Business Health Check Report: IHG Analysis on Business Strategies

This report conducts a business health check on InterContinental Hotels Group (IHG), a multinational hospitality company. It begins with an introduction to business health checks and IHG's background, mission, vision, and objectives. The report then analyzes factors impacting IHG's operations, including SWOT and PESTLE analyses, and Porter's Five Forces. It explores potential improvements using the Ansoff Matrix, specifically focusing on market penetration. The report also reviews business effectiveness and proposes plans for improvement, evaluating management and staff skills and suggesting development plans. The conclusion summarizes the key findings and recommendations for IHG's sustained success.

BUSINESS HEALTH
CHECK

Table of Contents
INTRODUCTION...........................................................................................................................3
TASK 1............................................................................................................................................3
1.1: Analyse the objectives of business.......................................................................................3
1.2 Define the factors that impacts business operations in a considerable manner....................4
1.3: Determine potential improvement in the operation of business..........................................7
M1: How the objectives of their chosen organisation meet the ‘SMART’ criteria of
organisational objectives.............................................................................................................9
D1: Contribution of Ansoff’s Growth Matrix in the improvement of Merlin Entertainments
Plc................................................................................................................................................9
TASK 2............................................................................................................................................9
2.1: Review business effectiveness.............................................................................................9
2.2: Plans to improve the business effectiveness......................................................................11
M2: Determination how effectiveness of business can contribute to the organisational growth
...................................................................................................................................................11
D2: Analysis of development plan which can lead to the improvement in business................12
TASK 3..........................................................................................................................................12
3.1: Evaluation of the current skills of management and staff..................................................12
3.2: Plan for developing management and staff skills..............................................................13
M3: Analyse of current experience, skills and abilities of management and staff....................15
D3: Different methods that can be used to develop the skills of management and staff..........15
CONCLUSION..............................................................................................................................15
REFERENCES ...............................................................................................................................1

INTRODUCTION
Business health check refer to the viability check that helps business to determine
strength and weakness so that business can be sustained for long duration (Ambec and et.al.,
2013). Within hospitality sector health check helps to maintain the sustainability in order to
operate business for long duration. Thus, it assist the business to maintain clarity through which
hospitality business can accept the business and run the process smoothly. For the better
understanding of report InterContinental Hotels Group has been selected which is multinational
hospitality company and its headquarter is in United Kingdom. It has wide chain of hotels and
resort to cover the national and international tourist successfully. This report cover following
topic such as objective of business and impact of factors on the operations of business.
Moreover, potential improvement in the operations of business organisation and review on
business effectiveness. Further, develop plans to improve business as well as evaluate current
skill of management and staff. Devise plans to develop the skill of management and staff are
covered in this report.
TASK 1
1.1: Analyse the objectives of business
The inter continental hotels group operates in the hotels and hospitality sector. This hotel
was established in the year 1946 by Juan Trippe. Its headquarter is at Denham in UK. They are
one of the leading hotel companies in the context of United Kingdom. They have the 100 hotels
in different countries as well as about 766837 rooms are available in over the world. Basically,
they offer wide range of hospitality services as per the need and demand of their customers
across the world. Apart from it, as per the data of year 2017 their revenue was $4075 million and
it year 2018, their revenue was $ 4337. So overall their revenue is increasing continuously.
Additionally, their major shareholders are the capital international investors who holds 39.16 %
shares as well as FMR LLC holds the shares of 36.12 %. So overall their shares are divided into
multi-pal shareholders. Herein, below mission, vision and objectives are mentioned below:
Mission: Every company has their own mission which they want to complete with the
use of available resources. Such as the inter continental hotels group operates their business with
a mission of providing those services and products to the customers so that their need, demand
can be satisfied. Herein, it is important to know that it is not a mission of their origin branch but

also it is common for all their branches which are located into different countries. As well as by
providing quality products and services companies can be able to attract more customers.
Vision: It refers to the futuristic goal that are needed to be fulfilled by the companies
with the effective use of available resources. Like the inter continental hotels group's vision is to
make all their hotels in the category of five star hotels. For this purpose it is necessary for the
inter continental hotels group to achieve the competitive advantage over the rivalry firms.
Objectives: The objectives of companies can be divided into two parts which are short-
term and long term objectives. Each company has some objectives such as the inter continental
hotels group, has some short and long term objectives which are mentioned below:
Short-term objectives:
 Prime objective is to increase the profit margin by 10% in upcoming years.
 As well as to increase the revenue by 15% in next 2 years.
 To increase their services in more and more countries (Dennis, Wixom and Roth, 2018).
Like they have their branches in 100 countries so their target is to increase their branches
in 150 countries.
 Additionally, they want to enhance their current services as much as possible.
Long term objectives:
 Their first long term objective is to provide attractive services as per the proposal from
the holiday planners.
 As well as their another objective is to increase the market share and growth.
 To improve the rich guest experience by effective welcoming, respecting and offering
needed services.
 To lead the hotel industry continuously not only in the UK but also other countries in
which they have their branches.
So these are long and short term objectives of the the inter continental hotels group.
1.2 Define the factors that impacts business operations in a considerable manner.
It is necessary for the companies to analyse all the factors of the environment so that they
can sustain. This is why because environment consists two kind of environment which are micro
and macro both have significant impact on the business. For this purpose companies conduct
SWOT and PESTEL analysis. The Swot analysis is suitable for micro environment analysis and
Pestle analysis is for macro environment analysis. So overall it is necessary for the companies to

