Hospitality Business Strategy

This report discusses the impact of macro environment on a hospitality organization, with a focus on Hyatt hotels. It analyzes the political, economic, social, technological, legal, and environmental factors affecting the organization. The report also evaluates the influence of the macro environment using SWOT analysis and VRIO analysis. Furthermore, it applies Porter's Five Forces model to assess the competitive landscape and suggests strategic directions for the hospitality organization, including market penetration.

Hospitality Business Strategy
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Table of Contents
Introduction......................................................................................................................................3
MAIN BODY...................................................................................................................................3
Analysis of the overall impact & influence of macro environment over business firm.......3
Analyse the impact & influence of macro environment over business firm.........................5
Evaluate and application of overall outcomes of by using of Porter’s Five Forces model to 8
Application of various models, concepts to develop a understanding & a detailed
interpretation of strategic directions for hospitality organisation.........................................10
CONCLUSION..............................................................................................................................13
REFERENCES..............................................................................................................................14
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Introduction
Business strategy is one of the most important tools of every organization that can help them
in achievement of certain specified goals. Strategies are helpful in dealing with all the changes
that are taking place in the external environment and dealing with challenges by suitable
strategies so that organization can be saved from any negative impact of such changes. hya
present report is based on hospitality organization that is Hyatt is one of the most awaited hotel
chains and approximately 750 hotels that is working under this chain. Present report is based on
the an internal analysis of this hospitality organization (Isa, 2018). There are certain to such as
external analysis and SWOT analysis that are being used for understanding the external and
internal dimensions of the organization. Further, there is discussion of various strategic
frameworks such as porter's five forces model, answer of growth vector matrix based on these
strategic plan of the organization is made.
MAIN BODY
Analysis of the overall impact & influence of macro environment over business firm
Pestle analysis:
Pestle analysis is a tool that is playing a significant role in understanding the external
macro environment and different aspects that are part of this environment. Below discussed is
the analysis of Hyatt hotels:
Political:
Political factors are very important in determining the overall impact of political environment
and different associated political risk. Hyatt group of hotels is a corporation that is affected in a
negative manner because of the political instability and different pricing regulations related to
their services (Miteva, and Ackovska, 2017). On the other hand it is affected positively by the
legal framework the Intellectual Property Rights that provide them protection from protecting
their trademarks and also helps in limitation of adequate safety regulations in the service sector.
Economic environment:
Environment consists of various factors related to the economic growth savings rate inflation
rate, interest rate foreign exchange rate, economic cycle are some of the important economic
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factors. In case of Hyatt group of hotels this organization is affected by the overall labor cost and
business cycle stages if there is recession then it leads to impact on the overall functioning of
hospitality organizations in a negative manner (Slootweg, . and Rowson, 2018). On other hand, if
the economic growth is high then it can increase the profitability and business activities for such
hospitality organization.
Social factors:
There are certain social factors that are related with the society such as shared attitude and beliefs
of the population play a very important role in affecting the marketers of Hyatt group of hotels
To develop a detail understanding of their customers and how can marketing activities be
designed. Certain social factors such as the target segment of market related with the class
structure and attitude of the customers have a positive as well as negative impact on search
hospitality brands.
Technology:
Technology is something that is changing very fast and disrupting across world. There is a
requirement to make a detailed technological analysis so that timely changes can be bought in
organization. In Hyatt the impact on the overall value chain structure and technological impact
has led to much new development such as use of digital media as a technological tool for
approaching the customers and marketing of the brand after growing use of internet (Gheribi,
2018).
Legal:
Legal factors are related to the word that has been developed by the concerned authorities and
institutions in every country. These have to be carefully evaluated and adopted by organization
according to which were the policies are developed. in Hyatt hotels, ,, a certain legal law such as
Consumer Protection employment laws health and safety laws data Protection Act that have to be
considered in formation of all policies by the organization.
Environment:
There are certain factors that are part of the overall macro environment in which organization is
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functioning and it is the responsibility to development to payback the environment in form of all
the resources that they are providing organization to carry on their functions. such as in Hyatt
hotels it is the responsibility of the management to make sure that there is no description on
negative harm that is on the environment according to policies are developed such as there is
reduction on the usage of plastics where it is maximum possible and paper is more preferably
used by this organization (Ye, Yan, and Wu, 2019).
Analyse the impact & influence of macro environment over business firm
SWOT analysis:
Analysis is a tool that is used for the purpose of understanding what are different strength
weakness opportunities and threats associated with a particular organization and helps in
developing understanding of all the internal factors. Below discuss is the swot analysis of Hyatt
hotel:
There are certain strength that helps Organization in achievement of competitive advantage:
Strength: weakness:
1) The strategic locations where Hyatt is
having presence.
2) They are having a extremely loyal base of
customers
3) There is a diverse exposure to different
factors such as franchising development and
ownership.
1)limited market share
2) There is very less brand differentiation
Opportunities: Threats:
1) Hyatt is can focus on different health
conscious consumer segment and then plan
their business practices according to that.
