Hospitality Business Strategy

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.

Hospitality
Business
Strategy

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: Porter’s 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
organization’s internal environment, evaluation of outcomes with the use of Porter’s 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.
 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.
 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.
 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.
 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.
 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.
 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.
 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.
 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.
 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.
 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 (González-Rodríguez 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.

 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.
 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-
Strengths Weaknesses
 Massive customer base- Rosewood
Hotels & Resorts has a massive
customer base which acts as their
strength as they can increase their
profits by providing their customers the
required level of satisfaction.
 Large-scale operations- Rosewood
Hotels & Resorts is a very big chain of
hotels which operates in many
countries in the world. Thus this act as
strength for Rosewood Hotels &
Resorts as it can earn higher-level of
profits in the future time period without
facing any kind of issues and problems.
 Low efficiency- There has been a low
efficiency in the services of the chain in
the recent years. This has led to
dissatisfaction among some of their
customers and clients and therefore has
created a weakness for the chain of
hotels.
 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.
Opportunities Threats
 Demand generation- There is a lot of
demand for the hospitality services in
the market and therefore demand can be
created for the services which are
offered by Rosewood Hotels & Resorts
which offer an opportunity for
increasing the level of profits.
 Innovation- Rosewood Hotels &
Resorts can use innovative tactics so
that they are able to attract more
 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.
 Economic slowdown- The global
economic slowdown has also affected
the profits of different types of
organizations all around the world.

customers and clients towards their
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-
Resources Valuable Rare Inimitable Organized
Brand Image    
Customer
Service
  
Level of services  
Global Presence 
The analysis is as follows-
 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.
 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.
 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.
 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
serving the customers. Level of services is not organized because they because

sometimes there are complaints by the customers. Global Presence is not organized
because in some places proper control and monitoring activities are not taking place.
TASK 3
P3: Porter’s five forces
Porter’s five forces is a model which is used commonly for the analysis of level of
competition within a particular industry (Porter’s Five Forces, 2016). The analysis in the
context of Rosewood Hotels & Resorts is as follows-
Threat of new entrants- Threat of new entrants refers to the chances of new firms in the
market where the organization operates in (Martínez-Pérez, García-Villaverde and Elche, 2016).
In the context of Rosewood Hotels & Resorts this threat is high because a lot of new entrants
have arrived in the hospitality industry. By providing better services at a much lower cost they
can decrease the profits of the chain. Therefore this force has a high power. This is so because
hospitality industry offers a bright chance to the new organizations to set up their business and
target the right customers and clients to increase their level of profits without any problems and
issues.
Bargaining power of suppliers- The bargaining power of suppliers refers to the power
suppliers hold to influence the prices of the inputs (Orantes-Jiménez, Vázquez-Álvarez and
Tejeida-Padilla, 2016). Therefore, in the context of Rosewood Hotels & Resorts this force has a
low power because the hotel operates in hospitality industry which is a service industry and
therefore there is no role of suppliers in its industry. This is so because the bargaining power of
suppliers has no impact on the hospitality industry as it is basically a service industry.
Bargaining power of buyers- The bargaining power of buyers refers to the power the
buyers have to influence the business of the organization. In the context of Rosewood Hotels &
Resorts the buyers refer to the customers and clients of the hotel. This force has a very high
power as the customers and clients are treated like kings in the hospitality industry. They have to
provide top-quality services so as to ensure that they are fully satisfied with the services received
for the price they have paid for availing them. This is so because the bargaining power of buyers
will be there because they wish to receive the best services for the price which they are paying.
Threat of substitute products- The threat of substitute products refers to the power of
substitute products to influence the business of the organization (Peters and Kallmuenzer, 2018).
In the context of Rosewood Hotels & Resorts this force has a very low power because it operates
in the hospitality industry where there are no substitute products and there are only services
which are offered to the customers as well as clients. Therefore, this force has a very low power.
This is so because the threat of substitute products is not existent in a service industry like
hospitality industry.

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 (Prud’homme 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-
 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.
 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.
 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.
 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.
Strategic plan- Strategic plan refers to a document which is prepared by the
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-
Particulars Details
Mission The mission of Rosewood Hotels & Resorts
is to provide excellent services to their
clients by providing them the ultimate
luxury experience.
Vision The 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.
Values  Respect- Hotel aims to respect its
clients.
 Humility- Hotel’s staff aims to be
humble in providing their services to
the clients.
 Integrity- Hotel’s staff aims to
maintain the integrity with the
clients.
Objectives  In the short-term the hotel plans to
bring the required innovations in its
services.
 In the medium-term the hotel plans
to attract more clients so that it can
increase its business.
 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.
Strategies The hotel needs to adopt aggressive
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.
Summary To summarize, this strategic plan focuses

on the mission, vision as well as values of
Rosewood Hotels & Resorts. Also, it makes
its focus on the objectives which are
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
level of the organization. The firm can
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.
Porter’s 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.

REFERENCES
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