evaluate both environmental factors to achieve the competitive advantages. Such as the inter
continental hotels group conducts both kind of environmental analysis which is mentioned
below:
SWOT analysis of inter continental hotels group:
The Swot analysis is a kind of technique to evaluate the micro environment that is related
with analysing strength, weaknesses, opportunities and weaknesses of the companies. Herein,
below the Swot analysis of inter continental hotels group is mentioned below:
Strengths: It is related to the positive elements
which a company have in the environment. The
inter continental hotels group has following
strengths:
 Wide brand portfolio.
 Strong financial condition.
 Better employee engagement.
 Wide group of satisfied and loyal
customers.
Weakness- This is associated with those
negative element of the environment which are
reason of loss for companies. Such as the inter
continental hotels group has below mentioned
weaknesses:
 Lack of effective information security
system.
 Lack of economic hotel brand and due
to this middle class people can't afford
their services.
 In recent their position in leading hotel
rank is decreases at the 3rd position.

Opportunities: It is related to those aspect of
environment which can be beneficial for the
companies if they utilize it effectively. The
inter continental hotels group has following
opportunities:
 They have opportunity to apply the
technology facilitated booking system.
 Continuously increasing international
tourists trend is also an opportunity for
them.
 Enhancement in current services is also
an opportunity for them.
Threats: These are the aspect of external
environment that can impact the businesses
negatively (Evanschitzky and et.al., 2012).
Herein, below threats of inter continental
hotels group is mentioned below:
 Increasing competition is a huge threat
for above hotel.
 Customers are depending on the
intermediaries which is becoming a
reason of lower sell.
 Economy sharing in the hotel industries
is also becoming a threat for them.
PESTLE analysis of inter continental hotels group:
This is a kind of environment analysis technique which is associated with the analysis of
macro environment. The inter continental hotels group conducts the Pestle analysis and on the
basis of it they take important decisions (Gouldson and Murphy, 2013).
Political factor- This factor is related to the political stability, taxes, duties etc. The inter
continental hotels group operates in different countries so it is necessary for them to follow all
the rules and regulation effectively.
Economical factor- It is associated with the market and economic conditions which
includes interest rate, inflation rate, exchange rate etc. Eventually, fluctuation in these rates can
effect the companies. Such as for inter continental hotels group if interest rate increase then it
will be difficult for them to take the financial services.
Social factor- This is a kind of factor which is related to the any particular country's
culture, religion, customer's like dislike etc. So it is essential for the companies to make their
plans accordingly. Like the inter continental hotels group operates in different countries so it is
required for them to follow the culture of multi-pal countries to sustain.
Technological factor- Now these days technology is continuously updating and
changing so it is necessary for the companies to adopt new and advanced technologies in their

operations. For example inter continental hotels are needed to implement new techniques for
enhancing the experience of customers.
Legal factor- This factor is related to the government rules and regulation as well as
different laws, taxation which are needed to be followed by the companies to become a legal
entity. Such as for inter continental hotel, it is necessary for them to maintain the quality of their
services as per the set standards. As well as adopt all the laws in reference to customers and
employees.
Environmental factor- In this factor environmental conditions, natural disasters,
climate conditions etc. are involved (Peltier, Zhao and Schibrowsky, 2012). Like the inter
continental hotel has their branch in different countries and each country's environmental
condition is different from each other. Certain changes in these factor can impact them
negatively.
Porter's Five Forces- The porter's five force model is evolved by Michael Porter to
achieve the competitive advantage over rivalry firms. It consists following forces such as: Threat of new entrants- It is a kind of force in which companies are needed to be aware
from the threat of new entrants. Eventually, it exists in those markets in which entry is
free for companies (Schaltegger and Wagner, 2017). Such as the for inter continental
hotel, they have the threat of new entrants in the hotel industry. Bargaining power of buyer- It is a kind of force that is associated with the power of
buyers which they have. It depends on number of customers if there are lot of customers
then bargaining power will be less. For inter continental hotel, their customers have more
bargaining power due to more option of hotels. Bargaining power of suppliers- The suppliers also have the power to bargaining their
prices. Such as in the inter continental hotel, they have different suppliers to purchase the
materials and due to this their suppliers power is weak. Availability of substitute goods- The substitute products are those which are similar in
feature but different in prices. Such as in the context of hotel industry, customers have lot
of options to choose the hotels which impact to the inter continental hotel.
 Rivalry within existing Firms- It is related to the competition among the firms. Such as
in the aspect of hotel industries, there is too much competition between the hotels. The
inter continental hotel, face tough competition due to availability of more hotels.

