TABLE OF CONTENT INTRODUCTION..........................................................................................................................3 A. SWOT analysis of Crown Plaza hotel........................................................................................3 B. Analysis of emerging market for Crown Plaza hotel through PESTLE analysis.......................5 C. Porters generic growth strategies...............................................................................................7 CONCLUSION.............................................................................................................................10 REFERENCES.............................................................................................................................11 APPENDIX...................................................................................................................................13
INTRODUCTION International hospitality management is defined as the strategy to understand the scope and framework of hospitality services in context of international markets without restricting scope of services to any single economy. Hospitality organisations aim at providing food, lounge and accommodation services to their guests. The globalisation and technology has promoted the concept and trend of international hospitality. The need and preferences of consumers have great diversity and thus it becomes very essential for the international hospitality groups to use appropriate management strategies. International hospitality management techniques not only help hospitality groups to explore the growth opportunities in the international market but also identify various challenges and factors which can affect the performance and growth of the hospitality organisations internationally (Ryan, 2015). The report will analyse the concepts and strategies of hospitality management in context of international market. It will evaluate the SWOT analysis of Crown Plaza hotel which is situated in Royal Victoria Dock. International hospitality management is essential to study because with increasing trends of globalisation people are finding it easy and necessary to explore different corners of world instead of restricting their activities to any single geographical location. The global movement of people demands needs of hospitality services which can meet the needs and expectations of diversified culture and people. Hence, concepts of international hospitality aims to develop an understanding of marketing and management trends which can understand the variations in international context. The document will discuss the emerging market for the development of Crown Plaza hotelandvariousfactorswhichcanaffecttheinternationaloperationalactivitiesofthe organisation. It will conduct PESTLE analysis of the organisation to evaluate business growth analysis in the suggested emerging market. In the broad marketing environment provided by international hospitality the hospitality organisations can use various growth and development strategies. The report will discuss the Porter’s growth strategies and approaches such as Ansoff matrix and fourteen growth strategies of Nykiel which can be used by Crown Plaza hotel.
A. SWOT analysis of Crown Plaza hotel Crown Plaza hotel is well known multinational chain of hotels which provides its services in different countries. At present the organisation is operating in around 52 countries and has more than 400 hotels. The organisation is part of the well recognised brand name of InterContinental Hotel groups. The SWOT analysis of the organisation is as follows: Strength: Royal Victoria Dock Crown Plaza hotel (R.V.D Crown plaza hotel) has strong brand presence and popularity among consumers. The great response of customers towards brand makes it very easy for the hospitality organisation to promote its services and products. The R.V.D Crown plaza hotel marks strong presence in global market. Currently it owns huge number of hotels and thus it helps to improve customer loyalty towards hotel. When organisation has such huge size then it is also easy for the hospitality organisation to manage its resources (Sigala, 2017). With easy availability of the resources R.V.D Crown plaza hotel can create and manage its newmarket effectively and can sustain itsposition among competitors. The organisation has been providing its hospitality services from long time and thus the high standard of quality and trust helps to expand its services across global boundaries. In parent country UK the hospitality chain has earned huge response and customer loyalty. It also encourages and inspires the consumers in other global locations to consider and accept the existence of Crown Plaza hotel. Weakness: The biggest drawback which restricts the organisation to achieve same level of success in different parts of globe is innovation. R.V.D Crown plaza hotel is still using outdated technology such as offline booking management system and payment in cash only. For instance the competitivehospitalityinstitutesareexploringrapidinnovationsinproductandservice development. The outdated technology affects the performance of the organisation. Most of the hospitality organisations are diversifying their services and are focusing on different product lines for targeting royal as well as common people (Raj and Griffin, 2015). On the other hand R.V.D Crown plaza hotel is not making any attempt to innovate its services. The marketing strategy followed by the hotel is also not innovative and influential. It can give competitive
