Hospitality Business Strategy

This document discusses the importance of business strategy in the hospitality industry, focusing on the case of Shangri-La hotels and resorts. It covers the impact of macro environment, internal environment analysis using SWOT analysis, and the application of Porter Five Forces Model. The document provides insights into the various factors affecting the business strategy and decision-making process in the hospitality sector.

Unit 41 - Hospitality
Business Strategy
Table of Contents
INTRODUCTION.................................................................................................................................3

TASK 1.................................................................................................................................................3
P1 Use appropriate frameworks and examine the impact of macro environment..............................3
TASK 2.................................................................................................................................................5
P2 Analyse the internal environment of organisation........................................................................5
TASK 3.................................................................................................................................................6
P3By applying Porter Five Forces Model, examine the various forces in relevance with chosen
enterprise...........................................................................................................................................6
TASK 4.................................................................................................................................................8
P4 Apply range of theories, concepts and models and prepare strategic planning.............................8
CONCLUSION...................................................................................................................................10
REFERENCES....................................................................................................................................11
Books & Journal:.............................................................................................................................11

INTRODUCTION
Business is a wider and broader concept in which where is the office of functions
operations and activities are involved. Competition is rising at rapid level and it is necessary
to deal with the rivals and competitors in proper manner. Business strategy is defined as set
of tactics or planning how the resources and other things can be used in the business. Thus,
today competitive advantages organisation uses the business strategy. Shangri-La hotels and
resorts which is a multinational chain of hotels headquartered in Hong Kong. The hotel is
located worldwide provide ample number of facilities as well as services to the customers.
This report includes PESTEL Analysis, Porter 5 forces models, SWOT analysis and various
theories and concepts. It is not possible for any business to survive in the market without the
use of business strategy has it helps them to forecast and determine the enterprise position as
well as performance analysis.
TASK 1
P1 Use appropriate frameworks and examine the impact of macro environment
In business environment plays vital role and have a different background for
productivity as well as performance of company. There are very sectors environment which
affect the business and slow down the growth and overall development of business. In
relation with Shangri-La hotels to determine the environmental factors which are also known
as macro environment the organisation uses the PESTEL analysis. Manager of the hotel at
assures that appropriate tools are used in the management through which strategies and
tactics are implemented properly and accordingly (Strategy, 2019
PESTEL Analysis
It is a tool which is used by many organisations to determine the impact of external or
macro environment on this business. In relevance with Shangri-La hotels it is important to
examine such factors because this will help enterprise to take decision effectively. To
implement this tool proper market research is required which is a time consuming process but
assists taking competitive advantage within the business sector. Also reliable information is
required so that positive result is achieved when going with this framework. So various types
of factors involved in this tool are being discussed below-
Political factors- In this factor, it includes Labour law, government law and many
more. In relation with Shangri-La hotels, they have been also affected by this effective as
Hindi HK labour tax r higher and which increases the cost of production at higher level.
Also, political stability in Hong Kong is dynamic which makes it difficult for business sector
to run their activities in proper manner (Ardley, 2019).

Economic factors- This includes inflation and deflation rate, wages rate tariff and
non-tariff rates etc. With the differences between 2 major countries and their economics
which is U.S as well as Britain have affected the global interest rates various industrial
sector. In context to chosen hotel they have been also affected by this as because the global
rates are becoming unfavourable and expenditure as well as other costs is increasing at larger
scale. Economic factors slow down the growth of business as because involvement of
government is more in this element. With focusing on this factor they are able to maintain a
positive relationship with government and national authorities which is beneficial for their
firm (Lanzolla, 2020).
Social- Social factors also play important role in the business environment as because
they include religion, culture, income etc. In relation with Shangri-La hotels, they focus on
social factors in proper way such as they provide customers a world class service and
environment like their home so that customer feels good and they feel like they are in their
own house. Through this total satisfaction is achieved by the customer and also which
increases the goodwill of the enterprise (Cao, 2019).
Technological- In this, it includes using of advanced technology artificial intelligence
hardware and software and many more. Technology has become necessity for enterprises
because it simplifies the human work and help in achieving the goals as well as objective
within a period of time. In context to Shangri-La hotels they also use technology in an
appropriate manner such as they use social networking platforms and various e-commerce
website for their business and accessing customer at global level. Also they use digital
seconds as well as kiosk.
Environmental- Then, further comes the environmental factor in which it includes
pollution waste management weather and many more. It also business activities as they are
related with society and citizen. In context to chosen entity, they also focus on these factors
as bye developing and implementing more sustainable development programs and
establishing campaigns. Many enterprises keep this factor at priority level because it have a
positive impact on their brand and product goodwill.
Legal- It includes rules and regulations, laws and many more. Legal factors are
essential for the business because activities and functions are being carried out under the
consideration of government legislation. In relevance with Shangri-La hotels legal team of
their department make ensure that all the activities as well as operations are being carried out
in appropriate manner. Legal team of selected entity is well aware about government rules
and regulation as well as policies and accordingly they make their decisions in the market and
management. This helps them to eliminate the risk ok and other problems.