1.3: Determine potential improvement in the operation of business
Application of Ansoff Matrix helps the firm to enhance its operation and expand
successfully to attain the set object. Thus, potential improvement helps the firm to improve, grow
as well as function for long duration.
Ansoff Growth Matrix: It is also referred as product/market expansion grid, which help
to adopted best suited strategy and help the firm to grow by analysing the risk which are
associated with the set strategy. It include four types of business strategy that are discussed
below:
Market Penetration: Within this strategy, business are willing to sell the existing
offering in the existing geographical area at reasonable price. The objective of doing so is to
enhance the current market share of company within the market (Sesen, 2013). Additionally, the
strategy of setting low price is not only to retain existing customer but also attract the potential
consumer to maximize the profitability of firm. In context to IHG hotel can use this strategy to
give tough competition to its rivalries also it decrease the presence of new competitor. To attain
the objective successfully selected business can extensively promote the product through various
platform and strengthen the distribution channel to minimize gaps.
Product Development: Within product development strategy firm takes the initiative to
launch the new product in the existing market where customer are already familiar with the
brand. It include indulgence of business in research and development activity so that the product
line can be expanded effectively. In context to IHG hotel can use this strategy as they operate
worldwide and have clear understanding about the specific market. Thus, it can help the selected
firm to come up with creative solution to fulfil the upcoming need of traveller with existing
market. Hence, IHG hotel can formulate partnership and makes the optimum utilised of resource
to produce and distribute the resources effectively within confined region.
Market Development: Market development strategy helps the firm to enter into new
market or cater people of new geographical area with existing product. Company usually adopt it
when it receive favourable responses from existing market and ready to experience new market.
This expansion can be either in regional or international market. Herein, IHG hotel can widen up
their services in new geographical market like, it has approximately eight lac rooms. So company
can make the advantage of economies of scale to expand its existing services successfully.

Diversification: According to diversification strategy firm takes riskiest step to bring new
product in new market (Shenkar, Luo and Chi, 2014). Here, research and development
department helps to identify the likings and preferences of people based on which alterations are
made on the product and offered to new customer. In relation to IHG hotel can adopt this
strategy to diversify their business and offer new services at new place. For instance, with the
increase business of travel and tourism respective company can stretch to new places and provide
additional services like pick and drop of guest from the airport. Hence, it helps the business to
remain competitive and earn enormous revenue by mitigating the chances of risk.
Therefore, amongst the various strategies IHG hotel can select diversification strategy as
it help to gain global presence which automatically generate the loyalty of customer. Along with
it overcome competitive pressure that helps the firm to gain the advantage of long term
sustainable development.
M1: How the objectives of their chosen organisation meet the ‘SMART’ criteria of
organisational objectives.
The objectives of inter continental hotels are meeting with the criteria of SMART. This
is why because their objectives are meeting with same aspect. Like their objectives are specific,
measurable, achievable, relevant and timely achievable (Stanley and Doucouliagos, 2012).
Above mentioned objective of inter continental hotel consists short and long term objectives
which are fulfilling the criteria. Hence, the objectives of above respected hotel is meeting with
the criteria of SMART.
D1: Contribution of Ansoff’s Growth Matrix in the improvement of Merlin Entertainments Plc
Ansoff growth matrix consist of four strategies based on which business select the most
suitable ones based on the risk which it can take (Suresh and Ramraj, 2012). Each strategy has its
advantage like market penetration is adopted to expand the market share whereas diversification
is adopted to maximize the chances of revenue. Thus, application of such tactics can help the
business to huge return as well as profitability. In terms of IHG company application of Ansoff
growth matrix can help the hotel to enhance it's operation and gain worldwide recognition from
the adoption of diversification strategy. Although it include huge risk but firm can take the
advantage of its economies of scale with the purpose to generate huge growth.

