Hospitality Business Strategy

This document discusses the importance of business strategy in the hospitality industry, specifically focusing on Shangri-La hotels. It covers the impact of macro environment, internal environment analysis using SWOT analysis, and the examination of various forces using Porter's Five Forces Model.

Unit 41 - Hospitality
Business Strategy

Table of Contents
INTRODUCTION.....................................................................................................................................3
PART A...................................................................................................................................................3
P1 Use appropriate frameworks and examine the impact of macro environment............................3
P2 Analyse the internal environment of organisation.......................................................................5
P3By applying Porter Five Forces Model, examine the various forces in relevance with chosen
enterprise..........................................................................................................................................7
PART B...................................................................................................................................................9
P4 Apply range of theories, concepts and models and prepare strategic planning ..........................9
CONCLUSION.......................................................................................................................................11
REFERENCES.........................................................................................................................................12
Books & Journal:..............................................................................................................................12

INTRODUCTION
Business is a wider and broader concept in which where is the office of functions
operations and activities are involved. Competition is rising at rapid level and it is necessary
to deal with the rivals and competitors in proper manner. Business strategy is defined as set
of tactics or planning how the resources and other things can be used in the business. Thus,
today competitive advantages organisation uses the business strategy. Shangri-La hotels and
resorts which is a multinational chain of hotels headquartered in Hong Kong. The hotel is
located worldwide provide ample number of facilities as well as services to the customers.
This report includes PESTEL Analysis, Porter 5 forces models, SWOT analysis and various
theories and concepts. It is not possible for any business to survive in the market without the
use of business strategy has it helps them to forecast and determine the enterprise position as
well as performance analysis.
PART A
P1 Use appropriate frameworks and examine the impact of macro environment
In business environment plays vital role and have a different background for
productivity as well as performance of company. There are very sectors environment which
affect the business and slow down growth and overall development of business. In relation
with Shangri-La hotels to determine the environmental factors which are also known as
macro environment the organisation uses the PESTEL analysis. Manager of the hotel at
assures that appropriate tools are used in the management through which strategies and
tactics are implemented properly and accordingly (Strategy, 2019
PESTEL Analysis
It is a tool which is used by many organisations to determine impact of external or
macro environment on this business. In relevance with Shangri-La hotels it is important to
examine such factors because this will help enterprise to take decision effectively. To
implement this tool proper market research is required which is a time consuming process but
assists taking competitive advantage within the business sector. Also reliable information is

required so that positive result is achieved when going with this framework. So various types
of factors involved in this tool are being discussed below-
Political factors- In this factor, it involves Labour law, government law and many
more. In relation with Shangri-La hotels, they have been also affected by this effective as
Hindi HK labour tax r higher and which increases the cost of production at higher level.
Also, political stability in Hong Kong is dynamic which makes it difficult for business sector
to run their activities in proper manner (Ardley, 2019).
Economic factors- This includes wages rate tariff and non-tariff rates etc. With the
differences between 2 major countries and their economics which is U.S as well as Britain
have affected the global interest rates various industrial sector. In context to chosen hotel
they have been also affected by this as because the global rates are becoming unfavourable
and expenditure as well as other costs is increasing at larger scale. Economic factors slow
down the growth of business as because involvement of government is more in this element.
With focusing on this factor they are able to maintain a positive relationship with government
and national authorities which is beneficial for their firm (Lanzolla, 2020).
Social- Social factors also play important role in the business environment as because
they include religion, culture, income etc. In relation with Shangri-La hotels, they focus on
social factors in proper way such as they provide customers a world class service and
environment like their home so that customer feels good and they feel like they are in their
own house. Through this total satisfaction is achieved by the customer and also which
increases the goodwill of the enterprise (Cao, 2019). As they are located globally, they
provide services acforidng to region, culture and income so that customers are easliy
accesible to their hotel services.
Technological- In this, it includes using of advanced technology artificial intelligence
hardware and software and many more. Technology has become necessity for enterprises
because it simplifies human work and help in achieving goals as well as objective within a
period of time. In context to Shangri-La hotels they also use technology in an appropriate
manner such as they use social networking platforms and various e-commerce website for
their business and accessing customer at global level. Also they use digital seconds as well as
kiosk.
Environmental- Then, further comes the environmental factor in which it comprises
of pollution waste management weather and many more. It also business activities as they are

