Influence of Macro Environment on Crown Plaza: A Strategic Analysis

This assignment analyzes the influence of macro environment on Crown Plaza, evaluates the internal environment and capabilities of the organization, examines the competitive forces in the industry, and suggests strategic planning options.

Hospitality Business
Strategy

Contents
INTRODUCTION...........................................................................................................................1
MAIN BODY..................................................................................................................................1
Analyse the influence of macro environment over business firm...............................................1
Domination of the internal environment and capabilities of organisation..................................2
Evaluation of the competitive forces of company.......................................................................5
Application of different theories, models and concepts, interested frame strategic planning.....6
CONCLUSION................................................................................................................................8
REFERNCES...................................................................................................................................9

INTRODUCTION
A business strategy is an amalgamation of processes and competitive moves that company
usages for attracting target audiences, strengthening execution, accomplishing business firm’s
goals and objectives as well as contend appropriately. It can define as that plan of actions and
strategies which are formed by the administration of the firm for effective running and operating
business in specific business industry (Kandampully, Zhang and Jaakkola, 2018). It is master
plan which management use to secure competitive position in market, carrying operations and
attaining objectives of venture. This assignment is based on Crown Plaza which is a
multinational chain of full service, upscale hotels. The organisation was incorporated in 1983
and is headquartered in Denham, UK. The written report will discuss about impact of macro
environment, internal environment and capabilities of organisation. Further, will define Porter’s
five forces analysis to define the competitive forces and strategies to improve market position.
Different concepts, theories and models as well as strategic planning will also define for strategic
growth.
MAIN BODY
Analyse the influence of macro environment over business firm
PESTEL analysis
It is a strategic tool is implemented by companies to analyse the impact of external or macro
environment factors over the business of firm. The brief description of this analysis in context of
Crown Plaza is mentioned as below:
Political factor- It include different components such government intervention, taxation
policy, political stability or instability, foreign exchange, trade restrictions and many more. In
Crown Plaza, government policy is the main factor that influence the business of company Due
to COVID19 pandemic there are several kind of change in government polices and plan
regarding hospitality industry that affect the business of respective firm in unfavourably manner
(Revathi and Aithal, 2018).
Economical factor- It consider factors like interest rate, exchange rate, currency rate,
economic growth, employment or unemployment rate, inflation or deflation and economic
recession as well as cost of goods etc. Brexit is the main factor that highly affects the business of
Crown Plaza. Due to Brexit, inflation arises and suppliers make increment in their products
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services that affect the economic condition of firm. Causes of this, the management of respective
venture make change in its pricing strategies.
Social factor- This component of macro environment analysis consider different factors like
culture, beliefs, values, needs, demands , taste and preferences and demographic components.
Crown Plaza is focused on satisfaction of consumer’s needs but the business of this firm is
influenced by higher tax (Li and Singal, 2019). Because when tax increase, the administration
make maximisation in its prices of services which negatively affect the company as customer are
prices conscious and it is hard to maximise average achieved room rate.
Technological factor- This factor include several components like technological innovation,
advance technology, research and development, artificial intelligence and many more. In Crown
Plaza, the administration use multimedia technologies to develop productivity and develop
business growth options. The hotel also equipped with the latest information system with the
purpose of collecting information. Online reservation system also enhances advance bookings
from across the world which positively influences the business of respective firm.
Environmental factor- It considers different atmospheric and social responsibility factors. It
consists components like climate, weather, environmental laws and many more. In existing time,
customers are more vigilant and normally favour the organisations that care about environment.
This component include the strong prominence on CSR is one of the major core skills of Crown
Plaza. The organisation, holiday destinations are sold as opportunities to stay at some paradise
but their activities so more damage to the nature than preserve them. This has made the
customers conscious and they want ethical companies, green hotels and eco-friendly goods.
Legal factors- It includes diverse laws and legislations that are framed and developed by the
government for the effective operating of business company. It consists employment act, health
and safety law, consumer protection act and many more (Bratton and Watson, 2018). The
administration of the firm appropriately follows and considers equality, health and safety or
consumer protection act, the venture offer equal pay, better growth option, the company offer
security to employees and securing information of consumer offer provide to them.
Domination of the internal environment and capabilities of organisation
SWOT Analysis
It is considered as a strategic tool and technique that is utilised and implement by a
business company to monitor the internal environment of the organisation in form of analysing
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capabilities, weaknesses, opportunities and threats. The explanation of this concept in reference
to Crown Plaza is mentioned as under:
Strengths
 The major strengths of the Crown Plaza are that it has its availability all over the globe
and operate its business in different destination or locations of the world (Metaxas,
Chatzoglou and Koulouriotis, 2019).
