Reflective Account of Value Chain Model in Intercontinental Hotels Group

This reflective account explores the value chain model in Intercontinental Hotels Group (IHG) and its impact on the company's internal environment. It discusses the primary and secondary activities of IHG, the importance of value creation, and the usefulness of the value chain model in gaining a competitive advantage. The essay provides insights into the operations and strategies of IHG in the hospitality sector.

REFLECTIVE
ACCOUNT QUIZ
AND ESSAY

Table of Contents
INTRODUCTION...........................................................................................................................1
MAIN BODY...................................................................................................................................1
Value Chain Model.....................................................................................................................1
Intercontinental Hotels Group.....................................................................................................2
Internal Environment..................................................................................................................3
Reflection on Value Chain Model...............................................................................................5
CONCLUSION................................................................................................................................6
REFERENCES................................................................................................................................7

INTRODUCTION
Reflective Essay refers to an activity that is associated with appropriate and effective
evaluation of certain activities or procedures that are inclusive of experiences or procedures of a
company that helps in reflecting upon the current performance of an organisation (Josserand and
Kaine, 2016). In this context, the reflective essay below is based on internal environment of
Intercontinental Hotels Group (IHG), which is one of the most recognised organisations in
hospitality sector of the United Kingdom. The assignment covers description of Value Chain
Model, along with a detailed description of the hotel and its business operations. Furthermore,
the essay is also inclusive of application of the value chain model and reflection of its usefulness.
MAIN BODY
Value Chain Model
Value Chain refers to an appropriate combination of several activities that a firm
performs in relation to delivery particular products as well as services within the marketplace.
Moreover, this aspect is very much necessary in order to appropriately and effectively create
value within the company. The reason for this is because it directly reflects upon success of the
firm, as higher value enhances the productivity and profitability of the organisation. Moreover,
value chain of a firm also helps the company in building a strong and sustainable competitive
advantage (Albert and Grzeda, 2015).
In this context, one of the most effective and essential contributions was done by Michael
Porter in 1985, where the concept of value chain was firstly introduced. In the Value Chain
Model described by Porter, all the systems and their input towards the output (performance
objectives) were taken into consideration rather than the departments and functional units of the
company. A rather homogeneous display has been provided within this model of activities that
are common within businesses, regardless of the sector in which they operate. Moreover, these
tasks are further divided amongst primary and supporting activities. In terms of former, activities
like inbound logistics, operations, outbound logistics, marketing and sales, as well as service are
included. However, the tasks which are directed towards the primary activities are inclusive of
procurement, human resource management, technological development as well as infrastructure.
A combination of all these activities are adopted and performed by an organisation consistently
and effectively which enhances the scope of achieving objectives in an appropriate manner.
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One of the biggest strengths of value chain model by Porter is the approach which is
followed by its concept. This is because a linkage is established within the systems of the
company within one another, which showcases prominent impact upon the cost, as well as the
profit. This clarifies the sources within the firm that are generating value for the organisation as
well as the resources that are negatively impacted through the current performance of
organisations on these grounds. Hence, value chain model is an effective form of analysis which
explores the working of an organisation along with factors that could possible help the company
in relation to create effective value (De Jong and et. al., 2017).
Intercontinental Hotels Group
Intercontinental Hotels Group or IHG is an international organisation that deals in
accommodation, food and beverage operations within the UK's hospitality sector. In addition to
this, the firm has an effective presence in almost 100 nations, where it owns several brands that
contribute in enhancing the success of the enterprise. Founded in 2003, the firm has made its
goodwill and reputation in all over the UK and beyond as an organisation which gives effective
food items, accommodation services as well as essentially market its services to the public.
As per the firm's mission and vision, the value within the company is very much created
through delivering its hospitality services, which includes the food items they provide, the
quality of accommodation, additional services such as internet and lodging facilities and so forth.
Moreover, since the firm has a global reach, the firm includes flexible systems that are associated
with catering guests from different cultural origins and different social backgrounds.
