Strategic Management in Hospitality Industry

This guide explores the concept of strategic management in the hospitality industry, with a focus on Claridge's hotel. It covers steps for corporate strategy, evaluation, formulation, challenges, and issues faced by the organization. The guide also includes a PESTEL analysis, Porter's Five Forces analysis, and Ansoff's growth matrix for Claridge's hotel.

STRATEGIC
MANAGEMENT IN
HOSPITALITY
INDUSTRY

Table of Contents
INTRODUCTION...........................................................................................................................3
MAIN BODY...................................................................................................................................3
Steps for corporate strategy.........................................................................................................3
Evaluation...................................................................................................................................5
Formulation of strategy...............................................................................................................9
Challenges and issues................................................................................................................10
CONCLUSION..............................................................................................................................11
REFERENCES..............................................................................................................................12

INTRODUCTION
Strategic management refers to the identification and description of strategies which
executives can carry for achieving better performance and competitive benefit for the company.
It can also be defined as bundle of decisions and actions which executives undertakes and
decides result of performance of the organization performance. It is a continuous process which
evaluates and controls the business in which company is involved. The company chosen is
Claridge's hotel. It was established in the year 1812 as as Mivarts hotel. It is situated in Brook
Street and Davies Street in Mayfair,London. It has relations with royal palace and also known as
annexe to Buckingham Palace. The project will state the corporate strategy concept used by the
organization to be more competitive. It will also mention the challenges faced by the
organization with implementation the strategies in business.
MAIN BODY
Steps for corporate strategy
Corporate strategy is used for achievement for goals of company as corporate is related to
earning more profits. It means that policies are developed by top management and executed by
junior employees. Workers in company are bind for following the strategies developed by top
management. But there is condition for making it binding on workers by making it legal means if
there is any illegal act in strategy such as cheating etc. then it is not binding accountable for
executing strategies as per policy. The policy enables allocation of resources and responsible for
priority of objectives and actions held for fulfilling the objectives. Strategic management
provides clear view for objectives of organization and provides reasons for achieving goals in
given time. Strategy gives way for processing activities of company in proper manner(Keding,
2021).
However the preparation for corporate strategy helps in company in creation sense of
direction which organize aims for receiving the performance at better level for company.
Strategic plan provides base for competitive hotel Claridge's which helps in development of
organization and evaluating success by compensating workers and helps in decision making. It
makes to be proactive than reactive which helps in assistance in marketplace and analyse
uncertainty as per measuring(Dzwigol, 2020).

It makes company enable for survival in competitive environment. Corporate strategy
specifies plan to management and align with goals to activities of management and increase
efficiency in operations by allocation of budget and resource.
Strategic management in hospitality sector helps in creating effeiceint and effective plan
for success in gaining more profits. It helps in decision making process steps for achieving
objectives. Hospitality sector includes corporates related to services provided to consumers in
order to increase experience and satisfaction of consumers and reviews also. It increases the
rates of consumer retention(Chofreh and et, al.,2021). Plan is compulsory for development of
policies and principles and satisfaction to clients by increase in consumer base.
Various steps are included in development of strategy. Claridge's hotel also follows
strategy for increase in current competitive environment. It consists of developing objectives
which requires focus of top management because they have better understanding of objectives
and have power for formulating strategy. Managers only implement policies made by
management. Setting of objectives aids in ascertaining the goals and aims. It provides clear
vision for execution process and plan for achievement by managers and follow plan.
Analysis s the next step in development of strategy. Claridge's hotel this step for analysis
for needs of marketplace. Management of business evaluates market for aim and objectives
which are set in strategy and competitive so management develop policy. Business also uses
resources available in company for achievement of goals but if there are no resources then
management has to make it available for achievement of goals(Makadok, Burton, and Barney,
2018).

