Analysis of External and Internal Environment of Bvlgari Hotel London

This report analyzes the influence of external environment on Bvlgari Hotel London and evaluates its internal capabilities using different frameworks. It also applies Porter's five forces model to assess the competitive environment of the company.

Hospitality Business
Strategy

Contents
INTRODUCTION...........................................................................................................................3
TASK 1............................................................................................................................................3
P1 Analysis of the influence and impact of external environment on the organization and its
strategies.......................................................................................................................................3
TASK 2............................................................................................................................................6
P2 Analysing internal capabilities and environment of the company using different framework
......................................................................................................................................................6
TASK 3............................................................................................................................................9
P3 Application of Porter’s five forces to evaluate the competitive environment of company....9
TASK 4..........................................................................................................................................10
P4 Application of concepts, models and theories to devise the strategic planning for the
company.....................................................................................................................................10
CONCLUSION..............................................................................................................................12
REFERENCES..............................................................................................................................13

INTRODUCTION
Business strategy is categorised as such action plan which are used within businesses so
that long term business survival can be made. These are the manner in which various aspects of
the business are required to be managed and with the help of business strategies these can be
handled in most significant manner. Business strategy is considered as an integral part of the
business which assists them in growing and attaining such business measures that leads them to
gain sustainability (Ruel and Njoku, 2020). In the current time of customer driven market
hospitality industry is one of those significant industries which have so many numbers of
competitors and these are providing similar services as well. So for hospitality industry this is
imperative that they make such robust business strategies which are helpful for the business in
providing positive contribution which leads them to attain competitive edge. The current report is
based on Bvlgari Hotel London which is regarded as one of the prominent hotel within London
area. The hotel is associated with rendering luxurious services such as Ballroom, staying
facilities and many more. The report is providing various tools which are beneficial for hotels to
analyse their internal strength and utilise the same to gain competitive edge and distinct market
position.
TASK 1
P1 Analysis of the influence and impact of external environment on the organization and its
strategies.
The macro environment can be categorised as the factors which are existed within
economy. For a company in the process of decision making macro environment is having higher
influence so that higher business decision can be taken. For analysing the impact of macro
environment different tools and theories can be used by Bvlgari Hotel London which is
elaborated as under:
PESTLE Analysis

PESTLE analysis is defined as the tool which is used in order to examine external
environment factors that may have higher impact over business operations. In the context of
Bvlgari Hotel London PESTLE analysis is elaborated as under:
 Political: These are defined as the factors which are related with political stability of the
country in which business is being operated (Melissen and Sauer, 2018). In the context of
Bvlgari Hotel London as the company is managing their business in London that means
political aspects existed within London may have higher impact over Bvlgari Hotel
London. On the other hand during pandemic COVID negative implications has been seen
over Bvlgari Hotel London.
 Economic: These are the factors which are linked with inflation rate of a country,
employment rate, interest rate and many more. For Bvlgari Hotel London as they are
providing luxurious services in which wealthy people are being targeted. In current time
as banks are offering several borrowings which are of minimal interest rate and in this
manner Bvlgari Hotel London may have higher implications which are positive for its
profits and customer satisfaction.
 Social: These are the factors which are linked with customer preference, socio cultural
aspect and purchasing power of customers. In the context of Bvlgari Hotel London
undertaking needs and preferences of their customers in higher manner as these aspects
are dynamic and provide positive change as well in the business. Environmental: These are the factors which are linked with such reasons due to which
environment may have impact. In this manner for Bvlgari Hotel London they are using
eco-friendly practices so that to serve customer in such a manner that environment harm
can be prevented. This is the best manner in which Bvlgari Hotel London can enhance
their service quality and customer attention as well.
 Legal: These factors are linked with associating such legislation within business so that
any hardships can be avoided. For Bvlgari Hotel London as they are a service provider so
they are required to comply with certain laws and regulations so that any type of legal
consequences can be avoided.
 Technological: These factors are linked with using such features in the business which
are technologically advanced and regarded as a latest trend as well. These are helpful for
giving appropriate level of satisfaction to customer so that customer loyalty can also be

