Hospitality Business Strategy

This report provides an analysis of the internal and external factors of Montcalm Royal London House using PESTLE and SWOT analysis, McKinsey's 7s framework, and Porter's Five Forces model. The report suggests a market penetration strategy and product development using the Ansoff matrix to improve competitiveness and achieve long-term expansion goals. The subject of the report is Hospitality Business Strategy, and the course code is not mentioned. The report does not mention any specific college or university.

HOSPITALITY BUSINESS
STRATEGY

Table of Contents.
INTRODUCTION ..........................................................................................................................3
MAIN BODY...................................................................................................................................3
PART A- INTERNAL AND EXTERNAL ANALYSIS THAT PROVIDE THE BASIS FOR
STRATEGIC PLANNING..............................................................................................................3
Impact of PESTLE and SWOT analysis framework...................................................................3
M1 To determine the strategic management decisions ...............................................................5
Analyse the capabilities with the McKinsey’s 7s .......................................................................5
M2 To assess the strengths & weaknesses of organisation's internal capabilities, structure and
skill...............................................................................................................................................6
Evaluate competitive forces by Porter's Five Forces model........................................................6
M3 Devise appropriate strategies to improve competitive edge..................................................7
PART B............................................................................................................................................7
Porter generic strategies...............................................................................................................7
Ansoff matrix ..............................................................................................................................8
Range theories, models and concept for strategic planning.........................................................9
M4..............................................................................................................................................11
D1...............................................................................................................................................11
CONCLUSION..............................................................................................................................12
REFERENCES..............................................................................................................................13

INTRODUCTION
Business strategy refers to the set of competitive actions that involves the formulation
and implementation of the major goals taken by an organisation as the success of any business is
determined by the effectiveness of the strategy (Moktadir and et.al., 2020). The report will
analyse the strategic plan of the hospitality business. The Montcalm Royal London House is the
hotel chosen to conduct the research. The hotel was established in 1973 and named after the
Marquis de Montcalm which was acquired by Shaftesbury Hotels in 2008. The project will
determine the impact of macro environment factor with the help of SWOT and PESTLE analysis
which will aid in the strategic management decisions. Further, the case study will analyse the
internal environment and capabilities through the McKinsey's 7s framework to access the
strengths and weaknesses of internal capabilities, structure and skill. It will evaluate the
competitive forces by applying Porter's Five Forces model which will improve the competitive
edge. The report will describe the strategic direction and justify it with the appropriate growth
platform. It will discuss the theories of corporate, business and tactical strategic priorities. Lastly,
the report will produce a strategic management plan having a tangible and tactical strategic
priorities.
MAIN BODY
PART A- INTERNAL AND EXTERNAL ANALYSIS THAT PROVIDE THE
BASIS FOR STRATEGIC PLANNING
Impact of PESTLE and SWOT analysis framework
Following is the PESTLE analysis of Montcalm Royal London House are:
 Political: Positive collaboration with the UK government made the hospitality
industry one of the largest growing business. Recovering from the 2009 economic
recession and currently fighting with the Covid-19 pandemic witnessed relevant
challenges for the hotel.

 Economic: With the pandemic being endemic, the rise in the living standard of
the public in London has seen a potential rise in the profitability of the hotel. The
government is framing fiscal policies to support and recover from the losses.
 Social: It rises to different pattern which are followed by the quoted hotel after
the easing of international restrictions or regional lockdown, people around the
world using the collaboration tools and WFH policies took advantage and started
working remotely (Nandonde, 2019.). This change see a boom in the reservation
of the rooms and corporate also planning to have events at the hotel.
 Technological: The quoted hotel made the hotel completely tech friendly to
better provide better experience to the customers and also preserving the precious
part of the city of London's heritage.
 Legal: This factor could be taken care by developing a robust system of policy
which defines the minimum standards to avoid legal battle with the stakeholders
and regulating with the minimum wage rate.
 Environmental: The hospitality industry lays an important emphasis on
protecting the environment and the given hotel have a strong CSR strategy which
would work to reduce or manage the waste materials, carbon emission, concern
regarding the health of the customers (Stevenson and Marintseva, 2019).
SWOT analysis of the quoted hotel is as follows:
Strengths Weaknesses
 Innovative style and concierge service
facilities (Carlo, 2021).
 Knowledgeable and experienced
working staff.
 High profitability due to the luxuryess
experience.
 Huge setup and maintenance cost.
 Limited loyalty program opportunities.
 Single brand strategy resulting in high
prices of products and service.
Opportunities Threats
 Organizing corporate club meetings
and award functions increases
revenues.
 Strong competition as UK is one of the
top location for the hospitality industry.
 Unfavourable economic condition

