Strategic Hospitality Management ( Distinction Criteria )

This essay discusses the importance of strategic management in hospitality industry, theories of strategic management, external environmental analysis, organisational culture, Porter five forces, and Porter generic strategies model. It also covers the implementation of strategies and challenges faced in corporate strategy formulation at a global level.

Hospitality Management

Contents
Contents...........................................................................................................................................2
INTRODUCTION...........................................................................................................................1
MAIN BODY..................................................................................................................................1
Operational and organisation context..........................................................................................1
Theories of strategic management in relevance with hospitality industry..................................1
External environmental analysis through STEEP model.............................................................1
Understanding of organisational culture in relevance with hospitality organisations.................2
Ascertainment of industry effectiveness through Porter five forces...........................................3
Strategic choices and implementation of strategies.....................................................................5
Understanding of business, corporate and operations strategies in relation to hospitality
industry........................................................................................................................................5
Porter generic strategies model....................................................................................................6
Evaluation of the options.................................................................................................................7
Implementation of strategies in relation to hospitality industry..................................................8
Issues and challenges faced in corporate strategy formulation at global level............................8
CONCLUSION................................................................................................................................9
REFERENCES..............................................................................................................................10

INTRODUCTION
Hospitality management is considered as a broader aspect which essentially encompasses
overseeing routine, operational as well as commercial activities of businesses like restaurants,
shops, amusement parks, casinos and many more (Ali and Et.Al., 2019). Strategic management
can be understood as a ongoing monitoring, controlling and planning in relation to differential
strategies for meeting organisational goals and objectives.
Strategy can be understood as an action which is undertaken by managers for attaining
organisational objectives. Minterzberg 5 P's model is developed to distinguish varied strategic
vision by the organisational managers for making critical decisions regarding an establishment.
Organisations principally follows three levels of strategy, namely, corporate, business and
functional which enable leaders to set their objectives. In context to hospitality industry,
strategies are essentially related with building brand, attainment of operational excellence and
enhancing customer value (Manovan, 2020). This essay is aim to perform a critical discussion
regarding corporate strategy and how it is linked with strategic management in relevance with
global strategic management.
MAIN BODY
Operational and organisation context
Theories of strategic management in relevance with hospitality industry
Strategic management can be understood as a practice whereby goals, procedures and
objectives are determined by an organisation in order to become more competitive (Dev, 2020).
For instance, it is necessary for managers of Whitbread Plc to respect socio-cultural background
of their guests and prevent any chaos on the basis of this. With strategic management, managers
of Whitbread Plc provide affordable and quality services or offerings for guests in order to help
them in living and working well (Sustainability of Whitbread Plc, 2022).
External environmental analysis through STEEP model
In order to evaluate the practices in regards with strategic management, hotel managers
can use STEEP analysis which aid them in assessing external macro factors which have impact
on their operations. There are various external factors that impact on success along with growth
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of the hotel industry (Frue, 2019). All the factors of STEEP analysis in relevance with hospitality
industry are as follows:
Social factors- In UK, visitors and customers are more conscious and their preferences
changes frequently which impacted the sale and customer base of hospitality organisations. For
example, professionals of Whitbread Plc must conduct deep research about recent customer’s
trends and lifestyle to modified their services in order to meet the desires of their visitors
(Whitbread Plc, 2022).
Technological factors - There are many upgraded and advanced technologies availability
in UK which influence the productivity and effectiveness of tourism industry. For example, In
Tune Hotel Group marketers can use digital and social media marketing to spread awareness
about their hospitality services to increase their brand value (Tune Hotel Group, 2022).
Economic factors- In UK, inflation rate is stable as well as banks also provide funds at
low interest rate which provide benefits to tourism sector to grow their business in another
market. For example, entrepreneur of Four Seasons Hotel can take loan form bank at low cost to
bring new innovation and upgrade their hotel interior to enhance the experience of their visitors
(Four Seasons Hotel. 2022).
Environmental factors- In UK, the climate condition, natural resources and weather are
not favourable and fluctuating which impacted the sales and revenue of hospitality organisations.
For example, Whitbread Plc suffer from heavy losses during the time of winter season as visitors
do not visit their hotel which decline their sales and profitability (Whitbread Plc, 2022).
Political factors- In UK, political conditions is favourable and has many growth scope
which influence the profitability of hospitality organisations. For Example, management of
Savoy Hotel used this advantage to explore their business portfolio to attract large number of
visitors and tourist in order to increase their customer base (The Savoy Hotel, 2022).