After a brief analysis of above matter it is seen that it is important for the organisation
to focus on external environment and their factors so that decision making as well as
complete advantages is done or acquired properly. With the help of the specified tool it
becomes easier for entity to take decisions effectively without facing any problem solve
issues. Therefore it is essential for organisations to adopt this Framework so that risks related
with business are effectively examined.
TASK 2
P2 Analyse the internal environment of organisation
In an organisation, internal environment is also necessary because it helps to identify
and analyse the activities of the entity. So, to examine factors of internal environment SWOT
analysis is being used by enterprises at wider scale. It is important to focus on the
environment so that capabilities and abilities of company are easily identified. With the help
of internal environment it is easier for enterprise to use resources and adopt the most suitable
strategies for the beneficial of business (Varadarajan, 2020).
SWOT Analysis
SWOT analysis is a tool which is used by entities to identify the capability and
internal strength of organisation (Bagnoli, 2020). To use this tool accurate information and
proper market is required so that resources and their resources are used in appropriate way. It
is helpful for the business sector as it has them understand the market situation as well as
examine their through which level of enterprise. In relevance with Shangri-La hotels they
also use this tool in in effective way and it includes various elements which are explained
below-
Strength
 Main strength of chosen hotel is that
they are globally located which help
them to acquire the larger market
share and customer ratio.
 Then, strength is it is easily possible
for them to raise the capital for
business as they have goodwill in the
market.
 Also, the hotel focus on forecasting
which allows them to take
competitive advantage and which
help them to face rivals properly.
Weakness
 The hotel is located globally but main
focus is on Asian specific countries.
 Other weaknesses there are many
rules and regulation in some of the
countries which are strict and restrict
the hotels functions and operations to
operate in proper manner.
 Labour law is affecting the hotel cost
of production and due to which it is
becoming difficult for them to operate
their activities smoothly.

 Moreover, the chain of hotel is white
and which also so help them to
market the brand at international
level.
 They have a strong customer base
through which in vitamin there for
them to globalise their business
(Dinçer, 2020).
 With new entry of businesses it is
also difficult for Shangri-La hotel to
carry on their activities and business
operations as because customers
switching behaviour is increasing
(Mota, 2020).
Opportunity
 The hotel has opportunity of
reservation as well as repositioning
the brand which will help them to be
recognisable in the market.
 Also, as the tourist and tourism ratio
of Hong Kong is rising at rapid level
it will be beneficial for the hotel to
achieve high rate of customer ratio.
 Moreover, the hotel can also merge
with other multinational hotel chain
which will expand the business at
global degree.
 The hotel focuses on environmental
factors by establishing sustainable
development program and which also
have a positive impact on the
goodwill at large scale. This also
means that through this they can
attract more new customer for their
functions and operations and also
efficient employees all manpower.
Threat
 The leaders of Europe and America
and there ratio is increasing which
leads to more competition and rivalry
among the industrial sector.
 Global interest rate is frequently
increasing and becoming
unfavourable which is a threat for the
entity.
 The hotel is one of the multinational
resorts which depicts that Shangri-La
is in the hit list off other medium
level brands.
 Government of Hong Kong is
dynamic in nature which is the state
for the organisation because they have
to change their infrastructure
accordingly and which disturb the
environment of management.
A brief analysis of above paragraph it is examined that SWOT analysis is essential for
an organisation so that internal capabilities are identified in appropriate manner. It is
responsibility of the manager to make ensure that all the elements are being used with proper
market research so that can conflicts or error do not occur in your future. Furthermore, it is
also analysed that accurate information is required for the implementation of optimistic
decision making process. Management of the hotel is always active towards the market which
assist them to use resources as well as resources in well organised and at optimum level.

TASK 3
P3By applying Porter Five Forces Model, examine the various forces in relevance with
chosen enterprise
Market is wider and becoming uncertain due to rise in competition. It is important for
business to have accurate information regarding the market situation as well as trends so that
they are able to examine the forces which affects the enterprise and its activities. In marketing
there are many tools which are adopted by enterprises to analyse the degree of competition
and market situation. So, in context to Shangri-La hotels they also use porter five forces
model to determine me profitability as well as level of competition in the specific sector. It is
necessary to have a proper knowledge and information regarding the market so that resources
as well as capital are used in the business in most efficient way. In the hospitality industry, it
is crucial for every entity to be active in the market so that they implement strategies and
tactics 2 degree with the degree of competition in in positive way.
Porter Five Force Analysis- It is a marketing tool which is used by marketers as well
as entrepreneurs in their business to identify the degree of competition in the sector. it is
beneficial for the firm to use this Framework through which they will be able to make
strategies in effective manner. So, when using this framework proper analysis is to be done so
that problems do not occur during the process. In this tool it has various forces which are
mentioned below-
Bargaining power of buyers- In market without wires suppliers cannot carry out
their business in smoother and. It is often said that buyers demand to bargain with motive of
acquiring resources at affordable prices. Power of bargaining is mostly higher when buyers
purchase the raw materials or resources in in bulk quantity, switching cost of vendors are
low, large number of substitute available. Under these situations buyers have the more power
in the market. In relevance with season hotel their bargaining power is moderate as because
they have many competitors and vendors are also in large numbers. So it is essential for them
to maintain positive relationship with the suppliers (Nicula, 2019).
Bargaining power of suppliers- Suppliers are most important part of business
because they help in delivering the product to the final consumers. Vendors have more
bargaining power when there are many buyers but suppliers are in less numbers, raw
materials are rare, cost of switching of the resources or material is high. In context to selected
enterprise, they also have vendors in which power of bargaining is low because there are
many buyers and which also depicts that raw material are available at larger level
(Phadermrod, 2019). Furthermore, manager of the hotel making sure that most suitable
supplier is being selected because along and positive relationship is maintained for longer
period of time with the vendors.