Evaluation
Pestel analysis
Its a frame work used by businesses for analysing and monitoring macro environment
factors which affect the company. It is a model used by management teams for strategic planning
and risk management and helps in developing innovative goods and market initiatives and by
community of financial analyst where factors may affect model assumptions and decisions of
finance. Here is the analysis of Claridge's hotel-
 POLITICAL FACTORS- They are the factors affecting the company directly such as
tax reforms, interference of government etc. Claridge's hotel operates globally, so these
factors puts impact on the performance of business directly if it is ignored by
organization. Claridge's hotel will have to check the all political factors for smooth
functioning of business. Hotels is generating employment for people where political
stability is there(Lynch, 2018).
 ECONOMIC FACTORS- They are those factors which are related to issues of economy
such as demand,supply,cost etc. Claridge's hotel s is presently focusing on related issues
such as variegation, compliances and advertising of brand aiming at neglecting the outer
factors which may affect the company performance. Claridge also knows this of
changing currency rates constantly aiming for reduction in fluctuations in the company.
 SOCIAL FACTORS- These are mainly related to culture and direction presently going
in society such as consumers tastes,preferences,demography and many others. Claridge
is mainly focusing on the things for fulfilling the demands and needs of every segments
of society in the better way. Claridge is also increasing the range of goods in
marketplace so not a single consumers goes empty handed. It is a good technique which
is used by Claridge.
 TECHNOLOGICAL FACTORS- They are those factors which are related to
technology used in company. With the ever changing technology mow and then it
provides numerous opportunities for Claridge for developing the technology. Claridge
hotel is now mainly focusing on the online business and provides consumers better
experience and online support(Barbosa, Castañeda-Ayarza and Ferreira, 2020).

 LEGAL FACTORS- Each and every company has to align with the regulations and
rules which are applicable. As the government policies and other tax reforms make a
impact on execution of the company. Claridge hotel is dealing in the products of retail
for keeping check the laws applicable and rules constantly. Claridge is very well known
for being strict with rules and regulations and known as the best company in following
the compliances and rules in proper manner.
 ENVIRONMENTAL FACTORS – They are those factors which increase the
awareness of environment and accelerates pressure on company for performing the
operations of business while adhering the issues of environment. Claridge hotel is
committed towards to perform the part by effort making for reduction the carbon
footmark by 30% by year 2035.
The above model analysis concludes the Pestle is useful in knowing the affect of outer
factors and business performance which can be increased by small changes in organization
policies. Business of Claridge hotel is changing very fast and approach of the company looks
very bright.
Porter's Five Forces analysis
It is the analysis used for evaluating the performance of competitors of organization and
factors affecting performance of organization. It mainly aims at 5 forces which are important in
comparison to other forces. They are bargaining power of customers, competitive rivalry,
threat of new entrants and threat of substitutes. Here is the analysis of Claridge hotel-
 COMPETITIVE RIVALRY- It means that company is facing competition from other
competitors in the market place. As the Claridge hotel is operating hotel business where
the price competition is very high among the competitors. The force is very strong as it is
actually impacting the performance of Claridge hotel as there are many players in the
market such as Central park,Hilton and many others. They are giving services to
consumers at the same price range. They are using same tools and techniques for smooth