 There are several products and services like luxury environment, Priority Club rewards,
confirmed suite upgrades, online reservations, organised hotels chain and mini bar etc.
Weaknesses
 The weakness of the company is global acknowledge strategic plan and not enough hotels
in comparison to related brands.
 In addition to this, the organisation has less valuable travel packages and cost of them is
high which affect business of organisation.
Opportunities
 By making expansion in its business in term of operating it in diverse nations or markets
where it is not running.
 By framing seasonal tour or travel packages and setting effective pricing strategy will
also assist in developing the market share and size as well as improving brand image of
the firm.
Threats
 The main threat that is faced by Crown Plaza is economic condition, changing trends and
maximised competitive atmosphere.
 There is several kind of changing occurred in government laws and policies so this
fluctuation also affects the company (Metaxas, Chatzoglou and Koulouriotis, 2019).
VRIO Analysis
It is a strategic framework that is used or implement by business to identify the internal
resources in the company and capabilities that offered long term rival advantages. It consists four
components such as value, rarity, inimitability and organisation. Crown Plaza implements this
concept to analyse the internal assets and find out whether these resources survived for long term
in a competitive atmosphere.
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Resources Valuable Rare Inimitable Organisable
Brand image Yes No No No Competitive
disadvantage
Technical
capability
Yes No No No Unused parity
Financial
resources
Yes Yes Yes No Competitive
sustainable
Human
resource
Yes Yes Yes Yes Temporary
parity
Valuable- The brand image of Crown Plaza is very precious in competitive environment
because it commodities and services are familiar to its target marketplace (Altin and et. al.,
2018). The technology that is used by the company is valuable because it use creative attributes
to design their products and its financial assets are also valuable because it enable in investing in
to extrinsic growth option. Human resource of respective company also efficient valuable as
workforce utilises their efforts and effectiveness in business operations.
Rare- Technical capability of Crown plaza is not rare because the firm utilise technology
in its promotion activity and consumer services that can be utilised by their business venture in
easier form. Fiscal assets of the company are very rare as it has string financial resources and
only such organisations can acquired it. Human resources of the enterprise is also rare as each
individual has its own competencies and abilities.
Inimitable- In Crown Plaza, fiscal resource is highly costly that is hard to imitate. This
will contain the new entrants and companies acquire higher profitability. Technology that are
utilised by the management in promotion and providing customer services are imitate because
there are different other companies in similar industry. Human resource of the company also has
diverse competencies and cognition that is not easier to copy by others.
Organisable- The financial resources of company are administrated to capture the value
because the company use recourses strategically and invest on right place this will create
development option and reducing threats (Okumus and et. al., 2019). By organising training and
development programs, the human resources of Crown Plaza can be managing by the
management of the organisation.
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Evaluation of the competitive forces of company
Porter’s five forces analysis
This framework is utilised by an organisation to monitor the rival in a particular industry
within the company operating its business. This model is formulated by Michael Porter in 1979
to understand the concept of five competitive forces over business (Peters and Kallmuenzer,
2018). This concept basically used by the company to identify a business industry’s structure to
determine corporate strategy. The brief description of this model in context of Crown Plaza is as
beneath:
Threats of new entrants- To establish a business in hotel industry is required high cost. In
Addition to this, there are several laws and legislation of national authorities that are crucial to
consider or follow in term of safety and security of customers and others. So it not easy to set a
business in this sector and cause of which the risk is low in form of new entrants regarding
Crown Plaza. The respective venture is offer quality services and trustworthy for its visitors so
for a new business gaining customers trust and believe is not easy.
Bargaining power of suppliers- The power of providers over hospitality industry is only
subjected to the power of labour, trained employees and the business sector has a high
requirement of them. The power of suppliers over hotel industry is relatively low. Hotels like
Crown Plaza are not subjected to the bargaining power of suppliers and it has low and indirect
force of their competition. For a sustainable business plan of action, a hotel will have to maintain
a permanent cosy advantage over potential rivals in higher strategic teams.
Bargaining power of buyers- This force focus on the bargaining power of buyers. When
the concentration of buyer is high than the marketers then the business industry is subjected to
the high power of purchases. In hospitality industry, certain teams of buyers include domestic
and international airlines, tour operator and convention organisers and participants. When
business travellers are distributed the segregation becomes essential and the hotels are under
pressure to manage or keep their brand exclusivity.
