Strategic Business Model Analysis: High-End Hotel Industry in the UK

This report provides a comprehensive analysis of the business strategy within the high-end hotel industry in the UK. It begins with an introduction and industry overview, highlighting the competitive landscape. The core of the report focuses on Porter's Five Forces model, examining the power of the buyer and the threat of substitute products. The analysis reveals the high buyer power due to the availability of various hotel options and the need for competitive pricing. The threat of substitutes, though present, is considered lower, but still necessitates strategic management. The report further explores strategic business models and applies the BCG matrix to assess the industry's position, identifying advancement services and technology as stars, hotel locations as cash cows, food products as dogs, and global market opportunities as question marks. The conclusion emphasizes the importance of strategic adjustments to enhance competitiveness and market share. The report provides valuable insights into the industry's dynamics and offers recommendations for strategic decision-making.

Running Head: Business Strategy
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Project Head: Business Strategy

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Contents
Introduction.......................................................................................................................3
Industry overview.............................................................................................................3
Porter’s five forces model.................................................................................................3
Power of the buyer........................................................................................................4
Threat of substitute.......................................................................................................5
Strategic business model...................................................................................................6
BCG matrix...................................................................................................................6
Conclusion........................................................................................................................8
References.........................................................................................................................9

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Introduction:
This report briefs the user about the porter’s 5 forces model of high end hotel industry
and it also depict about the strategies which would help the comapny to make better decisions
about the comapny. This report has been preformed over the HIGH END HOTEL
INDUSTRY of UK. Firstly the power of buyers and the threat of the substitute products have
been analyzed and further, the BCG matrix has been analyzed of the comapny. The analysis
over the power of the buyer depict that the level of the buyers are quite high and the comapny
is required to make some new strategies to make a control over these factors and further the
level of the substitute products are bit lower.
Industry overview:
HIGH END HOTEL INDUSTRY of UK is quite competitive. Mainly, it includes the
luxurious hotel chains which could be managed by various companies from the decades. The
reports over the HIGH END HOTEL INDUSTRY of Uk depict that various changes have
taken place into the industry nowdays due to international hotel chains and the external
environamwnt of the industry. The hospitality and leisure industry of UK has been enhanced
rapidly in terms of market share and the profitability condition of the industry. This HIGH
END HOTEL INDUSTRY has strong presence in the UK market. Mainly, this industry has
around 1.1 contribution in the total GDP of the country. This industry has expanded its
market very rapidly with various new services and the technology. Currently the share of the
industry in terms of market base is currently high.
According to a report, the market share and the profitability of the industry is
continuously enhancing. The industry is performing its operations very smoothly in the
market of UK. The mission and vision of the industry depict that the industry wants to enter
various services and enhance their market share. The corporate social responsibilities of the
industry are also competitive (Dallas, 2011). This industry uses various new technology and
advancement services to attract more customers. And the loyal customers list of the industry
is also very high.
Porter’s five forces model:
Porter’s five forces model is a study which is conducted to analyze the external
market and environment of the industry. Porter’s 5 forces model has been studied over the

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high end hotel industry of UK to analyze the power of buyers and threat of substitute. The
analysis over the power of buyers and threat of substitute is as follows:
Power of the buyer:
Power of the buyer is one of the stages of analyzing the external environment of the
industry. Power of the buyers could be relatively strong when there are various other hotels
and competitors in the market. Mainly, the power of buyers depend over the location as few
places have only one hotel or few hotels whereas at some places, various hotels are there
even in the same lane (Cravens and Piercy, 2006). It directly depict that if numerous hotels
are there in the same area or within a tourist hotspot, the power of the buyers would be
greater as the customers would be able to compare the prices, services etc offered by the
comapny and at the same time, the prices, promotions and advertisement also affect the
power of the buyers.
Power of the buyers is basically relayed to the price changes. Basically, the prices are
the main commodity which is noticed by the customers before availing any services or the
products. If the prices are continuously raising than also the hotel industry must try to reduce
the level of the prices as much as possible. For this, the industry could find many ways such
as cheaper services or cheaper suppliers. Now days, it has become very easier for the
customers to go online and analyze the best hotel through clamouring the prices, services and
the locality of the hotels. Customers need not to go the agents, middle man to analyze that
which hotel offers the best services (Dean & Yunus, 2001).
Basically, it is not easy for a hotel company to save itself from the power of the
buyers and their bargaining level. For reducing the level of the power of customers, HIGH
END HOTEL INDUSTRY of UK could take the help of various strategies and policies. So
that the customer level of the industry could be enhanced and the comapny get successful to
manage the market share and the profits in the market. Other firm chains may offer various
services into lesser prices but the comapny must use some strategies to reduce the level of the
power of the customers.
The tourists are the main customers of the hospitality industry. Tourist could take the
help of various communication channels in order to analyze the level of the hotel as well as
the prices and services of the high end hotel industry and Fairmont hotel of UK. As various
hotels are already available in the market of UK with competitive services and the price, the