functioning of business so there is no differentiation in business(Alieinykov and et, al.,
2019).
 BARGAINING POWER OF CUSTOMERS- It is one of the significant force which
directly impacts the organizations turnover. Bargaining power provides power to
consumers for selecting the place where they want to buy from. Consumers buy products
which are low in cost. The force is moderate for Claridge hotel as all competitors are
giving same quality and cost of goods so consumers can not use power and go to hotels
near to the house. It will not make any big impact on Claridge hotel.
 BARGAINING POWER OF SUPPLIERS- It is another force where the suppliers do
not have sufficient power as there are many suppliers for every hotel and changing the
supplier to another is not a big task for organization such as Claridge hotel. It is weak in
nature for Claridge hotel. As the company power of negotiation is with them and id
dominant in market place. The retailers have right of selecting suppliers who is giving
them best price(Barney, 2020).
 THREAT OF NEW ENTRANTS IN MARKET- It is the another force and is very
difficult tasks for new entrants for competing with big companies in market place. The
force is weak for Claridge hotel as new companies cant invest in infrastructure of hotel
as it requires very large capital and do business operations at a big scale. The big players
in the market can give discounts to consumers for its facilities by cost reduction which is
impossible for new players. It is a difficult task to climb for new entrants.
 THREAT OF SUBSTITUTES- It is the force which impacts the business as now each
and every hotel has a substitute but the personalized services given by the Claridge hotel
are different in nature which they provide to consumers. So this force is moderate for
Claridge hotel as it is famous for fine services and has large consumer base so it will
neglect the substitute of services.
Ansoffs growth matrix
It is a tool which helps managers and marketers in the company for understanding how
they can develop and change strategies for getting more growth. They are all alternatives which a

company can use for reaching in markets or growing the offerings of goods. Each have some risk
in implementing the strategy. Here is the analysis of Claridge hotel-
 Market penetration- It is the action of marketing existent goods in current markets.
Claridge hotel uses this strategy in different ways. They aggressively promote the
services in suitable channels of marketing as it will help in attracting consumers. They
are also offering discounts at certain times of year like New year and Christmas for
increasing the revenue. At times when sales is low they cut the prices. Mergers are
common in this sector as small hotel are acquired by big chains. Claridge hotel is
working on developing the facilities and do price adjustments. When booking is done by
the large groups they give discounts. Loyalty cards are also give to regular consumers for
increasing sales in market.
 Market Development- It takes place when the current goods are launched in new market
places. Hotels use this by opening new branches at new places. Claridge hotel does this in
by opening new branches in same city and nation. Hotels establishing takes more time
and money. When ever hotel opens a new branch it promotes for creating awareness.
They give discounts for motivating consumers for staying at hotels. Claridge hotel uses
strategy by offering rooms with less service then elite ones. They offer at different prices
for attracting segments of consumers. They promote as well as it allows them for creating
new segments in current markets which will help in increasing sales.
 Product Development- It is the act of marketing new goods in current markets. In hotel
industry the addition of premium rooms is done. Claridge hotels new services is based
on trends of market and feedback of customers. New services will helps to improves the
stay of consumers. Facilities already offered are improved for increasing value to guests.
Extra amenities are given by hotel which consists of new goods in hotel sector. Product
development is promoted by hotels to create awareness to target consumers. It is a
another way for hotels to show case the efforts for consumers satisfaction(Pfarrer and et,
al., 2019).
 Diversification- Hotel sector is already very diversified,they provide the food
services,laundry,cleaning and various other services. Claridge hotel can diversify
vertically by growing crops for food. They can also provide transport services also and

diversify in other sectors like theme parks,resorts etc. It will be easy for them as they
have hotel experience. Unrelated diversification can be done if Claridge hotel want to
enter in new sector such as textiles,sports and use their brand name for gaining success.
Formulation of strategy
After evaluating the market place and competitors management requires to develop
strategy for achieving objectives of strategy. Strategies must be developed which suits the
present situation of market place and current condition of competitors. It must be legal in eyes of
law.
Now the strategy developed is to be implemented by managers of Claridge's hotel. In
this step the strategies objectives set are executed by some specific individual. Duties are
mentioned in this step as it states clear plan and person liable for the implementation. It helps in
effective and efficient business management as all the things of strategy are specified. Claridge's
hotel may implement it in a best way.
The final step is evaluation and control for implementation of strategy by manager of
Claridge's hotel for seeing the results. It mentions the review of strategic operations of business.
If there is loophole after reviewing management can make new plan. It also provides the changes
done for increasing efficiency in engagement of organization. Strategic management process
execution stats activity of plan and scheme executed by management for long term goals
achievement. It is included in structure,culture,individuals and systems control for gaining
advantage. Starting with establishment of goals and objectives and definite covariant setting for
success in business. Claridge's hotel has set smart objectives which can be easily achieved by
efficient team.
In next step the formation of roles,responsibilities and relationship between workers of
Claridge's hotel for achieving objectives by delegating the work. Process of implementation and
monitoring is important for business. Management can take corrective action also and can get
closure on agreement on output of business. Progress of organization is reviewed also for
implementing way for executing plans(Ansoff and et, al., 2018).