TASK 2
2.1: Review business effectiveness
Business effectiveness: To achieve long term success business needs to work effectively
and with full efficiency. Effectiveness mean quality completion of task with the effort of both
employee and employer whereas Efficiency means task gets completed within stipulated time
period by making the optimum utilisation of resources. This help the firm to achieve best
possible outcome and generate huge profitability.
Products/Services: Product and services are the foundation of business which are the
major source of revenue generation. So it is essential for IHG company to increase the quality of
product by reducing the unnecessary cost. For instance, it offer various services such as luxury
and economic room as well as food and beverages so the major concern of firm is to increase
effectiveness of services and maintain the quality by offering it at suitable prices.
Marketing: Marketing helps in promotion of goods as well as services to enhance the
sales. The effectiveness of marketing for a IHG hospitality's company depends upon the strategy
set by marketer to achieve the long and short term goals of business successfully. Herein, IHG
hotel can promote its services through digital media which is an effective source as company can
cater global customer. Further, it presents the result at real time and incur less expenses in terms
of print media or traditional media which leads to increase in efficiency.
Sales: Sales is the passing of services from service giver to service seeker in monetary
terms (Taghian, D’Souza and Polonsky, 2015). The effectiveness is directly proportionate to the
sales of services like higher the business effectiveness higher will be the sales of services. In
terms of IHG hotel the return on marketing investment is the outcome of effective and efficient
application of sales strategy.
Finance: Finance is an essential part of an organisation that leads to smooth performance
of business operations. In relation to IHG hotel intensive effort is made to maximise
effectiveness by looking for the most favourable source of finance that can help the firm to
successfully deliver the services.
Staffing: Staffing means placing the employee together on the basis of their skill set or
interest areas. Thus, grouping of employee based on similar capability helps to attain the shared
objective successfully. In relation to IHG hotel the effective and efficiency can be maximized

with the help of training and development of employee which enhances their knowledge and
maker them competitive to face the changes successfully.
Record Keeping: Record keeping is used to store the customers record based on their
existing performance. This is useful technique to provide the constructive feedback so that
employees can work on their weakness and leads to enhancing the effectiveness of business. IHG
company, conduct performance appraisal technique based on record keeping which encourages
the employee to excel in their areas and work effectively as well as efficiently.
2.2: Plans to improve the business effectiveness
Business planning is the description of information that help organisation to attain its
objective. Such plan is prepared by IHG hotel to enhance the business effectively and contain the
procedure to prepare business plan that is defined below:
Research: It is the initial step which is conducted before preparation of business plan
(Vij and Bedi, 2016). Research helps the business to provide deep information in relation to
product, market as well as competition level. Herein, IHG hotel based on the research
programme can evaluate the actual position of firm based on which desired position can be
analysed.
Determine planning purpose: Based on the research planning is conducted to enhance
the performance of business. On the basis of planning communication is conducted amongst the
various level where the objective of planning is made clear to the firm to maintain the
transparency and fair relation. Herein, IHG hotel can make feasible business plan like if the
hotels wants to increase the market share of company then it can invest in promotional technique.
Collection of resources: As per the objective or plan business identifies the resources
which can be utilised effectively. In relation to IHG hotel based on the business plan that is
increase the market share. In this case company will look for various sources of fund such as
equity or debt that will lead to positive result by increasing profitability of business.
Implementation of plan: Once plan is developed and resources are identified then next
step is to execute the plan with the purpose to achieve desired objective. In relation to IHG hotel
works on promotion the brand by making long term relationship with the existing customer and
attract the potential customer. Hence, company can promote the brand through social media
which is a wide community of various people of different age group and can encourage huge
traffic for company.

Review the action: It is the last step that depict the result after the implementation of
business plan. Herein, IHG hotel can evaluate the gap between actual and standard performance.
Thus, on the basis of deviation corrective measure can be taken effectively.
M2: Determination how effectiveness of business can contribute to the organisational growth
Effectiveness of business depend upon the business effectiveness as well as efficiency
that help the business to run successfully. It helps to achieve the productivity by lowering down
the unnecessary cost that saves the time and cost of firm. Herein, IHG comp[any in order to
increase the effectiveness of business it provide training to the employee and make optimum
utilisation of resources to make the significant contribution for organisational success (vom
Brocke, Zelt and Schmiedel, 2016). Hence, business make improvement to upgrade the various
aspect of business including product or services, sales and finance which needs to be upgraded
constantly.
D2: Analysis of development plan which can lead to the improvement in business
There are various elements such as planning, objective as well as time frame to attain the
task are associated with development plan that can help company to enhance its prevailing
performance. In relation to IHG hotel development plan helps the firm to enhance the skills of
business such as technical skill or operation skill within stipulated time frame. The procedure of
development plan to improve existing skill is followed by overall staff as well as manager to
attain desired position.
TASK 3.
3.1: Evaluation of the current skills of management and staff
Technical skill: It refer to the practical skill needed to perform the specific task
successfully. This skill helps an individual to gain expertise over specific field that help in
effective completion of task by handling the task successfully (Schläfke, Silvi and Möller,
2012). Along with that enhancement of technical skill helps employee to attain the career growth
and improve the business position. In relation to IHG hotel have utilised the technical skill
successfully as with the change in time and evolution of digitalisation company has became more
prone to technology. For this selected company has provided training and development session to
its staff in order to maintain long term relationship with their customer through electronic media.