related with society and citizen. In context to chosen entity, they also focus on these factors
as bye developing and implementing more sustainable development programs and
establishing campaigns. Many enterprises keep this factor at priority level because it have a
positive impact on their brand and product goodwill.
Legal- It includes rules and regulations, laws and many more. Legal factors are
essential for the business because activities and functions are being carried out under the
consideration of government legislation. In relevance with Shangri-La hotels legal team of
their department make ensure that all the activities as well as operations are being carried out
in appropriate manner. Legal team of selected entity is well aware about government rules
and regulation as well as policies and accordingly they make their decisions in the market and
management. This helps them to eliminate the risk ok and other problems.
After examining of above matter it is seen that it is important for the organisation to
focus on external environment and their factors so that decision making as well as complete
advantages is done or acquired properly. With the help of the specified tool it becomes easier
for entity to take decisions effectively without facing any problem solve issues. Therefore it is
essential for organisations to adopt this Framework so that risks related with business are
effectively examined.
P2 Analyse the internal environment of organisation
In an organisation, internal environment is also necessary because it helps to identify
and analyse the activities of the entity. So, to examine factors of internal environment SWOT
analysis is being used by enterprises at wider scale. It is important to focus on the
environment so that capabilities and abilities of company are easily identified. With the help
of internal environment it is easier for enterprise to use resources and adopt the most suitable
strategies for the beneficial of business (Varadarajan, 2020).
SWOT Analysis
SWOT analysis is a tool which is carried by entities to identify the capability &
internal strength of organisation (Bagnoli, 2020). To use this tool accurate information and
proper market is required so that resources & their resources are used in appropriate way. It is
helpful for the business sector as it has them understand the market situation as well as
examine their through which level of enterprise. In relevance with Shangri-La hotels they

also use this tool in in effective way and it includes various components which are explained
below-
Strength
 Main strength of chosen hotel is that
they are globally established which
help them to acquire the larger
market share and customer ratio.
 Then, strength is it is easily possible
for them to raise the capital for
business as they have goodwill in
the market.
 Also, the hotel focus on forecasting
which allows them to take
competitive advantage and which
help them to face rivals properly.
 Moreover, the chain of hotel is
white and which also so help them
to market the brand at international
level.
 They have a strong customer base
through which in vitamin there for
them to globalise their business
(Dinçer, 2020).
Weakness
 The hotel is located globally but main
focus is on Asian specific countries.
 Other weaknesses there are many
rules and regulation in some of the
countries which are strict and restrict
the hotels functions and operations to
operate in proper manner.
 Labour law is affecting the hotel cost
of production and due to which it is
becoming difficult for them to operate
their activities smoothly.
 With new entry of businesses it is
also difficult for Shangri-La hotel to
carry on their activities and business
operations as because customers
switching behaviour is increasing
(Mota, 2020).
Opportunity
 The hotel has opportunity of
reservation as well as repositioning
the brand which will help them to
be recognisable in the market.
 Also, as the tourist and tourism
Threat
 The leaders of Europe and America
and there ratio is increasing which
leads to more competition and rivalry
among the industrial sector.
 Global interest rate is frequently