 Local and international expansion of
business by partnering with the
suppliers and stores.
 Providing many booking plans after the
end of pandemic like workcation,
bleisure travel and co-working.
which is the result of the pandemic.
 Apartment rental industry is the biggest
threat which provides the customers a
strong substitution of the service.
M1 To determine the strategic management decisions
The strategic management decision is based while considering the internal and external
factors of the quoted hotel and to frame the strategies according to the rules and regulations of
the government. It helps to achieve the corporate objectives and goals resulting the hotel
completely focused on the long-term expansion goals.
Analyse the capabilities with the McKinsey’s 7s
McKinsey's 7s model refers to a tool which analyse the company's organisational design.
The first three elements are the hard one which are relatively easy to figure out and could be
influenced by management whereas the remaining 4 are the soft element which are less tangible
(Njeru and Kariuki, 2019). The goal is to depict the effectiveness which could be achieved with
the help of seven key elements which are as follows:
 Structure: The Montcalm Royal London House structure is based on the vertically
integrated model which consolidates multiple steps in the distribution process. It avoids
the sole performance and rather integrate task performance which are to be carried by
combining the tasks.
 Strategy: The quoted hotel strategy is customer-centric which are providing the excellent
experience with the help of concierge service to make the stay most comfortable.
 Skill: The staff members and managers are trained with the resilience, compliance
training and communication skills so to easily provide a better experience to the
customers.
 System: This includes the daily activities of the staff members which includes the
procedure to be followed by the workforce in the quoted hotel. The code of conduct

prevailing within the hotel and the use of technological development to make their work
in a quicker and easier way.
 Shared values: The subordinate goals are the core values which reflects the general work
ethics within the hotel. The quoted hotel's organisational culture is positive in regard to
the employees working.
 Style: The given hotel follow the autocratic style of the leadership due to the
unpredictable situations or circumstances in the hospitality industry which helps to
mitigate the problems effectively.
 Staff: The hotel size in regard to employees vary from 200 to 600 employees which is a
privately owned hotel. The staff of the hotel includes students who are pursuing their
masters in hotel management resulting in the great opportunity for the employee's.
M2 To assess the strengths & weaknesses of organisation's internal capabilities, structure and
skill
The quoted company's strength while considering the structure, capabilities and skills of
the hotel is the innovative style and service provided by the staff members who are well-trained.
Whereas, one of the biggest weakness of the quoted hotel is the structure cost and alternate
hotels available to the customers with the same price range. The staff of the quoted company are
well skilled and hotel is completely capable to fight with the market competition prevailing in
the industry.
Evaluate competitive forces by Porter's Five Forces model
The Porter's model influence the decision-making of the quoted hotel and is an integral
part of the strategic management. The five forces are as follows:
 Threat of new entrant: The highly rate of the hospitality industry in the UK has
dominated by the Hilton London Bankside, The Ampersand Hotel, The Premier Inn Hotel
and the quoted hotel. The degree of risk involved from the new entrant is very low due to
the large investment and to create a brand name.
 Threat of substitute: In the current scenario, the hotel industry is facing a strong threat
from the tough competitors. The reason for this is the change in the taste of the customer
as they require a hygiene room and the degree of risk is high in regard to this force.

