Hospitality Business Strategy - Analysis of Imperial Hotels' External and Internal Environment, Competitive Forces, and Strategic Directions

This report analyses the external and internal environment, competitive forces, and strategic directions of Imperial Hotels, a UK-based four-star hotel chain. It includes a PESTLE analysis, SWOT analysis, Porter's Five Forces model, and evaluation of strategic directions using Ansoff's Product/Market Growth Matrix.

Hospitality Business Strategy

TABLE OF CONTENT
INTRODUCTION...........................................................................................................................4
PART-A...........................................................................................................................................4
1- Analysing the impact and influence of the external factors of the Imperial Hotels................4
2-Critically Analysing the External Factors................................................................................5
3-Analysing the internal environment and capabilities of Imperial Hotels ..............................5
4- Analysing the competitive forces of Imperial Hotels..............................................................8
Part B...............................................................................................................................................9
Evaluation of the different types of strategic directions available to the Imperial Hotel............9
Most appropriate growth platform and strategies........................................................................9
Strategic Management Plan ......................................................................................................10
CONCLUSION..............................................................................................................................13
REFERENCES..............................................................................................................................14

INTRODUCTION
Business Strategy is the outline of all actions and plans performed by the organization to
achieve business goals and competitive advantage in the competitive market. It helps the
business by giving set of values and also helps in accomplishing goals of the organization. The
current report has chosen the organization Imperial Hotels to analyse its business strategies. The
Imperial hotel is a UK based four-star hotel that operates more than 25 hotels in UK. It offers
many services like boarding facilities, conference facilities, restaurants services and leisure
centres. This report about Imperial hotels is going to contain the macro and micro environment
of the organisation and includes range of models, concepts and strategies which are used by it to
achieve the customer satisfaction through delight and care and at last by meeting the customer
expectations.
PART-A
1- Analysing the impact and influence of the external factors of the Imperial Hotels
PESTLE MODEL
PESTLE model is the analysis of the business environment to find out the
political,economical, social, technological, legal and environmental factors. This model is used
by the industries to find out the factors that affects the growth of the industries.
 Political Factors: Imperial hotels operates in many countries so it is bound to follow
policies according to the countries they operate in(Khorasaniand Heidari, 2020). It has to
work according to the intervention of both local and national government as government
plays huge role in creating policies.
 Economic Factors: It includes the inflation rate, taxation rate, labour marketing
conditions which affects the operation of hospitality industry. In recent years,
government has started investing in developing infrastructure to improve the business
environment. Imperial hotels present infrastructure that helps to get growth in service
sector.
 Social Factors: This factor includes the preference, buying habits, lifestyle of the
consumer that helps in gaining the customer satisfaction. Customers are giving higher
preference to experimental services rather than the traditional services. Imperial hotels is

focussing on to provide the facilities and trends to gain the maximum customer
satisfaction.
 Technological factors: Technological advancements are disrupting the supply chain as it
provides access to information to not only supply chain but also the service sector.
Imperial hotels has to keep information regarding the development of technology and
enhancement of customer's experience with increasing speed. This can help in achieving
maximum satisfaction.
 Legal Factors: This factors include the intellectual property rights, patents, trademarks
and copyrights which need to be considered by the hospitality industry(Kabeyi, 2018.).
Imperial hotels position will be affected if these rights are not followed properly.
 Environmental Factors: This includes the factors like climate change, waste management
and pollution. Waste management for places close to the urban areas has been taken into
importance by Imperial hotels. Government has come up with the strict rules and
regulation to manage waste in urban areas.
2-Critically Analysing the External Factors
Macro environment refers to all the uncontrollable and external factors of a company that
affects the decision-making process of the company. These are known as legal, demographic,
political, social, natural or cultural forces. Imperial Hotels operates in many countries and every
country has different environments. Management can use this tool to make better decisions
which leads to better profit margins. If they are not followed properly, they may find themselves
receiving less customers which will directly affects their profitability.
3-Analysing the internal environment and capabilities of Imperial Hotels
SWOT ANALYSIS
SWOT Analysis is a method undertaken by the industry to find the internal strengths and
weakness and external opportunities and threats of the organization.
STRENGTHS:
 Geographic representation: Imperial hotels operates globally and has extensive network
that helps in delivering efficient services and helps in getting a competitive advantage in
the industry.