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advantage to other organisations. Another significant weak feature of this hotel is the poor satisfaction of employees. Thus, R.V.D Crown plaza hotel have to spend more capital for retention of skilled human resources. It not only creates additional financial burden but also affects the performance of the hotel adversely. Opportunities: The international marketing opens up vast opportunities for R.V.D Crown plaza hotel to increase its revenue and profits. The hotel can explore its services and products to regions where tourism is gaining more significant popularity. The hospitality organisation can also use various innovations in technology and operational activities to reduce their operational cost as well as to draw the attention of new consumers (Sigala, 2018). The technology and advanced marketing trends has also provided opportunity to Crown Plaza to explore its business activities into more diverse products. For example, this hotel can explore the benefits by providing home delivery services of its food and beverage department. Threats: The international expansion of the services of R.V.D Crown plaza hotel also brings various threats which can affect the existence and performance of the hotel. Crown Plaza is facing tough competition from other hospitality groups. Especially in the international market it is challenging for the hotel to understand the needs of the consumers. Though standardisation of the products and services improves the quality and performance but R.V.D Crown plaza cannot implement same pricing or promotion strategy for the diversified groups. Thus, substitution of the Crown Plaza hotel by other hospitality group is the biggest threat for sustaining growth and benefits of organisation. The products and services provided by Crown Plaza hotel have easy substitutes in the market. Thus, it is hard for this hotel to raise prices or to bring even a slight change in products to reduce operational cost (GarcÃa-Lillo, Úbeda-GarcÃa and Marco-Lajara, 2016). The easy product substitution and lower market share can affect the performance of Crown Plaza hotel as compare to other hospitality groups.
B. Analysis of emerging market for Crown Plaza hotel through PESTLE analysis Internationalhospitalityinemergingmarkets:Thereareeconomiesinwhichglobal organisations are rapidly showing interests from the business perspective. The local citizens are also speeding good amount of investment on travel and leisure. Thus, global hospitality organisations are finding it as a great opportunity to operate in international market and to address the needs of people from different culture and needs. Emerging markets:Crown Plaza hotel has many growth opportunities by expanding into new emerging markets. Though organisation has already marked its hotel chains in different countries but still there are emerging opportunities for the organisation in developing economies. In matured or stable economy Crown Plaza provides its quality services to users who specifically require hospitality facilities for business persons and their needs of meetings and lounge services. On the other hand in the developing or growing economies such as Asian and African countries business activities and tourism is rising exponentially. It also encourages the need of hospitality organisations like hotels and restaurants (Denizci Guillet and Mohammed, 2015). Though it is difficult for R.V.D Crown plaza hotel to establish its roots in these emerging economies but on successful expansion to these emerging markets the hotel will be able to explore new target audience and to increase its profit and brand value margins. Apart from growing economies such as China, India, Africa, Russia and Brazil there are developed economic markets which are finding choices for sustainable development. In such markets the organisation can bring new practices which are environment friendly and can meet the needs of those markets. For achieving the success goals in emerging opportunities Crown Plaza hotel mustanalyseseveralfactorswhichcaninfluencethestrategiesandfunctionalityofthe hospitality group (Tongchaiprasit and Ariyabuddhiphongs, 2016). These factors can be analysed by PESTLE analysis. Political:These are the crucial factors which can influence the execution of business activities of Crown Plaza hotel. The government policies can change or affect the use of technology, legal aspects and attitude of consumers towards any product or organisation. The governmental authorities and political factors are directly involved in making laws, policies and
thus can support hospitality organisation or can create barriers for R.V.D Crown plaza hotel to achieve its goals. The political factors thus greatly influence the economy, legal systems and nature of the social factors. Hence, these factors can be considered as very crucial which can change the entire scope and strategies for the organisation (Brown, Arendt and Bosselman, 2014). The government support to such foreign organisations through taxation reliefs and funding can enhance the growth possibility of the Crown Plaza hotel. Economic:The economic factors have great impact on entry into new market segments. Thus before making decision to enter any new market Crown Plaza hotel must consider these factors. The unstableeconomy or the countrieswhich havelowper capita income, the organisation may require revising its cost price so that the target audience can make purchase decisions. If the economy of the country is suffering from financial instability or its citizens do not favour much expense on leisure or hospitality then it may become difficult for the organisation to manage its operational cost and profit goals (Manoharan and Singal, 2017). Social:The perceptive of consumers towards the products and services of people also depends upon the social structure and cultural factors of the country. If the practices and values of R.V.D Crown plaza hotel are not in accordance with the social and cultural beliefs of the society then it may become difficult and challenging for the hospitality organisation to meet their objectives. For example for successfully creating