 Bargaining power of customers: The degree of risk in regard to this force is high due to
the relatively various options available to the customer's (Baxter, 2019). The quoted hotel
has used promotional strategies to mitigate this threat.
 Intensity of competitive rivalry: The rivalry among the different luxury hotels give rise
to aggressive pricing and promotion battle to attract the customers. The degree of risk
involved due to the rivalry is very high because the switching cost to change the hotel
option is relatively easy and low.
 Bargaining power of suppliers: The degree of risk involved in this force is very weak.
The hotel industry require a lot of manpower to provide services to the consumer which
gave less opportunity to the staff members to bargain with the management.
M3 Devise appropriate strategies to improve competitive edge
The appropriate strategies to improve the competitive edge of the quoted hotel is by
focusing more on international travellers by providing them spacious accommodation facility.
The focus of the hotel should be utilizing the technology and embedding it in the level of
customer's experience by lowering the workload of the staff resulting in the revenue generation
and enhance the competitiveness of the organisation.
PART B
Porter generic strategies
Porter generic strategies are used for classify company's behaviour and drive company
behaviour in order to gain competitive advantage and also reminding generic strategies which
are useful for achieving market share growth. The four strategies are as follows:
 Cost leadership strategy- This strategy is used for focusing on reducing cost in order to
deliver products or services to customer for ensure about profit that can add shareholder
value or invest in different parts of business strategy. There are different factors which
are necessary for consider such as impact that can be driven by cost for customer and
employees of chosen company (Firoz Suleman, Rashidirad and Firoz Suleman, 2019).
Then, chosen company uses this strategy in order to focus on reinvest additional profit of
business and get the idea of producing the lowest cost delivery other than competitors. For
chosen company major competitors are Premier inn hotel. Also, this is help for maintaining the

position as the lowest cost which can not catch by competitors. Further, this strategy is long term
strategy and that is why organization focus on it to start or creep back into business in any ways.
 Differentiation strategy- In this strategy company focus on differentiating its product and
services from competitors. Also, this is focused on wide spectrum from full product
diversity to unique features within core product. In this strategy there are some major
factors which are identified for understanding the maturity of market and its service.
Then history of competitor innovation and suggested feedback.
The reason behind not using this strategy is there are large number of hotels are present in
UK and that is why competition is very strong in UK. To provide exact separate service is not
possible. Also, this is used for risk and make sure about how this strategy work for tomorrow.
Cost focus strategy- This strategy is focus on niche market either by industry or
geography that are help for delivering in hospitality industry (Greckhamer and Gur, 2021). Also,
cost refers to organization related to producing product and services for aggressive cost to them.
It is also related to opening up partnership with companies in same industry. The reason behind
not choosing this strategy is related to Montcalm London not focused on niched market in order
to improve their production.
 Differentiation focus strategy- This strategy is focused on evolution of
differentiation strategy by focus on cost leadership as well as other aspect that are
help for highlighting the fact of business which is entering a niche market.
This strategy is not chosen by company because it is depended on innovating additional services
in order to sell as auxiliary products. Also, this strategy can be used by company in future but
now not possible.
Ansoff matrix
Market penetration-
The strategy suggest improving the existing market share with existing resources to use
them efficiently through introduction of new policies, schemes and offers to gain the interest of
loyal customers and also suggest what improvement required to perform effectively and what
measures taken for the growth of the current market share (Dawes, 2018).
Market development-
The growth of business inclined towards the market and exploring the options to improve the
performance in current market to introducing better policies and measures to cover the market