received. In the context of Bvlgari Hotel London they are using differential emerging
technology in their check in and check out system so that to make experience of their
guest remarkable one.
Ansoff matrix
Ansoff is defined as the model of business expansion in which different strategies are
being added that can be used by businesses in order to develop their business and expand the
same to various territories. For Bvlgari Hotel London this model is explained as under:
 Product development: This is the strategy which is related with introduction of new
offerings within existing market with the major purpose of enhancing market capture and
acquiring higher customers as well (Backman, Klaesson and Öner, 2017). In the context
of Bvlgari Hotel London this strategy could be helpful in intensifying range of their
customers so that overall experience can be enhanced.
 Market penetration: This strategy is used to enhance overall sales within existing market
by targeting higher range of customers. For Bvlgari Hotel London this strategy can
increase overall sales and customer footfall within existing market so that they will be
able to acquire higher market share.
 Diversification: This strategy is regarded as the most risky as under this a differentiated
lined product or service will be launched by the organisation in a new market. For
Bvlgari Hotel London this strategy may help them to acquire perceptive customers which
may lead the hotel to function in better way.
 Market development: Under this strategy a new market in being explored with the help of
existing products so that numerous edge can be received within customer segment. For
Bvlgari Hotel London this strategy could be helpful in developing their market image in
global market periphery so that chance to enhance customer base can also be given.
Stakeholder analysis
Organisation is made up of different people and their efforts so that overall business
functions can be managed in most impactful manner. There are numerous stakeholders that are
having role in Bvlgari Hotel London with different perspective. These are elaborated as under:

 High power high interest: This is related with the stakeholders that are having
appropriate access over data and information existed within the organisation (Lashley,
2016). Top level management is added within this category as in Bvlgari Hotel London
they are having higher interest within execution of organisational functions. The
functions of top level management are directly linked with providing customer
satisfaction in most prominent manner.
 High power less interest: This is linked with such stakeholders those are keeping lesser
interest within business but at the same time they have high power within business. In the
context of Bvlgari Hotel London employees are having low interest in the business but at
the same time they are having higher power which leads to develop proper business
functioning.
 Low power low interest: These are the stakeholders those are not required to be informed
regarding any business obligation as they have low interest. For Bvlgari Hotel London
their suppliers are added under this aspect as they have low power and they are not
required to be informed for any business obligation or functions.
 Low power high interest: These stakeholders are having low power but they have high
interest so they are required to know every tiny decision and business functioning in prior
manner. For Bvlgari Hotel London their customers are taken in this category as customer
need to know about business functions so that they can take buying decision based on
several aspects whereas they do not hold any power to manage the business as well.
TASK 2
P2 Analysing internal capabilities and environment of the company using different framework
For every organisation examination of internal competencies are defined as one of the major
factor by which efforts can be used to attain overall business objectives (Alvarez-Risco and et.
al., 2020). Besides this strategic capabilities are defined as such factors which are helpful in
developing business functions in such a manner that business capabilities can be used to its
maximum. For Bvlgari Hotel London these are elaborated as under:
Resource based view

These are defined as such managerial framework which is helpful in using business
resources in optimal manner. These are the aspects which helping gaining significant competitive
edge within marketplace using tangible and intangible resources of the organisation. This is the
framework which is helpful in gaining protection against rivals so that competitive edge can be
received.
VRIO analysis
This is a tool which is used in order to differentiate organisational capabilities in terms of
various dimensions and their inclination with attaining competitive edge. For Bvlgari Hotel
London they have ample resources and the same are required to be maintained so that
competitive edge can be attained. In this manner these resources are elaborated as under:
 Valuable: This is linked with such resources which are associated with providing higher
value to the business and helps the business to get smooth flow of operations. In the
context of Bvlgari Hotel London employees are regarded as valuable resources for the
organisation as their skills are leading the business to provide ultimate service quality to
their customers (Jaleha and Machuki, 2018). By efforts of their employees Bvlgari Hotel
London is able to satisfy needs and expectations of their customers.
 Rare: These are the resources which are regarded as rare and help the business to get
specific edge into the market and lead market size as well. For Bvlgari Hotel London
their financial resources are considered as rare so that these are helpful in providing
various expansion opportunities so that market threats can be treated in better way and
succession options can be inhaled.
 Inimitable: These resources are regarded as those which cannot be imitated by
competitors. For Bvlgari Hotel London their functional processes are taken in this
category which cannot be copied by their rivals and helps the business to grow and
sustain for longer time period. These are the resources which are helping in bridging gap
between customers and the business so that overall profitability can be enhanced.
 Organized: These resources are defined as such resources which help the business to
managed and organised (Ranta, Aarikka-Stenroos and Mäkinen, 2018). For Bvlgari Hotel
London their brand value is taken under this head and helping the business to acquire
higher market share and customer as well.