Threats of substitutes- There is less force of this risk and the threat of the substitute is
relatively low. People and customer looking for cheap accommodation that can easily opt to live
in hotels, motels and many more. Crown Plaza use competitive price due to which this threat less
impact the business of company (Cheah, Ho and Li, 2018). The business of hotel industry is
price sensitive and the hotel’s consumer becomes the cost cognisant people. However, in case of
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lodging, large group of individual travelling in team and as business travellers, The hotel does
not face a threat of similar product however it suffer competition of separation.
Rivalry among existing competitors- This force moderately affect the business of the firm
because there are number of hotel that offer quality services to their target audiences and
generate competition to other companies that operate their business in hospitality sector like
Crown Plaza (Roma, Panniella and Nigro, 2019). But this firm moderately influence by this
force as it have number of loyal and trustworthy consumer cause o its quality services and
effective pricing strategies. The competition that is arise regarding respective hotel cause of
Holiday Inn, Marriott, Radison and many more hospitality sector organisations.
Application of different theories, models and concepts, interested frame strategic planning
To survive in rivalry marketplace, environmental analysis is important for every company so
that is can run the business in accurate direction and attains its set business goals in granted time
frame. Some of the strategic direction that are available for Crown Plaza is defined with the help
of Ansoff Matrix and the explanation of them as under:
Ansoff Matrix
It is a strategic planning tool that is used by organisations to provide directions in order to
support senior, executives and other people of the company for future growth. The brief
explanation of this model in context of respective organisation is as below:
Market penetration- It is a strategic development option that can be used by company to
increase the sales and profits of the company. There is no risk because existing products and
services are launched in existing market by using effective promotional tools and setting
effective pricing strategies. By adopting this option, the management of Crown Plaza can make
development in its sales and profit margins.
Product development- It is another growth option that can be adopt by the management of
Crown Plaza with the purpose of developing productivity and improving market position. This
strategy is risky more than market penetration as new products and services are launched in to
existing market (Melissen and Sauer, 2018). So it hard to analyse that new commodities and
services will be liked by people or target audiences or not or they are able to fulfil their needs
and demands.
Market development- In this development option, the company can gain growth by entering
in a new market with its existing services and products. In Crown Plaza, the organisation can
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make business expansion in developing nation like China, India etc. with the purpose of
maximising customer base, sales and profitability. This strategic option is more risky in
comparison to product development because in this option, the business is expand in to new
market so it is not sure that the services and products are able to needs of customers of new
marketplace.
Diversification- This growth direction is highly risky because the company operate its
business in to new market with new services and goods with the aim of increasing customer
base, profit margins and productivity (Ahmad, Bakar and Ahmad, 2018). But it not assures that
customer of new market will like organisation’s new services and commodities. By adopting this
option the firm can expand its business in same sector or in another sector like manufacturing,
IT, Automobile etc.
As per mentioned information, it has be analysed that market development is an effective
strategic option for making growth in the business of company in term of increasing customer
base, sales and profitability of the firm. With the help of this direction, the organisation can
expand its business in that nation in which it is not exist, this will help in growth of Crown Plaza.
Strategic management plan
It indicates to a written document that can be used and adopted by the company for
communicating and its help in setting goals, focus energy, setting priorities and many more. It is
useful for ensuring that staff is working efficiently for attaining the objectives and goals. These
plan of actions, objectives and tactics in reference to strategic management plan are defined as
below:
Strategies
It refers to high degree plan that are formulated by the management department of the
company for attaining the aims and objectives of business. When the administration of Crown
plaza expand its business in to new market with its existing services than it should consider some
strategies that are as beneath:
STP- It defines to a broad structure that reduces and analyses the action of market segmentation
(Radjenovic, 2018). This strategy is useful for Crown Plaza because each component of STP
help the company in explaining the profitability measures that can be adopted by respective
venture.
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Segmentation- It refers to segregate market according to the demographics like consumer
age, gender, income, profession and living standard, geographic by nation and state and psycho
graphically like attitude, values, risk and others (Boella and Goss-Turner, 2019). When the
organisation will expand in new market then it can do segmentation on the basis of cost
conscious group.
Targeting- The organisation can target all income group customer during the time of
expanding business in new market. The administration will target this income group because the
company use competitive pricing strategy.
Positioning- The firm operates in hospitality industry and offering accommodation, food,
tour packages and many more services to its consumers. Crown Plaza already has a good market
position but at the time of business expansion, the firm can utilise efficacious marketing channels
and innovative technology in customer services.