Understanding of organisational culture in relevance with hospitality organisations
Organisational culture can be understood as underlying beliefs, values and expectations
that are needed to be consider while planning strategies for an establishment (Franco and Et.Al.,
2020). This can be used as a tool which is used by managers for influencing and training
mindsets as well as attitudes of personnel which led them to slow down their resistance for any
strategic change. Hospitality industry is tends to bring changes on a constant manner which can
be embraced by their employees in a strategic manner through adoption of effective
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organisational culture. For better understanding of role of organisational culture in hospitality
operations, Handy's cultural model is taken into consideration.
Handy's cultural model
Yapp (2020) says that culture is customs, social behaviour together with ideas of specific
people or society (Yapp, 2020). It is most effective organisational culture model which is
introduced by Charles Handy which helps management of hospitality organisations to choose
most suitable culture from four types to run their business effectively. The four types of culture
in context to hospitality industry are as follows-
In this task culture management of hospitality organisation formed a team of employees
which have similar skills, interest and qualification to meet the requirements effectively. For
example, Manager of Savoy Hotel can use this culture by making a team for their kitchen
department to serve best food to their clients (The Savoy Hotel, 2022).
In power Culture authority is remain at the top level of management as well as they give
instruction to their employees to complete the task with perfection. For example, In Tune Hotel
Group, top executive can use this culture to take major decision regarding change in method,
policy and their room services in order to bring more innovation (Tune Hotel Group, 2022).
In Role Culture HR management of hospitality organisations assign duty, role, power
and responsibility to their staff members as per their skills or speciality to conduct systematic
working. For example, management of Whitbread Plc can use this culture by assigning duty to
their workforce which helps them to bring more clarity about job role in order to achieve the
target efficiently as well as reduce cost of operations (Whitbread Plc, 2022).
In people culture professionals of tourism and hospitality businesses allow their
employees to take participation in decision making to increase their morale and confidence to
achieve success. For example, entrepreneur of Four Seasons Hotel can use this culture by giving
more freedom to their employees so they lead the task and increase their productivity which
helps them to improve quality of their services to meet customer expectations. At present, service
culture is adopted by Four Seasons Hotel wherein all people are allotted and guides actions for
performing best as possible (Culture of Four Seasons Hotel, 2022).
Ascertainment of industry effectiveness through Porter five forces
Industry effectiveness essentially represents potential for earning profits as well as secure
competitive edge in relation with business organisation (Guix and Font, 2020). In relevance with
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hospitality industry, it is significant for hotel managers to evaluate the attractiveness of the
industry while planning varied strategies. In order to understand the attractiveness of hospitality
industry as well rationale for formulating corporate strategies, Porter five forces model is taken
into consideration.
Corporate strategy encompasses a clearly defined vision that is set by organisation in
order to motivate the workforce for adopting proper actions which help them to attain customer
satisfaction (Altin and Et. Al., 2018). It is important for hotel managers operating in hospitality
sector to frame corporate as well as innovative strategies for securing competitive advantage. In
order to better understand the corporate strategy in relation to hospitality industry, Porter generic
strategies model is adopted.
Porter five forces
In hospitality industry the impact of competitive rivalry factor is high due presence of
large number of organisations. For example, management of Tune Hotel Group must analyse the
recent market trends and condition to adopt changes in their hospitality services to gain
competitive advantage over competitors (Tune Hotel Group, 2022).
The impact of bargaining power of customers in hospitality industry is high due to low
switching cost and many organisations are operated their business innovatively. For example,
professionals of Savoy Hotel must improve their quality of services and bring new innovative
features to enhance the experience of customers (The Savoy Hotel, 2022).
The impact of bargaining power of suppliers in hospitality industry is low due to less
requirements and large number of suppliers available. For example, it enables the manager of
Whitbread Plc to take input easily at low cost from many suppliers due to low switching cost
(Whitbread Plc, 2022).
In hospitality industry, the impact of threat of new entrants is high for new start up due
to huge investment and new innovation is required. For example, In Four Seasons Hotel, this
factor has less impact because it operated at large scale and have huge customer based and brand
value (Four Seasons Hotel, 2022).
Threat of substitute has low impact in hospitality industry due to different innovation,
services and methods. For example, In Savoy Hotel, it has low impact on their sales and revenue
because they offered unique and better quality services to the customers which helps them to
retain their loyal visitors for long run (The Savoy Hotel, 2022).
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Strategic choices and implementation of strategies
Strategy formulation can be understood as a process of choosing most appropriate as well
as efficient ways that aids an organisation to realize their vision, goals and objectives (Guzzo,
Abbott and Madera, 2020).
Understanding of business, corporate and operations strategies in relation to hospitality industry
Business and corporate level strategy majorly differs in relation to their objectives.