Furthermore, a prominent approach which the company includes within its systems is innovation
and differentiation. This could be reflected by the fact that the firm introduced several concepts
within the US, such as inclusion of boutiques within their hotels. Such additional inputs made
sure that the firm's sales uprise to a substantial and effective level (Waithanji and et. al., 2015).
In addition to this, the company has been a pioneer in marketing its services to its target
market and attracting the same through ensuring consistency in its systems. For instance, all the
primary activities associated with logistics, marketing and sales as well as services are
improvised and modified on a regular basis so that the firm could operates on a fair scale and
effective services are provided to the customers appropriately. Moreover, the infrastructure,
human resource as well as technological development are very much appropriate to support the
primary tasks of the organisation.
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Internal Environment
It is quite imperative that the internal environment of an organisation is evaluated using
value chain model as it covers appropriate systems and operations of the company that is
necessary to achieve its objectives, which primarily are the sales and profitability. Hence, in
context of Intercontinental Hotels Group, the value chain model appropriately includes the
primary as well as supporting activities of the company (Bi, Davison and Smyrnios, 2017).
Primary Activities
Inbound Logistics
In this activities, firms tend to build up effective and stronger relationships with the
suppliers, as their support is very important for a company like Intercontinental Hotels Group to
acquire, store as well as deliver their offerings. In terms of this company, the firm has contractual
suppliers all over the UK for its multiple hotels, which are responsible towards delivering
beverages, raw vegetables and fruits, as well as laundry services for the company. furthermore,
the firm has a house storage, as well as distribution function within the departments of the
company, along with systems inclusive of stock requisitions and inventory control.
Operations
The operations within Intercontinental Hotels Group involves activities like assembling,
food production, packaging, testing as well as product delivery. Moreover, another key
operational activities within the organisation is related to maintenance and repairing of
machineries and equipments. The firm has been appropriately and effectively managing these
operations to control its operations through acquisition of equipments that helps the firm in
innovate as well as conduct these operations with minimal waste and maximum output.
Outbound Logistics
These activities are inclusive of processing the order, report preparation as well as storage
of food. Since the firm has a daily acquisition of food items, the storage facilities of the company
is quite effective and temperature controlled to keep the food quite fresh as well as provide best
quality food items to customers. As for order processing, the organisation has digitally
transformed and automated systems for their websites and mobile applications, which helps the
firm in tracking orders and processing them in a prominent and effective manner (Folmer, 2016).
Marketing And Sales
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These activities are inclusive of communicating the services of the hotel to its customers
in a prominent manner. In relation to Intercontinental Hotels Group, the firm focuses on
marketing the differentiated products and services to the customers, which are available at
affordable costing as well as high quality. To conduct the same, the firm uses advertising through
social media and promotions, sales agents, building effective relationships with prominent
channel members and so forth. These allow the firm to market their food items and
accommodation services, along with selling the same to their target customers.
Service
This is inclusive of the pre-sale, as well as post-sale services for the customers. In terms
of the former, the firm grabs attention of the customer through engaging in communication about
the kind of services expected from the company, as well as acquire information about all the
queries and requirements of the customers on the basis of which the firm acts upon at the time of
sales. Moreover, for post-sales services, the customer relationship management of the firm is
directed towards acquiring feedbacks from customers along with providing offers and discounts
on prominent locations to ensure their engagement with the company.
Secondary Activities
Infrastructure
In relation to the infrastructure, the firm acts appropriately to manage their financing
accounting, legal matters as well as planning activities. For these purposes, technical, financial
and human resources are hired by the organisation to develop strategies as to how best the
infrastructure of the company be improved and help the firm in gaining competitive edge.
Human Resource Management
This activity is primarily concerned with appropriate and effective management of the
employees and workforce of the company. There are several techniques through which
Intercontinental Hotels Group ensures this management. For instance, the firm trains their
employees on professional grounds,which allows them to deliver the services in an enhanced and
competitive manner. Moreover, to retain and engage their clients, the firm improvises its
rewarding mechanisms and policies to motivate the workforce (Jordan and Kapoor, 2016).
