SWOT and PESTLE Analysis of Intercontinental Hotels Group

This report provides a detailed analysis of Intercontinental Hotels Group using SWOT and PESTLE frameworks. It discusses the strengths, weaknesses, opportunities, and threats of the company, as well as the political, economic, social, technological, legal, and environmental factors affecting its operations. The report also explores the hotel strategies that can be adopted by the company to enter new markets.

International
Hospitality
Management

Table of Contents
INTRODUCTION...........................................................................................................................4
MAIN BODY...................................................................................................................................4
A. SWOT analysis of Intercontinental Hotels Group Plc................................................................4
B. PESTLE analysis.........................................................................................................................6
C. Hotel strategy to be adopt and to be implemented (using strategic model and frameworks)
within the entering market...............................................................................................................8
Justification of strategy.............................................................................................................10
Practical application of strategy................................................................................................11
CONCLUSION..............................................................................................................................12
REFERENCES..............................................................................................................................14

INTRODUCTION
Concept of hospitality management consists look over everything relates with operational
tasks and functions of a hotel. Effective management of services in a hotel help in offer positive
experience to customers and also support in encourage them to visit again (Gursoy, 2019). As
every organisation operates in a dynamic and flexible business environment so number of forces
are there which affect the process of their decision making and their implementation activity.
Proper identification of those elements is very essential for an enterprise in order to attract
number of customers. Intercontinental Hotels Group, that is a British global hospitality
organisation having it’s headquarter in England is consider in this report for analysis. External
elements that have an impact on operations on IHG is all explained in this report. Further,
various strategic options available to organisation and various strategies that could be adopted by
company in order to maintain its market share and to ensure future growth is all discussed in this
report.
MAIN BODY
A. SWOT analysis of Intercontinental Hotels Group Plc
Today, hotel industry is considered as one of the most growing industries, where companies
dealing in this sector earn high revenues and profitability, by offering high facilities and
accommodations to its customers. The Intercontinental Hotels Group Plc refers to one of the
leading firms in British multinational industries, which has headquartered its business in
Denham, England in 2003 (Law, 2019). It has maintained its dominant position not only in UK
market, but also in overseas by expansion of hotels in near about 100 countries, in just seventeen
years of launching. Today, it has launched a number of brands like Regent Hotels, Kimpton
Hotels & Resorts, Holiday Inn Express and more, to develop its competitive image in this sector.
To analyse its international performance and competitive image, SWOT analysis can be
conducted in terms of marketing, operations, finance, management information systems or
strategic planning, as explained below –
Strength
Profitability: In current business environment, intercontinental hotel group is
continuously developing its profitability where the annual growth of 4% can be seen within

profit of intercontinental hotel group which is around 1700 million dollar. This is the highest
number of growth and profitability to the intercontinental hotel group since it opening.
Global presence: It is also strength of intercontinental hotel group which is related to its
global presence where company. It is serving in hundred countries and a leading organisation in
the hospitality industry in relation to global presence. The allied brands of intercontinental group
is Kempton, crown plaza, hotel indigo, holiday Inn, holiday Inn express and many more which
helps organisation in providing the worldwide facilities for different kind of inn, resorts, hotels
and club vacation (Morgan and Pritchard, 2019).
Weakness
Improper it security: One of the major weaknesses which is faced by intercontinental
hotel group in recent time is related to improper it security within the organisation. This is
because there are various cases registered from the side of intercontinental group regarding the
theft of information related to its customers about their credit cards and malware practices
miscreants. This directly impact on the IT security of the organisation and become a reason for
the weakness within the IT security related to its customer.
Dissatisfaction in customer: This is the weakness of the organisation which is also
related to the satisfaction with the customer. This is because there are various situations where
customer provided negative reviews to the facility organised by the form related to holiday inn
priority club and intercontinental hotel group reward club (Chan and Hsu, 2016). This is because
of improper management as well as improper allocation of points which are promised to
customer.
Opportunities
New geographic markets: In the current market there is trend to expand the business
which is already adopted by the intercontinental hotel group. No organisation can move to
different geographical locations where it can partner with different organisation. This will help
company in implementing its expansion strategy more effectively as well as increasing
profitability of firm but different mergers and joint ventures.
Threats
Competition: In relation to hospitality industry, become level of competition is
continuously increasing where intercontinental hotel group is facing tough competition from
various competitors like Marriott and Accor hotel group. For dealing this competition