Threat of new entry- In market there are many new businesses which have taken
places and due to which existing business and organisations are getting affected at deeper
level. Threat of new entry is high when there are no rules and regulations of government, no
restrictions, see you companies to satisfy the customer demands and requirements. In relation
with Shangri la hotel, they also are affected with the entry of new business for example many
local and medium level hotels provide the same amenities as well as services at less and
cheaper rate. This results in higher switching cost of customers to the other local brands and
enterprises.
Competition rivalry- Competition rivalry is also have a major impact on admission
functions as because in this many enterprises compete for the more profit and sales revenue
by producing same product with different attributes and USP. No matter what competition
rivalry deliver a huge profit to the economy of a country but it also negatively affects the
industrial sector at wider scale. In relation with Shangri la hotel, they also have many
competitors such as Hilton hotel, Hayat, Morgan’s hotel group and many more. The degree
of competition amongst all these is high which also produces more new opportunities as well
as services (Saikim, 2020).
Threat of substitutes- Every product as substitute which is adopted by customers
find total satisfaction within the acquired product. In relevance with hospitality industry,
there are many substitute of product and services which are being have positive as well as
negative impact on business. It is necessary for the companies to focus on the product as well
as customer ratio and their switching behaviour so that threat of substitute is minimised up to
some extent. With the help of appropriate market strategies and tactics it is possible for
organisations to be aware about the customer switching behaviour as well as market trends
(Mason, 2020).
After a brief analysis of above matter it is examined that through the use of marketing
tool entity is able to make decision making in most effective way during the process.
Moreover when using the tool it is to be examined that required information is available for
the competitive advantage hand increasing the profitability level of business.
TASK 4
P4 Apply range of theories, concepts and models and prepare strategic planning
In an organisation it is important to have a proper strategic planning so that goals and
objectives are achieved in effective manner strategic planning is defined as process through
which entity is able to increase their productivity as well as profitability at broader level.
Without the use of strategic planning it is difficult for them to deal with computers and rivals

in the market. In relevance with Shangri-La hotels, they also used strategic planning in
appropriate manner which the used in most efficient way and is discussed below-
Mission- Main mission is to provide total satisfaction and quality of services.
Vision- To be the global leader and access the international market
Objectives- To increase the large market share growth and enhance the productivity
Ansoff Matrix
This is a framework which is adopted by many companies for planning and preparing
strategies as well as tactics for the growth of business in market. It includes various
dimensions which are explained below-
Product development- This stages involves new product into existing market. In the
product development strategy risk associated with this is moderate because extension line of
product is being done by the enterprise. Mostly, this is adopted when there is need to extend
product line and this is done after a proper analysing the customer demand requirements. So
Shangri-La hotel can use this strategy for their business as it will help them to attract more
customers (Kibria, 2017).
Market development- In this, new market spring forecast for the existing product. In
this risk associated is right eye because market is unknown and trends as well as customers
are new. This is adopted when there is need to expand the business at different locations or
globally. The chosen hotel can also use this strategy but with appropriate market research.
Market penetration-Then arise the penetration strategy in which existing product is
introduced in the existing market. It is the safest strategy which is used by organisation. So,
selected enterprise they can use this by using more advanced methods and new ideas
(Nguyen, 2017).
Diversification- At last this strategy depicts that in new market new product is
introduced. Risk associated with this strategy is higher because the situations are unknown
and results are also and uncertain. Shangri-La hotels did not have to go with this strategy
because it will require huge amount of capital as well as resources. Moreover, they can
develop their business are use the resources in the other established areas.
The above paragraph shows that strategic planning in necessary to achieve goals
objectives in proper manner also it is essential to use this strategy after conducting a proper
research.

CONCLUSION
After a brief analysis office report it has been concluded that business strategies and
essential and required in hospitality industry at wider level in this present report Saturn
discussions having me such as best talent SWOT analysis, Ansoff matrix which helps the
business to run the functions as well as activities effectively. Furthermore, it is seen that it is
not easy to implement or business strategy which require high level of skills and knowledge
during the process. So, a deep market research is to be conducted while adopting the strategy.

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