Hospitality Business Strategy: SWOT, PESTLE, VRIO and Porter's Five Forces Analysis of Four Seasons Hotel

This paper analyzes the hospitality business strategy of Four Seasons Hotel through various frameworks such as SWOT, PESTLE, VRIO and Porter's Five Forces analysis. It examines the impact of macro and internal environment on the hotel's competitiveness and develops a strategic management plan for future growth.

Hospitality Business
Strategy

Contents
INTRODUCTION...........................................................................................................................................3
PART A.........................................................................................................................................................3
SWOT analysis and its impact on Four Seasons Hotel.............................................................................3
PESTLE analysis and its impact.................................................................................................................4
M1 Critical analysis of macro environment.............................................................................................6
Analysis of internal environment of Four Season Hotel by using VRIO framework.................................6
M2 Critical analysis of internal environment...........................................................................................7
Applying porter's five forces model to evaluate competitive forces.......................................................8
PART B.........................................................................................................................................................9
Apply range of models and concepts, interpret and develop strategic planning.....................................9
Strategic management plan...................................................................................................................10
CONCLUSION.............................................................................................................................................11
REFERENCES..............................................................................................................................................13

INTRODUCTION
Hospitality is described as a connection between a host and a visitor in which the host
expresses kindness and entertains the guests (Ansoff and Et. Al., 2018). The master plan created
with enterprises that provide lodging, transports, and other services to visitors in the hopes of
ensuring a market advantage and accomplishing ultimate objectives is known as the tourism
corporate strategy. It entails a variety of acts and manoeuvres that enable a company to reach
customers, enhance quality, generate money, and maximize shareholder value. InterContinental
London - The O2 is chosen to learn about tourism company strategy. It is part of the
InterContinental Hotel Group's franchise group. The hotel shines out on London's Greenwich
Peninsula. The paper focuses on the use of a suitable basis for assessing the effects of the macro
environment on corporate objectives. It also uses proper concepts to examine the internal climate
and competencies. Porter's Five Forces approach is often used to analyses competitive force
analysis. Finally, some models and ideas are used to aid in the comprehension and development
of a growth strategy for the firm's future aims.
PART A
SWOT analysis and its impact on Four Seasons Hotel
SWOT analysis refers to the concepts that are used to identify an organization's strengths,
weakness, opportunities, and threats. The following is a SWOT analysis of InterContinental
London - The O2's internal factors:
Strengths Weaknesses
 InterContinental London - The O2 is a
lively position that serves to draw huge
crowds and deliver on their
expectations.
 The hotel's greatest strength is its
personnel, who are seasoned, efficient,
knowledgeable, and also have the
confidence to try new things.
 Exorbitant rates for special packages
and other provided services, which are
out of reach for the privileged.
 Another issue of InterContinental
London - The O2 is its low visibility
and limited modern equipment.
Opportunities Threats

 InterContinental London - The O2 has
the chance to address the needs of the
middle and higher middle and working
classes by providing coupons or other
services that will increase its existing
customers.
 Investing in new and improved
technologies allows the company to
grow its market into other areas.
 One of the threats to the firm's ability to
start activities is COVID - 19's
limitations on operating hotels.
 Rising gasoline prices are a result of
increased desire for lower-cost hotel
rooms, which the firm is unable to
meet.
 The InterContinental London - The O2
operates in a highly competitive from
both domestically and abroad hotels..
PESTLE analysis and its impact
The PESTLE Analysis methodology is useful since it aids in strategic company's
environmental analysis features. The following elements have an influence on InterContinental
London - The O2's effectiveness, profitability, and techniques:
Political: The political system of the United Kingdom is typically robust and stable, which
provides several chances for different organizations inside its borders. It is indeed determined
that the country offers a significant number of prospects for development in other countries,
which has a beneficial influence on InterContinental London - The O2's plans for completing
activities without difficulty. Unfortunately, government limitations on transport and travelling in
the UK have had a massive effect on COVID - 19 advice policies, forcing the firm to
immediately cease operations until more notice.
Economically, the United Kingdom's economic growth places it as the world's fifth biggest
country. Several economic elements that have a beneficial influence on InterContinental London
- The O2 include the population increase and household consumption in the tourism sector. For
instance, the UK government established standards pay for workers of various ages, allowing
businesses to hire individuals for short periods of time and get work done. Wage rates for
persons aged 25 and over are £8.21 per hour, £7.70 per hour for those aged 21 to 24, and £6.15

