Crowne Plaza Hotel: Strategic Analysis for Market Expansion in Italy

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International Tourism Management

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TABLE OF CONTENTS
Background to International Hotel Industry (and tourism).............................................................3
Background to Hotel Company.......................................................................................................3
SWOT analysis of Crowne Plaza Hotel in Royal Victoria Dock....................................................4
Background to emerging markets....................................................................................................6
PEST of selected emerging market..................................................................................................7
Hotel strategy to be adopted and to be implemented.......................................................................8
Porter’s generic and intensive growth strategies for Crowne Plaza London Docklands.............8
Generic Strategies:.......................................................................................................................8
Ansoff’s Matrix:..........................................................................................................................9
Nykiel’s fourteen strategies.........................................................................................................9
Justification and practical application of strategy.........................................................................11
Conclusion.....................................................................................................................................12
Reference List................................................................................................................................13
Appendix:......................................................................................................................................15
SWOT framework.....................................................................................................................15
Additional information on the SWOT analysis.........................................................................16
PEST of Italy.............................................................................................................................17

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Background to International Hotel Industry (and tourism)
The hotel industry is associated with various forms of businesses, which are focused on
providing accommodation to the tourists in different areas as well as other facilities like food and
beverage, and a vast is a variety of services, which is organised and interrelated for public
service. This industry is also associated with providing the guest with different services
associated with sports and facilities, conferencing, fitness, banqueting, bars, beauty spa and
sophisticated restaurants. These types of organisations are differentiated according to the quality
and service (Moutinho and Vargas-Sanchez, 2018). The firms residing in the industry is
extremely affected by the goodwill and the brand image it has in the market. The industry
consists of luxury hotel chains, which also includes in the five star hotels, country houses, trendy
boutiques, guesthouses, leisure and adventure sports and places for conferences.
The tourism industry is associated with providing the tourists with economic, social, and cultural
phenomenon that allows them to travel from one place to another, which is different from the
usual environment they reside in. The concept of the hotel and tourism industry was started when
people started travelling from one place to another for businesses or for pilgrimage. This industry
has been so popular in the modern world that it has been the prime businesses of several
countries around the world and is the main source to the GDP of those countries. The global
hotel industry is currently expanding and the retail value has reached US$500 billion in the year
2018. The total revenue of the industry has nearly reached $200 billion and is going to be one of
the largest customers’ sectarian in the coming years (Page, 2014). This industry is nearly
providing to the 10% of the global GDP if associated with the food and beverage sector,
otherwise it has provided to nearly 6% to the GDP of the world.
Background to Hotel Company
Crowne Plaza Hotels and Resorts is a multinational hospitality chain that provides the customers
with upscale hotel and restaurants, especially to the customers travelling for business or for
meeting the conventional markets. The headquarters of this multinational chain is in Denham,
United Kingdom, and currently this group of hotels operate in more than 410 locations all over
the world, in more than 100 countries, providing more than 3600 hotels and 118000 bedrooms.
The Crowne Plaza London Docklands provide the customers with a contemporary and unique

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Hotel experience, which provides a good view of the Royal Victoria Dock and is located in a
walking distance from the Excel Exhibition Centre. It is also situated very near to the city of
London and Canary Wharf, the London Airport, the O2 and the Tower of London. It provides
customers with a variety of amenities, which includes high-speed internet, fitness centre, bar and
lounge, taxi service, business centre, pool, and parking on site (Crowne Plaza London –
Docklands, 2019).
SWOT analysis of Crowne Plaza Hotel in Royal Victoria Dock
(Please refer to 10.2 in the appendix for added information)
The Crowne Plaza London Docklands is one of the largest hotels in that area and has good brand
recognition among the customers. The company has a very good brand image in the market and
the company is located in a very good area, which provides easy access to all of the city and the
different tourist locations nearby. According to Raj and Griffin (2015), the company has been
striving for a long time to provide customers with the best experiences and has succeeded in
providing the same. The company is making enough upgradation so that they can make the
experiencees better and provide the customers with the finest quality services at all times
(Crowne Plaza London – Docklands, 2019). The company has been awarded the five stars and
currently it is looking forward to expand the business area and provide better accommodations to
the public.
There are several things that the Crowne Plaza can improve upon and some of the mistakes that
it has is in the overall strategies for marketing and for the betterment of experiences within. One
of the major weaknesses of the Crowne Plaza is that the products and services offered by the
company is not diversified and therefore, there are several gaps which results in a small product
range. Van der Ze and Vanneste (2015) argued that this is why there is a lack of choices for the
customers and so the competitors in the market can have a better foothold, evidently reducing the
competitive advantage. Moreover, the companies have a problem with high inventory when it is
compared to the competitors and the company utilizes a lot of capital on the same, which is
useless and affects the profits of the company. A lot of capital is invested in the channel and thus,
this affects the growth a lot.