Business strategy essentially focuses on facing competition in market. At the contradictory to
this, corporate level strategies function at higher level which is also get affected through shared
goals. Business strategy is considered as holistic in its approach whereas operational one is
formulated to oversee how diverse needs of customers are catered in an effective manner
(Kalargyrou and Costen, 2017). In relevance with hospitality industry, business level strategies
related to expansion can be implemented by hotel managers. While corporate level strategies in
respect to cost leadership, differential and focus strategies can be adopted. It is imperative for
them to adopt the strategies in a strategic manner through following a systematic manner. Such
as:
In order to develop effective corporate strategy, it is essential for hospitality organisations
to determine their objectives. It is needful to develop a descriptive plan which outlines objectives
that are to be accomplished by an organisation. In respect to hospitality industry, objectives can
be increase customer loyalty, optimize profitability, adoption of sustainable practices and many
more. For instance, objectives of Whitbread Plc are to provide quality as well as affordable space
to their guests. They have also developed their sustainable practices and name it 'Force for Good'
for providing support to their staff, suppliers and customers in an effective way (A focused hotel
group. 2022).
In relation to hospitality industry, organisations are required to ascertain how their
competitors are performing in industry. For example, managers of Whitbread Plc continuously
traced activities of their competitors such as Marriott, Inter Continental Plc etc. in an effective
manner (Whitbread Plc, 2022).
It is imperative for organisations to set up their targets which can be achieved in a
specified time or duration. These targets are considered as significant for organisations as they
help them to determine a segmented customer base or products that they need to be modified in a
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strategic manner. For example, managers of Whitbread Plc have set targets to reduce carbon
emission intensity by 50% by 2025 (Whitbread Plc, 2022).
It is desirable for organisations to measure their actual performance with pre-determined
aspects. For instance, Whitbread has announced that they are successful in reducing nearly 40%
of carbon emission. They are planning to accomplish 84% of reduction of carbon emission by
2040. The unique ownership model of business provides it with competitive benefits in
challenging marketplace that enable it to become top hotel operator and expanding business
globally (Business model and strategy of Whitbread Plc, 2022).
Another example can be considered of Four Seasons Hotel, whereby managers have
adopted corporate strategy of expanding their operations through extending their luxury lifestyle
offerings with the growth of their private retreats. Despite the challenges faced due to covid
pandemic, managers of Four Seasons are planning to add many hotels to their portfolio in 2022
(FOUR SEASONS STRATEGIC GROWTH DRIVEN BY ROBUST DEVELOPMENT PIPELINE
AND ENHANCED COMMERCIAL STRATEGY IN 2022 AND BEYOND, 2022)
Porter generic strategies model
Porter generic strategies model can be understood as a framework which assist
organisations in determining their competitive edge in a strategic manner (Bodkhe and Et.Al.,
2019). All the strategies of Porter generic strategy in relevance with organisations operating
hospitality sector are mentioned below:
Cost-leadership can be achieved by gaining the lowest cost leadership in industry. This
can be performed through pursuing a cost-leadership mindset, lowering their operational cost,
mass production, economies of scale, variation in technology and product design. In relation to
hospitality industry practices that can adopt by organisations for implementing cost leadership
strategy are operating through economies of scale, rely on outsourcing temporary staff members,
apply an systematic effective training approach for their employees. For instance, managers of
Tune Hotels Group have adopted cost leadership strategy which aims them to strengthen their
brand as well as maximizing their operational performance which assists them in expanding their
operations on a global level (Tune Hotel Group, 2022).
Differentiation strategy is termed as a strategic tactic whereby organisations try to create
their differentiated position in market. This differentiation practices can be adopted by
establishments in many ways such as durability, appearance, functionality, operational efficiency
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and many more (Cabral and Jabbour, 2020). In relevance to hospitality industry, for
implementing this strategy an organisation needs to determine their innovative and differentiated
products or services which assist them to gain competitive advantage. This strategy can only be
pursued by organisation through providing a unique value to their customers apart from their
competitors. For example, managers of Four Seasons Hotel can adopt this strategy through
improvising technology, creation of differentiated marketing activities, proposing new features in
an existing product or services and many more (Four Seasons Hotel, 2022).
Focus strategy concentrates on a specified segment of customers either to offer
differentiation or cost advantage in an effective manner. In relevance with hospitality industry,
hotels can adopt this strategy by offering their services to premium clients or by providing
discounts to their loyal guests. For instance, managers of Tune Hotels Group focuses on
providing high quality basics and accommodation to their international guests which help them
to operate their operations on a global basis (Tune Hotels Group announces new company
structure, 2022).
