Strategic Hospitality Management: Corporate Strategies, Models and Tools

This report discusses the principles and application of strategic management in the hospitality industry, with a focus on corporate strategies, models and analytical tools. It includes a case study of Premier Inn, a British hotel chain, and analyses the effectiveness of various strategies and challenges faced by the industry. The report also covers PESTEL analysis, Porter's 5 forces model, SWOT analysis and more.

Strategic Hospitality
Management

TABLE OF CONTENTS
TABLE OF CONTENTS..............................................................................................................2
INTRODUCTION...........................................................................................................................3
1. Introduction of the organisation..............................................................................................3
1.1. Aim And Objectives Of Report...........................................................................................3
1.2 Formulation of corporate strategy:........................................................................................4
2. Demonstration of understanding:............................................................................................5
2.1 Corporate Strategies In Hospitality Organisation.................................................................5
2.2 Strategic management applied to hospitality industry:.........................................................5
2.3 theories from hospitality and analysis:..................................................................................6
2.4 The models and analytical tools:...........................................................................................7
3. Critical analysis of the industry practice:................................................................................9
3.3 Implementation Of Corporate Strategy And Strategic Management Process.......................9
3.4 Issues And Challenges Of Implementation of strategies....................................................10
3.5 Effectiveness Of Implementation Of Strategies..................................................................12
CONCLUSION..............................................................................................................................12
REFERENCES..............................................................................................................................14

INTRODUCTION
Strategic management for hospitality industry involves managerial efforts to establish and
implement the plans within the company environment. It is a proactive procedure to achieve long
term goals and to check the compatibility of the corresponding area of tourism. This shows the
most profitable way to implement priority to develop the goals in tourism, the most crucial part
of the strategic management is operational strategy. The importance of strategy management is it
provide the direction to develop plans and strategies and design policies to accomplish objectives
and allocating resources to implement plans to get the edge on the competitive advantage.
Although implementing and initiating the corporate strategies can be very difficult if it processes
are poorly described which is often seen in the companies. It can cause confusion and uncertain
difficulties and make it impossible to successfully implement the strategies without facing any
difficulties. While there are 4 major strategies used in hospitality industry that is building brand
image, increase customer satisfaction, operational excellence, and being in the good books of the
citizen while being in corporate business.
1. Introduction of the organisation
Premier Inn a British hotel chain established in 1987 with more than 75 thousand rooms
and 800 hotels globally in operations. The chain is owned by Whitbread PLC in 2005 the
company launched its 500th hotel in Hemel. The company expanded its business in UAE, Ireland,
Qatar, Germany. Abu Dhabi. The company has two sub brands HUB BY PREMIER INN is in
city centre format with the latest technologies and ZIP BY PEMIER INN is low priced hotel with
simple food and drinks services. All the hotels have in house restaurants but most of them
provide breakfast services only. It the first big budget hotel chain to invest in prime time
television advertisement. This company showcases all the principles and models which is used in
the report.
1.1. Aim And Objectives Of Report
This reports aims to develop learners knowledge in a field of hospitality business and the
current challenges faced by these organisations as they plan to grow globally. Which is required
to demonstrate the understanding of the principle and application of strategic management in
hospitality organisation. The objective of this report is to write critical analyses of various

processes, challenges, and the effectiveness of corporate strategy. This report is based on a
review of various literature authors of strategic management concepts. The practices of concepts
and strategies might include challenges or effectiveness.
1.2 Formulation of corporate strategy:
Business Canvas Model
This business model is one page summary which describe the high level strategic analytical
details needed to get the organisation successfully into the market. The key areas which should
be covered in this model is:
1. The product's proposition which means what it does and what the product promises
2. Customer segmentation which refers to the target audience the company is looking for
3. Key resources which indicates which personnel, tools or the budget the team can have
access to.
4. Monitoring channels to how the company will have a marketing strategy and sell it.
5. Customer relationships it shows how the company will deal with their customer base
regarding their complaints, feedbacks, or customer satisfaction after the service is
provided
6. Partnerships can be a difficult execution to how the third party will fit in the plan.
7. Costing structure is very important factor which includes production cost, operating cost,
marketing cost. It all depends upon the popularity of the product and how well it is
selling in the market.
8. Monitoring revenue is the last but the most important part where excluding all the cost
that is being removed and what left will the profit. The revenue should be greater that all
the cost including then only the company will have profit.
This product or model is very simple and can even be done on sticky notes too. It only has to be
the highlighted or the important part rather than the whole information. The model does not have
to be long termed. The business canvas helps visualize the forces by which it addresses key area
to users . The main disadvantages of the model is that it does not include the external forces of
the business model.

