Hospitality Business Strategy

This report discusses the application of PESTLE analysis, SWOT analysis, and Porter's Five Forces model in the hospitality business strategy. It focuses on Choice Hotel International, a leading hotel chain operating globally. The report analyzes the impact of macro environment factors on the organization, evaluates the internal environment using SWOT and VRIO frameworks, and examines the competitive forces using Porter's Five Forces model. It also highlights the strengths, weaknesses, opportunities, and threats of Choice Hotel International.

Hospitality Business
Strategy

Table of Contents
INTRODUCTION......................................................................................................................3
MAIN BODY.............................................................................................................................3
TASK1.......................................................................................................................................3
P1 application of pestle for identifying macro environment and strategy formation............3
TASK2.......................................................................................................................................5
P2 analysis of internal environment with the use of Swot and VRIO framework.................5
TASK3.......................................................................................................................................8
P3 application Porter’s Five Forces model in evaluation the competitive forces..................8
TASK4.......................................................................................................................................9
P4 Using the theories for strategic formation........................................................................9
CONCLUSION........................................................................................................................11
REFERENCES.........................................................................................................................12
Books and journals...............................................................................................................12

INTRODUCTION
There is continuous development within the tourism and hospitality industry which
also impacted positively on the business of hospitality organisation. In this report The Chosen
organisation is choice Hotel International. It is a leading Hotel chain within the world where
its own number of Hotel brands ranging from upscale to economic classes. Hotel has 7000
properties in 41 countries worldwide with approximately 6 lakh rooms (Sheresheva and
Kopiski, 2016). Headquarter of this hospitality franchisor is in Rockville, Maryland, United
States. In the beginning of this report there is analysis of impact and influence of macro
environment on the given firm. The middle of the report is consist of internal environment
and capacity of the organisation by the use of SWOT analysis there will also identification of
porter's five forces model and the competitive advantage within the market to this firm. In the
end of this report, there will be application of different theories conception model for
interpreting and analysing the strategic planning within the organisation for achievement of
goals and objectives (Scott, 2016).
MAIN BODY
TASK1
P1 application of pestle for identifying macro environment and strategy formation
Choice hotel International is operating at global level where it is important for the
organisation to deal with its micro and macro environment. Micro or external environment
have direct impact on organization performance. It is important for the hotel to analyse its
macro environment for getting the maximum advantage as well as performing a good
strategy. For identifying the Macro environment organisation can use pestle analysis which
stated below.
Pestle analysis: pestle analysis can be defined as that type of analysis which is directly
involve analysing and planning for external factors which includes political social
economical environmental technical and legal factors. All of these are identified for framing a
proper policy within the organisation to cope up with negative impacts (harwani and
Mathews, 2017).
Pestle analysis of choice Hotel International
Political: political factors are those which include the rules and regulation and policy
formation by the government of the nation where organisation is working. In context of

choice Hotel International, is operating at a global level where it have to deal with number of
policies regarding different governments of different nations. This will impact both positively
and negatively on the organisation as it have to formulate number of policies and complies
with the attitude of different governments in different nation. Positive impact of this is that it
get chance to interact with different government policies where it can strong its structure and
gain the maximum competitive advantage because of that politically stable structure.
Economic: practices are those which include the GDP rate employment ratio interest
rates and many more things related to the economy of the nation where the organisation is
working. In reference to choice Hotel International, headquarter of Hotel is situated in United
States the developed economy. This also means that there is stability within the economy and
Organisation can easily Run its operation and fulfil its goals and objectives related to
economic development. GDP growth is also normal within United States. This impact
positively on choice Hotel International because it can perform easily its functions as well as
chances of growth will also increase (Rather and Sharma, 2016).
Social: social factors are important part of macro environment analysis for
organisation like choice Hotel International. This is because hotel is trading on a global level
which gives different opportunities to it as well as some challenges related to society. Current
times the trend toward tourism and travelling is continuously increasing which help hotel in
growing its function and impacted positively on the profitability because of increased
business opportunities (Petronella, Swart and Anne Taylor, 2018).
Technological: technological factors are those which are directly related to the
technology within the business environment. In reference to hotel choice International,
Technologies in important part of organisation because there are continuous changes within
the technological environment which helped hotel in improving its functions like self-
checkout and check in system, Online sale of room many more (Vlachos, 2016). This
increases the business of the organisation and impacted positively. Negative impact on the
organisation because it has to identify technology and ensure huge amount of Expenditure
within this for gaining it.
Environment: environment factors are those which include climate pollution
geographical location and many other things related to the organisation external environment
which have their direct impact on the performance and capability of the organisation. There
are some environmental factors like change in climate and pollution which have their direct

