International Hospitality Management: Strategies for Crowne Plaza Hotel in London

This assignment discusses the background of Crowne Plaza hotel in London and analyzes its SWOT and PEST analysis. It also explores the hotel's tactics and justifies the chosen strategy.

INTERNATIONAL HOSPITALITY
MANAGEMENT
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Table of Contents
INTRODUCTION...........................................................................................................................3
MAIN BODY...................................................................................................................................3
Background of chosen hotel...................................................................................................3
SWOT analysis of chosen hotel firm......................................................................................4
PEST analysis of emerging market........................................................................................5
Hotel tactic to be adopt and to be implemented.....................................................................7
Justification of strategy.........................................................................................................10
Practical Application of Strategy by Crowne Plaza Hotel 5 to 10 Years Ahead.................11
CONCLUSION..............................................................................................................................12
REFERENCES..............................................................................................................................14
Appendix..............................................................................................................................15
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INTRODUCTION
International hotel industry represents all kinds of accommodation from luxury to
affordable services, from city centre venture oriented to resorts, and from motels to bars as well
as health spas. The market size of this industry was just more than 570 billion pounds.
International hotel industry provides range of services and products to its guests according to
their needs and preferences. It ranges from quite small privately owned family ventures to major
global units with over 600,000 rooms. Hotels sectors consists of over than 15% of all individual
who worked in hospitality industry. Motels and hotels falls into a number of varied categories
which include glamorous and luxuries five and seven star resorts global luxury chains, country
house, trendy boutiques, leisure and conference rooms.
The current assignment will be based on Crowne Plaza hotel, which fall under list of
leading hotels in London, UK. This study will explain SWOT and PEST analysis in context of
chosen firm. Furthermore, this report will justify strategies adopted by company and practical
application of tactics.
MAIN BODY
Background of chosen hotel
Crowne Plaza hotel in Royal Victoria Dock is one of the best hotels in United Kingdom.
It makes an ideal base for both leisure and business guests (Macháč, 2016). This hotel is heaven
from hustle and bustle of London life; people can find tranquillity and peace in modern
surroundings. It was perfectly located for visiting all of city’s best attractions. It is a
multinational chain of full services; they cater to business travellers and to conventions markets
and meetings. It is a unique contemporary hotel overlooking Royal Victoria Dock. Firm is
located next to Docklands light railway station, which connects after one place with Jubilee Line
at canning town, into central Stratford. It boasts their meeting success centre with more than 8
meeting rooms, accommodating up to 275 delegates including a dedicated and excellent
Executive board room. Organization offer leisure and business travellers friendly, dependability
service and the best in designer led facilities at greater value rates.
They provide assurance about quality of food and beverage as well other service to its
guests. Crowne Plaza houses a contemporary, busy bar and lounge and a restro accessible from
avenue. Quad club of hotel offer visitors a purpose build fitness and health facility, with an
indoor Jacuzzi, steam room, pool and the latest gym equipment. Hotel provides room services,
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mini bar, air conditioning, housekeeping, refrigerator, and other services to people who visited
premises with family and friends to enjoy their vacations away from busy life schedule.
SWOT analysis of chosen hotel firm
SWOT analysis is one of the most renowned tools or techniques for analysis and audit of
overall strategic position of a business company and its environment. Key purpose of this
framework is to determine tactics that can create Crowne Plaza hotel specific business concept
that can best align with their capabilities and key resources.
Strengths-
 Each organization has their strengths that drive them towards success (Bakker and van
Woerkom, 2018). Crowne Plaza hotel has the biggest strengths that affect its business
performance and productivity. They have skilled workforce and talented workers that
are the big strengths of hotel. With this strength firm is able to provide quality services
and products. With knowledgeable applicants, hotel can sustain for longer period of time
within hotel industry.
 Solid consumer relationship is the another strength of Crowne Plaza Hotel, which
makes them able to gain attention of new business travellers towards them and aid to
retain existing one for longer period. Effective consumer relations is extensively executed
by firm where they record preferences and needs of each visitor and every time deliver
same set of preferences to respective people’s on their visit.