per hour for those aged 18 to 20. Whenever the management of the InterContinental London -
The O2 hire part-time employees, it has a good influence on their plans since they are able to
complete a large portion of the work needed to fulfill consumer demand and achieve greater
outcomes.
Social: Travelers in the United Kingdom are a little more demanding since they have a wide
range of interests, views, and spending options when it comes to movies and vacation. They also
invest a significant amount of money on customized packages provided by the hotel industry.
Executives of the InterContinental London - The O2 devise strategies are expected to
communicate with their target market and fully comprehend their individual preferences, which
has a beneficial effect because it allows the organisation to make minor adjustments to its
techniques, allowing it to satisfy the requirements of all consumer groups and improve its stance
in the hospitality business.
Technological: The technological factor in the United Kingdom has changed dramatically in
recent years. Information systems including such chats, wearable technology, robotics, change
accordingly, and machine intelligence are accessible for use in the tourism sector in the United
Kingdom. Management teams at the InterContinental London - The O2, for instance, have
accepted technology such as the Internet of Items, intelligent systems, and social media
platforms to broaden institutional interconnection with huge potential audience, which has
positive consequences in terms of customer acquisition and improving service quality.
Legal: In the United Kingdom, the government implements legislative framework and
regulations to ensure the very well and security of workers, consumers, and businesses. A few
pieces of laws, such as the Consumer Protection Act, the Equality Act, the Data Protection Act,
the Antitrust Law, and others, are critical for all businesses in the hotel industry to follow. In the
case of the InterContinental London - The O2, all laws are strictly followed and implemented by
the management, which has a beneficial effect on the hotel's techniques for protection of
intellectual property rights, facilitating equality and diversity, and safeguarding employees from
discrimination and other dangers while being on the premises.
Environmental: The United Kingdom has distinct environmental requirements, which have an
influence on company profitability. For example, the InterContinental London - The O2 invests

in lowering carbon output and boosting biodiversity in the United Kingdom. However, gasoline
prices are a crucial environmental element that has a detrimental influence on organizational
tactics. Since declining oil prices result in lower travel expenses as well as increased demand for
hotel rooms. At the same time, rising temperatures caused by global warming have a negative
influence since they render beach resorts too hot for pleasure and compel businesses to shutter
for short time periods.
M1 Critical analysis of macro environment.
The macro environment is used to analyse macro elements that impact both the inner and
exterior environment. SWOT analysis was used to examine the internal environment. The Hotel
has specific sorts of advantages and disadvantages, as well as opportunities and dangers that
affect the entire operation of the organisation. The PESTEL study is also used in the framework
of the hospitality industry to determine how the political, legal, social, environmental, technical,
and economic environment affects the operational productivity. All of these considerations make
acquiring a competitive edge difficult.
Analysis of internal environment of Four Season Hotel by using VRIO framework
VRIO Analysis defines the appropriate framework for evaluating a firm's assets,
competencies, and transferable skills that aids in competitiveness. Management at the
InterContinental London - The O2 may use the methodology to evaluate and analyze existing
funds, technical skills, and competencies. The following is the VRIO Analysis for
InterContinental London - The O2:
Resources and
capabilities
Valuable Rare Imitable Organised
Management of offerings ✓ X x x
Operational practices ✓ ✓ x x
Human resource ✓ ✓ ✓ ✓
The term "useful" refers to core competences that may be used to both maximize profits and
mitigate risks. Human resources, administrative techniques, and administration of products are

key resources for InterContinental London - The O2, giving it a competitive edge over its
competitors. InterContinental London- O2's hr department, for instance, are significant since
they give administrators with fresh concepts for evaluating and exploiting existing chances in
order to achieve favourable competitive outcomes. Administration of services is significant
because it allows managers to provide numerous services and goods to clients, such as
accommodations, transportation methods, processing method, and etc, in the most respectable
and inventive manner possible, hence reducing the likelihood of default to satisfy customers'
requirements.
Rare: Organizational knowledge and capabilities were those who were completely distinct from
current or future competitors. Face-to-face time, understanding clients, going over and above
expectations, generating WOW factors, and other management procedures of InterContinental
London - The O2 are uncommon because the hotel conducts its processes while contemplating
the requirements of clients, which other hospitality businesses do not.
Imitable: Resources and capabilities that are impossible to match by other organizations but
some other firms are not able to duplicate are described as imitable. InterContinental London -
The O2 possesses people resources with a wide range of issue, communications, collaboration,
cooperation, timekeeping, technical competence, and innovative skills that are difficult for
competitors to match, giving the property a strategic advantage.
Organized: Organized capabilities are defined as resources and competencies that are correctly
organized to accomplish the job and aid in the use of other assets. Human resources, or workers,
at the InterContinental London - The O2, are organized through management via appropriate
training and development programmers that improve their technical skills to execute functioning
in order to maintain comparative advantages.
M2 Critical analysis of internal environment.
The VRIO framework is used to manage the hotel's internal environment. The corporation
employs a variety of resources that are unusual in environment, important to the enterprise, can
be easy or difficult to copy, and aid the business in working successfully and gaining a strategic
advantage. The firm has resources that may propel the corporation to new heights while also

