Hospitality Business Strategy: Analysis and Strategic Planning for Howard Johnson's Hotel

This report provides an analysis of the internal and external factors affecting Howard Johnson's Hotel and offers a strategic plan based on the findings. Includes PESTLE and SWOT analysis, Porter's Five Forces analysis, and evaluation of strategic directions.

Unit 41 - Hospitality
Business Strategy
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Table of Contents
INTRODUCTION...........................................................................................................................3
Task: Report ....................................................................................................................................3
Part A internal and external analysis that provides a basis for strategic planning ..........................3
PESTLE and SWOT analysis of the organisation and an analysis of the organisation’s
capabilities...................................................................................................................................3
Analysis of the competitive environment using Porter’s Five Forces model..............................7
Part B Devise a strategic plan based on the environmental analysis and findings..........................8
Evaluate the different types of strategic directions available to the organisation........................8
Justify and recommend the most appropriate growth platform and strategies............................9
Produce a strategic management plan with strategies, objectives and tactics.............................9
CONCLUSION..............................................................................................................................12
REFERENCE ................................................................................................................................13
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INTRODUCTION
Planning is the first need that is required properly in order to perform all actions and
attaining the business goals. For management and business owners it is mandatory to make
strategy and plans that can help to increase organisational productivity and profitability. In other
words, business strategy is actions decisions for organisations which are uses to reach the goals
and be competitive industry. If there is proper planning then managers can deal with competitors
effectively which enhance competitive advantages (De Beelde and Tuybens, 2015). To
increasing insights about business strategy Howard Johnson's Hotel has been considered that will
help to increase the understanding about how to run and compete with other business. This is
American chain of hotels and motels located primarily throughout the U.S. This was founded in
1925 by Howard Deering Johnson. This is providing better quality of products and services to
customers which make happy and regular clients. This is located at more than 322 location and
serving worldwide area. This report covers PESTLE and SWOT analysis for strategic planning,
analysis of competitive environment by using Porter's five forces model, types of strategic
direction, growth platform and strategies. Moreover, it covers strategic management plan with
objectives and tactics.
Task: Report
Part A internal and external analysis that provides a basis for strategic
planning
PESTLE and SWOT analysis of the organisation and an analysis of the organisation’s
capabilities
Macro Environment – Business environment is the combination of internal and external
factors that can help to run the business and increase the organisational productivity. These is
important for organisation to analysis the environment and make the right business decision.
Howard Johnson's Hotel is conducts macro analysis that can help to operate the activities and
manage the performance. For this PESTLE analysis is stated as below:
PESTLE analysis – It is consider as a framework that is uses by organisation to analysis
the environment and make right business decision. The management of Howard Johnson's Hotel
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are using this analysing to maintain the activities which can help to increase the organisational
productivity that are as defined:
Political factor – The relation of political factor is stability, tax rates, changes in
regulation etc. that has impacted on business. In UK, tax rates are reduced after Brexit that
helped Howard Johnson's Hotel to operate their activities and increase the organisational
productivity. On the other hand, there are fluctuation in government regulations that may affect
the operation negatively because it bounds company to follow such regulation at the time of
running business that is difficult (Fuchs and Köstner, 2016).
Economical factor –The containment of economic factor is economical changes,
inflation rates, interest rates and foreign exchange rates that can helps to manage the
performance. In UK, Howard Johnson's Hotel, is running and growing business effectively as in
country, inflation rates are low that can increases the number of customers as people started to
buy the hotel services that increases business performance and productivity.
Social factor – Now a days, lifestyle of people and needs are changing day by day where
company should provide products and services accordingly so all activities can be operated and
increases productivity. Howard Johnson's Hotel is focusing on changing demand in hospitality
industry in relation to services according to different culture, official event, seminars and other
extra activities environment is provides by management that help such organisation to maintain
all activities and business are growing efficiently. On the other side, not providing better quality
of food according culture and tradition can be create conflicts between customers and provide
dissatisfaction which falls down the rating (Jeston and Nelis, 2014).
Technological factor – This stated as field in relating to technology and innovation that
uses to bring and introduce something some in organisation and manage the performance.