2) There can be assessment of various light
Business models and different membership
1) Hyatt is facing high intense competition
from other brands of hotels is such as Marriott
International Hilton hotel Holiday Inn premier
Inn are some of the major competitors of
Hyatt.
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plans. 2) There is long term rest that is associated
with the non-traditional lodging options
3) There is a very high threat from different
political and external environment research
terrorism and the jio political conditions are
posing a High threat on the overall functioning
of this organization.
Vrio analysis:
VRIO Analysis is a tool that is used for the resource based analysis of A firm that helps in
understanding what can be a major resource that can help in achievement of long-term
competitive advantage. There are mainly four factors that are part of this analysis and it includes
value rarity (Gheribi, and Bonadonna, 2019). imitability and Organisation. Images of Hayat
Hotel this analysis will help in identification of all the resources that are part of the competitive
environment.
Resources Valuable Rare Inimitable Organisable
Brand image Yes Yes Yes Yes Long run
Competitive
disadvantage
competent
workforce,
Yes Yes Yes No Short term or
temporary
Competitive
advantage
large
customer
base
Yes Yes No No Unused parity
technical
competence
Yes NO NO NO Temporary
parity
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1) Valuable:
It is a determinant that is used for understanding what all is the most valuable resources
that is possessed by a organisation. In case of Hyatt there are four major resources that have been
identified to be most valuable for this hospitality organisation and it includes the brand image,
competent workforce, technical competence and large customer base. These are the basically
the resources that are very valuable for the employees and these are achievement of competitive
advantage only provides time sustainable advantage.
2) Rare:
There are some of the resources are very rare in any Organisation in case of Hyatt hotels four
identified valuable resources there are three resources that are rarely found in any hospitality
organisation. These resources include the brand image, competent workforce and large
customer base. These three resources are very rare to be found in other competitors of Hayat
Hotel and hence are helping this organisation in development of some unused parity (Hurdawaty,
and Pratama, ., 2019).
3) Imitability:
There are some resources that are possessed by organisation all can be valuable but there are
some resources that cannot be easily imitated by other competitor and such resources are very
necessary for development of a sustainable competitive advantage. in Hyatt hotel and
cooperation it can be said that the major two resources that are helping the organisation in
development of a sustainable competitive advantage and cannot be imitated by other competitors
are the brand reputation or the brand image of the organisation and the competent workforce
that have been developed by the long-run hard work of Human Resource Department of this
organisation (Richard, 2017).
4) Organization:
All the resources have to be kept properly organised as they all are helping in smooth
functioning of the organisation but there are some resources that are very helpful and must be
properly organised as the help of Organisation in achievement of long term competitive
advantage. These resources in case of include the high brand reputation that has been developed
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by this organisation the cause of the quality of services and the variety offered is not easily
available in other major competitors of this organisation.
Evaluate and application of overall outcomes of by using of Porter’s Five Forces model to
Porter's five forces model :
Porter's five forces model is a strategic Framework that is used for analysing the five
major forces that a part of the overall external environment of a business organisation and how it
is going to impact in a positive or in a negative manner in the long run. Below discussed is the
porter's five forces model of Hyatt hotel:
1) Threat of New entrants:
There is always a threat of new entrants that can lead to high competition for existing
organisation. Such as in case of Hyatt Hotel Corporation there are some measures that can be
used for tackling the overall threat of new entrants timely new innovation in products and
services there must be use of Economics of scale and more capacity must be built by the
organisation by spending their resource on the overall process of research and development
(Metaxas,., Chatzoglou, . and Koulouriotis, 2019).
2) Bargaining power of suppliers':
This is a power of suppliers that is related with all the raw materials and position that can be
achieved by organisation by the help of suppliers. If there are long term and powerful relation
with suppliers in the hospitality industry and there can be high negotiating power and extracting
of higher than effects by Organisation in the lodging field. In case of Hyatt hotels Corporation
there can be of the overall bargaining power of supplies by building a efficient supply chain,
more experiment product designs. Further, there can be also development of dedicated suppliers
who can help a building up of competitive advantage for organisation.
3) Threat of substitution:
It is a threat where similar products are developed in market and available for the target segment
of the customers and this can lead to substitution of products by the existing customers that can
lead to high threat for the existing loyal taste of customers. There can be managing the overall
rate of substitution by service oriented approach instead of product oriented by Hyatt hotels and
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Corporation apart from this there must be understanding developed for the court needs of
customer there must be efforts made to increase the overall switching cost of customers so that
they are not able to switch easily from the existing product and this mainly to somehow
managing the overall threat of substitution.
4) Industrial rivalry:
This factor is related with the rivalry that is present on the existing supplies in a particular
industry if the rivalry is strong then it can lead to driving of and can also affect the overall
profitability of a particular industry. In case of Hyatt hotels Corporation they are operating in a
highly competitive industry of lodging. There is high competition that is affecting the long-term
profitability of this organisation. There can we use of developing the measures to deal with the
high rivalry such as some sustainable differentiation building up of a scale so that this
organisation can compete in a better way (Li, . and Singal,., 2019). There can also be
collaboration with other competitors to enhance the market size and no competition was existing
in the smaller segment of market.
