International Hospitality: Crown Plaza Hotel's China Strategy Report

This report examines the strategic approach of Crown Plaza Hotel to expand its business within the Chinese hospitality market. It begins with an introduction to the international hospitality sector and highlights the competitive landscape. A SWOT analysis is conducted to assess the hotel's strengths, weaknesses, opportunities, and threats, followed by an application of Porter's Five Forces Model to analyze the competitive environment. The report then explores strategic models such as the Ansoff Matrix and Porter's Generic Strategies to determine the most effective strategies for market entry and sustainability in China. The report recommends a cost leadership strategy, supported by market development, and provides justification for the chosen approach, concluding with practical strategy applications and recommendations for Crown Plaza Hotel's expansion in China. The analysis emphasizes the importance of understanding the local market dynamics, including the bargaining power of buyers and suppliers, and the competitive rivalry within China's hospitality sector.

International
Hospitality
Management

Table of Contents
INTRODUCTION.................................................................................................................................3
SWOT analysis of Crown Plaza Hotel.....................................................................................................3
Porter’s Five Forces Model....................................................................................................................4
Hotel strategy to be adopt and to be implemented.................................................................................5
Ansoff Matrix....................................................................................................................................5
Porter Generic Strategy Model-.........................................................................................................6
Justification...........................................................................................................................................7
Practical strategy application.............................................................................................................8
CONCLUSION.....................................................................................................................................8
REFERENCES......................................................................................................................................9
Books and journals............................................................................................................................9

INTRODUCTION
Over the years, international hospitality sector can be considered as a crucial industry which
consists of many famous hotels that has given ample number of opportunities to visitors
which are looking forward to experience the best while visiting a foreign country or a
regional area that belongs to the same nationality (García-Lillo, Úbeda-García and Marco-
Lajara, 2016). This has resulted into rise within competition level because various hotels are
looking forward to enhance their operations among different emerging markets. In present
report, the hotel that has been taken into consideration is Crown Plaza Hotel in Royal
Victoria Dock which is already dealing at international level and presently has made an
objective of expanding business within the emerging market like China. Crown Plaza Hotel
Chain is already performing its operations in more than hundred countries with
approximately 3000 hotels are already in its control and delivering quality accommodation to
the tourists. On the other hand, this assignment will be e delivering information in relation to
SWOT analysis, strategic models like Porters Generic Strategies, Ansoff Matrix and Porter’s
Five Forces Model which will be helping in taking right decisions to improve sustainability at
Chinese Market.
SWOT analysis of Crown Plaza Hotel
Strength Weakness
In more than hundred countries with 3000
hotels and with marginal prices of rooms
accommodation services are being delivered
by Crown Plaza Hotel which can be
considered as a strength point for this hotel
that has not only improved clients loyalty but
also impacted positively on its brand image
at international level.
Absence of input detailing is considered to be
a significant issue for Crown Plaza Hotel as
there is delay in reacting different queries put
up by client, this is on the grounds that there
are number of client and staff isn't as
indicated by this so some time lodging need
to experience the ill effects of this issue and it
go about as there shortcoming.
Opportunities Threats
Business expansion among different
emerging countries like China can be
considered as one of the crucial opportunity
that can be easily grabbed by Crown Plaza
Enormous number of contender can go about
as danger for Crown Plaza Hotel because this
is on the grounds that huge number of
contenders will diminish the benefit capacity

hotel. Another opportunity that can be taken
into consideration by Crown Plaza Hotel is to
implement new technologies within its
marketing approach as this will directly help
company in grabbing attention of customers
from different countries.
of firm, and in lodging industry there is large
range of hotels within China that are selling
same sort of item additionally everything rely
on the brand estimation of hotel chains like
Crown Plaza Hotel(Lashley, 2016).
Porter’s Five Forces Model
This model consists of five different forces and these are presented underneath:
 Competitive Rivalry: China's hospitality market already holds different international
hotels Peninsula, Hyatt, The Ritz Carlton and many more which will be giving high
competition to hotel i.e. Crown plaza. Therefore, it can easily be said that this force is
really very high for a hospitality organisation which is looking forward to expand its
business in Chinese Market. The threat of new entrants: Chinese government moreover focuses on supporting
local hospitality service providers and less on foreign organizations to enter the
market. This could be considered as an obstacle for Crown Plaza Hotel to keep it self
sustained in Chinese Market. This places gigantic obstacles in the method of outside
organizations to go into the business. Therefore, this force is also really very high for
Crown Plaza Hotel (Okumus and et. al., 2019). The threat of substitutes: As the whole world already knows about China, that it can
make anything within very less prices. Therefore, threat from substitute can also be
considered as really very high force for Crown Plaza Hotel, because country
specifically supports local business for hospitality organisations that may effectively
deliver different range of accommodation services to the clients who are in need of
higher satisfaction with less prices. Bargaining power of buyers: Since, tourists already carries ample number of options
to stay in a hotel at the time of visiting China, therefore bargaining power of buyers is
also pretty much high for hospitality organisation like Crown Plaza Hotel. In order to
improve customer loyalty within China it will be required by Crown Plaza Hotel to
deliver quality accommodation, that satisfaction level can be improved of clients.