Innovation has impacted Howard Johnson's Hotel positively as it brought Wifi infrastructure,
Digital conference facilities, mobile communication, cloud services, proper records of customers,
smart key rooms etc. that make highly satisfied to customers by delivering best services.
Therefore, chosen organisation is performing all actions by adopting new technology and
increasing performance.
Legal factor – As business are operating at different places so rules and regulation are
also different that needs to follow which supports to complete the task and run the business
effectively. In context to Howard Johnson's Hotel, all legislations are following but profitability
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are going to be reduced in case of following the equal wages, compensation, health and safety
act because extra amount needs to bear by organisation which has impacted negatively
(Kwilinski, 2018).
Environment factor - As operation of Howard Johnson's Hotel is affected in good ways as
it is operating business by selecting a best place and destination from where customers can get
feel good, fresh, freely from stress, and others so they can make decision to select furthermore.
This helps to operate the business by reducing wastages, green plantation, using solar energy and
other environmental protection legislations that helps to increase the reputation and customer
happy by providing rooms in fresh environment (Leszczyński, 2016).
SWOT Analysis – This is a tool uses by companies in order to know strength and
weakness of organisation and run the business effectively. The SWOT analysis of Howard
Johnson's Hotel is defined below:
Strength Weakness
 Howard Johnson's Hotel is situation at
best destinations and places that can
help to operate the business.
 Uses of innovation and new services
in services in relation to hotel.
 Delivery of best quality of food and
beverages that can attracts customers.
 Select ion of best raw material and
standard products.
 Offering variety of hotel services that
make right selection.
 Increase number of hotels and
customers.
 This is seasonal in demand that can
reduced organisational productivity.
 Number of hotels and restaurant are
available in UK that can be selected
by customers.
 Charging high prices for their hotel
services.
 Lack of control on financial activities.
 Lack of management activities
Opportunities Threats
 Well trained and behaviour employees
that helps to deal with cultural
customers.
 Changing in needs and wants of
 Changes in Business process and
introducing new technology that
become difficult to adopt.
 Changes in government regulations
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people who requires new hotel
services.
 Observation to customers is required
skills which is having in employees to
operate the business.
 This helps to increase the
organisational productivity by
delivering best quality of service.
 Proper arranges and room booking in
advance that reduce the chances of
inconvenience.
 Following all regulation and treating
employees equally.
that can create challenge for
organisation to operate it
continuously.
 Lack of customer trust that can be
affected business negatively
(Mirzakhani, Parsaamal and Golzar,
2014).
VRIO Analysis: To analysis the internal environment and increasing organisational
capabilities following models are prepared by management that helps in competitive advantages.
For this, Howard Johnson's Hotel VRIO model is uses to maintain the business that are defined:
Resources Valuable Rare Inimitable Organised
Food and
beverages
Yes No No No
Brand image Yes Yes No No
Well design
infrastructure
Yes Yes Yes No
Good destination Yes Yes Yes Yes
Valuable: Resources are those needs which uses to operate and manage the business that
also provides competitive advantages to organisation and maintain a position. In Howard
Johnson's Hotel resources are food and beverages, brand image, well design infrastructure and
good destination that uses to operate the business as they are valued for organisation. Valuable
food and beverage attracts customers by delivering best quality and as per customer requirement
which is difficult for other hotels. Brand image and reputed infrastructure is uses to create a good
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perception in people’s eyes who make decision to select furthermore. And good destination is
another resources as they wants clean, peacefully environment that create competitive
advantages for organisation because it is difficult for other companies.
Rare: Howard Johnson's Hotel’s larger hotel that is maintaining brand image by
providing better quality of services that attracts customers and create sustainable advantages.
This is important for all organisation to create a brand image by providing unique products and
services which influences customers. Long term competitive advantages are taken by chosen
hotel as it maintain the higher productivity by giving best quality of hotel services.
Inimitable – This states as inimitable thing which can help to operate the business and
increase the high profitability. Howard Johnson's Hotel, is having well designed infrastructure
that is decorated by management properly and helps to increase the organisational productivity
by comparing with others and maintain high performance (Liboni and Cezarino, 2014).