Technological Development
In hospitality, it is required that the technological development is included within
organisations as a key activity to support the operations and systems of the firm. In context with
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the company, Artificial Intelligence has been used by the firm in relation to track, measure as
well as reduce the wastage of food. Usage of technologies like Winnow Vision AI, helped the
firm in reduction of 30% of food waste, which is quite effective to support its logistics and
operations (Award-winning AI technology helps IHG, 2019).
Procurement
This reflects with procedures that are included within the purchasing of raw materials,
supplies and equipments that are required to produce the food items within the company.
Strategic plans and supply chain management is adopted by the firm to successfully procure the
resources as per the requirements.
Reflection on Value Chain Model
It is required that appropriate reflection is provided on the above display and analysis of
the internal environment of the organisation using value chain model. This would allow
development of an effective insight on the usefulness of the model in order to serve the purpose
effectively (Kolk, 2016).
Value Chain Model helped me in context of getting an effective insight in elation to
appropriately analysing how Intercontinental Hotels Group could gain a competitive advantage.
The reason for the same is that it helped me in analysing the current operations of the
organisation, which is associated with providing the firm with an effective and competitive
advantage.
Furthermore, it also allowed me in evaluating the value that is created by the operations
of the company. For example, it is evident from the display below that Intercontinental Hotels
Group is quite appropriate in creation of value, as its logistics, operations, services and
marketing activities are very much effective in context of providing value which exceeding the
cost in an appropriate manner.
In addition to this, Value Chain Model of Intercontinental Hotels Group has also been
very much contributing in analysis of internal environment as the supporting activities reflected
the aspects that are internally included by the company to ensure procurement and supply chain
management of the organisation. In addition to this, while the internal environment of the firm is
inclusive of the management of resources and core capabilities, value chain model helped me in
realise all the elements of human resource management, along with logistics functions which the
firm performs in relation to accomplishing its business performances. Hence, there is a
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prominent contribution of value chain model in helping me understand the internal environment
of the Intercontinental Hotels Group.
CONCLUSION
Hence, it is concluded from the report above that reflective account helps individuals in
analysing experiences and working of companies that helps in enhancing the knowledge of
people about organisations and their functioning. Value Chain model is an effective framework
that is inclusive of appropriate and effective evaluation of systems within a company and their
linkages that helps in allowing the firm in creating value and effectively ensuring
accomplishment of business objectives. Lastly, reflection upon this model could help individuals
in getting an insight upon the internal environment of an organisation.
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REFERENCES
Books and Journals
Albert, S. and Grzeda, M., 2015. Reflection in strategic management education. Journal of
Management Education. 39(5). pp.650-669.
Bi, R., Davison, R.M. and Smyrnios, K.X., 2017. E-business and fast growth SMEs. Small
Business Economics. 48(3). pp.559-576.
De Jong, J., and et. al., 2017. Instruments of value: using the analytic tools of public value theory
in teaching and practice. Public Management Review. 19(5). pp.605-620.
Folmer, B. ed., 2016. The craft and science of coffee. Academic Press.
Jordan, S. and Kapoor, D., 2016. Re-politicizing participatory action research: unmasking
neoliberalism and the illusions of participation. Educational Action Research. 24(1).
pp.134-149.
Josserand, E. and Kaine, S., 2016. Labour standards in global value chains: Disentangling
workers’ voice, vicarious voice, power relations, and regulation. Relations
industrielles/Industrial Relations. 71(4). pp.741-767.
Kolk, A., 2016. The social responsibility of international business: From ethics and the
environment to CSR and sustainable development. Journal of World Business. 51(1).
pp.23-34.
Waithanji, E., and et. al., 2015. A gendered analysis of goat ownership and marketing in Meru,
Kenya. Development in Practice. 25(2). pp.188-203.
Online
Award-winning AI technology helps IHG. 2019. [Online] Available Through:
<https://www.ihgplc.com/en/news-and-media/news-releases/2019/award-winning-ai-
technology-helps-ihg-hotels-track-measure-and-reduce-food-waste>
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