 Bargaining power of suppliers: It has been analysed that, Chinese Market already
consists of ample number of suppliers that are available for delivering raw materials
to hospitality organisations. Therefore, while entering in the market of China the force
of suppliers will be low for Crown Plaza Hotel (Kuo, Chen and Tseng, 2017).
Hotel strategy to be adopt and to be implemented
Ansoff Matrix
This matrix is used by top level management and higher authorities of Crown Plaza
Hotel in order to identify the suitable strategies that are useful in achieving probable
succession growth within the dynamic market area like China. Along with this, it includes
four significant strategies that are evaluated below:
Market penetration: In terms of this organisation need to focus on enhancing their
sales and profitability by offering suitable products within the China. In terms of this there
are various services that are provided by the Crown Plaza Hotel like wakeup call,
accommodation, parking facilities, proper hygiene and many more that leads to increase their
reputation. According to the strategy company firstly offer their services at the low prices in
China in order to develop their loyal customer base as it is useful in retaining customers for
the longer period of time (Bowie and et. al., 2016).
Product development: According to the strategy company develop new products and
Services within the existing market in which they deal. In relation with this it is considered as
quite safe strategy as in this the manager of an organisation already know the taste and
requirements of customers. In relation with Crown Plaza Hotel if they adopt this strategy then
they needs to focus on some innovative services that helps in attracting and retaining
customers for the longer period of time.
Market development: As per this strategy, the existing product launch in the new
market in order to earn significant sales and profitability. Along with this the significant
strategy can be adopted by Crown Plaza Hotel in terms of expanding their business in China
and the manager of respective Hotel need to consider the requirements and behaviour of
Chinese citizens in order to fulfil them and develop their New Market area. Despite from this
the company expand their business and its functioning at the global level and for this they

need to adopt probable frameworks in order to analyse the risk factor that is present in the
business environment.
Diversification: It is considered as the risky strategy as in this the product and market
both are new and also need lot of investment to launch the significant product within the
market. In terms of Crown Plaza Hotel if they adopt this strategy then they need to conduct
probable research and development of the new market area as their product is also new in
order to attract ample of customers that helps in earning significant profit and revenues in the
future (Lugosi and Jameson, 2017).
Therefore by studying the above discussed strategy it is analysed that Market
Development is more significant for the Crown Plaza Hotel as because of this company can
significantly expand in China with their existing product and suitable Strategies and plans
that is beneficial in their development and growth. Market development strategy help the
company in order to strengthen its market image position and also helps in earning higher
profitability.
Porter Generic Strategy Model-
This module consists of four types of strategies that can be adopted by Crown Plaza
Hotel and these are presented underneath:
 Cost Leadership- This is said to be the primal strategy of Porter’s Generic Strategy
Model which delineates that each substance wishes to become maker of best expense
in the business world. This outcomes in getting of clients at more extensive level. In
setting to Crown Plaza, costs of rooms in four star or state three star is lower when
contrasted with hotels like Ritz London wherein cost of room are costly and not
reasonable for everybody. This procedure is utilized by Crown Plaza so lower, center,
and upper degree of clients are pulled in towards the business and their
administrations are convey to each prospect. This approach can help Crown Plaza
Hotel at the time of expanding business in Chinese market of hospitality (Chan and
Hsu, 2016).
 Cost Focus- Under this strategy accommodation services are administrations are
disseminated at lower cost yet inside a little or specific fragment with the goal that
business income doesn't get influenced. In connection with Crown Plaza, baggage
administrations are free and in certain territories they accuse a few expenses however

