Hospitality Business Strategy

This document discusses the strategies used in the hospitality business, focusing on the Crowne Plaza organization. It covers the analysis of internal and external aspects, strategic plans, and policies. The document also explores the importance of the macro environment, SWOT analysis, Porter's five forces, and suitable strategies for the chosen company.

Hospitality business
strategy:

Table of Contents
Introduction:.....................................................................................................................................1
MAIN BODY...................................................................................................................................1
Part A:.....................................................................................................................................1
Part B......................................................................................................................................7
Conclusion:....................................................................................................................................10
References:.....................................................................................................................................11

Introduction:
The hospitality business strategies are a plan which show the organisation a course of effective
action which helps the organisation to achieve the desire level of outcomes in the market places.
The term business strategy can be defined as those actions and approaches which have been used
by companies in order to achieve their goals. It is also known as the master plan used by the
organisation to accomplished the mission and vision of the company in the long period of time.
The hospitality industry is growing market so organisation uses different business strategies to
expand and growth in the target market place. under this report, the Crowne plaza organisation
which is world best hotel in the hospitality industry has been selected. This company is
headquartered in United Kingdom and there are numerous branches of this hotel around the
world. There are around 3600 branches in different nations with 118000 bedrooms of this hotel.
The project report is divided into two parts A and B. The part A consists information about
analysis of internal and external aspects by using different approaches such as Pestle, Swot,
Porter’s five forces. While in part B discussion about strategic plans and policies of chosen
company is done in accordance of environmental analysis. (Ansari and Kant,2019)
MAIN BODY
Part A:
Over view of the organisation:
The Crowne Plaza is a multinational hotel having the headquarter in the UK market and offering
the different kind of services to its target customer present in the international market. it also
forms the part of the intercontinental hotel group and operates across the 100 countries with 3600
hotels.
Mission and vision: The aim focus of the organisation is to offer the good quality of service to
its premium customer and expand their operational activities at the international market places.
Macro-environment: These are those factors which are present in the external environment of
the organisation and influence its operational activities and lead to affect the outcomes of the
organisation in the long run. In the context of the Crowne Plaza, the organisation analysis its
external factors which are stated as below:
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Pestle analysis-
Political factors: it includes the tax rates, political instability, unemployment rates, these rates
have affects on the organisation performances. The government of the UK uses the
Londonn2012 games to enhance the tourism and hospitality industry and focus on expecting the
4 million extra customer to the country by improving the political factors.
Economic factors: the currency fluctuation are common at the international market but the
Euro is used all over the Europe which provide some stability for the organisation. the
hospitality sector can generate the 236000 jobs across the global which improve the economics
of the country which lead to better functioning of the organisation.
Social factor: it includes the different kind of customer taste and preferences, their beliefs and
assumption which affects the productivity of the organisation. the Crowne plaza organisation
operates its activities at the UK market which is largest market in serving the hospitality
industry. (Cetin,Demirciftci. and Bilgihan., 2016
Technology factors: the Crowne Plaza organisation uses the advance technology to operates its
activities so that they can enhance the productivity of the organisation. the company uses
technology in the form of taking the online reservation and improving their services in the
market.
Legal factors: it involves the different government rules and policies which affects the business
strategies of the organisation. for example, if the government increase the value added tax in the
UK market by the 20% then the hospitality gets affects in the diverse ways.
Environment factors: as the hospitality industry provide various holiday destination which
cause harm to the nature in huge amount. So the Crowne plaza organisation focus on being more
ethical organisation, forming more green hotels and offers the eco-friendly product to the
customer.
Importance of macro environment for preparation of competitive strategies:
To make the effective and sound business strategies for the hospitality industry and for the
Crowne plaza, the organisation must examine the external factors which are present in outside
the organisation place. these factors can be in the form of political condition of the country,
social and economic and technology factors which can affects in the positive as well as in the
negative aspect. the positive side is that hospitality sector can grow their business at the
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international market by providing the effective services and goods to the customer and the
negative impact is that hospitality have to follow various government policies as they use the
nature environment and products to run their business
SWOT analysis:
The internal environment refers to those factors which are present in the organisation atmosphere
and affects its operational activities and helps the organisation to identify the opportunities
present in the market and make the best use of the available resources in better manners. the
examining the internal environment helps in make effective business strategies which helps them
to expand their business at the international market places. With the reference of Crowne plaza
organisation internal factors are stated as below:
Strength: it is factor which are present in the organisation environment and they are the core
strength of the company which helps them to take the competitive advantages in the market
places. Some of the strength of Crowne plaza are as follow: (Chotikapanit, 2016.)
Profitability: in the 2017, the organisation has opened its highest number of the hotels across the
global which helps them to earn more profits in the target market place.
Global presence: the Crowne plaza organisation operates in more than the 100countiers and
become the leading organization in the hospitality industry.
Weakness: the organisation also has some of weakness which reduce their productivity in the
market.