2. Demonstration of understanding:
2.1 Corporate Strategies In Hospitality Organisation
According to Noone and Glassmire (2017), top-level managers are responsible to formulate
corporate level strategy and are generally looked ahead of long time period like 5 years or so.
These strategies are mostly referred to large corporation which have businesses in other fields
also to know how they manage and allot resources between the businesses. Such strategy can
help the company to balance resources with marketing opportunity in every business area. As a
reference to the Köseoglu and et.al (2019), The corporate strategy is kind of unique framework
that is designed to gain a competitive advantage over the other market companies while
delivering both customer and stakeholders.
2.2 Strategic management applied to hospitality industry:
The three basic corporate strategies include growth, stability, retrenchment strategy and
combination strategy.
Growth Strategy
According to the Konovalova and et.al (2018), the growth strategy is applied when the
organisation is planning its expansion and the market share it serves or the products that are
being offered. The company might also increase its revenue and market share using the strategy.
In context of Petera (2020), the sub strategies which can be applied under growth strategy can be
market penetration, market development, product development and diversification.
Stability Strategy
An author Im and Kim (2021), stated that this is corporate strategy in which company
focuses on maintaining the market position it is on. A company will adopt various approaches
focusing on its existing product and market. According to authors, a company will use this
strategy only when it is satisfied with its current market position. In reference to cited source, the
advantages of this strategy is that the company is successfully running and their objectives are
accomplished and their performance is satisfactory. It is less risky and management doesn't have
to foresee any changes in opportunity or environment in market or faces any threats. According
to Hemmonsbey (2021), this strategy faces some disadvantages like the strategy can not be used
for long term run, which could result the company to be outdated and can kill the innovations.

Retrenchment Strategy
This strategy is explained by Camilleri (2018), when the company adopts this strategy the
organisation aims to reduce its business operation with the vision to cut expenses and reach more
stable financial orientation. This strategy is used by companies all around the world specially
start-ups there are advantages of this strategy which includes improved tax rates, waivers on
premium and even better debt's repayment. The Garavan (2021), has described its disadvantages
as it can leave traumatic and emotion impact on the employees that are still working and those
who are laid off. The employees which are still working will have trust issues on the company
will be less motivated this can result in less productivity in the organisation.
2.3 theories from hospitality and analysis:
Porter's 5 forces model
This model analyses competitive forces that can help determine the industry its
weaknesses or strength. This model is often used to identify corporate strategy. It can be applied
to any segment of the economy to understand the level of competition:
Competition In Industry:
It refers to the number of competitors, and their ability to undercut a company. The larger
the number of competitor and the equivalent product that are offered gives less power to a
company. When competitive rivalry is less the company can charge higher price and achieve
high sales and profits.
New Entrants Into Industry:
The position of the company would be weakened if the competitor enter into the
company's market within less time and costing of money, the company has to grab its highest
share and develop its market penetration strategy.
Power of Suppliers:
Supplier plays a vital role in cost of input of company because if the industry has less
than the supplier required, it can drive up the cost of the input can influence the company's
position in market. So it is better to have multiple supplier's so that the cost can be distributed

equally and it also affect the factor that changing the supplier can cost them. So instead of
changing the supplier, the company could rethink the economical part which will be effected by
it.
Power of Customers:
It consistent and powerful, can negotiate for better prices and offer deals. A company which have
smaller but independent customer base is easier target to charge higher and make profit.
Substitute Threat:
The product or the service a company is providing can be substituted by the competitors
which might lead the customer to have more options and can weaken the market position by
losing the market share & this is considered to be a threat to the company. The product or the
service has to be developed in a way that it could not be substituted closely by competitors.
The advantages of this strategy is to help identify where power lies in the business position. This
help in both the ways by understanding the current competitive position of the organisation and
position of the company that it look to move into. But a big drawback is followed as the
tendency to use this analytical framework to analyse ab individual company vs a wide industry.
Although the framework is too static and might omit the difference in competitive environment.
The number of customers will be a major impact on the decision of the company regarding the
pricing of the product and how the small customer base but consistent and powerful, can
negotiate for better prices and offer deals. A company which have smaller but independent
customer base is easier target to charge higher and make profit.
2.4 The models and analytical tools:
PESTEL analysis:
PESTEL analysis means analysing external environment which impact the business
organization and effect the strategies of the business, there are certain factors of PESTEL
analysis such as:
Political factor: political factor means government and its policy which directly and indirectly
impact the business, for every business organization political stability is very important. The
policy of government keep changing when there is change in the political environment in the