assisting competition in expanding their sales. It is critical for a corporation to have a variety of
resources.
Applying porter's five forces model to evaluate competitive forces
Porter's five force system is predicated on Michal E. Porter's competitive analysis, which he
developed in 1980. The application's primary aim is to evaluate industrial base and company
strategy in order to influence the industry. InterContinental London - The O2 is a corporation
that operates in the tourism sector in the Uk. The concept is used by the managers of
InterContinental London - The O2 to study and assess critical rivalry in the tourism location in
the United Kingdom. The following are the model's dynamics in relation to the tourism
organisation:
Industrial competitiveness: The hospitality industry is a broad market in which a significant
number of businesses compete to serve visitors from various countries. Competitors are very
competitive since all businesses strive to expand their consumer base and strengthen their market
resilience. Such organizations have effective marketing campaigns and distinct goods that set
them apart from the competition and raise client attention. This poses a significant threat of
competing to InterContinental London - The O2, as some of the industry's leading competitors
have indeed established their locations. Hotel Babylon, Las Palmas Hotel, Bishop's Gate Hotel,
and many others compete with InterContinental London - The O2 in the market area.
Threats from new entrants: The hospitality industry has grown dramatically, making it easier for
businesses to enter the UK market. New tourism entities, on the other hand, must make large
investments, design innovative advertising methods, and handle problems in order to begin
company and develop strong advantages. At about the same moment, new competitors in the
hospitality business are bringing innovation and clamping down on established companies like
InterContinental London - The O2, culminating in a heightened danger of new competitors. To
deal with this issue, appropriate measures and obstacles must be implemented in the hopes of
preserving comparative edge.
Threat of substitution: In the hotel sector, when a new item fits comparable client wants in
diverse manners, it creates a significant threat of new entry. The hospitality industry is the
biggest business sector in the UK that is not challenged by substitute goods, resulting in low

replacement risks for InterContinental London - The O2 and assisting in attempting to make
definite price fluctuations based on consumer accessibility and trying to serve optimum
performance and principles.
Buyers' bargaining power: Purchasers of goods in a sector are stronger since they have extensive
knowledge of other firms' offerings and the ability to push businesses to drive down the prices
and diminish manufacturing profitability. Consumers play a key part in the InterContinental
London - The O2 since the major goal of the firm is to fulfil buyer wants and improve customer
requirements. To do this, management must lower the cost of their products, giving purchasers in
the market sector strong negotiating power.
Supplier bargaining power: In the hotel business, vendors have the ability to raise the firm's costs
of production. Simultaneously, the part of the market has major suppliers who give essential
products, knowledge, and other goods to the firm at affordable costs and rising qualitative
standards. In the case of InterContinental London - The O2, it does business with huge providers
who have little negotiation power since when one provider considers or raises inventory cost, the
firm changes to other accessible ones.
PART B
Apply range of models and concepts, interpret and develop strategic planning
It is vital for an organisation to choose successful strategic directions that will help it establish a
dominant place in the market segment and boost profitability margins. To accomplish this,
management at InterContinental London - The O2 must employ specific models or concepts
while deciding on a suitable plan. The company's executives have chosen to increase market
share into additional locations. It is critical to use theories and models to discover appropriate
strategies. As used and understood, the models and theories:
It is Michael Porter's approach, which comprises three ways that companies may utilise to
develop their market in unexplored countries. The following are three approaches:
Cost leadership is a strategy whereby an organization engages in supplying items and services at
a minimal price and opens up options for all consumers to obtain goods at the lowest feasible
cost. At the moment, the firm is not employing the plan. When InterContinental London - The

