Hyatt Hotels: A Case Study Analysis using McKinsey's 7s Framework, STEEP and SWOT Analysis

This case study analysis of Hyatt Hotels using McKinsey's 7s Framework, STEEP and SWOT Analysis provides an understanding of the internal and external environment of the business and the issues it might face in the future. The report analyses the pricing strategy, structure, systems, shared values, style, staffs and skills of the hotel using McKinsey's 7s Framework. It also analyses the social, technological, economic, environmental and political factors using STEEP Analysis. Finally, the report provides a SWOT analysis of the hotel.

CASE STUDY ANALYSIS
HYATT HOTELS

Table of Contents
Introduction......................................................................................................................................3
The MICRO context........................................................................................................................3
McKinsey’s 7s framework...........................................................................................................3
The MACRO context...................................................................................................................5
STEEP analysis............................................................................................................................5
SWOT analysis................................................................................................................................7
Conclusion.......................................................................................................................................8
References........................................................................................................................................9
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Introduction
Hyatt hotels are one of the most developing hotels in the current market. It is planning to grow
even more to have a better competitive advantage in the market. In this report, the external and
internal environment of the business is going to be analysed for better understanding of the
issues that the organization might face in this venture. To conduct the analysis 7s, SWOT,
STEEP tool will be used. In the end, a conclusion will be provided to have proper data analysis
about the services.
The MICRO context
McKinsey’s 7s framework
Strategy
The hotel is one of the eminent ones and the pricing strategy it uses is premium. The most of the
cases it is seen that the management targets the higher economic class people from the society. It
is offering best cuisines to the people who are seeking for services in their domain. The festive
offers are also included in their plan and it is one of the most necessary things, which one
company should possess to have better marketing advantage (Dominici and Guzzo, 2010).
Structure
The hotel is focusing on the centralised system of having control over the employees and in this
regard, they have divided the entire workforce in different segments like, workflow, human
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resources, customer segments, management and other external bodies. The communication
process is updated and they have proper connection with the internal and the external
stakeholders (Chand, 2010).
Fig 1: 7S model
(Source: Dudovskiy, 2018)
Systems
The entire system of the hotel is balanced and it has a proper communication between every
segments of the business. According to the calculations, it is seen that the hotel has gained profit
of around $4 billion and the stakeholders have gained $207 million from this (Brady et al.,
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2015). The HR management team is highly efficient in performing the allotted tasks. The
decisions taken by them are always for betterment of the entire hotel group and the stakeholders
as well.
Shared values
The aim of the company is to provide the best service to the customers and to meet the need they
are fostering a common culture in every part of the organization. The hotel is sharing common
values among the employees to provide proper services. The company ventures are always for
betterment of the organizational performance and in this perspective, they have mainly focused
on the technical sides and innovation (Buil, Martínez, and Matute., 2016).
Style
The leadership style of the organization is efficient in mitigating the issues that have been
witnessed in the past years. The current scenario of the leadership skills is just the same and it is
seen that the employees properly communicate with the management to help then in taking
decisions (Tajeddini, 2010). With this process, the hotel is expanding in the outer part of the
country with a proper brand recognition and unequivocal balance sheet.
Staffs
The hotel has around 95000 associates and the employee number is 45000, which is a huge
number in order to determine the class of a hotel. Apart from that, the 55000 associates have
third party ownership with the hotel management and administration (Brady et al., 2015).
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Skills
The people who are working in the organisation are efficient in delivering the services that are
needed by the customers. Sustainability of the skills is monitored and efficient training programs
from the management’s side manage the entire business properly (Shaw, Bailey, and Williams,