Organised: Destination is another impoPESTLE and SWOT analysis of the organisation
and an analysis of the organisation’s capabilitiesrtant resource and factor that is needed to be
consider while operating a business and increasing organisational performance. Howard
Johnson's Hotel, is operated at various areas and destination which can help to enhance the
reputation and recognition in order to operate the business. The managers of organisation are
organising all activities properly and manage the good performance by taking the competitive
benefits.
Analysis of the competitive environment using Porter’s Five Forces model.
Porter’s five force model – This is a model that uses by organisation for the purpose of
taking competitive advantages. Organisation should be adopted appropriate model and theories
that provide a insights to people or business concern to operate a business. The porter’s five
forces in context to Howard Johnson's Hotel are as defined:
Competitive rivalry - This refers as competition that exist in organisation and create the
competition. In context to Howard Johnson's Hotel, competitors are Ritz hotel, Hayatt, Sheraton
hotel, Melia house etc. that are operating business. This threat is high in hospitality industry that
can be challenge for organisation to manage the activities and run business effectively (Nahi,
2018).
Bargaining power of suppliers – In UK, there are number of suppliers and technical
person which are providing different raw material and other activities that can helps to run
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business. In context to Howard Johnson's Hotel, threat of suppliers is low that can be challenge
for company to operate business.
Bargaining power of buyers – Buyers are those people who buys products and services
that helps to increase the business performance. The buying po0wer of buyers in UK is high as
they are playing important role who select best hotel and services that can help to manage the
work performance. The managers needs to provide different types of products and services that
can help to attracts and operate the business.
The threat of substitute products – This means having substitution of products and
services which are available in market that helps customers to operate the business. In context to
Howard Johnson's Hotel, pubs, restaurants and other place which can be uses by customer to fill
their needs and maintain the operation. This challenge is faced by organisation because
customers can select other options in order to take the living and food services that may reduced
organisational productivity (Schönhaar, Pidun and Nippa, 2014).
Threat of new entrants – To operate a business there is need to take the permission and
investments that can help to operate and enter in to market. In context to Howard Johnson's
Hotel, managers are running and growing their business because there is need of high investment
and permission to establish a new hotel that can be challenge for organisation. Therefore, this
can be advantageous for chosen company to run and maintain all activities by providing hotel
services.
Part B Devise a strategic plan based on the environmental analysis and
findings
Evaluate the different types of strategic directions available to the organisation
Strategic planning is determined as a process in which plans are prepared by managers for
growing their business and increasing the profitability. To do anything and completing task plans
is stated as first need that is required to deal with problems and organising all activities in order
to run and operate business. For this different models and theories are uses by Howard Johnson's
Hotel for attaining business goals and sustainable competitive advantages (Suess, 2014).
Ansoff Growth matrix – This refers as matrix that uses to grow and develop the business
by managing products and services in different market. This analysis is uses by Howard
Johnson's Hotel for selecting best options that are as defined:
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Market Penetration – This strategy is uses by Howard Johnson's Hotel by selling their
existing hotel services in existing market that helps to increase the organisation productivity. For
selling its product it needs to set low cost of their services that can help to increase the business
performance and provide competitive advantages.
Product development – This planning is required to select right option by introducing
new products in existing market. Howard Johnson's Hotel can use this, by introducing new hotel
services that can help to increase organizational performance which can maintain high
productivity (Szabó and Öri, 2017).
Market development – The market development strategy is determined as introduce and
selling existing products and services that can help to increase the productivity and marketing
image. In context to Howard Johnson's Hotel, new market area can be develop by selling the
existing products that can help to manage the performance and increase business effectiveness.
Diversification – This strategy is refers as activity that uses by companies by entering in
to new market with new products that can help to attracts customers and increase organisational
performance. Howard Johnson's Hotel can use this option by entering in to new market with new
hotel services that enhance activities and increases number of customers (Tajeddini and
Trueman, 2016).