Challenges and issues
Company facing issues while strategy execution creates barrier in achievement of
objectives. It consists of ineffective communication. It leads to non management in company
leading to conflicts among workers of organization. If workers of Claridge's hotel communicates
info in effective manner leading to management conflict. Employees not communicating with
each other leads to creation of communication hindrances(Siegel and Leih, 2018).
Ineffective alignment in company leads to problems as when there is bad implementation
of steps of strategy. Claridge's hotel is also facing same issue as set objectives are not
effectively fulfilled. Next is ineffective management change where they cannot change policy as
the needs of dynamic environment of marketplace and not comply with technologies available in
marketplace used by competitors. Ineffective management of performance when workers are
performing below standard level stated in strategy.
Claridge's hotel the workers work better in new strategy then previous one and other
concern is ineffective management of project when executives of project dont have required
capabilities for performing the tasks of strategy. Executives of company must be able for
handling the projects as if executives dont comply with duties of strategy. In Claridge's hotel the
executives lacks skills for management of projects, the executives should fulfil the duties for
better output.
The executives of projects must evaluate actions which are done by workers in setting
KPIs so the disciplinary actions must be taken when deviants are found in evaluation. Company
should review potency of goals by deciding strategic plan and when it is not straight with
capability which means its below exceptions. If objectives of company are not realized then a
effective plan must help the company for achievement of goals(Valeri, 2021).

CONCLUSION
The preceding report states that strategy management of business. It mentions the steps
involved in formulating strategy as it helps in helping management for developing better
policies and strategies. It also include the process of corporate strategy and strategic
management. Execution of strategies which enables the management for providing effective
perspective for business. The challenges and issues related to implementation of strategies which
can be solved by the management of business and explains the practices which enables for
implementation of strategies in business.

REFERENCES
Books and Journals
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Ansoff, H.I., and et, al., 2018. Implanting strategic management. Springer.
Barbosa, M., Castañeda-Ayarza, J.A. and Ferreira, D.H.L., 2020. Sustainable strategic
management (GES): Sustainability in small business. Journal of Cleaner
Production, 258, p.120880.
Barney, J.B., 2020. Measuring firm performance in a way that is consistent with strategic
management theory. Academy of Management Discoveries, 6(1), pp.5-7.
Chofreh, A.G., and et, al.,2021. Covid-19 shock: Development of strategic management
framework for global energy. Renewable and Sustainable Energy Reviews, 139,
p.110643.
Dzwigol, H., 2020. Methodological and empirical platform of triangulation in strategic
management. Academy of Strategic Management Journal, 19(4), pp.1-8.
Keding, C., 2021. Understanding the interplay of artificial intelligence and strategic
management: four decades of research in review. Management Review Quarterly, 71(1),
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Lynch, R., 2018. Strategic management. Pearson UK.
Makadok, R., Burton, R. and Barney, J., 2018. A practical guide for making theory contributions
in strategic management. Strategic Management Journal, 39(6), pp.1530-1545.
Pfarrer, M.D., and et, al., 2019. Sociocognitive perspectives in strategic management. Academy
of Management Review, 44(4), pp.767-774.
Siegel, D.S. and Leih, S., 2018. Strategic management theory and universities: An overview of
the Special Issue. Strategic Organization, 16(1), pp.6-11.
Valeri, M., 2021. Organizational Studies: Implications for the Strategic Management. Springer
Nature.