Weaknesses-
 Every firm want to enhance their performance and business activities in effective manner,
but due to some weakness they are unable to do so. Lack of expansion is one of Crowne
Plaza Hotel weaknesses that directly impact on its brand image in market and
profitability as well (Matovic, 2019). This weakness affects decision making and
productivity of hotel in negative manner. Without expanding business across UK,
company is not been able to gain attention of international travellers.
 Lack of technology adoption is another weakness of Crowne Plaza Hotel that may
affect its consumer’s base and marketing activities negatively. Without using the latest
and advanced technologies, firm would not be able to beat their competitors, running
their business in same sector especially to satisfy leisure and business travellers. In order
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to retain within hospitality industry, Crowne Plaza hotel must consider this weakness and
would plan to implement trending technologies.
Opportunities-
 Globalization gives one of the biggest opportunities to Crowne Plaza and other hotels
while operating their ventures in hotel industry. It gives business expansion as chance to
firm which makes their business more powerful and popular all over the world. Firm can
gain this opportunity to overcome their weakness and to become global leaders in whole
sector. It provides several benefits to chosen company in term of increasing their
profitability, sales and customer base more than rivals.
 Technology advancement is the best chance Crowne Plaza hotel in Royal Victoria Dock
can get to make their marketing functions and practice even better. When firm recognize
and then implement digital marketing tools and other technologies within business, they
can obtain competitive edge in effective manner. Both opportunities are quite beneficial
for organization as it help to strengthen brand image in market successfully.
Threats-
 Intense competition within hotel industry is one of the biggest external factors or threats
for Crowne Plaza Hotel that affect its existing strategies and current plans in negative
manner. The top competitors of firm are Marriott hotel, Hilton, Premier Inn and other.
They all are able to give tough competition to chosen company and impact their business
activities. It can be said that competition is quite intensive in hotel industry where chosen
company operates and hence it poses a big threat to their business in term of consumer
base and revenue growth.
 Threat of new entrance also put same influence on Crowne Plaza hotel in Royal Victoria
Dock. New companies or hotels can increase competition level more than before as they
can decrease number of consumers of firm by offering better quality and affordable
services to them. New firms can steal guest of chosen hotel, which is not appropriate for
its business.
PEST analysis of emerging market
PEST analysis stands for political, economic, social and technological factors, it
considered as management approach whereby a company can assess major external elements that
influence their operations in order to become more competitive in specific market. Here, this
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analysis can be conducted in regard to Brazil as emerging market where Crowne Plaza hotel can
seek to enter to make long term market progress in effective manner.
Political factor-
Brazil is known as the most powerful nation in South America, it is considered as middle
power that has moderate affect in global affairs (Kamhi-Stein and et.al., 2017). Being one of the
biggest democracies in the world has offered this emerging market huge potential in many fields.
Changes in trade policy, taxation rules, political stability and instability are included in list of
political factors that may affect business expansion strategy of organization in this market. In
context of Brazil, political stability is one of the main factors that makes growth of this nation
more progressive and allow them to become the great place where Crowne Plaza and other hotels
can expand their ventures in systematic manner. Brazil was enjoying political stability that had
been painstakingly built in 1985, when it transitioned to democracy after two years. Political
stability in nation allows companies to grow and get success while operating in Hotel industry. It
can be said that due to this political factor, Crowne Plaza hotel can easily enter into new market
place and sustain for long.
Economic factor-
Recession, unemployment rate and income source of people are considered as economic
factors. Brazil faces issues due to high unemployment rate and that is 11.8% which is more than
1% recorded in 2017. It is one of the biggest economic forces that may affect business growth,
GDP and other things in this emerging market. Unemployment rate impacts living standards of
local people’s. When Crowne Plaza enter into Brazil, due to this factor they have to pay more
attention on their recruitment and employment policies because human resource department after
considering this factor need to change their earlier plans related to workforce planning.
It analysed that, unemployment rate in Brazil stood at 12.6% in 2020 that is considered as
highest rate reported since March of last year (Andrade, Souza and Carmo, 2020). It slow down
growth and progress of economy and influence demand for services and goods. It also influences
ways local people live their lives and fulfil his or her needs.
