This report analyzes the impact of macro-environment factors, internal environment, and Porter's five forces on the business strategy of Rosewood Hotels & Resorts. It explores the opportunities and threats in the industry and discusses the application of theories, concepts, and models for strategic and competitive advantage.
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Hospitality Business Strategy
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Contents INTRODUCTION...........................................................................................................................................3 Part A...........................................................................................................................................................3 TASK 1..........................................................................................................................................................3 P1: Macro-environment factors..............................................................................................................3 TASK 2..........................................................................................................................................................5 P2: Internal environment........................................................................................................................5 TASK 3..........................................................................................................................................................7 P3: Porterâs five forces.............................................................................................................................7 Part B...........................................................................................................................................................8 P4: Application of a range of theories, concepts and models..................................................................8 CONCLUSION.............................................................................................................................................10 REFERENCES..............................................................................................................................................11
INTRODUCTION Hospitality refers to the relationship which is shared between a guest and the provider of service which is provided by charging a specific fee for it(Ahmad, Bakar and Ahmad, 2018). Business Strategy is framed by the organizations so that they are able to frame methods to get ahead of their various competitors in the future time period. This is much required by the hospitality organizations nowadays because they need a specific strategy for getting strategic and competitive edge within the market. For this report, Rosewood Hotels & Resorts has been chosen which is a large hospitality chain having hotels all around the world. In this assignment, specific focus will be made on analysis of impact of macro-environment, assessment of a hospitality organizationâs internal environment, evaluation of outcomes with the use of Porterâs Generic Strategies. Also, application of models, theories and concepts will be made as a part of this project. Part A TASK 1 P1: Macro-environment factors Macro-environment factors refer to various types of external factors which can create an impact on the business of any organization. They can be analyzed using PESTEL analysis. The PESTEL analysis in the context of Rosewood Hotels & Resorts is as follows- Political factors- These are government policy, political stability and tax policy(Aithal and Aithal, 2016). These factors impact the business of Rosewood Hotels & Resorts because they can either increase or decrease its level of profits. ï·Opportunity- If the government policy is lenient towards the businesses then it creates an opportunity for businesses like Rosewood Hotels & Resorts because it can lead towards increase in their profits. ï·Threat- If there is an increase in the tax rates by the government then it can lead towards a decrease in the level of profits of Rosewood Hotels & Resorts. Economic factors- These are economic growth, exchange rates, disposable income etc. These factors can impact the business of Rosewood Hotels & Resorts because they are directly linked with the economy of country. ï·Opportunity- If the economic growth of the country is increasing then it will naturally have a positive impact on the business of Rosewood Hotel & Resorts because it will help
the hotel a lot by increasing its revenues and subsequently the level of profits in the future. ï·Threat- If the disposable income of the customers falls due to economic slowdown then they will not prefer to stay in a luxury hotel like Rosewood Hotel & Resorts which will therefore become a threat for it as it can result in decrease in the overall level of profits. Social factors- These are population growth rate, heath consciousness and cultural barriers(Atrash, 2018). They can create an impact on the business of Rosewood Hotels & Resorts because this will lead towards an increase or decrease in its profitability. ï·Opportunity- Change in lifestyle attitudes of customers has led towards them increasing their spending by preferring to stay in luxury hotels like Rosewood Hotels & Resorts. Therefore this offers an opportunity to increase the level of profits. ï·Threat- Cultural barriers in certain sections of society stop certain people from staying in luxury hotels like Rosewood Hotels & Resorts. Thus this creates a threat for them as their level of profits can reduce. Technological factors- These are technology incentives, level of innovation and R&D activity(Chen and et.al., 2016). These factors create an impact on the business of Rosewood Hotels & Resorts because they create a direct or indirect impact on the level of profits. ï·Opportunity- Technology incentives offer an opportunity to Rosewood Hotels & Resorts because by developing their technology they can easily meet the needs and requirements of a dynamic environment. ï·Threat- If Rosewood Hotels & Resorts is not able to innovate according to the changing needs and demands of the market then it will naturally lead to a decrease in its revenues and level of profits. Environmental factors- These are weather, climate and environmental policies. These factors can impact the performance of the organization both in the short-run and long-run because they are likely to create an impact in the future as the customers are increasingly becoming more and more environment-conscious. ï·Opportunity- If Rosewood Hotels & Resorts is able to provide the right facilities to the customers and clients by being environment-conscious in its approach then it will naturally lead to an increase in its profits. ï·Threat- If Rosewood Hotels & Resorts is not able to provide its facilities by being environment-conscious then it can decrease its profits. Legal factors- These are discrimination laws, employment laws and consumer protection laws(GonzĂĄlez-RodrĂguez and et.al., 2018). These factors are likely to create an impact for the organizations like Rosewood Hotels & Resorts because they have to follow the legal rules and regulations of the country where they are operating in.