McKinney’s 7S
This is the framework which is used in order to examine such internal competencies
within business that are useful in gaining growth and success in prominent manner. These are
divided into different categories and for Bvlgari Hotel London the same is highlighted as under;
 Strategy: These are related with such action plan into the business which is helpful in
gaining competitive edge. For Bvlgari Hotel London as they are emphasised over putting
their focus on wealthy people so using advanced technology this factor can be attained by
them in higher manner so that ultimate customer satisfaction can be obtained.
 Structure: This is related with the way in which business functions are being managed.
For Bvlgari Hotel London the company is using hierarchical structure which is helpful
for the management to take proper decision in most effective manner. On the other hand
this structure is helpful in providing appropriate flow of command so that no gap can be
seen with top and bottom managerial level.
 System: This is defined as those aspects which are associated with daily activities and
helps the business to have appropriate level of functioning as well. For Bvlgari Hotel
London the company is adopting proper system of booking and other functions so that
remarkable experience can be provided to customer.
 Style: Style is categorised as the leadership which can be used within business so that to
provide business command and attain overall organisational objectives . In the context of
Bvlgari Hotel London autocratic leadership style is used within the premises which helps
in retaining power with higher management so that decision making can be made error
proof and customer satisfaction can also be enhanced.
 Shared values: This is related with core values which are aligned with ethics and such
principles which are helpful in taking prominent decisions within business (Kim, 2016).
For Bvlgari Hotel London in terms of ethics they are managing appropriate transparency,
passion and collaborative skills in order to enhance their services.
 Skills: These are associated with capabilities of the employees so that business
engagement can be improved. For Bvlgari Hotel London they are organising regular
training program for their employees so that to continuously enhancing their skills and to
align the same with gaining customer satisfaction.

 Staff: This is the dimension which is linked with employees and their acquired abilities
which helps the business to attain its objectives. For Bvlgari Hotel London the
organisation is associated with significant number of employees so that they leads the
company to gain opportunities for growth and success.
TASK 3
P3 Application of Porter’s five forces to evaluate the competitive environment of company.
Porter’s five force model is used by the business in order to examine level of rivalry
within industry. This is helpful in shaping the business and functions as accordance with market
demands and rivalry. For Bvlgari Hotel London this model is elaborated as under:
 Competitive rivalry: This aspect of the model is associated with examining rivalry which
is existed within various competitors in order to measure various aspects of the business.
In the context of Bvlgari Hotel London this is being analysed that market rivalry is high
as there are lots of competitors existed and may be they are providing homogenous
services so that high competition is existed (Varelas and Georgopoulos, 2017). So for this
every business are owing their customers and maintaining customer base as well. For
Bvlgari Hotel London the company is facing intense competition with Hyatt, Premier inn
and many more.
 Threat of new entrants: This is associated with new entrants within the industry and their
capabilities to acquire market and customers from existing organisation. For Bvlgari
Hotel London as the organisation is providing luxurious services so this is not easy for
other business to get accessible entry as in order to enter into this industry higher
investment is needed. So in this context for Bvlgari Hotel London this factor is having
low power and this is an opportunity for Bvlgari Hotel London to acquire brand loyalty
from their customers and lead the market.
 Bargaining power of customers: This force is associated with such customers those are
existed within the industry and have direct connection with any fluctuations. Bvlgari
Hotel London their customers are having high power as they have numerous other
options within the same industry.