Social factor-
Brazil is the most diverse nations in the world; it has a total population of about 208
million. Life expectancy for women is 79 and 72 years for men. Nation lifted millions of people
out of poverty in the last 15 eras; however, an estimated 10 percent of population still live in
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poverty. Population growth rate, lifestyle attitudes, safety emphasis, cultural barriers, health
consciousness, career attitudes and age distribution are included in category of social factors.
Career attitudes of youngster towards his or her career, is one of the social element that enhance
growth and development of Brazil even better. People focus on growth opportunities, which
make them able to start their professional career by working in large firm. It is beneficial for
Crowne Plaza Hotel when they enter into this emerging market in term of hiring skilled and
talented applicants who are highly dedicated towards their work and career progress. This factor
affect in positive manner upon economic and business growth.
Technology factor-
Advancement of technology is the last element of PEST analysis in context of Brazil as
emerging market, where Crowne Plaza hotel can enter to gain competitive advantages and
increase their profitability even better. Brazilians are among the most enthusiastic users of social
media in whole world and approximately 60% people are fully engaged in online activities of
some sorts. In fact, this nation has the 5th biggest number of internet and mobile users in the
universe. This factor affects hospitality industry and its business operating under this market
positively, by generating brand awareness in market effectively and easily.
Hotel tactic to be adopt and to be implemented
Porter’s generic strategies-
Michael Porter’s generic tactics are a useful and beneficial framework for Crowne Plaza
hotel as it helps them to determine potential niche in which they can gain a competitive edge in
hospitality industry after entering into new or emerging market and that is Brazil. It defines three
different strategic options accessible to company, which they can consider to obtain all benefits
in new market (Hales and Mclarney, 2017).
Cost leadership-
This is the first strategy of above model that can aid firm to gain competitive advantages
and become market leader. It helps to gets their sales higher than existing players in Brazil and
takes hotel business away from competitors, which is quite beneficial in term of maintaining
market progress and maximizing market share as well. Organization according to this strategy
can reduce their prices on each service and items as compare to others which allow them to gain
attention of international visitors towards hotel (Kharub, Mor and Sharma, 2019).
Differentiation leadership-
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This tactic includes making services and offers different from and more influencing than
those of Crowne Plaza Hotel rivals accessible in Brazil Hospitality industry. Organization can
consider this strategy to get desire outcomes in term of increasing market share and profitability
even better. With this strategy, they can typically include attractive and valuable things within
their existing services especially for target consumers that help to gain attention of new visitors.
Figure 1Porter's Generic Strategies
(Source: Porter's Generic Strategies, 2020)
Cost Focus-
This strategy requires from company to compete in new market based on price to target
narrow market. Instead, it charges low prices relative to other hotels that compete and run within
target market. When Crowne Plaza hotel can use this tactic they need to focus on specific niche
markets and by comprehending dynamics of that market and unique needs of visitors within
Brazil, they can create uniquely well specified services for them.
Differentiation focus-
It is the last effective strategy of Porter’s generic model that drive firm towards assuring
that management must add something extra in their existing offers to gain beneficial after
entering into Brazil. When firm pursue this tactic they can win market share by offering unique
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features and services that are valued by target consumers. It includes achieving differentiation
focus within niche market in ways that are not accessible to more widely focused players.
Ansoff matrix strategy-
It is one of the best strategic planning techniques or tools that can cater a structure to aid
executives, marketers and senior manager of Crowne Plaza Hotel to achieve their set aims and
objectives (Loredana, 2017).
Market penetration-
With this strategy, Crowne Plaza Hotel can use their current service and its quality in
existing market for customers. This tactic can be executed and used by firm in a number of ways
like decreasing prices to gain attention of new travellers, increasing distribution & promotion
efforts and acquire a competitor in same marketplace where chosen company want to enter. This
strategy is beneficial for company but not provide long term market share.
Figure 2: Ansoff Matrix
(Source: Ansoff Matrix Strategies, 2019)
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Product development-
With product development strategy, hotel can develop a new service or item to provide to
current market. It usually includes extensive investigation and development and expansion of
business’s service range. This tactic is employed when organization have a better understanding
of their market and are capable to cater innovative and creative services to meet needs of those.
Product development strategy can be implemented by investing in research and development
activities to develop new service to provide to existing customers.
