Unit 41 - Hospitality Business Strategy

Hospitality Business
Strategy

Contents
INTRODUCTION.......................................................................................................................................3
TASK 1.......................................................................................................................................................3
P1: Applying appropriate frameworks, analyse the impact and influence of the macro environment on a
given hospitality organization and its strategies......................................................................................3
M1: Critically analyse the hospitality macro environment to determine and inform strategic
management decisions.............................................................................................................................5
TASK 2.......................................................................................................................................................5
P2: Analyse the internal environment and capabilities of a given hospitality organization using
appropriate frameworks...........................................................................................................................5
M2: Critically evaluate the internal environment to assess strengths and weaknesses of an
organisation’s internal capabilities, structure and skill set.......................................................................7
TASK 3.......................................................................................................................................................7
P3. Applying Porter’s Five Forces model and evaluate the competitive forces.......................................7
M3. Devise appropriate strategies to develop competitive edge and market position..............................9
TASK 4.......................................................................................................................................................9
P4. Applying a range f theories, concepts and models, interpret and devise strategic planning...............9
CONCLUSION.........................................................................................................................................11
REFERENCES..............................................................................................................................................12

INTRODUCTION
Business strategy encompasses particular set of actions as well as decision that are made
by an entrepreneur in order to achieve the predetermined objective successfully. This led the
management of company to secure competitive position within the market in order to appeal the
interest of both internal as well as external stakeholders. Hospitality industry is one of the most
emerging sectors that accommodate the requirement of global customers (Charter, 2017). So
equipment of better strategy by top level management helps to discover, analyse as well as
exploit the opportunity by making effective use of the resources. For the better understanding of
report InterContinental Hotel group has been selected which is the multinational hospitality
company whose headquarter is in England UK. The company comprises of various hotel,
restaurant and resorts to make pleasant trip of the customer. This report cover topics like impact
and influence of macro environment within hospitality business. Demonstrate the internal
environment as well as capabilities of the hospitality sector. Apply Porter’s five force model in
order to evaluate the competitive forces and devise strategic planning for hospitality
organization.
TASK 1
P1: Applying appropriate frameworks, analyse the impact and influence of the macro
environment on a given hospitality organization and its strategies
Macro environment refers to the external factors which affects the operation of
company under this the company has done PESTLE analysis which can help to identify the
challenges and opportunities going in the external environment. There are six factors which are
analyzed by the company under Pestle which are as follows.
Political factor: It plays a significant role in determining the factors that can impact IHG
hotel. It can affect its profitability in certain markets. It is essential to have political stability in a
country in which companies operate in and IHG hotel business is travel and leisure industry
which needs political stability. The taxation rates fluctuation can work in favor or against the
company (Grant, 2016). If the rates are going down company will get benefited but in most of

the cases government increases tax rates which is a challenge for a company. As it results in
increase cost and decrease in margin.
Economic factor: There are lots of economic factors such as inflation rate, interest rate,
foreign exchange rate tax etc. which affect the company directly. Intercontinental hotel group
can use countries economic factor such as growth rate an inflation to forecast the growth in the
upcoming years. The company needs to take care of cost of borrowing as the higher the cost of
borrowing the company has to settle with lower margin and vice versa. Inflation rates can result
in increase in the prices of packages offered by the company and it need to figure out from which
country they want to do business as foreign exchange rate also plays an important role in
determining the profits of entity.
Social factor: The company need to take care of society in which they are operating
shared beliefs and attitude of the public plays an important role in framing a decision. The IHG
design their marketing message according to the needs of the customer of given marketplace.
The company analyse demographics and skill level of the population which is close to them.
Herein, hotel plays special attention towards the culture of the society as it includes gender roles
and social conventions and so on. The manger of hotel all focuses on the statute and interest of
public so that they can design a package accordingly (PESTEL Analysis of IHG, 2018).
Technology factor: If the company wants to do well globally they should use updated
technology. A firm should do a complete analysis of the speed at which technology disturbs the
industry. Herein, OHG focuses on recent technological development by the competitors. At the
same time using updated technology affects on cost structure of the company.
Environment factor: Environment norms keep on changing depending upon markets and
the country in which they are operating. Herein, Intercontinental hotels do complete analysis of
environment factors before entering into new markets. This includes climate, weather and
recycling of the product, attitude towards use of renewable energy and law regulating
environment pollution in the given country. Using renewable resources may work in the favor of
company as it reduces the cost and public also get attracted towards the hotels who are
promoting environment friendly techniques.