Strategic Hospitality Management: Corporate Strategy and Strategic Management in the Hospitality Industry

Strategic Hospitality
Management

Table of Contents
INTRODUCTION...........................................................................................................................3
Brief Introduction to the subject.............................................................................................3
Aim and Objective of Report.................................................................................................3
Formulation of Corporate Strategy and Strategic Management......................................................3
Understanding the models and analytical tools......................................................................3
Demonstrate the understanding of corporate strategy formulation and strategic management
................................................................................................................................................6
Body (Critical analysis of the Industry practices)............................................................................6
Choice of Literature and Case Studies...................................................................................6
Treatment on the process of Corporate Strategy Formulation in Hospitality Organisations. 7
Treatment on the implementation of Corporate Strategy and Strategic management process7
Issues and Challenges of Implementation..............................................................................9
Discussion on Effectiveness.................................................................................................10
CONCLUSION..............................................................................................................................10
Inclusion of Key points in the Summary..............................................................................10
Reflection and Consolidation...............................................................................................11
REFERENCES..............................................................................................................................12

INTRODUCTION
Brief Introduction to the subject
This essay reports provides an understanding of Principles and practice of strategic
management in hospitality industry and a critical analysis is done of the process, effectiveness
and challenges of implementing corporate strategy. In this report a thorough review of the
scholarly literature on strategic management concepts and models as well as theory and practices
of concepts are drawn including its challenges and effectiveness in global hospitality industry is
explained. In hospitality industry, strategic management is required to create and implement the
goal which can improve the reputation of company in Market. These strategies are formed by
management boards by focusing on available resources in Company. The management board
creates a strategy keeping eye on its competitor’s strategy (Ali, 2018). By applying strategic
management in hospitality industry, they can use the available resources efficiently and produce
services at low cost. With the help of strategic management, company can gain competitive
advantage in Industry. By making corporate strategic plan, the organization defines its goal and
ways of achieving with strategic management. The corporate strategy is a continuous process
that helps in responding appropriately to changing market situation in hospitality industry (Altin
and et. al., 2018).
Aim and Objective of Report
Aim
“To identify the importance of corporate strategy in strategic management”
Objectives
 To identify corporate strategy
 To determine influence of corporate strategy in effective strategic management
Formulation of Corporate Strategy and Strategic Management
Understanding the models and analytical tools
Corporate strategy is a plan which defines the vision and provides direction to company for
achieving its goal. Generally plan is made for long period of time to gain competitive advantage
in Market. The corporate strategy is divided into four types they are growth strategy, stability
strategy, retrenchment strategy and re-invention strategy.

The purpose of strategic management is to maintain, establish, develop and assess position of
organization in Market (Chandran and Bhattacharya, 2019).Strategic management is important in
hospitality industry as it provides direction to develop policies and plans for achieving goals and
objectives. Through strategic management, hotels and restaurant can allocate the resources for
implementing the plans. Thus, strategic management helps in gaining competitive edge from
other competitors in Industry.
To understand the models and analytical tools in better aspect porter’s five forces analysis
and organization model is explained in order to understand hospitality industry in clear aspects.
Porter's five forces analysis
Bargaining power of Suppliers is first factor in porter’s five forces analysis. Mostly
companies in hospitality industry buy raw material from various suppliers. If suppliers are in
dominant position they can reduce the profit margin of global hospitality industry. The suppliers
who use their negotiation power, charges more price from organizations. The impact of high
supplier power in hospitality industry is that it decreases the profitability of Hospitality
companies. The bargaining power of suppliers can be tackle by creating strong bond with
multiple suppliers. The firm in hospitality industry must experiment with product design by
using varieties of materials because if a price of one raw material goes up it doesn't create an
impact on performance of business they can shift to other raw material.
Bargaining power of Buyers is also a component while analysis porter’s five forces
model. Nowadays, buyers are demanding a lot which puts a pressure on global hospitality
industry. They want product and services of best quality with minimal price; it affects the
profitability of hotels and restaurant. Generally, buyers have less bargaining power if companies
in hospitality industry faces oligopoly and monopoly situation. The customer prefers customize
services which means services according to their taste and preference which create an impact on
the business and put emphasis on hospitality industry to fulfill needs and requirements of
consumers. The bargaining power of buyers can be sort out by creating a large base of customer
as it provides an opportunity to Firm to increase their sales and reduce the power of buyers. The
global hospitality industry must also focus on innovating new products.
Threat of substitute product is other factor in porter’s five forces analysis. In global
hospitality industry, there are various companies who are competing with each other in terms of
products and services. In hospitality sector there is a high chances to start business and get