5) Bargaining power of buyers:
It is mostly demanding for a hospitality industry and all the practices of organisation are
according to such demand of buyers. What hotels can deal with the high competition and gaining
power of buyers by such as building up of a large loyal base of customers with the help of rapid
innovation in their overall services if there is timely innovation approach that is used by Hyatt
then it will lead to reduction of the bargaining power of supplier. Customer switching to any
other brand and it will lead to high value that is high value by all their customers. This is going
to lead towards managing the overall bargaining power of suppliers and reducing it to some
extent.
Above discussed are the basic five forces that are part of the overall external environment and
can impact the functioning of business organisation. In case of hospitality industry the factors
have to be managed, so that in the long run it negative impact can be managed and positive
impact can be maximized with the help of availing all the opportunities and turning them into
business.
Sustaining in the market for a longer period of time it is very important for organisation to
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conduct a detailed environmental analysis to operate their activities according to write directions
and achievement of desired objective. Ansoff matrix is used by organisations for the purpose of
making certain strategic decisions and high growth in the external market.
Application of various models, concepts to develop a understanding & a detailed interpretation
of strategic directions for hospitality organisation.
Ans off matrix:
There are four strategies that a part of this Matrix and which helps in development of effective
strategic plan:
Market penetration:
It is a strategy that has been adopted for the purpose of an estimate of sales and overall
maximization of the profitability for organisation. In the strategy of market penetration there is
usage of existing products and services in which an organisation is already dealing into and the
existing market is also considered for the purpose of marketing of the products and services
(Jung, . and Yoon, ., 2018) . In case of Hyatt Corporation this strategy is useful for the purpose
of targeting the existing segment of market and achievement of higher sale by the existing loyal
base of customers.
Market development:
This is a strategy that is related with existing products but new markets are targeted by
organisation. This strategy is very helpful in higher growth and revenue as there is completely a
new segment of market that is approached by. In case of Hyatt hotels this strategy is very helpful
in approaching a completely New Market segment.
Product development:
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This is a Strategy related with new products that are being developed in an existing
Market segment. In this the there are more varieties that are being developed for the existing
customer base. In Hyatt Hotel this strategy is very helpful in increasing the overall level of
satisfaction of the present base of customers and influencing them to be associated with the
organisation for a longer period of time.
Diversification:
It is a strategy in which there is a completely new product that is developed and a new
market segment is approached for the purpose of such new developed product. Hotels and
cooperation this strategy is very helpful in diversifying the present base of customers and helping
in achievement of higher growth with enhancement of sales.
Above discussed are some of the major strategies of the answer of growth vector Matrix that can
be used by any organisation for the purpose of achievement of highest the most attractive
strategy that can be developed for higher growth by Hyatt is element where the existing Royal
base of customers can be used by this organisations for higher development this will be a very
cost effective technique as there will be no new segment of market but the existing customer
base will help in higher growth and revenue (Han, Lee, and Kim, 2018) .
Strategic management plan
Management plan is basically a written document that consists of different Strategies and
objective that can be used for communication of the overall growth plan of organization
presently below discuss is the strategic management plan of Hyatt hotels:
Objectives:
1) Achievement of higher growth revenue 15% by the year ending 2020
Strategies
STP Analysis:
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There are some of the strategies that can be adopted and for this STP analysis has been done:
Segmentation:
Total is segmenting the target Market by use of Geographic and psychographic method where
they are dividing their place of customers on the basis of their location and certain similar
characteristics that the process.
Targeting:
The management department of Hayat Hotel have decided to target their customers who are
having high financial competence as according to the quality of the services they have kept the
price is slightly higher and this is going to help them in higher revenue.
Positioning:
This is a strategy that is used for attainment of a significant position in the market as various
promotional tools and marketing campaigns will be adopted by Hyatt hotels for the purpose of
targeting their decided segment of market.
Tactics:
There are some of the taxes that can be used for the purpose of achievement of highest such as
there is requirement of marketing main as a tool to understand what are basic aspects that can
help in long-term sustainability for Hyatt hotels and achievement of organization objective.
Controlling and monitoring:
This is the last step of every strategic management plan where the management and all the how
to perform the various activities associated with the strategic management plan has to make sure
that all of the objective pre-decided have been achieved by the adoption of certain tactics and
strategies. This is a state where the overall deviations in the performance actual and standard
have been identified and measures have been taken to minimize such division in future course of
business action (Boella, and Goss-Turner, 2019). The step is very crucial in order to ensure that
all the decided objectives and functions are taking place according to the specified time.
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CONCLUSION
From the above discussed points it can be said that there are various different frameworks that
can be used for making a detailed analysis of external and internal factors such as pestle analysis
and swot are the two major tools that can be very helpful in developing a understanding of what
are some of the challenges and opportunities at a present in external and internal environment.
Apart from this porter's five forces analysis and ans off growth Matrix are another two main
theories that can be very useful in development of certain effective strategies by organization.
Further the strategic plan can be developed by use of such theory that can be adopted by
organization for their long term sustainable advantage and achievement of certain for a specific
time period.
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