impact on the choice International Hotel. Freezing temperature there are some tourist
destination which are failing to perform and causing negative impact on the branches of hotel
in the sites which is impacting negatively on the organisation (Peters and Kallmuenzer,
2018).
Legal: these are those factors which include the rules regulations and policies formed
by the legal authorities and government of the nation for governing the business and saving
the interest of individuals and companies from an unethical practice. In context of choice
Hotel International, it always follows the rules and regulations formed by the different legal
authority are of the Nations because it operates at a global level where every Nation and
every security have their own rules and regulations. This has positive impact on the
organisation as it helps in building the good image within the country. Negative impact of
this is that it directly impact on the cost of the organisation because of fulfilling these legal
requirements (Chan and Hsu, 2016).
The choice Hotel International performed different functions and strategy which will
help company in minimising the negative impacts of these factors. Use the positive impact of
these factors for minimising the negative impact and perform different functions for reducing
the negative impact and combining both of them for getting more and more competitive
advantage.
TASK2
P2 analysis of internal environment with the use of Swot and VRIO framework
For every organisation within the market, it is important to identify the internal factors
which will help company in formulating effective business strategy and gaining the
competitive advantage within the market. For this choice hotel international can use SWOT
analysis VRIO analysis where it can identify the strengths weaknesses opportunities and
threats of the organisation. SWOT analysis is that Framework which is used by the
organisation to identify its internal environment and decrease the chances of failure by
forming effective strategies (Martínez-Pére, García-Villaverde and Elche, 2016).
SWOT analysis of choice hotel international.
Strength:

 Global performance: the major strength of choice hotel international is its global
operations. Hotel is operating at a global level which helps it in increasing its revenue.
Global performance also builds a separate brand image as well as in fluid different
type of technology within the organisation which is come from performing in
different economics.
 Separate brand image: choice hotel international have a separate brand image within
the market of hospitality industry. This is because company is operating from a longer
period of time where it is serving his customer effectively it also listed in star rating
hotels where it have 5 to 7 star hotels. It also Help the organisation in maintaining
separate brand image (Varelas and Georgopoulos, 2017).
Weakness
 Because of poor performance from some branches of hotel, there is decline in overall
profit of firm.
 The major market of choice hotel international is in US where it is losing its shares
and interest of customers because of some ethical issue.
Opportunity
 Acquiring and joint venture: the hotel have a major opportunity that it can acquire a
tie up with different travelling agencies and airlines where it can provide some
discount on the tickets of airline for choosing the hotel. This will also increase the
market share as well as attract customer towards the organisation (Katou, 2016).
Threat
 Due to some political interventions and other problems the economy of world is going
down slow which impacted negatively on the performance of the hotel and it have to
come up with it which is acting as a flat for firm.
 Due to Mars lockdown and spreading of pandemic covid-19 organisation have to shut
its all operation for 3 months which also acted negatively on the revenue.
VRIO analysis of choice hotel international
Valuable: valuable include those resources which are important for the organisation
and provide the customer satisfaction and increase the chances of success for the
organisation. In context of choice hotel international, there are four valuable resources for the

organisation. These are financial resources, employees, automation, and strong dealer
community. These all resources are valuable for the organisation which plays an important
role within it (Li and Singal, 2019).
Rareness: it includes that quality of the resources which is important of for the
organisation it is the uniqueness of the specification for the business organisation within the
resources which made them important for the organisation and organisation must have
knowledge and full information about these resources. There are three resources which area
for choice hotel international. These are financial resources employees and dealer
community. This is because these all play important part within the organisation and help the
firm in easily running the business. Automation is not part of redness because it can easily
maintained by any other competitor of the organisation (Jones, Hillier and Comfort, 2016).
Imitable: it includes those resources which cannot be copied by the competitor of the
organisation. These are those resources which cannot be easily acquire by other form then
choose an organisation. In context of choice hotel international, it have to imitable resources
which are financial resources and employees of the organisation. This is because company
have a separate brand image which help form in building is financial resources. Employees of
the organisation or highly trained and qualified which also in your huge cost and it is
impossible. For computer to ensure that high cost.
Organised: in context of choice hotel international, employees of the organisation are
most organised resources within the firm which provide a competitive advantage to the
organisation. This is because in hotel industry, employees are the only key for success within
the firm. This is the reason behind organisation of these resources within this hotel (Yoon,
Jang and Lee, 2016).
It can be identified from the above mentioned SWOT analysis and drive analysis that
there are a number of strategies which can be formed with the help of these frameworks. It is
also identified that choice hotel international is operating at the global level where it in easily
combine its threats by identifying the opportunities and strength of the organisation.
TASK3
P3 application Porter’s Five Forces model in evaluation the competitive forces
Porter's five force model is that Framework which is used by the organisation to
identify the competitive advantage within the marketplace. This model also includes different