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ï·Opportunity- If Rosewood Hotels & Resorts follows the legal rules and regulations of the country then this can create an opportunity for it to increase its profits. ï·Threat- If Rosewood Hotels & Resorts is not able to follow the legal rules and regulations of the country then this will create a threat for it by decreasing its profits. TASK 2 P2: Internal environment Internal environment refers to an assessment of the factors which influence the level of profits of an organization(Jogaratnam, 2017). It can be assessed using SWOT analysis & VRIO analysis. SWOT analysis- SWOT analysis refers to an analysis of internal environment of the organization by an assessment of its strengths, weaknesses, opportunities and threats(Katou, 2016). SWOT analysis of Rosewood Hotels & Resorts is as follows- StrengthsWeaknesses ï·Massivecustomerbase-Rosewood Hotels&Resortshasamassive customerbasewhichactsastheir strengthastheycanincreasetheir profits by providing their customers the required level of satisfaction. ï·Large-scaleoperations-Rosewood Hotels & Resorts is a very big chain of hotelswhichoperatesinmany countries in the world. Thus this act as strengthforRosewoodHotels& Resorts as it can earn higher-level of profits in the future time period without facing any kind of issues and problems. ï·Low efficiency- There has been a low efficiency in the services of the chain in therecentyears.Thishasledto dissatisfactionamongsomeoftheir customers and clients and therefore has created a weakness for the chain of hotels. ï·Marketing strategies- The marketing strategies of the organization has left a lot to be desired as its competitors are much ahead of it and therefore this has created a weakness. OpportunitiesThreats ï·Demand generation- There is a lot of demand for the hospitality services in the market and therefore demand can be createdfortheserviceswhichare offered by Rosewood Hotels & Resorts whichofferanopportunityfor increasing the level of profits. ï·Innovation-RosewoodHotels& Resorts can use innovative tactics so thattheyareabletoattractmore ï·Increasing competition- The level of competition in the hospitality industry is increasing a lot. Therefore this can lead towards creation of problems for Rosewood Hotels & Resorts as their level of profits can reduce. ï·Economicslowdown-Theglobal economic slowdown has also affected theprofitsofdifferenttypesof organizationsallaroundtheworld.
customersandclientstowardstheir services without facing problems and issues. Thus Rosewood Hotels & Resorts has also been affected due to this economic slowdown which has led to a decrease in its profits. VRIO analysis- VRIO analysis refers to a management tool which is used by the organizations so that they assess the strength of their different types of resources which they have which will help them in securing a competitive advantage in the future time period(Konovalova and et.al., 2018). VRIO analysis in the context of Rosewood Hotels & Resorts is as follows- ResourcesValuableRareInimitableOrganized Brand Imageï·ï·ï·ï· Customer Service ï·ï·ï· Level of servicesï·ï· Global Presenceï· The analysis is as follows- ï·Valuable- Brand Image is valuable because it takes a lot of effort to create it. Customer service is valuable because satisfying customers is very important for a business. Level of services is valuable because the entire business of the hotel is dependent on its services. Global Presence is valuable because it offers the hotel a chance to earn more profits in the future time period. ï·Rare- Brand Image is rare because it is created after providing the customers best services for so many years. Customer Service is rare because not every organization is able to provide such services. Level of services is rare because not every hospitality organization is able to provide it in a standardized and efficient manner. Global Presence is not rare because many of the hospitality organizations have presence in different countries. ï·Inimitable- Brand Image is inimitable because it is very difficult to copy it.Customer Service is inimitable because the company provides a lot of satisfaction to the customers. Level of services is not inimitable because they can be provided in a standardized and efficient manner by other firms also. Global Presence is inimitable because a lot of firms are operating in international market nowadays. ï·Organized- Brand Image is organized because it has been created with a lot of efforts. Customer Service is not organized because there are sometimes there are problems in servingthecustomers.Levelofservicesisnotorganizedbecausetheybecause
Rivalry among existing competitors- It means the level of competition in the industry in which the firm is operating in(Petronella, Swart and Anne Taylor, 2018). In the context of Rosewood Hotels & Resorts, this force has a very high power because in the hospitality industry there is a very high-level of rivalry which is existent there among the various competitors in the market. If one hotel chain is decreasing its prices then the other chains also have to follow because they have to do so in order to sustain in a highly-competitive market. This is so because competition in the hospitality industry is on a higher side. Justification- From this analysis, it can be seen that 3 out of 5 forces have a high power for Rosewood Hotels & Resorts and the remaining 2 have a low power. Thus, it can be said that the organization has to make sure that it is able to deal with these forces effectively and efficiently so