country. It is very clear that if government change its policy then the business organization also
have to change the strategies to meet the expectation.
Economical factor: economical factor means a business organization may get effected from
economic factors. These include inflation rate, foreign exchange rate, employment and
unemployment rate and stability of the economy. These all factors are very important and need to
be considered in strategies making and planning. Strategic management of business might get
effected with these economic factors. That is why every strategy need to be short term to stay
dynamic to handle any changes from the economy.
Social factor: social factors are one of the most important factor because this includes customer
and their preference in choosing product in the market. Social factors may include the lifestyle of
people, standard of living, income and education level and taste and preference. These factor
influence the business and its strategies. Social factors keep changing as trends changes and
these change as taste and preference of people.
Technological factor: technological factor influences the business and its strategies as these
keep changing, technology keep developing day by day and business need to adopt latest and
fastest technology to survive in the market. Technological factor may include soft and hard
technological, the soft technological may include software and IT of the company whereas hard
technology include automation and hardware. A business strategy get effected with these
technological changes. The Marriott hospitality utilize the technologies in their organization
which helps them serve the guest in the perfect order and also utilize the different payment
methods in this rapid growing technology and digital world. Providing the different kinds of
payment methods reduces the risk of losing the consumers and guest and provide profitability.
Legal factor: legal factors means all the legal and legislative completion in running a business,
these include legal requirement to run a business. Sometimes business try to develop various
strategies which require legal permission from the government, these strategies are usually
related new product or expansion in international market. Legal documentation may include
licence and permit running production and manufacturing operations.
Environmental factor: environmental factors are related to nature and its activity which include
the natural calamity which effect the business organization. Environmental factor include
condition of the weather, climate and natural disaster. Although a business organization do not
mainly get effected with these factor because these often occur within a time and do not mainly

cause serious issue but sometime nature complete become the reason for discontinuing of the
business. The Hilton hotel focus on the environmental factor and implement the sustainability in
their hospitality which make them to attract more consumer and guest and leads them to improve
their productivity.
Internal analysis
SWOT analysis:
SWOT analysis is one of the best tool for analysing the strength and weakness in
business organization, these include:
Strength: strength means the best area of business organization, every business have their own
strength which allow them to be different from other and help them to survive the market.
Strength of business lies in the uniqueness, many organizations have their own uniqueness which
keep them different from others. The Premier Inn have strength in the luxury they provide to the
guest. Another strength of this hotel lies in the location where this accommodation is established.
For example, the Hilton hotel have the strength that they focus on the consumer desire and
satisfaction which helps them to grow more and provide all the requirements of the customer.
Weakness: weaknesses means area where business organization is not performing well and need
some improvement. Weaknesses are the biggest hinder of growth which the overall performance
of the business organization. The weakness of Premier Inn lies in the unstable management team
which sometimes unable to manage the session where they tend to lose guest. For example: The
Marriott hotel do not able to provide the effective customer service because of lack of trained
employee in their hospitality which makes them to not supply effective and better services to
their potential consumer and guests.
Opportunities: opportunities lies in the identification of weakness and planning to improve the
weak area, opportunities are small booster which help business to get the desired result.
Opportunities not only help business to boost but this also help in the betterment of the
performance. These always lies in the environment of the business where the organisation need
to have ability to find the opportunities. For Premier Inn, their opportunities lies in the
identification of weakness, if they successfully identified the weakness then it is very easy for
them to create opportunities. Another opportunities lies in the expansion of the business in near
town, if they do so, then it will be very beneficial.

Threat: treat are the hinders of the process, they not only affect the business, but they sometimes
become reason to failure of business organization. The biggest threat for every business
organization are competitor who keep effecting the business organization. The competitor of
Premier Inn have been giving tough competition to the hotel as they have better strategic
management team and their business location is much more better than Premier Inn. They need
develop various strategies to compete their competitors in the market.
3. Critical analysis of the industry practice:
3.3 Implementation Of Corporate Strategy And Strategic Management Process
Implementation of corporate strategies refers to the process in which executing plans and
strategies for long term run of the company. This techniques will develop the company and it
will utilize and integrate new process into the structure of the company it will convert the opted
strategies into the moves and action to achieve its objectives. According to the Majid and et.al
(2019), there are seven steps which can be useful to implement the strategies:
1) The company has to set clear goals and define its objectives.
2) Determine and assign roles and responsibility.
3) Delegate and divide the work fairly.
4) Execution of plan, monitor progress and performance and provide support
5) Take correct action, relevant to the situation.
An author Adeyinka-Ojo (2018), described it as a process that put plans and strategies into action
to reach the desired goal it can be a written document that has details of the steps and processes
which are needed to reach the planed goals which might include feedbacks and progress reports
ensuring that the plan stays on the tracks.
3.4 Issues And Challenges Of Implementation of strategies
There are various challenges in execution of strategies and what makes it so difficult?
Process, people, or the market system. Let's take a scenario of a company where a management
team will plan a strategy and set the goals and objectives to grow and potentially variable of the
company. The strategic plans are pulled in a nice and clean document and will be discussed in
the next staff meeting. But when the meeting started the management is excited to share the