of minimal effort. With the help of this strategy, Crown Plaza Hotel easily improve
sustainability within Chinese hospitality sector.
 Differentiation Focus- Another crucial approach which specifically attempt by a
hospitality organization to separate itself from contenders and adversaries. Each
business ought to have unique selling point, with the goal that objectives and
destinations are accomplished in legitimate way. If it is talk about Crown Plaza Hotel
while expanding its business in China, then additionally it will be required by hotel
chain to substantiate itself from contenders by making clients their primary goal and
giving them customized administration from register to look at process. With the help
of this, Crown Plaza Hotel could easily sustain in Chinese market for a longer period
of time (Gursoy, 2019).
 Differentiation Leadership- Under this type of strategy, a hospitality organization
keep its focus on substance with rationale to accomplish upper hand by offering item
with premium costs. This technique is more dangerous if not done in legitimate way.
In setting to Crown Plaza, they receive this differentiation leadership technique by
directing proper statistical surveying and publicizing just as special devices within
China. This is on the grounds that when selling significant expense of
accommodation related services, clients just spotlight on quality of administration on
that services and are prepared to follow through on the cost. In this way, lodging
convey quality of merchandise and ventures and which help them in creating benefit
through premium costs.
In present context, while expanding business within Chinese hospitality market, Crown Plaza
Hotel will effectively take into consideration of cost leadership strategy because it will be
required by company to first make its existence better within China and then reach to a
decision for adopting any other strategy like differentiation leadership which will help
company in sustaining within Chinese Market afterwards.
Justification
In present context, if it is talk about the cost leadership strategy that has been taken into
consideration by Crown Plaza Hotel and it can easily be justified because China already
focuses on supporting local hotels (Madera and et. al., 2017). Therefore, if Crown Plaza
Hotel wood required to sustain in in hospitality market of China then it will be required by
company to start serving accommodation related services to clients considering low prices.

On the other hand, market development is the another strategy that has been adopted by
Crown Plaza Hotel because at the time of expanding business and Chinese Market, it is may
be possible that company would require to bring some changes within the existing services in
relation to accommodation that has been provided but, it can be said that services that has
been offered by Crown Plaza Hotel among hundred countries with more than 3000 hotels it
has already delivering effective services and kept customer loyalty towards more profitable
situation for them. so, it can easily be said that utilisation of market development strategy will
help Crown Plaza Hotel in sustaining within Chinese market for a longer period of time.
Practical strategy application
After performing analysis of the external business environment of China, it can be said that
the strategy that has been taken into consideration by Crown Plaza hotel which is Cost
leadership strategy. This particular strategy will help famous hotel chain in serving visitors in
much effective and in efficient manner because entering new emerging market like China it is
not that much easy because this is considered as one of those countries that supports local
businesses then foreign organisations. It is may be possible that considering cost leadership
strategy will help Crown plaza hotel in reaching to success level in Chinese Market in a short
period of time because it will be delivering accommodation services with minimal prices and
this is considered as one of the crucial element that may also improve customer loyalty as
well (Litvin, Goldsmith and Pan, 2018).
CONCLUSION
With the help of above mentioned report, it can easily be said that it is not that easy
for a business organisation that is dealing within hospitality industry to just enter a whole
new market which is emerging. It is said because, there are a range of factors like
competition, governmental support for an organisation and many more can both make or
break desired objectives. Therefore, it is pretty much required for a business organisation to
take right decisions in correct time as this will be much more fruitful at the time of business
expansion.

REFERENCES
Books and journals
Bowie, D and et. al., 2016. Hospitality marketing. Taylor & Francis.
Chan, E.S. and Hsu, C.H., 2016. Environmental management research in
hospitality. International Journal of Contemporary Hospitality Management.
García-Lillo, F., Úbeda-García, M. and Marco-Lajara, B., 2016. The intellectual structure of
research in hospitality management: A literature review using bibliometric methods of
the journal International Journal of Hospitality Management. International Journal of
Hospitality Management, 52, pp.121-130.
Gursoy, D., 2019. A critical review of determinants of information search behavior and
utilization of online reviews in decision making process (invited paper for
‘luminaries’ special issue of International Journal of Hospitality
Management). International Journal of Hospitality Management, 76, pp.53-60.
Kuo, C.M., Chen, L.C. and Tseng, C.Y., 2017. Investigating an innovative service with
hospitality robots. International Journal of Contemporary Hospitality Management.
Lashley, C. ed., 2016. The Routledge handbook of hospitality studies. Taylor & Francis.
Litvin, S.W., Goldsmith, R.E. and Pan, B., 2018. A retrospective view of electronic word-of-
mouth in hospitality and tourism management. International Journal of
Contemporary Hospitality Management.
Lugosi, P. and Jameson, S., 2017. Challenges in hospitality management education:
Perspectives from the United Kingdom. Journal of Hospitality and Tourism
Management, 31, pp.163-172.
Madera, J.M and et. al., 2017. Strategic human resources management research in hospitality
and tourism. International Journal of Contemporary Hospitality Management.
Okumus, F and et. al., 2019. Strategic management for hospitality and tourism. Routledge.