organisation has to formulate various policies so that it can easily eliminate the competition
within the market.
After the detailed discussion on SWOT analysis of intercontinental hotel group it can be
seen that there is majority of strength and opportunities in front of organisation which can be
used to minimise the impact of threats and weaknesses of the firm. Organisation is operating at
good profitability level so it is easier for to operate within the new market and formulate various
strategies to achieve its business objectives.
B. PESTLE analysis
In current business environment the most appropriate market for hospitality organization is
UK. This is because there are various factors such as fat GDP growth, changing market pattern,
better employment level are the factors which impacting on the performance of organisation
dealing in hospitality idolatry. The current market of UK is providing various opportunities to
organisation which can be used by firm. To achieve its business objectives and identify various
opportunities, for identification of business opportunities for hospitality industry the framework
which is use by organisation is PESTLE analysis (Lynn, 2019).
PESTLE analysis
It is a framework which is use by organisation to identify various opportunities in the
market where it is going to lunch its business activities or operating them in current time.
Therefore, this enable organisation to identify various external factors which can be used to
make decision related to future investment in projects of that area. It includes various factors
which are discussed below:
Political: It is that factor which is related to political condition of the area where the
organisation is going to lunch its venture. In relation to condition of UK, there are various
political uncertainties which are impacting on function and decision making ability of hospitality
organisation. There major issue is related to condition of BREXIT, this is because there is
continuants changes in political condition due to BREXIT where organisation has to formulate
various polices related to functioning of firm which can impact on flexibly and also lead to
wastage of resources, this will impact negatively on organisation. On the other hand due to this
organisation also get various chances like increment in rebates by government for promotion of
business organization under new government (Lugosi, 2019).

Economical factor: Economical factor involves inflation rate, unemployment rate,
interest rate as well as exchange rate and many more. Therefore, the economic condition of UK
is stable, so that it is not vital for organisation to change their policies frequently which will
beneficial for organisation in upcoming period of time. In context of hospitality sector, they
focus on providing services as per the need of customer in order to gain competitive advantage
over rivalries at marketplace. They also provide innovative services to its user at relatively low
cost that helps in increasing profit margin and sales in upcoming time period.
Social factor: These are those factors which are directly related to social trends within
the market where organisation is trading. This is important for organisation to identify this factor
to use the current trends in society and use them for benefit of organisation. In relation to UK,
the current trends in society for hospitality industry continuously are changing. In relation to UK,
current trends in society are related to fulfilment of corporate social responsibility by
organisation, where customers are focusing on that organisation which is fulfilling their social
responsibility. So it is important for organisation to follow this concept to achieve its businesses
objectives.
Technological factor: Technology plays a very important role for success as well as
growth of business organisation. It is necessary for hospitality sector to implement advanced
technology in order to provide innovative services to its user in order to satisfy them. It also
helps in achieving competitive edge over rivalries at marketplace. In addition to this, their main
focus is to adopt latest technology for satisfying the changing need of customer at marketplace. It
helps in increasing profit margin and sales in future period of time. And also it enhances
experience level of customer which will be beneficial for user in upcoming time period (Lugosi,
2019).
Environmental factor: Environment plays an important role for success as well as
growth of organisation. Therefore, the manager focuses on providing environmental friendly
services to its customer that helps in boosting brand image as well as reputation of company in
front of user at marketplace. Hence, the hospitality sector providing their services in such a way
that increases standard of living of an individual person of society which will be beneficial for
organisation in future period of time. They provide services which does not generate pollution so
that it increases goodwill of organisation in mind-set of user at marketplace.