brand awareness R.V.D Crown plaza hotel must use advertising strategy which involves tradition and culture of the country so that people can emotionally feel connected with the hotel and R.V.D Crown plaza can develop a place among its target audience. The ignorance to these social attributes can also affect the performance of organisation adversely. Like in certain markets it is possible that some people may prefer nutritional food or some groups may not prefer non vegetarian food from health or religious perspective (Chan and Hsu, 2016). Thus, in such cases Crown Plaza hotel must ensure that these parameters can lead to both positive and negative effect on its sales. Technological:These factors affect the approaches in which Crown Plaza hotel can perform its operational activities and delivery of services. In emerging markets which are seeking for sustainable practices Crown Plaza hotel can bring technical advancements. For
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example organisation can use data management systems and online record management system to reduce the use of papers. It will be cost effective as well as favourable to environment. When government and people perceives Crown Plaza hotel as supporter of the environment it becomes easy for organisation to create its impact on consumers. Similarly, Crown Plaza hotel also ensures that in all markets its brand value and quality of services is not compromised. Thus, it uses certain techniques such as security, smart rooms and mobile applications. If any economy does not have the necessary technique to support these services then it is not possible for the organisation to plan for development in such markets (King, 2017). Legal:The legal considerations are necessary to ensure that hospitality organisations are performing without compromising the safety and quality of its consumers. The legal regulations also includes the strategies and regulations related to working conditions for employees, health and safety regulations, employment and minimum wages conditions as well as the process related to taxation and other formation aspects of company within an economy. If organisation does not comply with these legal regulations then Crown Plaza hotel may fall into financial and legal penalties. If Hospitality Company fails to ensure the safety of its consumers and other legal standards then it can lead to legal conflicts which can affect the brand image of the hotel and consumers may feel hesitation in joining or connecting with such organisations. Environmental factors:With changing trends in the preference of consumers as well as regulatoryagencyhospitalityorganisationsareshiftingtowardssustainablepractices(J. Harrington and et.al., 2014). Crown Plaza hotel is using various practicessuch asdata management systems and digital marketing techniques to contribute towards environment. It makes organisation more popular brand among consumers. Before entering into any emerging market Crown Plaza must also analyse these environment factors must be considered so that it make effective strategies to control its functional activities, resources and operational cost. Thus, it can be concluded that for achieving growth objectives in international market R.V.D Crown plaza hotel must bring innovations into its practices so that it can deal with the emerging threats of substitution and competitors. It is also analysed that legal and political factors must be followed strictly so that organisation can enter into new emerging markets with ease.
C. Porters generic growth strategies In order to achieve success goals in international market Crown Plaza hotel must implement suitable growth strategies which can help organisation to sustain its position in the competitive market. To adopt these growth strategies various concepts can be used by the organizations. Some of the most popular and widely used growth strategies which can be used by Crown Plaza hotel are as follows: Porter’s generic strategies:These strategies are mainly employed by the organisation to achieve competitive advantage so that hospitality institutes can sustain their growth for long term. This strategy evaluates following attributes or concepts: Cost leadership:As per the cost leadership growth strategy Crown Plaza hotel can use cost factors as the key attribute to achieve its growth related goals. The company can make efforts so that its cost is lowest as compare to other service providers in hospitality industry (Singal, 2014). Crown Plaza can use various efforts to reduce its operational cost such as improved technology, recruitment of more skilled human resources, innovation and more appropriate selection of raw materials which are used within hotel. The cost leadership will help Crown Plaza hotel to influence customers for whom price is an essential consideration in making purchasing decisions. However it is very challenging to control the prices in an international market various economies have different financial stability and thus the operational cost also varies greatly. This factor affects the overall pricing strategy followed by the Crown Plaza hotel. Differentiation:The uniqueness is one of the features which creates a long lasting impression in the minds of customers and forces them to choose organisation over others. For example the brand name of Crown Plaza hotel ensures that in all countries the service quality of the organisation is of same quality so that its brand effectiveness can be maintained. In hospitality organisations food and beverage quality is considered as one of the most important attributethusCrownPlazahotelcanmakeinnovationsintheseattributeswhichmake organisation unique from others and can force consumers to pay even extra for it. This growth technique is effective and can be considered as efficient for long term growth of organisation (Ruetzler and et.al., 2014).