Justify and recommend the most appropriate growth platform and strategies
From the above, Market penetration strategy is uses by Howard Johnson's Hotel in order
to take the competitive advantages. This is appropriate, relevant and suitable strategy because
people wants better quality of services at low cost that can gave them higher satisfaction and
helps to increase the organisational productivity. Howard Johnson's Hotel, is out of them which
is selling their hotel services and food products at low cost than others which helps to run the
business and maintain high profitability. Thus is important for all companies to analysis the
market and make a conclusion which strategy they should be use so business can be manage and
organised in proper way. The chosen company is taking competitive benefits by entering in to
competitive market and delivering best quality of services.
Produce a strategic management plan with strategies, objectives and tactics
A strategic management plan
A strategic management plan is considered as management plan which made by business
owners in order to attain the business goals by completing task. In other words, a plan and
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document uses for deciding the goals, increasing operations, ensuring all activities are running
properly and will help to increase the organisational productivity. The other term says, business
strategy is a document that fill the vision and mission of business organisation.
Executive Summary - Howard Johnson's Hotel, is larger hotel group that aims to
increase the production and brand image in competitive business environment by delivering
qualitative services (Walker, Ni and Dyck, 2015). A business plan is given below that helps to
complete the task and attain goals that are as defined:
Vision - The vision of Howard Johnson's Hotel, to increase the number of hotels at
different areas by serving best quality of services.
Mission - To increase the brand image and maintain positioning company in competitive
business environment.
Objective - To increase brand image by 30% within 2021.
 Increase in profitability present than last year by capturing market share 40% in 2021.
 To retain existing and add new customers by increasing products and services base.
 To manage the good position in competitive environment by delivering product and
services.
Strategy - Howard Johnson's Hotel, is hotel that wants to increase their organisational
performance and objective by operating business effectively. The management of such
organisation are following different strategy that increases sales and profitability (Wirtz and
et.al., 2016).
 Differentiation strategy – In this strategy managers plans to provide new food
items and staying services that can help to create competitive advantages. This
can help to maintain the good performance in environment.
 Extensive marketing – Marketing strategy is important for business organisation
that uses by Howard Johnson's Hotel in order to attracts customers and providing
information that can help to increase the organisational productivity. The chosen
organisation will use social media, online marketing and websites that will help to
inform customers and increase sales (Pröllochs and Feuerriegel, 2020).
 Pricing strategy – According to this, prices of products are set by marketing
management by conduct the market analysis and make right business decision by
delivering best services at low or competitive prices. This can help to increase the
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organisational performance in competitive business environment and managing
the performance.
STP Approach: This tactics is uses to run the business by targeting specific areas and
customers.
 Segmentation – The chosen corporation is focusing on demographical
segmentation in which it offers services to different ages of customers as per their
wants which helps to increase number of customers.
 Targeting – The target point is 20 to 60 years old people who wants better hotel
services.
 Positioning – It is maintaining high position in market (Jansen, 2017).
Tactics - Tactics are those activities and actions that can help to implement and operate
the business plans effectively. By using following tactics Howard Johnson's Hotel, is making
profits that are as defined:
 Data analyst – This is important tactics which uses by organisation and
marketing managers to analysis the market get information about people needs
and share with production department that can help to increase the productivity.
With the help of this managers can use different activities that can help to attain
the business goals (Nahi, 2018.).
 Sources of Fund – This is important tactics which should be uses by Howard
Johnson for expanding business and increasing capturing marketing share.
Howard Johnson will use bank loan, personal assets, sale of fixed assets that will
help to arrange the funds.
Evaluation and implementation - All activities and performance will be measured by
KPI and Benchmarking tool that can help to evaluate the employees performance and maintain
the good performance. Managers of Howard Johnson's Hotel, uses their activities and increase
the profitability by comparing with others that can help to make right decision (Suess, 2014).
For implementing all strategies and tactics Howard Johnson's Hotel, conduct data
analysis and uses strategies that can help to increase business performance. These strategies can
help to fill task and attain the business goals in certain time.
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CONCLUSION
From the above report it has studied that strategies for business are important that uses to
decide goals and attaining them properly. Porter’s five forces model is uses to select right option
and take competitive benefits. PESTLE analysis is uses to analysis the macro environment for
knowing which factor has impacted on business. Business plan is main for completing task and
attaining the objectives in certain time by implementing all strategies and plans.
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REFERENCE
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