2011). The hotel also provides better services to the external shareholders who are one of the
main units of the hotel.
The MACRO context
STEEP analysis
Social
The education level of the region is one of the most important parts that are hindering the growth
of the hotel. The high class and power barrier in the society is stopping the hotel from being a
successful structure in different parts(Brady et al., 2015). Apart from this, the hotel patronises
the entrepreneur spirit and with its contribution, the hotel is trying to contribute in the
surrounding society.
Technology
The technical side of the organization is developing day by day. The diffusion rate is also high
for the value chain and it is being impacted in a negative manner. The technical development
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needs proper financial support and to maintain the service standards the management has to
analyse the situation for technical modification in a lower rate.
Economics
The economic factors that are hindering the growth of the hotel are present in an enormous
amount. It is seen that Australian inflation rate has affected the growth of the industry and the
hotel as well. The labour cost and technical cost is rising with every passing day (Alberti, 2016).
Apart from this the unemployment rate is also going high (3%), which is diminishing the
development of the hotel.
Politics
The Australian political ambience is not that suitable for the lodging industry and the
bureaucracy is stopping the growth of the hotel. The wage regulation issues are safety
regulations are one of the most important factors to be considered in the hotel industry. The
Hyatt hotel adhered all of them to provide profound services to the customers.
Environment
The weathers conditions of Australia are one of the most important factors to be considered. The
wage management needs to be considered as one of the most important facts in this segment.
There are other sections where the hotel needs to focus, and one of them is using the renewable
energy (Ge, Chen, and Chen, 2018).
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SWOT analysis
Strengths
- Proper growth in franchise.
- Good property ownership.
- Proper network and market
shareholdings.
Threats
- The currency rate fluctuation.
- The presence of huge competition in
B2B and B2C segment.
Weakness
- The incremental profit is not shared.
- The capital management has some
issues.
Opportunities
- The opportunity to operate in regional
basis.
- The vacations owner properties can be
sold.
The above table denotes that the hotel has some issues but opportunities as well. There are many
possible segments where the hotel can make a good profit, but for that, they have to minimise the
threats and the weaknesses. They need to optimise their strength and provide more focus on the
opportunities, which it has in the market. The B2B and B2C market is important segment and in
these grounds, the company needs to focus more. Apart from that, the customers can be attracted
with the proper brand endorsing strategies.
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Conclusion
According to the microanalysis, the shared value and development strategies are lagging and it is
necessary for the hotel to have focus on that part. In accordance with the MACRO analysis the
entire political context and the economy of Australia is becoming a barrier for the hotel. In
accordance with the SWOT analysis, the company can use the strength and opportunities of the
hotel to get more productivity from different segments of the hotel.
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References
Alberti, G. 2016. Moving beyond the dichotomy of workplace and community unionism: The
challenges of organising migrant workers in London’s hotels. Economic and Industrial
Democracy, 37(1), 73-94.
Brady, S. R., Young, J. A., and McLeod, D. A. 2015. Utilizing digital advocacy in community
organizing: Lessons learned from organizing in virtual spaces to promote worker rights and
economic justice. Journal of Community Practice, 23(2), pp.255-273.
Buil, I., Martínez, E., and Matute, J. 2016. From internal brand management to organizational
citizenship behaviours: Evidence from frontline employees in the hotel industry. Tourism
Management, 57, pp.256-271.
Chand, M., 2010. The impact of HRM practices on service quality, customer satisfaction and
performance in the Indian hotel industry. The International Journal of Human Resource
Management, 21(4), pp.551-566.
Dominici, G. and Guzzo, R., 2010. Customer satisfaction in the hotel industry: A case study
from Sicily.
Dudovskiy, J. 2018. Amazon McKinsey 7S Model - Research-Methodology. [online] Research-
Methodology. Available at: https://research-methodology.net/amazon-mckinsey-7s-model-2/
[Accessed 8 Sep. 2018].
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Ge, H., Chen, S., and Chen, Y. 2018. International alliance of green hotels to reach sustainable
competitive advantages. Sustainability, 10(2), 573.
Shaw, G., Bailey, A. and Williams, A., 2011. Aspects of service-dominant logic and its
implications for tourism management: Examples from the hotel industry. Tourism
Management, 32(2), pp.207-214.
Tajeddini, K., 2010. Effect of customer orientation and entrepreneurial orientation on
innovativeness: Evidence from the hotel industry in Switzerland. Tourism management, 31(2),
pp.221-231.
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