Objective- The SMART objective of Crown plaza is below:
 To exploit the sales of the company by 15% within 11 months by providing better
accommodating services.
 To enlarge 7% profitability margins of the business firm in upcoming 9 months by
expanding business in to new market.
Tactics- It indicates to those plan and techniques that are used to deal with short time period
complexities. In Crown Plaza, the management can utilise cash management tactics to develop
effective budget planning at the time when company make business expansion in new
marketplace (Prebensen, Chen and Uysal, 2018). By devising innovation in technology to offer
good customer services, the firm can also provide better consumer services.
CONCLUSION
It has been concluded from the preceding defined data that business strategies are those
tactics and plans that are developed and created by management of the company to get over
business industry’s issues and operate the business of corporation in a particular business sector
in effective manner. With the help of effective strategies, a firm can deal with each complexity
and sustain or survive till long term. For sustaining time period, the organisation should
implement effective framework or strategic tools like PESTEL, SWOT ad VRIO analysis to
determine the impact of external factors, capabilities of business as well as analyse strengths and
weaknesses of enterprise. Porter’s five force analysis is crucial to determine competitive
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environment. By using different methods and concepts like Ansoff Matrix the firm can use
strategic growth option for development and can design strategic planning for strategic growth.
REFERNCES
Books & Journals
Kandampully, J., Zhang, T.C. and Jaakkola, E., 2018. Customer experience management in
hospitality. International Journal of Contemporary Hospitality Management.
Revathi, R. and Aithal, P.S., 2018. Business Strategy of Top Indian Company: L&T
InfoTech. International Journal of Case Studies in Business, IT, and Education (IJCSBE), 2(1),
pp.64-89.
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.
Bratton, J. and Watson, S., 2018. Talent management, emotional labour and the role of line
managers in the Scottish hospitality industry. Worldwide Hospitality and Tourism Themes.
Metaxas, I.N., Chatzoglou, P.D. and Koulouriotis, D.E., 2019. Proposing a new modus operandi
for sustainable business excellence: the case of Greek hospitality industry. Total Quality
Management & Business Excellence, 30(5-6), pp.499-524.
Metaxas, I.N., Chatzoglou, P.D. and Koulouriotis, D.E., 2019. Proposing a new modus operandi
for sustainable business excellence: the case of Greek hospitality industry. Total Quality
Management & Business Excellence, 30(5-6), pp.499-524.
Altin, M. and et. al., 2018. Performance measurement and management research in the
hospitality and tourism industry. International Journal of Contemporary Hospitality
Management.
Okumus, F. and et. al., 2019. Strategic management for hospitality and tourism. Routledge.
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.
Cheah, S., Ho, Y.P. and Li, S., 2018. Business model innovation for sustainable performance in
retail and hospitality industries. Sustainability, 10(11), p.3952.
Roma, P., Panniello, U. and Nigro, G.L., 2019. Sharing economy and incumbents' pricing
strategy: The impact of Airbnb on the hospitality industry. International Journal of Production
Economics, 214, pp.17-29.
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Melissen, F. and Sauer, L., 2018. Improving sustainability in the hospitality industry. Routledge.
Ahmad, S.Z., Bakar, A.R.A. and Ahmad, N., 2018. An evaluation of teaching methods of
entrepreneurship in hospitality and tourism programs. The International Journal of Management
Education, 16(1), pp.14-25.
Radjenovic, M., 2018. THE QUALITY OF HUMAN RESOURCES IN TOURISM AND
HOSPITALITY INDUSTRY IN MONTENEGRO. Transformations in Business &
Economics, 17(2).
Boella, M.J. and Goss-Turner, S., 2019. Human resource management in the hospitality
industry: A guide to best practice. Routledge.
Prebensen, N.K., Chen, J.S. and Uysal, M. eds., 2018. Creating experience value in tourism.
Cabi.
Online
Marketing plan for Crown Plaza Hotels & Resorts. 2020. [Online]. Available Through: <
https://studymoose.com/marketing-plan-for-crown-plaza-hotels-resorts-essay>.
Pestle analysis for Crown Plaza Hotels in UK. 2020. [Online]. Available Through: <
https://studentshare.org/miscellaneous/1576977-pestle-analysis-for-crowne-plaza-hotels-in-uk>.
Porter’s Five Force Model of Hotel industry. 2020. [Online]. Available Through:
<https://www.porteranalysis.com/porters-five-forces-model-of-hotel-industry/>.
Ansoff Matrix. 2020. [Online]. Available Through: <
https://www.tutor2u.net/business/reference/ansoffs-matrix>.
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