation organization Ltd as its competition are big in variety
including Novotel, Hilton, etc. as those rivalries are constantly marketing and marketing
and innovating their offerings that hinders profitability of organization.
 Power of buyers: This is potential of energy of clients concerning using the expenses of
merchandise and offerings. It is a high risk for UK vacation organization Ltd as there are
massive variety of carriers in marketplace-region and patron desire to shop for their
offerings at minimal rate as viable and for that they could shift to different organization
also.
 Power of providers: It addresses how without problems providers can power up the
charges and is predicated on variety of providers to be had in marketplace-region. There
is low risk for UK vacation organization Ltd resort as there are big variety of providers
with whom the organization can deal and due to which it is able to be switched to any
other provider without problems.
 Threat of latest entrants: Position of organization is prompted through how clean it's far
for a brand new entrant to go into into marketplace and what sort of wouldn't it not cost.
UK vacation organization Ltd chase economies of scale and has its very own marketplace
percentage so there is low risk of latest entrant for organization
 Threat of replacement merchandise: This risk is ready substitutes of services or
products to be had in marketplace. There is low risk for UK vacation organization Ltd of
replacement offerings as there aren't tons replacement offerings for the organization.
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PART B
Evaluate the different types of strategic directions available to the organisation
Bowman strategic clock has been assisting internal an business enterprise organization
this is exploring about various kinds of techniques this is positioned in market(Law and et. al.,
2018). The way internal which UK holiday group Ltd makes feature over products that is having
immoderate gain with its rival organizations this is accomplished in effective way. The trouble is
based totally completely over framework that has been noted as follows:
 Low price and espresso price added: This makes competition feature over UK holiday
group Ltd. The products makes differentiation over consumer this is apprehend with
plenty much less price over products although there price is plenty much less.
 Low price: The trouble of UK holiday group Ltd is based totally completely over feature
over low fee leaders internal market the use of fee minimisation over technique. This is
profits over each product that makes immoderate scale amount with over all profits in
more effective way.
 Hybrid: This technique embody elements of low price and product differentiation. This
positioning technique may be every effective in context with UK holiday group Ltd.
 Differentiation: Within this technique, UK holiday group Ltd is required to interest on
presenting cutting-edge offerings to their clients simply so profits can be higher
considerably.
 Focused differentiation: The products over placing over immoderate price degree
consumer over buying product this is surprisingly perceived over price. The technique is
used for costly logo running at worldwide degree.
 Risky immoderate margins: This technique internal an organization making
immoderate threat resulting upon making business enterprise failure(Murphy and et. al.,
2018). It UK holiday group Ltd set over immoderate price for providing of a few
component more perceived price.
 Monopoly pricing: In market monopoly business enterprise providing products with this
technique monopoly over business enterprise challenge about fees or innovation features.
If customer requires that product and making price too immoderate.
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 Loss of market shares: This strategic feature internal competitive market which makes
organization over set necessities with middle form of products. The market shares that
makes organization this is plenty much less.
Justify and recommend the most appropriate growth platform and strategies through the
application of Ansoff’s Product/Market Growth Matrix.
Ansoff Matrix
This framework is utilized by commercial enterprise so as to plot the boom and
achievement of modern or present merchandise or carrier in winning or new marketplace. The
version of Ansoff Matrix allows the control of UK holiday group Ltd in making an evaluation of
the possibilities that outcomes in increment within the sales of the employer. There are four
conditions inside this version and those conditions are defined as follows:
 Market penetration: This boom method attempts to increase quantity of income with
the aid of using targeting merchandising of present merchandise in present markets only.
UK holiday group Ltd can begin the method of giving reductions inside their groups that
allows you to increase the income of employer. It could assist lodge in gaining client
loyalty with the aid of using taking pictures extra clients within the marketplace.
 Product improvement: Such sort of boom method specially makes a speciality of the
improvement of latest or modern services or products to introduce or release them in the
present markets with the aid of using extending variety of merchandise that allows to
appeal to extra client-base. UK holiday group Ltd inn can deal in introducing modern
beverages with the aid of using including specific flavours inside their present ones.
