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Strategic Planning for The Hospitality Industry : Intercontinental Hotels Group

Undertake a strategic analysis of a hospitality company, demonstrating knowledge of strategic options, factors affecting implementation of strategies, and performance metrics.

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Added on  2020-10-22

Strategic Planning for The Hospitality Industry : Intercontinental Hotels Group

Undertake a strategic analysis of a hospitality company, demonstrating knowledge of strategic options, factors affecting implementation of strategies, and performance metrics.

   Added on 2020-10-22

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STRATEGIC PLANNING FOR THEHOSPITALITY INDUSTRY
Strategic Planning for The Hospitality Industry : Intercontinental Hotels Group_1
TABLE OF CONTENTSINTRODUCTION ...............................................................................................................................3MAIN BODY.......................................................................................................................................3CONCLUSION....................................................................................................................................8REFERENCES.....................................................................................................................................9
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INTRODUCTIONStrategic planning has significant part in the global hospitality field as there has been anupsurge of strategic tools to measure, evaluate and design the future objectivity for profit generationwith maximum development and progress by providing higher standards of services to thecustomers. This report is based on this strategic planning and management of hotel industryorganisations like Intercontinental Hotels Group,which undergoes through different functionaldecisions like mergers or acquisitions, contracting etc. to enhance profitability in the market. It willserve the purpose of various performance metrics adopted in this sector for proper orientation andprogress of operations.Background of the chosen organisation: Intercontinental Hotels Group is a well known name whichis headquartered in Denham, Buckinghamshire. This hotel has approximately 5000 hotel worldwidewith about 800000 guest rooms accommodation. Its operations is in around 100 countries withmany diversified brands that have already established its name in this circuit and carved a niche.In addition, these have a wide array of brands and includes Crowne Plaza, holiday inn, hotelindigo, intercontinental, Avid hotels and many more. Furthermore, this brand has established manynotable landmarks in context of properties. For instance, The InterContinental Davos has beenfamous for its rich architecture along with, the tallest building of Los Angeles which is popularlyknown as Wilshire Grand Tower.MAIN BODYExplanation about the most popular strategic optionsStrategic option can be considered as that alternative action oriented event which has beenIllustration 1: Details of brands and pricing of IHG based on Financial Reports of 2017(Source: Intercontinental Hotel Group IHG, 2018)
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taken for the identification and implementation of an enterprise's long term objectives. Here,Intercontinental Hotels Group (IHG) has been considered.Franchising: This is a framework where the franchiser transfer its rights on legal terms toanother organization called as franchisee. It has become evident in hospitality industry viarestaurants, cafes and hotels. Moreover, this is mainly done for three major enhancements such asdevelopment of conceptual design work, continuum assistance and process for initiation forconsistent running and training of all the operational activities. Franchising can act as the licensingstrategy for understanding the implications from franchisee's point of view in arenas like selectionof site, assistance in operations, screening etc. It accelerates a company's expansion plans.For e.g.IHG became synonym to affordable accommodation which is pulling customers as a franchisee forseveral hotels with a predominance in almost major locations of UK. Furthermore, it has benefitedin various ways such as access to find suitable and qualified talent pool who are ready to managework at other locations for profits generation. It supports in higher returns of financial growth withminimum risk and it's the biggest advantage is establishment of brand at faster pace with formationof loyal customer-base through a network of support in developing new products.Management Contracts:It is popularly known as contract administration. This isimplemented for smooth execution of procedures for performance management and employees'engagement. These management contracts are the legal written relationship for the control of theoperations through negotiation between business's owner and third agency. Here, the focus is tooperate the activities at hotel under expert guidance on behalf of the rightful proprietor. However,the main aim is to maximise productivity and revenues through increasing profits with low risk.Management Contracts are like the sourcing process to bring validity, reliability and sustainabilityto the hotel investors and shareholders involved (Elbanna, 2016). In hotel industry, there isbifurcation for management companies into independent and brand operators. For e.g. IHG Groupsof Hotel hired them for gaining competitive advantages for both managing brand and regulatingoperations. Such brand operators work in non-flexible mode who moderately anticipate savings formore incurring benefits. On the other hand, independent operators have large number of clients withbroad range of services and products. These help in high margins in profits and sales, autonomoustermination provisions and are less volatile towards the fluctuating economic factors and localmarketplaces. For e.g. Melvin Gold Consulting Ltd is one of the big names in UK's hotel industrywhich underwent a legal document with IHG.Joint Ventures:It is the common platform formed by the combination of complexarrangement of expertise and resources. Recently, this has been accelerated by major companies fortheir overall business opportunities in profits and development as well. This helps in promotingforeign direct investment by passing through untapped markets and distribution networks.
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