that they are able to achieve their short-term and long-term goals as well as objectives in the future time period without any kind of problems and issues. Part B P4: Application of a range of theories, concepts and models Ansoff Matrix- Ansoff Matrix is used as a tool in management so as to identify the various strategies which can be targeted by the companies for ensuring their growth in the market in the long-run(Prudâhomme and Raymond, 2016). It can also be used by Rosewood Hotels & Resorts so that they are able to devise a right strategy which ensures their growth in the future time period. The analysis of this matrix in the context of Rosewood Hotels & Resorts is as follows- ï·Market penetration strategy- This strategy can be used by the companies to target their existing market with more products and services. In the context of Rosewood Hotels & Resorts this strategy will be highly effective to make sure that they are able to target their existing market with new services in their hotel. ï·Market development- This strategy can be used by the firms so that they are able to enter into new markets through adopting expansion. In the context of Rosewood Hotels & Resorts this strategy can be highly effective as they can target various markets which are lying untapped. ï·Product and development- This strategy can be used by the organizations to develop new products and services to get a strategic edge in the market(Vlachos, 2016). In the context of Rosewood Hotels & Resorts this strategy will be highly useful because they can bring innovative services to attract more customers and clients. ï·Diversification- This strategy can be used by the companies when they enter into a new market with new products and services. This can be used by Rosewood Hotels & Resorts if they enter into a new market with new services to offer to customers as well as clients.
Justification- Rosewood Hotels & Resorts should select Product and development strategy so that it can innovate in its services and provide the right choices to the customers. Therefore in this manner, the hotel will be able to earn higher level of profits in the future time period without facing issues and problems. Strategicplan-Strategicplanreferstoadocumentwhichispreparedbythe organizations so that they are able to strategically create the right approach of getting ahead of their various competitors in the market(Yoon, Jang and Lee, 2016). The strategic plan of Rosewood Hotels & Resorts is as follows- ParticularsDetails MissionThe mission of Rosewood Hotels & Resorts istoprovideexcellentservicestotheir clientsbyprovidingthemtheultimate luxury experience. VisionThe vision of Rosewood Hotels & Resorts is to make sure that it gets a long-term strategic edge in the market. This can be done if it incorporates its plans properly. Valuesï·Respect- Hotel aims to respect its clients. ï·Humility- Hotelâs staff aims to be humble in providing their services to the clients. ï·Integrity-Hotelâsstaffaimsto maintaintheintegritywiththe clients. Objectivesï·In the short-term the hotel plans to bring the required innovations in its services. ï·In the medium-term the hotel plans to attract more clients so that it can increase its business. ï·In the long-term the hotel plans to get more market share so as to make sure that it is able to maximize its profits. StrategiesThehotelneedstoadoptaggressive marketing strategies to make sure that it is able to realize its objectives without facing problems and issues. Therefore the right strategies are required to be adopted by the hotel. SummaryTo summarize, this strategic plan focuses
on the mission, vision as well as values of Rosewood Hotels & Resorts. Also, it makes itsfocusontheobjectiveswhichare required to be set for different time-periods and the strategies which are required to be adopted to meet them effectively. Thus if this plan is used in the right manner then this can lead towards higher profitability leveloftheorganization.Thefirmcan therefore easily obtain a strategic edge in the market in the future time period without any problems and issues. CONCLUSION From the above report, it can be concluded that hospitality services are provided by different organizations. They are required to prepare a business strategy for succeeding in the market in the long-run period of time. The macro-environment can be analyzed using PESTEL analysis and internal environment can be analyzed using SWOT analysis and VRIO analysis. Porterâs five forces model is very effective so as to find out the impact created by the forces. Also, Ansoff Matrix can be used to prepare a growth strategy and a strategic plan helps the organizations to devise effective strategies so that the right approach can be adopted in the future time period by the companies for facilitating achievement of their goals and objectives.
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Prudâhomme, B. and Raymond, L., 2016. Implementation of sustainable development practices in the hospitality industry.International Journal of Contemporary Hospitality Management. Vlachos, I. P., 2016. Reverse logistics capabilities and firm performance: the mediating role of business strategy.International Journal of Logistics Research and Applications.19(5). pp.424- 442. Yoon, D., Jang, J. and Lee, J. J., 2016. Environmental management strategy and organizational citizenship behaviors in the hotel industry.International Journal of Contemporary Hospitality Management. Online PorterâsFiveForces.2016.[Online].Availablethrough: <https://www.business-to-you.com/porters-five-forces/>