O2 managers pursue a cost-cutting approach, they will have to decrease prices while also stymie
initiatives to grow customer base.
Differentiation leadership is defined as a technique that assists a company in developing items
that are distinct and more appealing than competitors' offerings. If the approach is implemented
at InterContinental London - The O2, management must provide products that are completely
distinct from those provided by other organisations.
Focus strategy is described as a strategy that focuses on a certain niche market by learning about
price movements, distinctive requirements of the targeted population, and assisting in the
development of well-specified and distinctively reduced products. When InterContinental
London - The O2 has a focus approach, management will be available to offer and equipment for
consumers that are both relatively inexpensive and properly defined.
Managers of InterContinental London - The O2 might use the suggested tactics to implement a
focus plan whilst growing the market into unexplored areas. With just this approach, the firm
will provide low-cost tourist bundles and products, allowing it to serve the marketplace in a
unique way. Furthermore, they may foster loyal customer base while enhancing the overall.
Strategic management plan
The following is the long term planning for InterContinental London - The O2 in order to grow
the industry into new regions:
Strategic planning for InterContinental London - The O2
Particulars Description
Vision The vision of InterContinental London - The O2 is to create an
efficient system in the UK hotel industry.
Mission The mission of InterContinental London - The O2 is to perform
hospitality activities responsibly in addition to provide unique
moments for residents and visitors.
Strategic objective The following are the goals of InterContinental London - The

O2:
 Objectives Increase client revenues approximately 15%
by the end of 2023.
 Increase customer list by 18% till the beginning of
2023.
Tactical priority Management at InterContinental London - The O2 are focusing
on growing the existing industry into Bristol and Yorkshire in
the UK by focusing on their outstanding support and customer
needs.
Strategy To accomplish the goal. Management at the InterContinental
London - The O2 would use a focus strategy in conjunction
with a differentiation strategy to provide high-quality
excellence in service benefits at cheap pricing. Furthermore.
The corporation will also make major attempts to ensure the
branding more trustworthy in the new markets.
Implementation and
evaluation
To find greatness in developing markets in other locations of
the country, InterContinental London - The O2 will adopt
differentiation and focus initiatives. In addition, all actions and
practices will be examined utilizing benchmark and KPI
measurements to obtain effective findings concerning expected
capabilities and current working process.
CONCLUSION
According to the survey, hospitality business strategy is critical for organisations in the hotel
industry. A company plan is described as a planning system that supports in carrying out
measures to achieve sustainability, such as interdisciplinary perspectives, gathering inputs, and
boosting revenues. The macro environment consists of six aspects that have a significant impact

on the organisation, and PESTLE analysis assists in properly looking at the consequences.
Hospitality Company uses SWOT Analysis, VRIO Analysis, and Resource Based View to
analyse and evaluate its inner economic environment. Strategy planning is crucial for businesses
since it aids in the development of strategies to attain goals.

REFERENCES
Books and Journal
Anning-Dorson, T. and Nyamekye, M.B., 2020. Be flexible: turning innovativeness into
competitive advantage in hospitality firms. International Journal of Contemporary
Hospitality Management.
Cabral, C. and Jabbour, C.J.C., 2020. Understanding the human side of green hospitality
management. International Journal of Hospitality Management, 88, p.102389.
Cerchione, R. and Bansal, H., 2020. Measuring the impact of sustainability policy and practices
in tourism and hospitality industry. Business Strategy and the Environment, 29(3),
pp.1109-1126.
Cherapanukorn, V., 2019, November. Antecedents of eCRM success in the hospitality industry.
In 2019 22nd International Symposium on Wireless Personal Multimedia
Communications (WPMC) (pp. 1-6). IEEE.
Bratton, J. and Watson, S., 2018. Talent management, emotional labour and the role of line
managers in the Scottish hospitality industry: A roundtable discussion. Worldwide
Hospitality and Tourism Themes.
Menicucci, E., 2018. The influence of firm characteristics on profitability: Evidence from Italian
hospitality industry. International Journal of Contemporary Hospitality Management.
D’Annunzio-Green, N., 2018. Cornerstones of talent management as a strategic priority in the
hospitality. Worldwide Hospitality and Tourism Themes.
Kiefhaber, E., Pavlovich, K. and Spraul, K., 2020. Sustainability-Related Identities and the
Institutional Environment: The Case of New Zealand Owner–Managers of Small-and
Medium-Sized Hospitality Businesses. Journal of Business Ethics, 163(1), pp.37-51.
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.
Reilly, P., 2018. Building customer centricity in the hospitality sector: the role of talent
management. Worldwide Hospitality and Tourism Themes.
Demir, E., Díez-Esteban, J.M. and García-Gómez, C.D., 2019. The impact of geopolitical risks
on cash holdings of hospitality companies: Evidence from emerging countries. Journal
of Hospitality and Tourism Management, 39, pp.166-174.