Cost Focus strategy:R.V.D Crown plaza hospitality organisation can also implement focus strategy for its growth objectives. With this approach organisation can focus on specific niche market. Suitable market research is conducted so that niche market can be analysed and needs of consumers in that specific market can be fulfilled. Differentiation focus strategy:The hotel can choose a market which has low competition and can deliver unique services and products. Thus, with this strategy uniqueness of the products is used to address the niche market. For instance hotel can launch services in developing country with voice recognition services in rooms. It will attract consumers and lead to growth. Ansoff matrix:With this growth matrix R.V.D Crown plaza hotel can ensure its growth by exploring its new/ existing products into new/existing markets. The attributes of ansoff matrix are discussed as below: Market development:To explore the international market benefits R.V.D Crown plaza hotel can sell its products to new markets. The new emerging markets can be a good choice for hospitality organisation to enhance its growth. This strategy involves greater risk of failure thus it is essential that before adopting this approach organisation hotel must conduct suitable market research. R.V.D Crown plaza can launch its new hotels to new geographical segments or via new distribution channels such as delivery of food and beverages of R.V.D Crown plaza hotel via online booking to home delivery. The hospitality organisation can also use different prices to different market segments as per the market trends (Ansoff Matrix, 2018). Market penetration:R.V.D Crown plaza hotel can develop strategies so that it can increase the sales of its products and services into existing market. To achieve this organisation cangiveattractivediscountsandcanfocusoncustomizedselling.Toovershadowits competitor’s organisation must use strong promotional strategies such as social media campaign, pricing adjustments as per the situation and customer loyalty programs. For instance during festival season or off season hotel can also give large discount or additional services in free or at lower cost so that more people can be gathered. With these market penetration strategies Crown Plaza hotel will be able to increase its sales records and growth in existing market with its existing services and product.
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Product development:Crown Plaza hotel is well aware brand name in hospitality. Thus, it can be very convenient for the organisation to develop new services and product. For instance organisation can introduce its own food chain so that people who appreciate its food and beveragescanaccess theseserviceseasily (UsingtheAnsoffMatrixtoidentifygrowth opportunities, 2018). Similarly, to meet the expectations and needs of travellers Crown Plaza hotel can launch their special budget hotel rooms so that it can achieve its growth targets among new audiences as well. Diversification:This can be one of the most risky growth strategies so R.V.D Crown plaza hotel must avoid this approach until it has detailed analysis of the market. With this approach hospitality organisation can introduce new products or services into entirely new market segments. It involves a great risk as organisation will not have any experience of neither product nor target market. Nykiel’s fourteen strategic growth options:With the following set of fourteen strategies proposed by Nykiel hospitality organisations can achieve their growth opportunities. 1.Crown Plaza hotel can expand its services horizontally like from one product of hospitality organisation to other. For example to ensure business growth organisation can expand its services from hotels to fast food restaurant chains or theme parks. 2.There are geographical regions which are rich in heritage and consist of large scope in travel and tourism sector. In such regions or other geographical parts Crown Plaza hotel can launch its hotels. The existing brand value and quality services can help hotel to gain the trust of the consumers (Redding and Chen, 2017). 3.Apart from horizontal and geographical expansion hospitality organisation can also grow itsservicesintocompletelydifferentanddiverserangeofservices.Itwillhelp organisation to use its existing strength for growth in new market. For instance Crown Plaza hotel can launch its packed food items or retail stores. 4.Crown Plaza hotel in Victoria dock currently focus on upscale development in price and quality of services. To grow further it can also shift towards budget centred hospitality organisation.