ratio of Hong Kong is rising at rapid
level it will be beneficial for the
hotel to achieve high rate of
customer ratio.
 Moreover, the hotel can also merge
with other multinational hotel chain
which will expand the business at
global degree.
 The hotel focuses on environmental
factors by establishing sustainable
development program and which
also have a positive impact on the
goodwill at large scale. This also
means that through this they can
attract more new customer for their
functions and operations and also
efficient employees all manpower.
increasing and becoming
unfavourable which is a threat for the
entity.
 The hotel is one of the multinational
resorts which depicts that Shangri-La
is in the hit list off other medium
level brands.
 Government of Hong Kong is
dynamic in nature which is the state
for the organisation because they
have to change their infrastructure
accordingly and which disturb the
environment of management.
A explaination of above paragraph it is examined that SWOT analysis is crucial for an
organisation so that internal capabilities are identified in appropriate manner. It is
responsibility of manager to make assure that all the elements are being used with proper
market research so that can conflicts do not occur in your future. Furthermore, it is also
analysed that accurate information is required for the implementation of optimistic decision
making process. Management of the hotel is always active towards the market which assist
them to use resources as well as resources in well organised and at optimum level.
P3 By applying Porter Five Forces Model, examine various forces in relevance with chosen
enterprise
Market is wider and becoming uncertain due to rise in competition. It is important for
business to have accurate information regarding the market situation as well as trends so that
they are able to examine the forces which affects the enterprise and its activities. In marketing
there are many tools which are adopted by enterprises to analyse the degree of competition
and market situation. So, in context to Shangri-La hotels they also use porter five forces
model to determine me profitability as well as level of competition in the specific sector. It is

essential to have a knowledge and credentials regarding the market so that resources as well
as capital are used in the business in most efficient way. In the hospitality industry, it is
crucial for every entity to be active in the market so that they implement strategies and tactics
2 degree with the degree of competition in in positive way.
Porter Five Force Analysis- It is a marketing tool which is used by marketers as well
as entrepreneurs in their business to identify degree of competition in field. it is beneficial for
the firm to use this Framework through which they will be able to make strategies in effective
manner. It is most effectuve tool which is adopted by chosen hotel becuase it assist in
development and gainig of competitive edge in most efficient manner. DSo, when using this
framework proper analysis is to be done so that problems do not occur during the process. In
this tool it has various forces which are mentioned below-
Bargaining power of buyers- In market without assist of suppliers company cannot
carry out their business in proper way and it is often said that buyers demand to bargain with
motive of acquiring resources at affordable prices. Power of bargaining is mostly higher
when buyers purchase the raw materials or resources in in bulk quantity, switching cost of
vendors are low, large number of substitute available. Under these situations buyers have the
more power in the market. In relevance with season hotel their bargaining power is moderate
as because they have many competitors and vendors are also in large numbers. So it is crucial
for them to maintain positive relationship with the vendors (Nicula, 2019).
Bargaining power of suppliers- Suppliers are most crucial part of business because
they help in delivering product to final consumers. Vendors have more bargaining power
when there are many buyers but suppliers are in less numbers, raw materials are rare, cost of
switching of the resources or material is high. In context to selected enterprise, they also have
vendors in which there power of bargaining is low because there are many buyers and which
also depicts that raw material are available at larger level (Phadermrod, 2019). Furthermore,
manager of the hotel making sure that most suitable supplier is being selected because along
and positive relationship is maintained for longer period of time with the vendors.
Threat of new entry- In market there are many new businesses which have taken
places and because of which existing business and organisations are getting impacted at
deeper level. Threat of new entry is high when there are no rules and regulations of
government, no restrictions, see you companies to satisfy customer demands and
requirements. In relation with Shangri la hotel, they also are affected with entry of new