type of factors which will help the organisation in gaining the competitive advantage within
the market and using that advantage for identifying the different opportunities.
Power of buyers: in hospitality industry the power of buyers a motor at a moderate
level.in context of hotel international it can be identified that companies operating at the
global level where it attract large number of customers towards the organisation. This is
because it uses different type of innovative techniques and good services which help
customer and satisfying their needs. This also provides a large number of ways to the
organisation for its customers where the power of bargaining of its customer gets lower. This
also provide a competitive advantage to the organisation because it provide different facilities
like spurgeon's birds and many more which attract the large number of customer who are not
able to bargain on the prices of the organisations product (Sowanber, Ramkissoon and
Mavondo, 2018).
Power of suppliers: the power of supplier’s also moderate factor in context of choice
hotel international. This is because choice hotel international is performing at global level
where there is large number of supplied to the product of the company. The supplier health
company acquiring accessories and other working products for the customers which are
needed in gym pass as well as different facilities of the organisation. Cause of large number
of Supplier Company can easily bargain with them and get the maximum competitive
advantage.
Threat of new entrants: hospitality industry is a wide interesting where investment
within these industries is very high. this is because it requires a proper infrastructure as well
as facilities where a large number of employees are also required to perform the different
functions related to front staff back staff facility management and many more. This all
requirements need a high capital investment which is impossible for new entrant to ensure
without successful business strategy and planning. So this is a benefit to choice hotel
international because there are low levels of new entrants within this industry which provide
up stable market to the organisation where it can set this factor side while forming the
strategies (Prud’homme and Raymond, 2016).
Threats of substitute products: in the hospitality industry every organisation is
providing the same products which are built of passports and other facilities which are
provided by an hotel. This industry can be said as the competition market because of there is
little variety within the products. it can act as a competition for the organisation because there

are number of hotels which are providing designer sweets and luxurious sweets which attract
customer more than the sweets of choice hotel international.it can use the strategy within the
operation management of the organisation where it can design up and use the innovative
ways to formulate it's suit and rooms for its customer.
Competitive rivalry: it is a high level competitive thread for choice hotel
international because there are number of competitive rivalry within the marketplace of
hospitality industry. The major rivalry of this hotel is intercontinental hotel and Marriott hotel
group. These groups are operating at high level which is equal to the level of choice hotel
international. This can act as a competitive disadvantage for the organisation so it must be
kept in the mind while forming the different strategies (Kuo, Chen and Tseng, 2017).
It can be identified from the above mentioned report that there are number of options
available within the market which must be kept in mind by the organisation while forming
different strategies. This will help organisation in gaining the maximum competitive
advantage.
TASK4
P4 Using the theories for strategic formation
Strategic planning is important part of every organisation as it helps company in
leading with the changes as well as improving its abilities and skills for achieving the goals
and objective in a specific time manner. For this company can use different type of
frameworks which will help in gaining the advantage and achieving the goals of organisation.
In context of choice hotel international, it always uses the ANSOFF matrix where it can make
a strategic decision for the growth of the organisation and achieving the goals and objectives
for the future perspective. This Framework includes the four stages which are mentioned
below:
Market penetration: it is that part of strategy which focuses on improving the
existing products and services of the organisation within the existing market. It is the easiest
strategy for growing organisation current market by using some small modification in the
current services. In context of choice hotel international, it is effective strategy because
company can increase the services by improving its existing services within the market. For
this company can use advertisement techniques where it can promote the existing services
and get maximum advantage.