5.The hospitality group can also develop a complementary product with same or different brand name to respond to specific target group or geographical regions. 6.If Crown Plaza hotel feel that in some regions it is not able to achieve its growth objectives then, organisation can also use product re-branding strategy. With this growth approach Crown Plaza will be able to define the quality, price, location and services of its products with new terms and specifications. 7.As per this strategy if hospitality group wants to have complete control over its services in international market then it can avoid franchising approach so that it can grow with its own directed specifications (Ryan, 2015). 8.In certain foreign markets it is difficult for the Crown Plaza hotel to manage its operations. In such country's hotel can use the franchising strategy so that it can establish its roots in the local market through local business groups. 9.The brand collection approach is one of the effective ways to expand the business growth in international market. Crown Plaza hotel is part of InterContinental hotel group and also offers franchising in different countries to explore the growth options. 10.Crown Plaza hotel can use management contracts which can help organisation to improve its services in any of the functional area. For instance if hotel believes that its marketing strategies are not effective enough then management contracts from other firms can help Crown Plaza to improve its marketing functions. 11.There is another growth approach such as vertical and horizontal growth in which hospitality organisation can own different segments of hospitality. However, this growth approach is not suitable and used by Crown Plaza hotel because currently the hotel is dealing in only hotel and accommodation services. 12.Organisations can also focus on a single product or services but being a hotel it is not possible for Crown Plaza hotel to focus on single product. It is essential that organisation focus on all services such as restaurants, room services and bars.
13.To sustain the growth in market Crown Plaza hotel can launch new services and products which can meet the growing needs of its consumers so that they can be retained for long term. 14.The higher focus on exploring services to global market is one of the most effective strategies to accomplish growth in the business activities (Robinson, Solnet and Breakey, 2014). R.V.D Crown plaza hotel can adopt strategy two so that it can also become leading hospitality in international context. The growth strategies such as franchising and new product development will be beneficial for the hotel in coming years. The franchising will help organisation to gain the local support from communities while making appraoches for international hospitality services. The innovation in products is also essential for the hotel to retain its customers and to lead other organisations. CONCLUSION From the report it can be concluded that to achieve the success goals at international level hospitality industries must explore and implement the international marketing and management strategies instead of applying only domestic or national marketing approaches. The report has described the SWOT analysis of Crown Plaza hotel. This analysis is very helpful and discusses the strength and weakness of the organisation. It helps hotel to have detailed information regarding its resources which can be used to achieve business objectives. The SWOT analysis is also essential for the company to identify the possible risk which can affect the success of the hotel. The study has also discussed the PESTLE analysis of the various emerging markets for the hospitality industry in international market. It has evaluated the range of attributes which not only affect the decision making but also influences the execution methods of operational and marketingactivitiesofthehotel.Thereporthasalsoexplainedthesignificanceand implementation of Porter’s generic growth strategy and how these strategies can be used as an integral part of the international hospitality trends and business objectives.
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Ansoff Matrix, 2018 [Online] Access through < https://www.smartdraw.com/ansoff-matrix/ > Using The Ansoff Matrix to identify growth opportunities,2018 [Online] Access through https://www.smartinsights.com/marketing-planning/create-a-marketing-plan/ansoff- model/
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APPENDIX SWOT ANALYSIS OF CROWN PLAZA HOTEL Strengthï‚·Large size ï‚·High brand value ï‚·Customer loyalty ï‚·High quality of services Weaknessï‚·Lack of innovations ï‚·Use of outdated technology and service patterns ï‚·Poor advertising and promotion strategies ï‚·High turnover on staffing Opportunitiesï‚·Product and market diversification ï‚·Expansion to global market by improved technology ï‚·Reduced operational cost through innovations Threatsï‚·Tough competition from other emerging hospitality organisations ï‚·Product substitution ï‚·Substitution threats from local competitors PESTLE analysis FactorsImpact Politicalï‚·Government policies can affect taxation and regulation. ï‚·Legal support is also influenced by this factor. Economicï‚·Economic stability affects pricing and operational cost.
ï‚·Taxation system can change the financial policies and marketing strategies. Socialï‚·Leads to changes in advertising and promotional concepts. ï‚·Product specifications are based upon social and cultural aspects. Technologicalï‚·Can make process more accurate and effective. ï‚·Innovations are dependent upon technical parameters. Legalï‚·Legal conflicts can create adverse impact on the brand image of the organisation. ï‚·Legal compliance is necessary for the hotel to ensure the health and safety and other organisational regulations. Environmentalï‚·Sustainable practices can improve the profits of organisation. ï‚·Environment instability can prohibit the successful execution of the functional activities.