strategy and what it can achieve. However, when everyone return to their desk, the strategy
become less important with each passing day and become less top of the mind. In short time
period the strategy become irrelevant to the day to day routine being performed. Understanding
the importance of implementation of corporate strategy is no big game but getting it right is the
challenge. The right vision is very important which shows organisational leader where to
dedicate their time, capital, budget resources.
Poor Goal Setting :
Strategic goals and objectives are often set high and are complex in nature which require
various resources distributed among different departments and location to obtain them.
Establishing clear goals for teams will result in increase in priority and responsibilities.
Lack of Alignment:
even if the company set the proper and clear goal it can still be challenged with a lack of
alignment that is typically prioritize issues and conflict that can achieve day to day goal. Often
non-strategic work becomes the priority as it can be routine and often the most easily achievable.
Inability to track progress:
Most of the organisation uses spreadsheets to track progress but this might only work
between manager and employee. This process however does not seem to be so easy to deduce
result and create transparency. The worst part is it can not be applied in real time to achieve the
goals.
People Not Connected To Strategy:
Generally people like to be ordered and be in routine so it most likely to focus where the
result can be achieved immediately. Regrettably, strategic goals can rarely be this easy and are
small in scope. The best way to connect people closely to strategies by aligning professional
objectives with personal interest. To learn new skills have more responsibility, to work with
different people on teams which is referred as strategic team.
No Leading Indication:

An old saying goes by “you manage what you can measure”. Without measurement how
can it be managed. The company should set measurable goal, track them and have lead indicator
like predictive analyses which stimulates the discussion at levels. It is recommended that “focus
on less to accomplish more” could be a right motto. Adopting technology which can give
predictive analyses on the individual using, Tanics which uses proprietary algorithm based on
certain concepts to provide checkpoints for managers.
Lack Of Communication
Communication is a key to execute any strategy, a honest and transparent communication
should not only be quality of the company but has to be a very important step to stick together to
work as a team. Communication has to be very precise and open to all (Ritchie, 2021).
Feedbacks should be taken from the receiver on how much they understood from the
conversation and implemented.
3.5 Effectiveness Of Implementation Of Strategies
Strategic implementation basically plays crucial role in the achievement of the goals and
objectives of the organisation. The effectiveness of organisation is improved with the proper
adoption and implementation of strategies such as by keeping the customers at first priority. For
example, Premier Inn, in order to improve the effectiveness of its hotels need to understand the
taste and preferences of all of its customers. For this, the company also need to provide proper
training and development sessions to its employees such as personality development and
communication strategy (Nikolskaya and et.al., 2021). This helps them to know the buying
behaviour of the customers. It is also advisable to the waiters and managers of the hotel to listen
more to customers rather than giving their own views.
Strategic plans are highly effective when it is implemented in the required manner as it helps an
organization to arrive at their final goals. With the implementation of strategic plans, a clear
direction a concern must follow can be determined and accordingly, realistic goals and objectives
can be framed by keeping in mind the mission and vision of the organization. Also, the
effectiveness of strategy implementation lies in the fact that it aids an organization in achieving
its objectives within the set time frame. Only strategy framing is not enough for the achievement

of organizational goals rather it must be implemented in appropriately. Therefore, with the
implementation of strategy, overall efficiency and effectiveness of an organization get increased.
CONCLUSION
This reports show the strategic hospitality management in which it shows concepts and
theories as well as strategies and skills that is used in management of hospitality organization. It
discusses the application of effective leadership style and sustainability concept to propose
alternative solution to the problems which might occur in the future in hospitality business. The
report also demonstrate the understanding of the individual of corporate formulation of strategies
and management in context of hospitality industry. The report shows various analytical tool and
models to analyse the organisation in the market it is operating. This project has various
corporate strategies to enhance the business and how implementing them can be strategically
beneficial for the organisation. This report will give an easy but thorough look in the subject to
reader.

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