 Market improvement: Within this method, present services or products of the employer
are bought into the brand new or modern markets with the aid of using making an identity
of the brand new geographical location or dispensing items with the aid of using making
use of various channels of distribution or changing the fee coverage to draw the
marketplace proportion inside marketplace vicinity that allows to increase new segments
of the marketplace. UK holiday group Ltd can open its extra branches within the more
than one towns for the motive of increasing the marketplace reach.
 Diversification: This sort of boom method allows the commercial enterprise in tapping
new segments of the marketplace with the modern or new services or products. Strategy
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of diversification is riskier in assessment to different three techniques of the Ansoff
Matrix due to the fact the employer goes to release or introduce new merchandise inside
that marketplace in which there may be no experience(Taylor, Dantu and Wells, 2022).
UK holiday group Ltd can diversify its meals merchandise and associated offerings with
the aid of using introducing meals merchandise with new flavours. This could assist the
employer in gaining aggressive benefits over the rivalries within the marketplace vicinity.
Applying a range of theories, concepts and models, interpret and devise strategic planning for a
given hospitality organisation.
Strategic management plan is that kind of plan which is formed by an organization to
understand about marketing priorities within an organization that makes fulfilling done in
effective way. Through this plan all kinds of marketing aspects has been explained over fulfilling
of various aspects more effectively. Strategic management plan is able to make organization
develop vision and mission as per market condition and organizations needs. Then strategies are
developed with the help of theories that makes customers needs understood effectively. This plan
makes product and services developed as per market.
CONCLUSION
From the above discussion it can be concluded that business strategy is an important
perspective which is based upon various kinds of aspects that makes business developed more
effectively. This file is based over two parts within which first part covers about PESTLE and
SWOT analysis that is an tool used for analysing internal and external factors. Then VRIO
analysis is also done with Porter Five Force for understanding about competitive edge present
within market. Ansoff Matrix is covered for analysing new or existing product in market.
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REFERENCES
Books and Journals
Adam, O., 2020. Business Model Reinvention: Impacts of Covid-19 in The Hospitality
Business (Doctoral dissertation, ISCTE-Instituto Universitario de Lisboa (Portugal)).
Altin, M and et. al., 2018. Performance measurement and management research in the hospitality
and tourism industry. International Journal of Contemporary Hospitality Management.
Choi, J. and Seo, S., 2021. Do brand rumors matter? The role of brand equity and response
strategy to brand rumor. International Journal of Contemporary Hospitality
Management.
Criscione-Naylor, N. and Fagan, L., 2019. The Total Hospitality Experience; Marketing and
Event Planning Strategy. Proceedings of the Northeast Business & Economics
Association.
Gajjar, T. and Okumus, F., 2018. Diversity management: what are the leading hospitality and
tourism companies reporting?. Journal of Hospitality Marketing & Management, 27(8),
pp.905-925.
Gamage, T.C. and Tajeddini, K., 2022. A multi-layer organizational culture framework for
enhancing the financial performance in tourism and hospitality family firms. Tourism
Management, 91, p.104516.
Guzzo, R.F., Abbott, J. and Madera, J.M., 2020. A micro-level view of CSR: A hospitality
management systematic literature review. Cornell Hospitality Quarterly, 61(3), pp.332-
352.
Iskandar, Y. and Tukiran, M., 2022. Strategic Management of the Hospitality Industry in
Increasing Innovation and Competitiveness during the Pandemic. Budapest
International Research and Critics Institute (BIRCI-Journal): Humanities and Social
Sciences, 5(2).
Kallmuenzer, A., 2018. Exploring drivers of innovation in hospitality family firms. International
Journal of Contemporary Hospitality Management.
Law, R and et. al., 2018. Systematic review of hospitality CRM research. International Journal of
Contemporary Hospitality Management.
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Murphy, K and et. al., 2018. A review of high performance work practices (HPWPs) literature
and recommendations for future research in the hospitality industry. International
Journal of Contemporary Hospitality Management.
Taylor, J., Dantu, R. and Wells, T., 2022. Promoting Guest Satisfaction: Digital Platforms as a
Means to Encourage Economic Development in Hospitality. International Journal of
Hospitality & Tourism Administration, pp.1-30.
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