share and explore the performance in alternative market and expanding it's growth in the
international market too.
Product development
The product development is addition of new feature to up gradation to improvement in
the performance of existing product to maintain and attract the new customers. The best example
of Microsoft which continually upgrade the existing product in existing market to maintain its
customer and perform better in the existing market (Khajezadeh and et.al., 2019).
DIVERSIFICATION
Montcalm followed when business decides to move into the completely different industry
in which product and market both are new. The company diversified its growth opportunities and
make a presence in the global market.
It is to be justified that market penetration strategy is best for company in order to focus
on growth The increment in market share also done by organization reach out directly to the
customers, improving sales point, and the more benefit of customer basket to maintain the
interest of loyal customers. The improvement in current market share not only improves the
growth of the Montcalm but also find out loopholes in current strategies and also suggests how to
use existing resources efficiently.
Range theories, models and concept for strategic planning
Resources based theory- This theory help for suggesting the resources that are available
for long term success of organization and this strategy help to developing firm capabilities which
can lead superior performance over time. On the other hand, resources based theory on the basis
of competitive advantage by accumulating and using resources in order to service consumer
interest (Baldridge and et.al., 2021).
Contingency theory- This is an organizational theory which claims on the basis of
organizing corporation in order to lead companies or makes decision accordingly. In this
company depends ion external and internal situations and how they impact on performance. For
example, during pandemic hospitality industry impacted badly because of external situation of
market.
Bowman’s Strategy Clock model

This is good idea for companies in order to collect information on their market position
for competitors also this model help for providing options that position within market in order to
perceived value.
Position 1: low price and low value added
This is related to strategy for quantity selling at low in value and price.
Position 2: Low price
This strategy is for becoming lowest cost option for customer in marketplace with low
margin (Kern and et.al., 2020).
Position 3: Hybrid
This strategy is help for identifying the price is competitive and low price perceived from
buyers while promoting added value with different services offer by organization.
Position 4:Differentiation
This strategy is related to focusing on services that are provided by competitors
Position 5: Focused differentiation
This strategy is not chosen by company because it is depended on innovating additional
services in order to sell as auxiliary products.
Baldridge, D., and et.al., 2021Kern, N.S., and et.al., 2020Position 6: Risky high margin
In this strategy customers are ready to pay more in order to consider the comapnsa s
known brand.
Position 7: Monopoly pricing
In hospitality sector monopoly pricing work better in order to set even price as other
company are keeping their eye on external factors.
Position 8: Loss on market share
This is suggested by worst positions of organization in existing market that is decline for
choosing strategy.
For identifying the position of Montcalm in Bowman's strategy is on the basis of SWOT
and PESTLE analysis that help for deciding strategic direction
Horizontal integration strategies model
 This model is used by company because it is offering same services as others in order to
focus on occupying same stage of value chain in hospitality industry.

 Also, in order to focus on such companies advantages that are related to their knowledge
to get more opportunities.
 For example, Premier Inn offered same services as Montcalm but the difference is there
are different brand value are considered by customer. Also, chosen company have
advantage of competitiveness (Zhu and et.al.,2019). In this situation chosen company can seek growth because it will lead on the basis of
great control as well as it help to control and power in competition and market.
Concept of strategic planning process
 By determining the strategic position in market for identifying right stakeholder.
 In order to prioritise objective company will offer different type of service which help to
increase customer acquisition.
 For developing plan it can be related to end of year 2022.
 Then executing the plan accordingly. Lastly, revising plan so that company can change strategy accordingly.
Corporate, business and tactical strategic priorities and objectives.
 To increase the customer satisfactions by 10%
 To increase profitability by 5% by end of years 2022. To increase uses of digital technologies for improving customer satisfaction level.
M4
In order to focus on tactical strategies it is necessary to focus on priorities which help to
addressing problem and achieving goals accordingly. Then vision of Montcalm is to provide high
quality of services and attaining customer satisfaction by 10% to customer so that it help to
improve brand images of company. By considering the tangible priorities it cans be related to
increasing number of hotel (Li and Zhang, 2021).
D1
There are different type of tactical strategy used by company such as from PESTLE and SWOT
analysing organization identify about the macro and micro environment which can impact
company. Then on the basis of porter generic model it has been a analysed that costs strategy is
used by organization in order to make better position in market.

CONCLUSION
The report has been concluded with the strategic plan by analysing the internal and
external analysis which helped in the strategic decision-making of the management. It was
evaluated the strengths and weaknesses with the McKinsey's 7s framework which provide that
they are using the autocratic style of leadership at Montcalm Royal London House Hotel. The
case study has been devised with the appropriate strategies to improve the competitive edge by
applying Porter's five force. The project was summarized by recommending the growth platform
by Ansoff's product and produced a strategic management plan.

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