Weak IT security: The Crowne plaza organisation get affected by the poor It security where the
information of the customer is leaked which harm the goodwill of the organisation.
IGH rewards club: here the customer claimed that some of the promised points are not given to
the customer.
Opportunities: here the organization tries to focus on matching its strength with the opportunities
so that they can achieve the desire outcomes in the most effective manners.
Crowne plaza the organisation has a plan to expand their business at the international location so
that they can increase their market share in the target market places.
Crowne plaza: the organisation has a market to expands their business by offering the good
tourist places which attach more customer for the organisation.
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Threats: these factors needs to reduce in the organisation so that they can safe their organisation
for unseen events:
Competitors: it is most effected threads as the organisation receive the competitions from
another organisation such as Marriott, Accor Hotels and Hilton.
Recruitment: as the organisation face challenges in hiring the worker for the front desk and
another department staff.
Analysis of inner environmental aspect of chosen company.
Examining the internal environment of the Crowne Plaza organisation has positive and
negative impact on the organisation goals and objectives. This positive side is that organisation
are able to match their strength with the opportunities present in the work environment so that
they can expand their business to next level by making the effective business strategies plan for
the organisation. the negative impact is that organisation are not able to reduce the threads with
are related to their weakness at the work place which harm the organisation objective.
Porter’s five forces:
The Crowne plaza organisation need to examine the competitive environment so that they can
make the effective business strategies plan for the organisation which will help them to grow
their operational activities at the international market. (Cheng and Foley,2019)
Porter five forces model is a strategic tool which is used to understand the competitive forces in
the target market and make the effective strategic management plan for the organisation. in the
context of the Crowne plaza organisation uses this model to enhance their profitable by
examining the competition in the market places.
Threats of new entrants: here the competitor’s organisation face problem to enter into the
hospitality industry become of costly enter in the market the hotel need to be have good capital
to have effective resource which will help them to run the operational activates in the effective
manners. the existing hotel have competitive advantage over new competitor as the organisation
have build the strong brand image and have loyal customer.
Power of the supplier: here, there are large number of the supplier and less amount of buyer
which make the supplier less powerful in the market place. the hospitality industry is having less
supplier power and is subject to the power of the labour and trained staff. The Crowne plaza have
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low pressure from the competitive organisation as they are able to maintain the cost advantage
over its rivals. (Zhang, and Zheng, 2018)
Power of the buyers: under this force, there are les number of supplier of goods and service
and buyer are large in number so bargaining power is in the hands of the buyer. In the hospitality
industry certain buyer exercise power over the another competitor when hotel room are booked
in bulk. When the business travellers are concerned they are providing premium service to build
and retain the brand name.
Threats of substitute products:
In the hospitality industry, threat of substitute goods and services are low. due to the recession
the hotel industry is affected from their competitors as customer are now looking for the cheap
accommodation as this market is price sensitive and customer switch to another organisation if
prices are low.’ (Ford. and Sturman, 2018)
These porter five forces help the Crowne plaza organisation to make the effective strategies
which will help them to expand and grow their business at the international market places. the
hospitality industry gets affected by the forces which are present in the competitive market and
have to examine these force so that they get less harm in the market.
Analysis of suitable strategies of chosen company:
With the help of the porter five forces, the Crowne plaza organisation can make the effective
strategic management plan which show the Plath where organisation can expand their business
activities in the global market places and focus on increasing the market share in the target
market place. it can be stated that stronger force may lead to low profits for the organisation and
weaker forces can provide more profitability in the market places. The Crowne plaza have an
opportunity to provide world class luxury services to its target customer and grow their business
by making effective business strategies for the organisation development.
VRIO analysis: VRIO is a tool for market research that forms part of a wider strategy scheme
for a company. The fundamental strategy process that every organisation starts with a declaration
of mission and progresses through priorities, internal & external review, strategic decisions and
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strategic execution. In the aspect of above chosen hotel, this analysis is done below in such
manner:
 Valuable- In Crown plaza hotel their resources are also helpful as it helps them to
improve the overall worth of consumers. This is achieved by growing the product's
separation or / and the price drop. Resources that are unable to fulfil this demand
contribute to competitive disadvantage. Reviewing the importance of the services is
necessary because continuously changing internally or externally circumstances will
make them less useful or worthless at all.
 Rare- Resources that one or a few enterprises can attain are considered to be different.
Rare and important tools have immediate competitive edge. On the other side, the
condition leads to economic parity where more than a few firms have the same capital or
use the capacity in the same manner. This is because businesses use the same tools to
execute the very same methods and no corporation can achieve superior efficiency. In the
aspect of above company, this can be seen that there are very less number hotels who
have such brand value and number of hotels at different locations.
 Imitate- It is considered as an expensive to imitate a resource if it cannot be imitated,
bought or replaced at a fair price by those organisations that do not have it. Imitation can
happen in two forms: by imitating (duplicating) the resource explicitly or supplying
(replacing) the equivalent product / service. In the context of above hotel, this can be
stated that they can make imitation of their resources by making changes or replacing by
new product.
