Analysis of Crowne Plaza's Strategic Positioning in Emerging Markets

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International Hospitality Management Assessment
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Table of Content

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s
Introduction................................................................................................................................3
Background of the Hotel Industry in international market........................................................3
Background of The Crowne Plaza.............................................................................................3
SWOT analysis of the Crowne Plaza.........................................................................................4
Background of international hotel and tourism industry within developed and emerging
markets.......................................................................................................................................5
Background of the Crowne Plaza regarding emerging market..................................................6
PEST of selected emerging market............................................................................................6
Analysis of SWOT and PEST....................................................................................................9
Hotel Strategy to be adopted using strategic markets..............................................................10
Porter’s Generic Strategies...................................................................................................10
Ansoff Matrix.......................................................................................................................11
Strategic growth options for The Crowne Plaza...................................................................12
Justification of strategies..........................................................................................................14
Practical application and future implementation of strategies after 5 and 10 years ahead......14
Conclusion................................................................................................................................14
References................................................................................................................................16

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Introduction
The study is based on the analysis of hotel and hospitality industry in a new emerging market.
Here the study was done on Crowne Plaza, which is an eminent group of hotel chain and
brand in the United Kingdom. As this hotel is a part of intercontinental hotel group, the
business of the hotel industry has an integrated and interconnected activity. Here, a brief
analysis on different disciplines of the hotel along with a comparative study on the
international market is performed.
Background of the Hotel Industry in international market
The hotel industry is related with providing of accommodation to a large group of people
along with several other services. This is a group of interrelated services, which are organized
for public services. The hotel industry is fallen under the hospitality sector, where the
principle service strategies are divided in several broad categories. The development of this
industry was done mainly at the end of 1700, which is mainly known as the Colonial period.
According to Assaf et al. (2011), at the very beginning this industry faced different issues,
which is mainly originated due to several social and contemporary factors. Nonetheless, this
industry had turned their business strategy and pattern during 1950. Although the concept of
providing a good accommodation to people was in the ancient period, the modified concept
in hotel industry had developed mainly in the year 1794, with the opening of City Hotel in
New York. On the other hands, this hotel is claimed as the 1st hotel designed with different
hotel operations. In addition, Bohdanowicz et al. (2011) commented that the emerging of
hotel industry had stated with the industrial revolution. The advent of different transport
helped this industry to flourish. Besides, there are several other factors, which helped in the
development of the industry in the world, among which the tourism played the most
important role. All of these are promoting this industry with a greater economic benefit.
Background of “The Crowne Plaza”
The Crowne Plaza is a famous multinational chain of hotels in the United Kingdom. This is a
famous brand and is an element of intercontinental hotel groups. The principle services
offered by this hotel chain are to the business travellers and the convention markets. The
group of hotel industry was originated as holiday inn in the United Kingdom, which is the
first holiday inn of that state. The first hotel of that chain was opened in Rockville, in
Maryland, in the year 1983 (cpdocklands.co.uk, 2018). However, Gu et al. (2012)

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commented on the changing of the brand as an international and independent hotel chain
within a period of 2 years, which mainly changed the overall business strategy of that hotel
chain. On the other hand, this hotel chain started to open several resorts as holiday inn. The
first Crown Plaza Resort was opened in the year 199, in Madeira, in Portugal. The hotel is
included as a part of international family of hotel brands, which are operating in several
countries (Madera et al. 2017). At present, the hotel group is operating their business in more
than 52 countries, having about 410 hotels overspread worldwide. As opined by Chon et al.
(2012), the brand is operating their business and expanding 81 hotels in conduit. All of these
activities lead this hotel Crowne Plaza as a part of intercontinental Hotel Group (IHG) brand,
as the IHG purchased the holiday inn family in the year 1990.
SWOT analysis of The Crowne Plaza
The Strength, Weakness, Opportunities and Threats of the Crowne Plaza are tabulated in the
table below:
Strength
 Brand name
The strong brand image of Crowne
Plaza is the principle strength of the
organisation, which provides an
additional support to the hotel to
charge higher prices from their
customers for their services.
 Customer loyalty
Crowne Plaza is targeting only a
particular group of customers to
improve their business, instead to
targeting to all.
 Supply chain
The Crowne Plaza has a strong supply
chain, which helps them in having all
the resources from their suppliers and
delivering these at proper time
(cpdocklands.co.uk, 2018).
Weakness
 Redundant technology
The outdated technology of Crowne
Plaza limits the ability of the hotel to
defend the rivals.
 High staff turnover
This causes a long- term negative
impact on the overall business of
the hotel industry, where the
replacement of the expensive
employees reduces the capability of
competing (Assaf et al. 2011).