Market development-
When Crowne Plaza hotel adopt this strategy they can effectively enter into new and
emerging market like Brazil where they can provide the best accommodation and other services
leisure and business as well as other travellers in ethical manner. Organization can enters into
target market with this existing services and offers into new consumer segments, and new
geographic regions. It is most successful tactic when potential buyers in new market are
profitable.
Diversification-
With diversification tactic, Crowne Plaza Hotel can enter into Brazil as emerging market
with a new items or services that help to satisfy people and allow them to revisit hotel again and
again. It can be said that this strategy is quite riskiest for hotel as both product development and
market development are needed; risk can be mitigated somewhat through related diversification.
Nykiel’s fourteen hotel strategic growth options-
This framework undertaken growth tactic such as assessing enhancement chance. Crowne
Plaza Hotel can use this strategy and can assess business growth opportunities in existing and
new market.
Justification of strategy
Ansoff’s matrix, porter’s generic strategies and Nykiel’s fourteen hotel strategic growth
options, are three different tactics which can be considered by Crowne Plaza hotel. They can use
cost leadership and market development strategies for entering into Brazil. These two tactics are
going to aid hotel maintain and enhance market growth and long term market share rather than
existing players within Hospitality industry. For example, with cost leadership strategy, hotel can
effectively increase their market size and gain profits even better.
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It is one of the most effective tactic chosen hotel can use in which cost of their food and
beverage, laundry and accommodation services are reduced in order to gain a wide marketplace
and market share. It can be said that every companies requires a marketing tactic to get brand
recognition in recent competitive market. This methods is one of those tactics, hotel can utilize to
promote high quality and standard services and selling them for a lower price more than its
rivals. As popularity of services increases among travel lovers the profitability of that firm
increases.
Market development is also beneficial for chosen hotel in term of increasing their market
share, revenue and generating brand awareness within new market place. Benefits of selecting to
engage in a tactic of market development include; gaining new buyers, business growth and
increased revenue. When company successfully implemented and used this strategy they can
lead to competitive advantages and build their strong brand image in hospitality industry of
Brazil. Market development strategy can efficiently increase consumer base and sales as well as
productivity level more than last few months or years.
Practical Application of Strategy by Crowne Plaza Hotel 5 to 10 Years Ahead
The esteemed Crowne Plaza Hotel can make use of and implement the cost leadership
strategy, organisational wide for its next 5 to 10 years of operations within the hospitality
industry of UK. This would allow for the hospitality business organisation to ensure that its
operations are conducted in an effectively successful manner for the foreseeable future. The use
and implementation of cost leadership strategy would also allow for the hospitality business
organisation to effectively gain a sustained competitive advantage against their industry
competitor business organisations. This ensures that Crowne Plaza Hotel would be able to
efficiently acquire new customers from the external environments without much issues, provide
them with services that are immensely valuable at highly competitive and affordable costs when
compared to industry competitors and generate increased profit margins for the next 5 to 10
years on the basis of this cost leadership strategy.
There remain various different ways and methods through which the leadership and
management of Crowne Plaza Hotel can ensure that they are able to implement the cost
leadership strategy organisational wide to the operations of the hospitality business organisation.
This would ensure that their operations remain successful, productive and profitable for the next
5 to 10 years of operations within the hospitality industry of UK. In order for Crowne Plaza
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Hotel to be able to successfully implement cost leadership strategy organisational wide across all
the operations of the hotel within hospitality industry, its leadership and senior management is
recommended to create and maintain highly productive, healthy and bilateral relations with all
the suppliers of the Crowne Plaza Hotel (Wada, 2018). Long term productive, healthy and
bilateral relations between Crowne Plaza Hotel and their industry suppliers can ensure that the
operational costs of Crowne Plaza Hotel remain decreased compared to industry averages. This
would allow for the hospitality business organisation to provide highly valuable and standardised
services to their customers within the hospitality industry of UK and effectively satisfy their
needs, demands and preferences without charging them high prices from their customers,
ensuring that the business is able to effective acquire new customers within the hospitality
industry of UK.