Legal factors: It includes those factors which are related to different legal authorities in
area where organisation is going to start its business for operating the business currently. It is
mandatory to the organisation that it has to follow different functions where uh the requirements
from legal authorities of the area must be fulfilled. In context of Intercontinental hotel group,
which is in market is UK where there are various legal authorities like government regulatory
boards and many more. Associated with rules and regulations formulated for working of a
hospitality industry. These rules has to be used by organization before working within the
environment of UK so that it can ensure the safety and security environment as well as reduce
the chances of legal liability of the organisation by fulfilling these rules and regulations.
There is continuous change within the business environment which has to be identified by
the organisation. It can be evaluated from the above-mentioned report that these changes can be
handled by the organisation by using a proper Framework we are the external factors which
affect the performance of Intercontinental hotel group can be identified and a proper decision can
be taken for achieving the business objectives in an appropriate time.
C. Hotel strategy to be adopt and to be implemented (using strategic model and
frameworks) within the entering market
Porter's generic competitive strategies:
Include those strategies which have the form in gaining the position within the industry
and determining the profitability methods to the form so that it can achieve its goals and
objectives. Hindustan teasing there is discussion about low cost and differentiation which can be
adopted by the organisation to achieve the competitive advantage within the hospitality industry.
In relation to intercontinental hotel to achieving objective organisation has to use one of these
mentioned strategies which are discussed below:
Cost leadership: Under the system of porter generic strategy organisational covering the
cost of products within the industry. In relation to intercontinental hotel organisation is dealing
with the hospitality industry where the strategy is effective for the organisation. For using this
strategy intercontinental hotel will focus on achieving effective cost structure within the industry
where it can use the economy of skin as well as proprietary technology so that it can reduce its
cost (Sabuncu and Karacay, 2016).
Differentiation: Differentiation is the second strategy within the porter's generic strategy
which can also adopted by the organisation to achieve a separate market base within the market

where it is trading. In context of intercontinental hotel group, organisation trading in hospitality
industry where it can adopt this strategy by offering unique product to the customers which will
be widely valued by its customer and help organtional in achieving business objectives. For this
organisation can use unique position itself to meet these needs by launching different kind of
products. For example, it can develop different culture provide a variety of services to customers
like opening launch nature protection and many more.
In relation to intercontinental hotel, it is trading within the hospitality industry where
there is continuous development and changes in the function of different organisation. So,
intercontinental hotel group can use the strategy of diversification where it can focus on the
development of new products to satisfy the needs of customers as well as maintain them for
longer period of time.
ANSOFFS matrix
This metric was developed by H. Igor Ansoff in 1957. It includes different strategies
which can be adopted by organisation within the market for achieving the business objectives.
This matrix includes four types of strategies which can be adopted by intercontinental hotel for
expanding its business and achieving the objectives. These Strategies are mentioned below:
Market development: Under the strategy organisation has to develop new market for a
new area within the existing market of the form so that it can sell its existing product within the
market. In relation to intercontinental hotel group organisation has to perform various function
which include the PESTEL analysis as well as using different frameworks which will help form
in identification of the current market situation. Different activities where it has to establish
different channels related to sales where it can easily maintain customers by providing services.
Under this system organisation is going within the new market by its existing product so
organisation has to use its marketing mix in an appropriate manner for attracting the customer
and eliminating the competition from the market (Manoharan and Singal, 2017).
Market penetration: Under this system organisation tries to sell its product within the
existing market where it has adopted strategies to target the new customers within the existing
market. In context of intercontinental group, organisation loyalty schemes to the customers as
well as special offers and promotional schemes which will help company in attracting new
customers towards the firm within the existing market. Also use Boston matrix where it help in

deciding the future investment within the different hotels and infrastructure of the firm in
existing markets.
Product development: In this strategy organisation was developed a new product within
the existing market so that it can attract customers as well as achieve the business objectives by
selling the new and innovative products. In relation to intercontinental hotel group, company can
also use this feature which health company in extending the product by producing the different
variants. Companies dealing with the hospitality industry where it can improve its services as
well as provide different kind of services in letter to improvement in war facilities as well as
organising cultural events which helped organisation in attracting large number of customers
(Guzzo, Abbott and Madera, 2020).
Diversification: It is the most mysterious strategy within the answer of matrix which can
be used by organisations. Include diversification in the production services of the organisation.
This strategy is not suitable for intercontinental hotel group because organisation profitable level
within hospitality industry is no need to diversification.
This can be seen that this matrix provide various kind of strategies which can be adopted
by the organisation. In relation to Intercontinental hotel group, appropriate strategy which can be
adopted by the organisation for achieving its business objectives as well as maintaining its
position within the market is related to market development organisation can expand its two
different markets of Asia. It helps in increasing its market and achieving benefits related to
economy of scale and globalisation.
Justification of strategy
It is important for organisation to adopt a proper strategy so that it can achieve its goals
and objectives as well as remain in competitive position within the market. Intercontinental hotel
group required to evaluate the existing market potential and various competitive issues within the
market so that it can easily take decision regarding different investments on the project.
Company required identifying the power of customer, suppliers, threat of substitute within the
market where it is going to launch the business activities and achieving its objectives
(Golubovskaya, Robinson and Solnet, 2017).
In relation to intercontinental hotel group, it can adopt the strategy of porter’s generic
model where company has to identify the different strategies related to differentiation and cost.
The best suitable policy for organisation is to adopt differentiation within the organisation