Strategy formulation help an organisation in making their brand more viable and create a
differentiated position in market. For instance, strategy of Whitbread Plc for developing their
business model as a unique ownership framework help them to secure a competitive advantage
(Our business model and strategy, 2022). They follow a vertically integrated model which aids
them in combining the ownership, operations and distribution aspect in order to grow their brand
name in a significant manner at much faster pace apart from their competitors. Even at the time
of covid pandemic, their consistent practices help to prioritize their strategies in order to create a
sustainable stakeholder. Their core strategy focuses on growth and development of their brand,
Premier Inn. Managers of Whitbread Plc have chosen differentiated strategy by providing their
unique features to their guests in an effective manner.
Evaluation of the options
It is needful for hotel managers to analyse suitability, feasibility and acceptability while
considering to implement any strategic policy in their operations in an effective manner. For
instance, it is imperative for managers of Whitbread Plc to check suitability of their strategies
(Whitbread Plc, 2022). Their strategy of providing unique features to their guests can be
considered as suitable and feasible as it led them to gain competitive advantage.
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Implementation of strategies in relation to hospitality industry
Strategy implementation can be understood as a practice of implementing tactics which
helps an organisation in reaching to a desired goal or objective (King, 2017). Strategy can be
implemented in relation to hospitality organisation in following mentioned ways:
It is imperative for organisations to determine their vision, mission, key performance
indicators and desired goals for effective strategy implementation practice (Köseoglu and Et. Al.,
2019). For example, managers of Tune Hotels Group communicate their plans to their employees
through effective communication channels.
In order to effective implementing of formulated strategy, it is imperative for
organisations to engage their team members in an effective manner by bifurcating their roles as
well as responsibilities strategically for instance, managers of Tune Hotels Group engage their
team for strategic implementation of strategy (Tune Hotel Group, 2022).
In relevance with hospitality sector, hotel managers need to align their priorities with set
objectives for attaining objectives and goals. It is also important to share their project planning
with their team members for effective strategy implementation. For effective implementation of
strategies, it is imperative for managers to critically analyse the procedure of change
management in order to make employees embrace the changes in an effective manner (Lee and
Lee, 2018).
It is important for hotel managers to critically analyse varied aspects in regards with
market suitability and accessibility of their products in an effective manner. For instance, in case
of Whitbread Plc, they are adopting differentiated whereby they are determined to offer unique
products to their guests at their new expanded hotel, namely, Premier Inn. They are planning to
provide cycling track to their guests which play a considerable part in fulfilling their
commitment of reducing carbon emission in a strategic manner. Another example for this is the
strategic expansion development strategy of managers of Four Seasons which they are
implementing in an effective manner (Four Seasons Hotel, 2022).
Issues and challenges faced in corporate strategy formulation at global level
Organisations can face issues and challenges in formulating the strategy in a strategic
manner which can hamper their image. Hospitality organisations are facing certain challenges
regarding customer expectations along with trends, all because the industry is growing rapidly
and business are struggling to keep with demand (Major Issues Facing the Hospitality Industry
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in 2021. 2021). Some of the challenges and issues of strategy formulation in accordance with
hospitality industry are discussed below:
Overwhelming strategic plan can pose as a significant issue for organisations as this led
them to have a confusion in determining their objectives, goals and vision statement (Li, Ma and
Qu, 2017). This confusion can put a wrench in procedure of strategy formulation. In relation to
hospitality industry, organisations face challenge of confusing strategic plan which curbs them to
have an effective strategy implementation.
Poor training- Another issue which is faced by hospitality organisations, for example,
Tune Hotel Group is lack of systematic training approach through which team members are not
clear with the guidelines and strategies given to them (Tune Hotel Group, 2022).
Lack of communication- This issue is common to the hospitality organisations, for
instance, Four Seasons Hotel as sometimes strategy formulation procedure become so complex,
it becomes difficult for managers to effectively communicate with their team members in order
to provide them clear directions. Four Seasons aims to connect with others, however, use of
technology in form of Four Seasons Hotels and Resorts App. There are certain of its customers
with whom the company lacks communication (Pougnet, 2022).
In order to overcome this issues, it is important for hotel managers to critically analyse
cross cultural differences while operating on a global scale. As people hails from differential
nationality comes with diverse background and cultural aspects, it is needful to understood cross-
cultural challenges in an effective manner (Lombarts, 2018).
CONCLUSION
From the above presented information, it has been concluded that it is significant for
hospitality organisations to frame corporate strategy as well as develop practices related to
effective strategic management which help them to operate their operations in an effective
manner. Strategic management is said to be producing effective goals and objectives which helps
them to achieve desired results. Corporate strategy can be explained as a highest strategical plan
of an establishment which assists organisational managers in defining their goals and overall
objectives which are to be achieved by employees. Porter generic strategies can be understood as
a strategic framework which assist an organisation in determining their competitive advantage.
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REFERENCES
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Ali, F. and Et.Al., 2019. 30 Years of contemporary hospitality management: uncovering the
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