Market development: it is the strategy which involves the launching of existing
products and services in a new market. In the context of choice hotel international, this is an
effective strategy for the company because it always adopts the global strategy where it want
to expand its business to different economies. It is an effective strategy which will also help
company in expanding its business as well as make the good relationship between customers
where it can fulfil their needs and requirements (Bowie, Buttle, Brookes and Mariussen,
2016).
Product development: this type of strategy is related to launching a new product
within the existing market. In hospitality industry this strategy is common and can be used by
choice hotel international because put hotel is operating at larger level where it can operate
more than one hotel at some tourism destinations in some cities where the demand is higher.
there are various search options in front of organisation where it can expand its business by
the use of new services.it can also include different type of services like spark James bars and
many other facilities within the existing organisations which will help company in increasing
its market share which can also in product development.
Diversification: it is the most risky situation for a strategy for organisation to adopt.
In this strategy organisation generally produce a new product of services within a new
market. This is a risky strategy because chances of success within this type of industry are
very low and risk of failure is high. In context of choice hotel international, it never use this
type of strategy because it demands a huge capital investment as well as full chances of lost
within the operation.
From the above analysis it can be identified that company can adopt different
strategies but the most suitable strategy for choice hotel international is market development
and product development where it can usually increase its market share as well as promote
the profitability of the organisation (Kim, Lee and Fairhurst, 2017).
Strategic management plan
It is that plan which is formed to facilitate the functioning within the organisation
where each and every function of the organisation can be divided according to the goal and
task of firm. The strategic management plan is directive based on the vision mission strategy
of the organisation which is stated underneath.

Vision: the vision of choice hotel international is to increase its business all over the
world.
Mission: the mission of this organisation is to provide quality services to their
customers for fulfilling their requirements by increasing the organisation profit and long run.
Strategy: company always adopt market development strategy for increasing its profit
and running the business for a long period of time.
Implementation: it always implement the plan from top to bottom level where it can
easily execute all the functions and assign and duties to individual where there is no delay in
work because of lack of cooperation and coordination.
Evaluation: hear it can be evaluated that choice hotel international is performing at a
global level where organisation is continuously increasing its market share as well as going
toward the good future where it can run its operation from long period of time.
CONCLUSION
It can be concluded from the above mentioned report that there are number of factors
like political economic and technological which have their impact on choice hotel
international. This must be clearly identified and used by the organisation for maximizing its
benefit. Company must also focus on its resources and strength where it can minimise its
weaknesses and grab the opportunities by eliminating the threats.it can also use porter's five
force model which will help company and identify the competitive advantages which are the
which are the power of buyers and suppliers in context of this hotel. This hotel is a clear
vision mission strategy which will help in making possible for it to implement its policy and
get the better results.

REFERENCES
Books and journals
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Bowie, D., Buttle, F., Brookes, M. and Mariussen, A., 2016. Hospitality marketing. Taylor &
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Chan, E.S. and Hsu, C.H., 2016. Environmental management research in
hospitality. International Journal of Contemporary Hospitality Management.
Jones, P., Hillier, D. and Comfort, D., 2016. Sustainability in the hospitality
industry. International Journal of Contemporary Hospitality Management, 28(1),
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Katou, A.A., 2016. Human resource management and performance in the hospitality industry:
methodological issues. In Project Management: Concepts, Methodologies, Tools,
and Applications (pp. 1980-1999). IGI Global.
Kim, S.H., Lee, K. and Fairhurst, A., 2017. The review of “green” research in hospitality,
2000-2014. International Journal of Contemporary Hospitality Management.
Kuo, C.M., Chen, L.C. and Tseng, C.Y., 2017. Investigating an innovative service with
hospitality robots. International Journal of Contemporary Hospitality Management.
Li, Y. and Singal, M., 2019. Capital structure in the hospitality industry: The role of the asset-
light and fee-oriented strategy. Tourism Management, 70, pp.124-133.
Martínez-Pérez, Á., García-Villaverde, P.M. and Elche, D., 2016. The mediating effect of
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tourism clusters firms. International Journal of Contemporary Hospitality
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Peters, M. and Kallmuenzer, A., 2018. Entrepreneurial orientation in family firms: The case
of the hospitality industry. Current Issues in Tourism, 21(1), pp.21-40.
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Performance in Tourism: The Case of Hospitality Business'. The Emerald Handbook
of Entrepreneurship in Tourism, Travel and Hospitality. Emerald Publishing
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Prud’homme, B. and Raymond, L., 2016. Implementation of sustainable development
practices in the hospitality industry. International Journal of Contemporary
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loyalty in hospitality sector. South Asian Journal of Tourism and Heritage, 9(2),
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Scott, M.E., 2016. Strategies for retaining employees in the hospitality industry.

Sheresheva, M. and Kopiski, J., 2016. The main trends, challenges and success factors in the
Russian hospitality and tourism market. Worldwide hospitality and tourism themes.
Sowanber, V., Ramkissoon, H. and Mavondo, F., 2018. Impact of sustainability practices on
hospitality consumers' behaviors and attitudes: the case of LUX* Resorts & Hotels.
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Varelas, S. and Georgopoulos, N., 2017. Porter’s competitive forces in the modern globalized
hospitality sector–the case of a Greek tourism destination. J Tour Res, 18, pp.121-
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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.