business for example many local and medium level hotels provide same amenities as well as
services at less and cheaper rate. This results in higher switching cost of customers to other
local brands & enterprises. In terms of hotel industry, they are less affected by threat of new
entry because it took time to access market and customers for new business.
Competition rivalry- Competition rivalry is also have a major impact on admission
functions as because in this many enterprises compete for the more profit and sales revenue
by producing same product with different attributes and USP. No matter what competition
rivalry deliver a huge profit to the economy of a country but it also negatively affects the
industrial sector at wider scale. In relation with Shangri la hotel, they also have many
competitors such as Hilton hotel, Hayat, Morgan’s hotel group and many more. The degree
of competition amongst all these is high which also produces more new opportunities as well
as services (Saikim, 2020).
Threat of substitutes- Every product as substitute which is adopted by customers
find total satisfaction within the acquired product. In relevance with hospitality industry,
there are many substitute of product and services which are being have positive as well as
negative impact on business. It is necessary for the companies to focus on the product as well
as customer ratio and their switching behaviour so that threat of substitute is minimised up to
some extent. With the help of appropriate market strategies and tactics it is possible for
organisations to be aware about the customer switching behaviour as well as market trends
(Mason, 2020).
After analysing of above paragraph it is examined that through the use of marketing
tool entity is able to make decision making in most effective way during the process.
Moreover when using the tool it is to be examined that required information is available for
the competitive advantage hand increasing the profitability level of business.
PART B
P4 Apply range of theories, concepts and models and prepare strategic planning
In an organisation it is important to have a proper strategic planning so that goals &
objectives are achieved in effective way strategic planning is defined as process through
which entity is able to increase their productivity as well as profitability at broader level.
Without the use of strategic planning it is difficult for them to deal with computers and rivals

in the market. In relevance with Shangri-La hotels, they also used strategic planning in
appropriate manner which the used in most efficient way and is discussed below-
Mission- Main mission is to provide total satisfaction and quality of services.
Vision- To be the global leader and access the international market
Objectives- To increase the large market share growth and enhance the productivity
Hard skills Soft skills
 These are those which are related
with specific field orstudy which is
guided by leaders or teachers.
 For example- Analytics,
administrativem techjnical knolwedge
etc.
 These are those which are related
with interersonal abilities pof a
person.
 For example- Listening skill,s time
management, etc.
Tangible strategic priorities-
These are those which can be touched and are used for achievement of objectives. For
exmaple- in this current marketing plan main tangible priority is accounting, storing of
important documents, etc.
Intabgible priorities-
These are those which cannot be touched, these priorities includes feedbacks, way of
perception, services., ideas etc.
Ansoff Matrix
This is a framework which is used by many companies for planning and preparing
strategies as well as tactics for growth of business in market. It includes various dimensions
which are explained below-
Product development- This stages involves new product into existing market. In the
product development strategy risk associated with this is moderate because extension line of
product is being done by the enterprise. Mostly, this is adopted when there is need to extend
product line and this is done after a proper analysing the customer demand requirements. So

Shangri-La hotel can use this strategy for their business as it will help them to attract more
customers (Kibria, 2017).
Market development- In this, new market spring forecast for the existing product. In
this risk associated is right eye because market is unknown and trends as well as customers
are new. This is adopted when there is need to expand the business at different locations or
globally. The chosen hotel can also use this strategy but with appropriate market research.
Market penetration-Then arise the penetration strategy in which existing product is
introduced in existing market. It is safest strategy which is used by organisation. So, selected
enterprise they can use this by using more advanced methods and new ideas (Nguyen, 2017).
Diversification- At last this strategy depicts that in new market new product is
introduced. Risk associated with this strategy is higher because the situations are unknown
and results are also & uncertain. Shangri-La hotels did not have to go with this strategy
because it will require huge amount of capital as well as resources. Moreover, they can
develop their business are use the resources in the other established areas.
The above paragraph shows that strategic planning in necessary to attain goals
objectives in proper procedure also it is essential to use this strategy after conducting a proper
research.

CONCLUSION
After a brief analysis office report it has been concluded that business strategies and
essential and required in hospitality industry at wider level in this present report Saturn
discussions having me such as best talent SWOT analysis, Ansoff matrix which helps the
business to run the functions as well as activities effectively. Furthermore, it is seen that it is
not easy to implement or business strategy which require high level of skills as wel as
knowledge during the process. So, a deep market research is to be conducted while adopting
the strategy.

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