 Customer Satisfaction: Imperial hotels provides services to the customer according to
their needs and preference and provides them satisfaction. This can become a huge
strength for company as it will give better profit margins in long run.
WEAKNESSES:
 Increasing competition: Business model followed by Imperial hotel can easily be
assessed by the other industries. To overcome this weakness, it has to build a strong
brand image and need to maintain it in a long run.
 Increasing profit margins: Operating profits and gross margins which are going forward
and increasing are going to put pressure on imperial hotels Financial Statements.
OPPORTUNITIES: Collaboration with local industries: Collaborating with local industries can bring more
opportunities for Imperial hotels(Benzaghta and et.al, 2021.). The local industries will
bring the local expertise which will lead to a better profit margin.
THREATS:
 Competitors coming up with development: Imperial hotels is still leader in bringing
innovation in the hotels but competitors are also trying best to bring innovation which can
lead to stiff competition for Imperial hotels.
MCKINSEY’S 7S MODEL
The Mckinsey 7s model is a technique that helps the industry to enhance their business.
Imperial hotels use this model to find out the business performance and to make successful
changes. It helps the industry by ensuring that their performance level are maintained. These
elements are categorized as hard and soft element's and they are identifies as:
Hard Elements Soft Element
Strategy Skills
Structure Style
Systems Staff
Shared value
HARD ELEMENTS

 Strategy: Strategy is the outline of plans developed by the industry to gain competitive
advantage and to compete in market in a long run. Imperial Hotel need to focus on
strategy to create a shot run cost saving and to achieve a competitive advantage in the
market.
 Structure: Structure defines the way industry is divided into several levels and shows who
is accountable to whom. Imperial hotels follow a hierarchical structure by dividing
people in smaller teams, by taking decisions including team and by easy reporting to
headquarters.
 Systems: Systems are the procedures followed by the company which represents daily
activities performed by industry. Imperial hotels need to focus on the Customer
relationship management and web app optimization(Faturrohman and et.al, 2018). It also
needs to put a “work from home” system for greater interaction between employees
which helps in increasing productivity.
SOFT ELEMENTS
 Skills: Skills are the capabilities of the employees which helps them to perform well.
Imperial hotels hire employees on the basis of their skills. They also provide training for
people working from rural areas.
 Staff: It is concerned with the type of people and number of employees an industry need.
Imperial hotels is focusing on recruiting and training employees(Razmi, Mehrvar and
Hassani, 2020). They recently launched the remote onboarding system by providing
small videos and group interactions. This helps in building a transparent and open
culture.
 Style: Style determines the way company is managed by upper level managers. Imperial
Hotels follow collaborative form of leadership by dividing teams in smaller segments as a
part of larger teams.
 Shared Values: Shared values are the rules and regulations that guide company behaviour
and actions. Imperial Hotels follows the rules and regulation to maintain standards and to
bring more transparency in work.
3-Critically analyse the internal environment
SWOT Analysis is a technique used to analyse the Strengths and weakness that Imperial
hotel controls and opportunities and threats which affects the competitive advantage of the

industry. It helps the industry to manage competition, provides new opportunities and increases
the return on resources. Imperial hotels find capabilities by analysing the soft and hard elements
present in the organization. The soft elements are related to the people of the organization,
Whereas the hard elements are related to the organization structure.
4- Analysing the competitive forces of Imperial Hotels
PORTER'S FIVE FORCES MODEL
Porter's five forces model helps in identifying the forces that shapes the industry and
determines the internal factors of industry. This model is applied by industries to find out the
level of competition in the market. These forces are identified as:
 Bargaining Power of Suppliers: If suppliers have strong bargaining power than they will
charge higher prices from industries. In this case, Imperial Hotels profit margins will be
low. If there are more suppliers in the market then industry can analyse and can earn
higher profit margins.
 Bargaining Power of Customers: If customers have strong bargaining power then they
drop down the prices which will affect the profitability of the Imperial hotels.
 Competitive Rivalry: Imperial hotels are facing competition as there are other industries
providing same services like Cloudfare, Southernhay House Ltd(Yuan and et.al, 2020).
If Competition is more than it will become difficult fore industry to earn more profit.
 Threat of Substitute Product: Imperial hotels are facing the threat of substitute products
as there are many hotels at same place and with different price range. Internet has also
increased the threat of substitute products by offering websites to compare hotels.
 Threat of New Entries: Threats of new entries is a not a strong force for Imperial Hotels
as new entries need a huge capital requirement and brand value to compete with Imperial
hotels.
5-Critically Analysing the competitive forces
Mangers can use Porter's Five Forces model to find the competition faced by the Imperial
Hotels in the market. This forces helps in analysing the nature & level of competition faces by
the industries and provides solutions to cope up with competition. These Forces helps in
determining the profitability of the business.