 Bargaining power of suppliers: This is the dimension which is related with capability
presented with suppliers to hold power of prices fluctuations. In the context of Bvlgari
Hotel London as they have so many suppliers so this force is low in this case as they do
not give any degree of control to their suppliers and keeps whole power with themselves
to change their suppliers.
Threat of substitute: This force is associated with number of alternative options available in the
market. For Bvlgari Hotel London this threat is high as there are numerous substitutes available
in the markets which are providing competition to Bvlgari Hotel London. In this manner
customers are having various options to choose form and satisfy their needs and demands
(Hossain, Kannan and Raman Nair, 2020).
TASK 4
P4 Application of concepts, models and theories to devise the strategic planning for the
company.
For Bvlgari Hotel London the concept, model and strategic plan is elaborated as under;
Porter’s generic strategy
 Cost leadership: This strategy is linked with using low cost model that may help the
business to get new customers. For Bvlgari Hotel London using low cost model will help
the business to enhance their profitability and acquire customers from varied segments.
 Differentiation: Under this strategy innovation is considered as the main element in
which new features are inserted in the service and attention of customer is grabbed
(Omsa, Abdullah and Jamali, 2017). For Bvlgari Hotel London using advanced
technology in the business may help them to differentiate their services with other rivals
and acquire prominent market image.
 Focus: This strategy is linked with minimisation of cost and providing differentiation in
services as well. Using this strategy may lead Bvlgari Hotel London to minimise their
cost and render innovation so that significant edge can be attained within marketplace.
Bowman’s strategic Clock

This model is having eight strategies and in context of Bvlgari Hotel London the same
are explained as under:
 Low price, low value added: This is focused over such services by the organisation which
can be offered within low cost and lead to low value as well. For Bvlgari Hotel London
this strategy may lead the company to acquire higher sales.
 Low price: This strategy is related with such business offerings that can be offered in low
prices to the customers in order to attract new customers.
 Differentiation: This strategy is linked with inhaling such differentiation in compared to
other rivals that may help Bvlgari Hotel London to get prominent market position.
 Focused differentiation: This strategy is linked with gaining high value of customer and
using this Bvlgari Hotel London may earn huge profits.
 Hybrid: This strategy can be used in order to exhale customer range and acquire higher
sales as well (Desai, 2019).
 Monopoly pricing: Under this prices of the services will be exclusively controlled by the
company as they are the single business under this sector.
 Loss of market share: This strategy is associated with taking exit from the industry so
that using this strategy Bvlgari Hotel London may explore some new market ranges.
 Risky high margin: This strategy is providing assistance to the company so that higher
profits can be enjoyed. For Bvlgari Hotel London this strategy will lead the business to
cater to large population and earn profits.
CONCLUSION
From the above mentioned discussion this can be concluded that planning and preparing
business strategy is necessary for every business in order to get long term business survival and
to attain distinct position in competitive market. This is imperative to analyse internal and
external market factors that are having direct or indirect impact over the business. So using such
tools and practices within business may help the organisation to deal with such internal or
external threat which may create barrier in succession.

REFERENCES
Books and Journals
Alvarez-Risco and et. al., 2020. Sustainable Hospitality Management.
Backman, M., Klaesson, J. and Öner, Ö., 2017. Innovation in the hospitality industry: Firm or
location?. Tourism Economics, 23(8), pp.1591-1614.
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Publishing Limited.
Hossain, M.S., Kannan, S.N. and Raman Nair, S.K.K., 2020. Factors Influencing Sustainable
Competitive Advantage in the Hospitality Industry. Journal of Quality Assurance in
Hospitality & Tourism, pp.1-32.
Jaleha, A.A. and Machuki, V.N., 2018. Strategic leadership and organizational performance: A
critical review of literature. European Scientific Journal, 14(35), pp.124-149.
Kim, S., 2016. Strategic predisposition in communication management: Understanding
organizational propensity towards bridging strategy. Journal of Communication
Management.
Lashley, C., 2016. Hospitality studies: developing philosophical practitioners?. In The Routledge
handbook of hospitality studies (pp. 417-430). Routledge.
Melissen, F. and Sauer, L., 2018. Improving sustainability in the hospitality industry. Routledge.
Omsa, S., Abdullah, I.H. and Jamali, H., 2017. Five competitive forces model and the
implementation of Porter’s generic strategies to gain firm performances.
Ranta, V., Aarikka-Stenroos, L. and Mäkinen, S.J., 2018. Creating value in the circular
economy: A structured multiple-case analysis of business models. Journal of cleaner
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Ruel, H. and Njoku, E., 2020. AI redefining the hospitality industry. Journal of Tourism Futures.
Varelas, S. and Georgopoulos, N., 2017. Porter’s competitive forces in the modern globalized
hospitality sector–the case of a Greek tourism destination. J Tour Res, 18, pp.121-131.