 Organized to capture value- The resources themselves do not confer any profit to a firm if
it is not structured to gain the gain from them. A business must coordinate its
management structures, procedures, strategies, corporate structure and community so that
it can completely understand the value of its important, uncommon and expensive
resources and skills to emulate. In regards to above mentioned hotel, it is essential for
them to organize their overall resources in a manner so that they can make optimum
usage.
Part B
Strategic direction for company:
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The Crowne plaza organisation used different kind of theories and concepts which provide them
a way where organisation goals and objective can be achieved within the set time period. the
hospitality industry is a growing sector so the organisation need to make the effective strategic
management plan which will help them to expand their business in the UK market as well as in
the international market places.
Porter’s generic strategies:
 Cost leadership strategy- This approach entails the business gaining market share by
recruiting cost-conscious or price-sensitive clients (Gibson. and Parkman, 2018). This is
accomplished by having a lower costs or at least the cheapest cost-to-value ratio in the
target consumer segment (price relative to what consumers receive). The organisation
must be able to work at a relatively lower cost to excel in delivering the cheapest cost
while still maintaining sustainability and a high profit. In regards to above company, it is
essential for them to keep the cost of operations lower as much as possible so that prices
can be controlled and more number of customers can attract.
 Differentiation strategy- If the consumer target group is not price-sensitive and the
marketplace is dynamic or fragmented as well as consumers have very specific
requirements that could be less well-served then a differentiation approach is necessary
(Van and White, 2018). This may involve trademarks or other intellectual property (IP),
special technological skills (e.g. the design ability of Apple or the production ability of
Pixar), skilled employees (e.g. the star athletes of a football team or the top investors of a
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trading firm) or creative methods. The above hotel can adopt this approach in order to
make own trademark and goodwill among customers.
 Focus strategy- Due to various small business dynamics, this component is not a distinct
tactic for big businesses. Big businesses who have opted to implement distinction
techniques can also prefer to employ them in combination with focus strategies (either
cost or difference). In the other side, this is certainly a reasonable tactic for small
businesses particularly for those who want to escape rivalry with big ones. In the context
of above hotel, they can adopt this strategy in order to focus on a particular market
segment or customer groups.
Suggestions about strategies-
The Crowne plaza organisation can examine their external as well as internal environment which
will helps in making the effective and sound strategies for the company. It is recommended to
the Crowne plaza to use the porter five force model to understand the competitive forces which
are present in the work environment and affects the operational function of the organisation so
examining these forces will provide strategies to grow in market and secondly the organisation
can use the Porter’s generic strategy to study the which new market they must enter with what
kind of goods and services which will help them to grow their business at next level. And they
can use porter generics strategies that will also help in expanding their business to another level.
(Fraj, Matute and Melero, 2015)
Strategic management plan:
Strategic management plan: it refers to written report where the organisation mission and
visions are stated and followed by the growth and expansion plan which are shared to the
stakeholder of the organisation so that all the employees and important people of the organisation
are working for the organisation goals and objectives in the long run.
Aims: The Crowne organisation, has aim to serve the customer by offering the world class
accommodation and hospitality service across the global market places.
Objective: the objective of the Crowne plaza is to grow their business at the international market
and attach the premium customer for the organisation.
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Mission and vision: the Crowne plaza organisation are working to provide the offer hospitality
service and focus on growing their business at various another location.
STP: it stands as segmentation, targeting and positing the organisation goods and service which
helps them to reach out the large number of customer.
Segmentation: here the organisation divides the whole market into the small segment according
to wants and demands of the customer so that organisation can serve them properly. Some of the
segmentation are as follows:
Demographic segmentation: it includes the customer disposal income, their lifestyle here the
organisation need to segment is customer on the base of income and their preferences in the
market.
Geographical segmentation: here the organisation segments its customer according to the
different areas and location. ‘(Koch, 2016)
Behavioural segmentation: here the Crowne plaza organisation make segment as per the
responds of the customer and sever them accordingly.
Targeting: here the Crowne plaza organisation, target its premium customer after making
segmentation effectively in the market place. this will help the organisation to target the
productivity and expand their business.
Positioning: after targeting the customer, the organisation uses positioning strategies to attach
more customer towards the organisation service which will helps the expand their business at the
global market place.
Market analysis: The Crowne plaza need to examine and understand the market in which they
are planning to enter with different kind of services for its customer and analysis the competitive
present in the market and make the effective strategic management plan which include blueprint
the organisation needs to follow to achieve the desire level of outcomes in the organisation.
Conclusion:
According to the above discussion, it can be stated that hospitality industry can grow their
business at the international market places with the help of making the effective business
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strategies for every level in their management so that they can accomplished the desire goals and
objectives in the most profitable manners. the organisation also uses the five force to expand
their business to the next possible level by analysing the competitive market. organisation also
uses Porter’s generic strategies to make the effective strategy for their growth in the target
market places. (Lu. and Gursoy,2015)
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