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 Advantageous size
The size of the Crowne Plaza
provides an additional support to
reduce the business risks. This helps
in pursuing resources from new
markets and defending against rivals.
Opportunities
 Development of new technology
The implementation of newer
technology in Crowne Plaza helps
to meet the customer’s demand
properly and to improve their
services. Moreover, this helps in
developing of protection against
their rivals.
 Innovative strategies
Development and implementation
of innovative strategies helps in the
production of exclusive products
and services (Assaf et al. 2011).
Threats
 Intense competition
Competition reduces the profit of the
brand. In addition, the competitors
can attract the customers towards
them.
 Origination of substitute products
Development of substitute products
limits the business and profit of
Crowne Plaza, as it restrict the brand
to raise their price, as the customers
can easily shift towards new products.
Table 1: SWOT of Crowne Plaza
(Source: Learner)
Background of international hotel and tourism industry within developed and emerging
markets
As stated by Boella et al. (2013), the emerging market plays the most important role in the
hospitality industry, which comprises their business in several countries present all over the
world. This is changing the mode of business of the hotel industries in a country. It has been
found that mainly the BRIC economy now shows the positive rise towards the hotel and
tourism industry, which is mainly denoted by their increased GDP over the last five years.
However, China has shown the maximum potential towards this process and it shows that the

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potential of hotel and hospitality industry in the country has a high growth rate. This can be
comprises of their increased GDP rate, which is about 7% increase per year, although it was
about its half in the year 2007. Another important comment was given by Chin et al. (2013),
where the author described the potential of Chinese market for invading the hotel and tourism
industry is that about half billion of people of the country is now escaped from poverty,
which denotes a positive change in the economy. However Zhou et al. (2014) argued on the
development of hotel and tourism industry in that country, as the author is not supposed to
consider the country as an emergent and developed market for this industry. This is mainly
because of having several long-term challenges in the country, which can influence on their
economy. These are the shortage of potential resources, aged population, and lack of
democracy.
Background of the Crowne Plaza regarding emerging market
As opined by Yu et al. (2014), the major prosperity of the market for the Crowne Plaza is
found in the emerging market of BRIC group. However, the major prosperity of Crown Plaza
is found in the market of China in BRIC group, where the economy of the country shows
significant prospects for flourishing in that country. The average GDP growth of China is
found above 10% per annum, which is quite a big amount for investing in the hotel industry
in that country. On the other hand, there is a clear evident of 6.5% annual increase in the
spending on travel business of that country, which is denoting a positive upraise in hotel
industry. All of these are suggesting that China is a potential emerging market for hotel
industry, having competitive advantage in different hospitality sectors (Gannon et al. 2015).
Besides, there is a clear evidence of improvement in the travel market in China. It has been
found that the domestic travel market have penetrating in China, which is going to yield the
biggest long-term annual return in this country, and this will be prospectus for international
brands to set up their hospitality industry in this country (Li et al. 2017). In addition, another
advantage of establishing the Crowne Plaza in China is the large size of the population that
contributes in the establishing of the hotel chain in that country. Moreover, Bowie et al.
(2016) also mentioned on the demographic dividend of China, which will provide a wide
assemblage of working population in the country.
PEST of selected emerging market
The BRICS nations form to be potent emerging market for The Crown Plaza hotel. As
outlined by Zeng and Wang (2018), PEST analysis helps in outlining the impact of external