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power of the customers has been enhanced. Mainly this power of the buyers has been
enhanced due to various websites which assist them to find the best of the hotels. These
websites enhance their bargaining power (Walker, Mullins, Boyd and Larreche, 2005).
These procedures shifts the power of the customer to the end users of the services and
the products as it has been found through the study of porter that these freedom and the
power of buyers directly affect the cost of the comapny, it enhances the cost of shifting the
buyer interest. So that a customer’s loyalty towards a single firm is the main thing as if the
customer get attached and loyal with one firm that he or she do mouth publicity for the
comapny and enhances the market base of the company (Lecalle, 2017).
Threat of substitute:
Threat from the substitute is one of the stages of analyzing the external environment
of the industry. Threat from the substitute could be relatively strong when there are various
other options available in the market for the customers of the hotel. Mainly, Threat from the
substitute depend over the various other options which are available in the market which
could be use by the customers to stay, have food and enjoy the luxurious services. It directly
depict that if numerous other options are there in the same area or within a tourist hotspot, the
Threat from the substitute would be greater as the customers would be able to analyze the
other options which would be offered to the them in the lower prices and at the same time, it
would affect the prices of the comapny as well as the services of the comapny (Quester et al,
2007).
Threat from the substitute is basically relayed to the charged prices. Basically, the
prices are the main commodity which is noticed by the companies before choosing any
services or the products from the suppliers. If the prices are continuously rising than the hotel
industry must try to reduce the level of the prices as much as possible so that the threat from
the substitute could be lower (O'Neill and Mattila, 2010). For this, the HIGH END HOTEL
INDUSTRY of UK could find many ways such as enhancing the level of the services in
lesser prices. Now days, it has become very easier for the customers to analyze the different
substitute through the various online websites and the agents available in the market.
Customers are just required to analyze the prices of the substitute products through various
online sources and choose the best place to stay and avail the hospitality services (Zeithaml,
Bitner and Gremler, 2006).

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Basically, it is not easy for a company or an individual to start the business off
hospitality as the investment amount is bit higher and the investors are required to check the
feasibility of various levels. So it has been analyzed that the threat from the substitute
products of the HIGH END HOTEL INDUSTRY of UK is little lower but still the industry is
required to manage the strategies and policies to save itself from any substitute product.
Other firm chains may come into the market with a great customer base and a new and high
market campaign or high formulated internet approach (Pride, 2008).
Basically, the customers of the hotels look for the luxurious stay services and 3meals
in a day. HIGH END HOTEL INDUSTRY of UK could take the help of various technology
and the advancement products to satisfy the needs and demands of the customers in order to
analyze the level of the substitute products as well as the prices of the substitute products
which are offered to the customers (Gaughan, 2010). Comapny is required to offer some
unique services and the products so that the customers do not think about switching (Jain and
Haley, 2009). Mainly this substitute threat level has been enhanced due to various hotel
chains which could come into the market of UK at any time to reduce the level of market
share of the company.
These procedures shifts the threat of the substitute products to the companies of the
hospitality industry as it has been found through the study of porter that these freedom and
the threat from the substitute products directly affect the cost of the comapny, it enhances the
cost of shifting the buyer interest (Fulin, 2011). So that a customer’s loyalty towards a single
firm is the main thing as if the customer get attached and loyal with one firm that he or she do
mouth publicity for the comapny and enhances the market base of the comapny. And through
thus the level of the threat of substitute products of HIGH END HOTEL INDUSTRY would
be lesser.
Strategic business model:
Strategic business models are the analysis study of the comapny to emphasize of
planning on the basis of various strategies for starting and developing the new operations and
the activities of the comapny. It is required for every hospitality industry to analyze and
prepare the strong strategic business unit to save itself from various level of the risk
(Kaufamnn, 2009).
BCG matrix:

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BCG matrix is an analysis matrix which has been created by Boston consulting group
to analyze the strategic position of the company’s brand portfolio and the potential of the
comapny. It classifies the portfolio of the business into 4 sub categories to analyze the
industry attractiveness. The BCG matrix study has been performed over the HIGH END
HOTEL INDUSTRY to analyze the strategic position of the company.
(Barney, 2011)
Question marks
 Low market share
 High market growth
(Industry is still not aware about the
opportunities and their uses; industry is
required to enhance the investment.)
Stars
 High market growth
 High market share
(Doing very well and have great
opportunities.)

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DOGS:
 Low market growth
 Low market shares
(Industry is weak in the market share and
it’s difficult for the industry to make the
profits.)
Cash Cows:
 Low market growth
 High market share
(Industry is doing very well in the market and
the industry has limited opportunities.)
(Atasu, Sarvary and Van Wassenhove, 2008)
Through this analysis, it has been found that the stars of the industry are the
advancement services and the technology of the industry. The cash cows of the HIGH END
HOTEL INDUSTRY of UK are the places and the location where the hotels are operating its
business, the DOGS products of the industry is its food products and the question mark has
been put over the policies and global market opportunities (Elmuti & Kathawala, 2001).
Through this analysis, it has been found that the industry is just required to make
some changes into the strategies and policies to become more competitive and meet the
targets of the comapny.
Conclusion:
According to this study over the high end hotel industry, the power of the buyer depict
that the level of the buyers are quite high and the comapny is required to make some new
strategies to make a control over these factors so that the comapny would be able to meet the
mission and vision of the comapny. Further the level of the substitute products are bit lower
in the local market but comapny is required to have some threat with the global companies
especially the hotel chains.
Lastly, it has been analyzed that the BCG matrix over the industry depict that the
strategic position of the industry is very strong and the industry is just required to make some
changes into the policies and the strategic part of the industry.

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