Part B
Evaluation of the different types of strategic directions available to the Imperial Hotel
Porter's Generic Strategy
Cost Leadership strategy- This strategy involved for increasing shares in market by
appealing to visitors which are sensitive to pricing (Ali and Anwar, 2021). This strategy deals
with cost of rooms by which visitors attracts with the hotel in greater amount. Imperial Hotel
had six branches in the central region of London which has low prices thereby visitors want to
prefer to stay in that hotel. Imperial hotel should work on the strategy by which visitors are more
attracted towards them and that also creates positive impact on the profile of Hotel which results
in high profitability.
Differentiation strategy- Differentiation strategy are helpful in the hotel industry because
this strategy mainly focuses on innovation in the interior of hotel by which client attracts from
first time to journey of clients. By serving better quality services and communication skills of
management helps in collecting the information of client about their social media sites, telephone
and emails so that hotel connects with clients for a long time it also makes and advantage to
hotel for next visit of client this creates a positive impact on the company profile which results in
the higher amount of profitability and increase in number of clients.
Focus Strategy- Focus strategy is based on particular target market rather than whole
market coverage by giving services according to clients approach as the company works on the
segment which basically in demand by most of the clients. This strategy further divide in two
category:
 focused low-cost strategy- In this strategy, mainly work on the pricing of
rooms and services with innovation. For hotel industry it is quite difficult to work
on the basis of this strategy because this includes uniqueness and that is quite
tough for hotels to maintain that criteria (Vargas-Hernández, Orozco Quijano and
Benítez, 2020.).
 Focused Differentiation strategy- This strategy involve in particular segment
which also deals with uniqueness of services in Hotels. This creates a positive
impact on the Imperial Hotel profile by giving a unique services to clients.
Most appropriate growth platform and strategies
Ansoff’s Product/Market Growth Matrix.

Market Penetration- Market Penetration means works or focus on existing products/services
with existing market to gain higher amount of profit (Novikov, 2018.). Imperial Hotels have
good hold with their existing customers by various channels which helps in achieving higher
position in the market place. Imperial hotels also offer discounts to their customers at particular
time which helps in customers engagement with the firm.
Market Development- This strategy mainly takes place for launching of existing product in new
market (Ushakov and et.al., 2022). For Hotels this method basically means that the opening of
new branch at different location which was may be present in the same locality, region or
country and it may establish in the different country with the same services and products.
Product Development- Product Development involve for new product/ service promotion in the
existing marketing. New products/ services establishment in existing markets leads according to
customers demand and their need and that also help in improving customer stay rate (Hanif and
Fafurida, 2018). Extra efforts makes in these sectors may helps in the engagement of client
which results in high rate of profitability and that also increase market value of business.
Diversification- This includes launching of new product/ services in the new market. The hotel
industry already have much extent where it is to be diversified. They have their own services in
terms of cook food, laundry etc. Imperial hotel have all this accommodation and Ambience in all
branches. This creates a very positive effect on the Imperial hotel in order to gain profit and
achieve higher position in market place.
Strategic Management Plan
Overview(70)
Imperial Hotel is located at east side of Russell Square, one o the branch of Imperial
Hotel. Old building was build by Charles Fitzroy but in the old building there are many
problems arises related to services, bathroom facilities etc. which leads in hotel's demolishing.
After demolishing of existing one new building established with same name. Hotels ensure
strategy which are suitable and creates a effective impact on the profile of business.
Organisation structure(70)
Imperial hotel have managing director at higher position which manage all other
department it includes food and beverages, sales and marketing, rooms, accounting and personal
each department has manager which look on every aspect of their department. Imperial Hotel