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environment on the business functioning of various hospitality organisations. Subsequently
decisions can be undertaken fit the best of interpret of the organisations and risks can be
mitigated. Within the BRICS nation, China forms to be the most suitable emerging market,
wherein The Crown Plaza can open its hotel for catering needs of the esteemed customers.
The impact of various external environment factors within emerging market of China that
affects decision-making processes in The Crown Plaza are outlined as below:
Factors Issue identified Analysis Opportunity/
Threat
Political
factors
 Political
framework
within China is
influenced by
both Communist
Party of China
and Central
people’s
government.
China is well known for maintaining
proper diplomatic relationship with
foreign countries. The country is an
important part of World Trade
Organisation and G 77. The leadership
within China is well structures and
several political laws favour
international trades and commerce.
Opportunity
Economic
factors
 The GDP of
China in 2018
was $14.092
trillion and held
the second spot
in terms of GDP
growth.
 The economic
growth was
The steady growth of economic and
various trade facilities provided by the
government are beneficial for
international hotels and companies.
The population factor also proves to be
a source of advantage for the economic
growth rates (Boella et al. 2013).
Opportunity

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around 6.6% in
the fiscal year
2017.
Social
factors
 The tourism
rates in China
are much higher
than European
nations such as
UK and France.
As far as global tourism is concerned,
people from various countries visit
China every year. In addition,
economic conditions of people are
becoming stabilized and this will help
in generating high returns and profit to
company (Boella et al. 2013).
Opportunity
Technologi
cal factors
 China boosts of
various
technological
advancements
that can be
implemented
regarding
provision of
luxurious
experience in
hotels.
The advancement in various gadgets
and articles help to make the hotel
rooms more luxurious and makes the
stay period of tourist pleasant. In
addition, implementation of new
technology in logistics will help hotels
to obtain materials from across
international borders immediately
(Tribe, 2016).
Opportunity
Table 2: PEST Analysis of China
(Source: Learner)

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Analysis of SWOT and PEST
It has been found from the above SWOT analysis that the principle strength of the brand is
based on their brand image. Thus, the promotion of the hotel chain can be advantageous for
the establishment of Hotel Crowne Plaza in China. As the customers are showing inclination
towards the hotel, this helps them to increase the price for services, as the customers will pay
for increased amount. Moreover, there is another evidence of having a loyalty of their
customers, where a particular group of customers can be targeted in their new hotel chain
(Gannon et al. 2015). Another important factor of the hotel is its strong supply chain, which
should be maintained in the new and emerging market, so that the delivery of the services can
be done properly in the new market to their customers.
However, it has been found that the staff turnover is an issue found in the hotel industry,
which should be mitigate in approaching for the emerging market of China. However, as the
market has abundant source of trained staffs, this could be beneficial for establishing their
new hotel chain in the country. In addition, another attention should be paid towards the
improvement and implementation of different technologies, which will not only help in
meeting the customer demand but also withstand with increasing competitive rivalry
(Sheresheva et al. 2018). Another important issue, which should be focused during
approaching towards the new market, is the intense competition and development of
substitute products. Thus, the brand must select their pricing strategy in such a way, so that
they can have a competitive advantage over other in the market.
From the PEST analysis of China, it is evident that this country opens up various sources of
opportunity for The Crowne Plaza. The political stability of country initiates and supports
foreign investments and companies to open up their functioning units within China. In
addition, the strong and rampant economic growth is indicative of the fact that hospitality
organisations will not face sudden bankruptcy or crashing of economy in the near future.
Moreover, the fewer amounts of taxations will help hotel groups such as The Crowne Plaza to
meet all demands of the tourists. The increased number of tourist throughout the year and
availability of labour within market will ensure high returns after providing exemplary
services to their customers (Madera et al. 2017). In addition, the advanced technology will
help The Crowne Plaza in implementing luxurious additions within rooms and hotels. The
improved forms of logistics will enable provision of raw materials and other goods without
delay. This will reduce risks of poor services to the customers by the hotel.