because it will help organisation in achieving a unique position within the market. This can be
seen from the strength of intercontinental hotel group, that organisation is performing at
profitable level from last 10 years. This is helpful to the organisation achieving the opportunities
related to differentiation within the product where it can adopt a proper research and
development strategy within the organisation. Therefore, it will help in identifying a product
which is completely unique within the market as well as help in building the separate image. It is
easier for intercontinental group to use the strategy of different situation within the market
companies operating at high profit with improve the level of infrastructure. Company can use
strategy of differentiation because it is in a position to afford a research and development on the
process of differentiation and implement it because of well reputation within the market (Guzzo,
Abbott and Madera, 2020).
Intercontinental group can also apply ANSOFF matrix model to the organisation. This is
because in case of intercontinental hotel group, company is performing at largest level where it
can use the strategy of market development. The reason behind choosing a market development
strategy in this organisation is related to strength of the organisation about its global presence.
According to the SWOT analysis of intercontinental hotel group it can be seen that organisation
is a major strength of global expansion in business. This is helpful to the organisation in adopting
the policy related to market development where organisation can lunch its existing products
within the new markets. This strategy is more effective in the market of UK where company can
develop better infrastructures so that it can achieve hundred per cent infrastructure at different
tourism destinations within the UK. This will also help organisation in achieving its business
objectives as well as enabling it to target developing market for hospitality industry.
Practical application of strategy
After the implementation of both ANSOFF matrix strategies and porter's generic strategies
it can be evaluated that the most accurate strategy for intercontinental hotel group is porter's
generic model. This is because these strategies are providing the options of both cost effective
techniques and differentiation strategies to the organisation where form can easily manage its
resources for achieving the business objectives after 5 to 10 years (Wang and Abukhalifeh,
2020). According to the current market situations, it can be seen that Innovation and
development of differentiation within the product play key role within the market of hospitality
industry. This can be seen from the present time, where there are various hospitality industries

like Marriott and choice hotel international which are adopting new and innovative ways and
differentiation in their products so that they can attract customers as well as maintain a unique
selling price within the market so that customer will directly attracted toward the product of the
organisation. The present situation provides indications related to this trend of differentiation
within the product which also impact on cost leadership as well as functioning of the
organisation. This is the most appropriate strategy in consideration of five to ten year ahead is
related to differentiation strategy of porter generic model. In relation to intercontinental group,
organisation is dealing with in hospitality industry so it is important for a firm to maintain a
unique within their services for attracting the customers and achieve business goals. This can be
easily implemented on the current structure processing system of the organisation where the
management of form will also get different kind of benefits in adopting the strategy of
differentiation.
After the implementation of porter's generic strategy, it can also be expected from
intercontinental hotel group that it will gain stronger position within the market after five to ten
year ahead. The main reason behind this is that company will gain a competitive advantage by
using the differentiation strategy which helped company in minimising its cost as well as
targeting the new customer by retaining the old ones. This also helps company in achieving the
cost-effectiveness and attracting each and every customer from each and every income group.
Innovation within the organisation and differentiation from other product will also establish a
separate ways for the company which can be used by it for longer period of time as well as for
coming tourist era (Grotte, 2018).
CONCLUSION
It can be concluded from the above mentioned information that current business
environment related to hospitality industry is changing continuously. It is important for the
organisation to adopt various policies and identify the internal and external factors which can
impact the performance of the firm. For this organisation can use SWOT analysis and PESTEL
analysis which will help in identification of internal and external capabilities of the firm and the
target market of UK. It is also important for intercontinental hotel to adopt a proper strategy
which can be used for the new area where the organisation is going to launch its business.
According to the analysis it can be concluded that porter's generic strategies are the best strategy

which can be adopted by the organisation where the differentiation strategy is most suitable
strategy to achieve the competitive advantage.

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