have thousands of employee in sic branches. All employee has proper knowledge about hotel
industry. Proper managing team creates a positive impact on the growth of business.
Vision30
Imperial Hotel focus on premium service quality and hold the highest position among
other competitors, partners etc. Hotels are also work on the environmental friendly technologies
in order to maintain between nature and humans.
Mission30
Imperial Hotel mission is to provide high hospitality services to the guest according to
their need and satisfy them with better serve (Dirisu and et.al., 2018). For gaining the highest
position this should be followed by the company.
SMART Objectives30
 To be a benchmark in the industry in the nest 5 years.
 To consistently increase the profits of the firm by 6.5% each year. To be considered as most desirable hotel in the end of 2025.
Marketing mix200
Product / Services- Imperial Hotel have many categories on which rooms and services are
provided to the client (Ekawati and Yasa, 2018. ). They serve best in every field to satisfy the
need of clients.
Price/ Rooms rate- Accurate price for different class of room play a very important role in the
hotel industry because many clients didn't want to use extra services of hotel so some packages
provided by the hotel for attracting the guests.
Place- It plays a major part in achieving higher position in the market place, Imperial Hotel
located at the centre region where tourism rate is high so it is beneficiary for this hotel.
Promotions and communication– For achieving higher postposition in the marketplace there
should be proper marketing, sells management and communicating skills to the target audience
by which profitability increase.
Process- Imperial Hotel Have many technologies and workers in managing all sectors and for
successful growth of hotel services is properly provided for the clients
People- Workers plays crucial role in creating positive profile of the Hotel because customers
are directly in touch with them .

Physical Evidence- Imperial Hotel have its six branches in UK, and they also have channels i.e.
social media, online website etc.
Strategy formulation (VIRO)200
Particulars Valuable Rare Imitable Organization Competitive
advantage
Market
reputation
Yes Yes Yes, It has
special cheif
in their
kitchen with
best serving.
Yes Yes, it has
affordable
pricing and
placed at
favourable
region of UK
Customer
satisfaction
rate
Yes Yes Yes Yes It has hogh
rate of
engagement
with
customers
Marketing
strategy
Yes Yes,
depending on
the strategic
plan
Yes,
innovation in
their product
or food
Yes Competitive
advantage is
high
The above VIRO analysis of Imperial hotel creates a positive effect on the profile. The
management and growth enhance performance of the firm. This analysis shows that imperial
hotel have a good market reputation with affordable pricing that reflects in the demand by the
clients. Marketing strategy of that firm is effectively work in the organisation
Implementation80
For achieving higher positioning in the market place, it is more important to implement
proper strategies on which Imperial Hotel run their business with positive attribute that results in
positive outcome in performance of hotel (Vargas-Hernández and Benítez, 2019). Imperial hotel
have many departments any every department work on particular aspects for giving best to the
hotel. In each department it is necessary to work according to roles, responsibility and goals.

Execute plan and monitoring each segment of work profile and meeting should be provided by
firm for proper management.
Evaluation 80
For evaluation of proper management, a bench mark is set by the hotel to evaluate the
performance of the hotel in the end of financial year. There are two major possibilities arises one
is that annual gross profit exceed the decided bench mark that means strategic management didn't
effectively make by the management and if hotel are under performing according to bench marks
means management didn't work according to strategic management.
CONCLUSION
From the above discussion this report concluded that business strategies play a very
important role in achieving higher goals this competitive market. Imperial Hotel has maintained
strategic plan for successful growth of business. Imperial Hotel have six branches in UK. Part 1
of this report contains impact and influence of the macro environment and applying proper
strategies for appropriate frame work using SWOT and PESTLE analysis. It also discussed
Misckey's 7s and apply Porter's Five Forces for competitive analysis which helps in featuring of
the organisation. Part 2 Later this report had discussed strategy using Porter's Generic Model
and also recommend appropriate growth platform by using Ansoff's market growth Matrix than
this report had discussed strategic plan management on the basis of different aspects for growth
and survival.

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