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Hotel Strategy to be adopted using strategic markets
Porter’s Generic Strategies
In order to be a notable figure within the hospitality sector, it is important that all the
opportunities within the emerging markets would be utilised. In this context, the Porter’s
Generic strategy helps in outlining various strategies that are based upon resources and
facilities available within the current hotel company and the external environment. The
strategies that can be implemented within The Crowne Plaza are outlined as below:
Cost Leadership Strategy: This involves pricing the commodities and services in such a
manner that they are feasible to the customers within the particular nations (Tribe, 2016). In
this regard, The Crowne Plaza has undertaken strategies to keep the pricing of services such
as room bookings 5% less than UK within China (cpdocklands.co.uk, 2018). Moreover, the
customers will be provided a special trip to various ethnic Chinese provinces on availing
premium services. This strategy will help in providing value for money services to tourists.
Focus Strategy: This strategy involves conferring of specific services in order to cater a
specific segment of customers. In this context, The Crowne Plaza implements premium
services such as luxurious suites and private jet facilities in order to attract the upper class
customers within emerging economy of China. In addition, various high profile tourists
visiting China will also be targeted by focussing services to their needs.
Differentiation Strategy: This strategy is implemented for creating a unique image
regarding services provided by the hotel within the emerging market. Novel strategies such as
provision of private jet facilities, helicopter tours and exquisite suites will help The Crowne
Plaza to attract more high profile customers within China.

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Figure 1: Porter’s generic strategies for The Crowne Plaza
(Source: Learner)
Ansoff Matrix
In order to ensure long-term profits of the hotel, it is important that strategies are
implemented that are based upon the growth and latest trends of the market. In this context,
the Ansoff matrix for The Crowne Plaza is outlined as following:
Increasing
Risk Increasing Risk
Existing products New products
New
market
Market Development
 New hotel room services
within exquisite suites will
be provided
 Expansion of business in
BRICS countries will help
entering in global market
Diversification
 The Crowne Plaza can
offer novel facilities such
as visits to Chinese
provinces and water sport
activities.
 The hotel can also include
shopping malls and guide
facilities.
Existing Market penetration Product development
"Cost leadership"
Availing hotel rrom services at
lower prices than UK "Differentiation"
Availabilty of various novel
services
"Cost Focus"
Targetting premium and high
profile tourist and customers
in China
"Differentiation Focus"
Availing transport and travelling
to Chinese provinces to
customers
S
C
O
P
E

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market  The current marketing in
China proves to be
advantageous for The
Crowne Plaza as economic
growth and social set up
allows expansion of
hospitality sector.
 The services cater to wide
domain regarding demands
of customers.
 The services have to be
created such that it reflects
uniqueness of hotel as well
as outlines culture of host
nation.
Table 3: Ansoff matrix for The Crowne Plaza
(Source: Learner)
Strategic growth options for The Crowne Plaza
There exist many complexities within the hospitality sector. In order to mitigate such
complex factors and to use opportunities provided by the host nation, various strategies are
implemented internationals hotels. As mentioned by Sheresheva et al. (2018), strategic
options within hospital industry have to be more persuasive that covers factors such as
geographical coverage, brand options and size of opportunities. In order to seize all
opportunities and provide exemplary hospitality services to customers in China, The Crowne
Plaza can implement Nykiel’s fourteen hotel strategic options as outlined below:
Strategy Objective Description
1. Horizontal
Expansion
The Crowne Plaza can expand their line of hospitality from
one service to others, for instance opening up of new spas,
hotel resorts or theme parks.
2. Geographical
Expansion
The Crowne Plaza is already taking the decision of opening
up new hotels in different continent such as Asia.
3. Product/Services
Hybridisation
Inclusion of various novel features within services improves
reputation of hotels and makes them favourite amongst
customers (Ioannis, 2013). The Crowne Plaza can
implement certain facilities such as premium car services,
cruise trips and private jet facilities for their premium