Hospitality Business Strategy - Analysis and Recommendations

HOSPITALITY BUSINESS
STRATEGY

Table of Contents
INTRODUCTION...........................................................................................................................3
MAIN BODY...................................................................................................................................3
PART A...........................................................................................................................................3
1. SWOT ANALYSIS.................................................................................................................3
2. PESTEL ANALYSIS..............................................................................................................4
3. ANALYSIS OF HOSPITALITY MACRO ENVIRONMENT TO DETERMINE
STRATEGIC MANAGEMENT DECISIONS............................................................................5
4. MCKINSEY'S 7S FRAMEWORK.........................................................................................5
5. EVALUATION OF THE INTERNAL ENVIRONMENT TO ASSESS STRENGTH AND
WEAKNESS................................................................................................................................6
6. PORTER'S 5 FORCES............................................................................................................6
7. STRATEGIES TO IMPPROVE COMPETITIVE EDGE AND MARKET POSITION........7
PART B............................................................................................................................................7
STRATEGIC PLAN BASED ON ENVIRONMENTAL ANALYSIS AND FINDINGS.............7
1.PORTER'S GENERIC STRATEGY........................................................................................7
2. ANSOFF PRODUCT MATRIX..............................................................................................8
3. STRATEGIC PLANNING FOR SAVOY..............................................................................9
Balanced score card model (BSC)-....................................................................................9
Red ocean strategy...........................................................................................................10
4. STRATEGIC MANAGEMENT PLAN THAT HAS TANGIBLE AND TECTICAL
STRETAGIC PRIORITIES AND OBJECTIVES.....................................................................10
CONCLUSION..............................................................................................................................11
REFERENCES................................................................................................................................1

INTRODUCTION
The report of hospitality business industry will cover several vital aspects of business
analysis. For this purpose, the hospitality organization taken is Savoy hotel. Savoy is a UK based
luxury hotel started in 1889, serving more than 34 countries. In part one of the report important
aspect in making business strategy such as SWOT analysis, PESTLE analysis, McKinsey's 7s
model, Porter's 5 forces will be briefly discussed.
Further, the report will also include critically analysis of the hospitality macro
environment in order to determine strategic management decisions and the internal environment
to assess strengths and weaknesses of Savoy's internal capabilities, structure and skill set
(BURKE and et.al., 2020). At last appropriate strategies to improve competitive edge will also be
mentioned. In part two, Porter's generic strategies, ANSOFF matrix, a strategic management plan
that has tangible and tactical strategic priorities, explanation of the strategic process in the
organization.
MAIN BODY
PART A
1. SWOT ANALYSIS
SWOT stands for strengths, weakness, opportunities and threats. Each of these is
discussed below.
Strengths:
1. Years of experience which brings extreme
expertise.
2. Huge customer base, which generates large
revenues & incurs huge profits.
3. Strong brand image and strong asset
portfolio.
Weaknesses:
1. It does not cater to multiple segments.
2. High cost of maintenance due to luxurious
affairs.
3. Poor customization of services, as it incurs
high cost (Cheng and et.al., 2021).
Opportunities:
1. Business expansion across various
demographics.
2. Using customization of services to improve
quality of experience for each customer.
Threats:
1. Pandemic, as Covid-19 pauses a big threat to
Savoy.
2. High competition affects the target market to
switch to another hotel.

3. High tax rates for luxury services.
2. PESTEL ANALYSIS
This analysis aims to evaluate some important micro factors impacting Savoy hotel.
Political factors: One of the most influential political factors is high taxes levied on luxury
hotel by UK government, which results in increased cost of operations. Trade disputes between
countries also affect the business of savoy as it is working globally e.g. dispute with US affects
business in long term.
Economic factors: Pandemic and its implications which resulted in lock down and stopped
business of the hotel industry altogether. High inflation rate because of increase in fuel prices
lowers individual spending power resulting into low revenues. Increase in unemployment rate
due to pandemic affects people's engagement in leisure (Lakatos and Arsenopoulos, 2019).
Social factors: Consumers preferences are changing rapidly and it incurs huge cost to savoy to
stay updated about such changes. Further, customer's expectation and likings are inclined
towards customized services which increases cost and operations of the Savoy. Change in
lifestyle of millennials, expecting luxury with affordability is a concern in long term.
Technological factors: With the development of artificial intelligence and use of data analytics
to predict consumer patterns and behaviour, Savoy needs to understand the technological
developments which are benefiting to the business. Online booking platforms have increased
digital footfall of the customers increasing visibility of Savoy.
Environmental factors: Savoy has massive need of fuel, water, electricity etc. and there also is
a huge waste of resources like water, electricity, food etc. in providing luxury to the customers.
Hence, government and environmentalist put a lot of pressure on hotel to have sustainable
approach.
Legal approach: UK has the toughest food safety laws in the world, which requires hotels to
look after food quality provided. In UK hotels must abide by the gas safety regulation 1998 to
ensure the safety of the guest. And such regulations should be taken care of in order to have
smooth business operations (Kim, Roehl and Lee, 2020).