The leadership and senior management of Crowne Plaza Hotel is also recommended to
promote increased operational performance and efficiency from all of their existing employees
and workforce for the next 5 to 10 years, for their application of cost leadership strategy to be
successful. Increased performance and efficiency of Crowne Plaza Hotel’s employees will allow
for the business organisation to effectively achieve its set organisational objectives and goals in
an effective and successful manner within the hospitality industry of UK and ensure that the cost
leadership strategy is implemented efficiently across the entire organisation (Gorondutse and
Gawuna, 2017). In order to promote increased operational performance and efficiency by the
employees of Crowne Plaza Hotel, its leadership and management is recommended to pay
increased emphasis on enhancing the overall motivation and job satisfaction metrics of the
organisation’s employees and workforce.
CONCLUSION
From above analysis, it has been concluded that Crowne Plaza hotel in order to increase
their market growth and market share uses market development and cost leadership strategies
that are providing several benefits to them. It has been identified that by using SWOT analysis
model, hotel identified their strengths, weaknesses, opportunities and threats, which makes them
able to overcome weaknesses by gaining existing chances. Furthermore, it has been summarized
that by utilizing PEST analysis framework organization effectively understand and determined
elements of selected emerging market and that is Brazil. It has been analysed that to gain
competitive benefits, Crowne Plaza hotel using market development and cost leadership tactics.
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Both strategies are quite beneficial for company and providing many benefits to them by
increasing their brand image and make them able to generate awareness about its services.
Moreover, it has been explained that there are varied strategies accessible in world of business,
but by using right tactics and approaches firm gets long term market share, which was its main
objective.
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REFERENCES
Book and Journals
Andrade, A.W., Souza, C.D. and Carmo, R.F., 2020. Analysis of spatial clustering, time trend,
social vulnerability and risk of human visceral leishmaniasis in an endemic area in Brazil:
an ecological study. Transactions of The Royal Society of Tropical Medicine and
Hygiene.
Bakker, A.B. and van Woerkom, M., 2018. Strengths use in organizations: A positive approach
of occupational health. Canadian Psychology/psychologie canadienne. 59(1). p.38.
Gorondutse, A.H. and Gawuna, M.S., 2017. Cost Leadership Strategy and Performance of Hotels
in Nigerian Context. Journal of Applied Structural Equation Modeling. 1(1). pp.1-12.
Hales, G. and Mclarney, C., 2017. Uber's Competitive Advantage vis-à-vis Porter's Generic
Strategies. IUP Journal of Management Research. 16(4).
Kamhi-Stein, L.D and et.al., 2017. English language teaching in South America: Policy,
preparation and practices. Multilingual Matters.
Kharub, M., Mor, R.S. and Sharma, R., 2019. The relationship between cost leadership
competitive strategy and firm performance. Journal of Manufacturing Technology
Management.
Loredana, E.M., 2017. The use of Ansoff Matrix in the Field of Business. Annals-Economy
Series, 2, pp.141-149.
Macháč, J., 2016. 2016 MTT-S Region 8 Chapter Chair Meeting [Around the Globe]. IEEE
Microwave Magazine. 17(10). pp.88-88.
Matovic, I.M., 2019. Entrepreneurs and Small Businesses: International Expansion Strategies.
In Proceedings of FIKUSZ Symposium for Young Researchers (pp. 141-148). Óbuda
University Keleti Károly Faculty of Economics.
Wada, T., 2018. Capability-based cost leadership strategy of Japanese firms. Annals of Business
Administrative Science. 17(1). pp.1-10.
Online
Ansoff Matrix Strategies. 2019. [Online]. Available through:
<https://corporatefinanceinstitute.com/resources/knowledge/strategy/ansoff-matrix/>
Porter's Generic Strategies. 2020. [Online]. Available through: <
https://www.mindtools.com/pages/article/newSTR_82.htm>
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Appendix
Background to emerging markets-
Economic growth is one of the main reasons behind emerging markets, where in future
hotels industry firms can enter and gain benefits. Mexico, South Korea, Russia, Thailand,
Taiwan and other major economies are included in list of emerging markets. In context of
Crowne Plaza hotel, Brazil is most applicable and right emerging market for chosen hotel to seek
an entry into it and to seek long as well as medium term market growth.
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