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Mason (2015) stated that the company has not been able to integrate different work cultures,
which has become a problem for the company in the modern world. There is also a lag between
the financial planning of the company and it is noticed that it is not done properly and efficiently,
resulting in decreased profits (Crowne Plaza London – Docklands, 2019). It is also becoming
harder for the company to manage the increasing entrants in the market, the company is feeling
high attrition rate in force work, and hence, it has to spend a lot of money in training and
development as compared to the competitors.
Currently, the demand of the customers are changing however, the changes in consumer
behaviour has been helpful for the company to increase the sales and profits in the current market
(Crowne Plaza London – Docklands, 2019). The company can easily build up diversified product
categories and build revenue streams that can help to excel in the current market. The core
competencies of the company can be successful. The company has been focusing on using the
online channel and it can attract several customers easily from the same.
It can be an opportunity for the company if it invests properly on the online channels and
increase sales, which can become an advantage to associate with the customers and serve them in
a better way. It can also use the big data analytics to forecast the demand beforehand and provide
them with what the consumers’ need, which will evidently increase the sales for the company
and the profits as a result (Medlik, 2016). The taxation policies introduced by the government
can be beneficial for the company to carry on business and allow it to establish themselves in
different parts of the country to increase the profitability. The easy flow of technologies can also
help the company to practice differential pricing strategies so that it can maintain a loyal base of
customers and attract more customers with value-oriented propositions. Finally, reduced inflation
rate in the country is bringing more stability in the market, and consequently, the company can
provide the customers with lower credit rate than before.
The increasing raw materials can act as a threat for the company as it can hamper the profits
extensively, and the company will have to reduce the same immediately. The government has
also introduced different liability laws and the company is exposed to the same. Thus, it has to
change the policies in different markets so that it is not fined because of its operations (Gretzel et
al., 2015). There is also a threat against counterfeit and low quality products in the market, which
can affect the final product. The company is also facing a problem because of the increasing
trend associated with isolationism and this can be negatively affecting international sales as well.

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Finally, the company can face problems with different lawsuits in different markets as these are
continuously fluctuating, which can affect the product standard and evidently the brand image of
the company.
Background to emerging markets
With the rapid development in the economy of the countries, he markets are also emerging
swiftly. The hospitality industry is growing with these rapid changes in the economy. With the
increasing consumption power the customers the hospitality industry is consistently raising. The
tourism and hospitality industry is a very vast industry in Italy. In recent years, the tourism
industry in Italy has seen its peak as the demand for the tourism industry in Italy is high
comparatively (Kandampully et al., 2015). It is found that the emerging markets are leading to
the high demand for the tourism and hospitality industry. Europe is one of the most favorite
destinations for tourists from all over the world, and hospitality industry contributes a large share
in the GDP of the country. The hotel industry is also keeping its position as one of the leading
positions in the global market. The hospitality market in this country is emerging with a rapid
speed. There are many destinations in Italy which always keep its position in the top favorite
destinations from all over the world. Similarly, the hotel industry in Italy is also appreciated for
leading positions. The companies in this industry do investment in order to make certain
innovations for the growth of this industry in the emerging market.
During the recent years it has been seen that the hospitality industry in Italy is reaching its peak
as it is showing amazing growth after the big investments. The turnover rate in the sales in t5his
market is also growing with the innovations (Kim et al., 2015). The hospitality industry in Italy
has made many remarkable innovations for attracting new customers such as by renovating and
providing innovative measures to the hotels it is attracting more number of customers towards
their business. The luxury houses have been sold in order to develop the chain of international
hotels. Rome has recently started developing luxury hotels for the customers which is also
becoming the tourist attraction in this country. With the innovation of all these hospitality and
tourism market in Italy is growing in a large extent. The latest trends in the marketing industry
create a great impact in the growth of the hospitality sector and the tourism sector in the Italian
market. Hospitality industry is becoming one of the most emerging markets in the country.

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PEST of selected emerging market
In order to expand their business in Italy, the service organisation Crowne Plaza Hotel is
analysing the pest analysis over the country. During the analysis it is found that, the political
factors such as Brexit has affected the business of the hospitality industry in this country. Due to
the occurrence of Brexit, there were great turmoil and tension in the whole of Europe leading the
decline in the growth rate of the hospitality industry (Vasant, 2016). In that case, if crowne plaza
wants t6o expand their business to that location it can also face the consequences in this country.
After analysing the economical factors of the country it is found that Italy has one of the richest
economies in the world. Because of the increasing tax rates and low tariff rates the hospitality
industry can be negatively affected. In the developing economy in this country the service
organisation can expect profitability in this country. The economical condition of the country
gives the customers the high consumption power which leads the organisation towards growth
perspectives.
Italy is possessed with great values, and has secured its rank as the 6th most valued country in
the world (Shabanova et al.,2015). Italy is a country of fantasies and is known as the premium
brand hub of the world. The people are more inclined towards the brands and are conscious
towards the famous brands. In that case, it has made a great impact on the rise of hotel brands.
The company Crowne plaza if expanded their business in Italy can expect to have huge
responses as it is a foreign brand. People will get attracted towards it. There is a large division in
the populations of the country where it will be a bit difficult for the industry to understand the
requirements of every group. The urban population in Italy belongs to the business class where
they have high consumption power in the market. During the analysis in the Italian market, it is
found that advanced technology also plays a major role in the market of hospitality industry.
Italy is known for its innovation and advancement in different fields which includes the
technological advancement.
The technology is evolving and taking the lead towards the emerging marketing scenario.
Technological advancement has always been an influencer for the market of hospitality industry.
It helps in easing the process in the hotels which will help the organisation in innovating
(Barbara et al.,2017). The hotel industries are using the recognition technology for attracting
more number of customers towards their business; this is helpful for sustaining in the

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competitive market as most of the hotels are not aware of this technology. The customers get
attracted towards the organisation which is technologically updated; in that case this helps in
providing customer satisfaction that will lead them towards profitability of the organisation. In
that case, the service organisation can expand their business to Italy as the technological
advancement of this country will help them to flourish in the hospitality market and more
innovations to achieve the main objectives of the firm. With the help of this PEST analysis the
organisation can grow their business in Italy and have a profitable business in this country. With
the help of this analysis the company will contribute in the emerging market of the country.
Hotel strategy to be adopted and to be implemented
Porter’s generic and intensive growth strategies for Crowne Plaza London Docklands
The Generic Strategies for Crowne Plaza London Docklands is associated with the Michael
Porter's model for generic strategies, which will help the company to develop the business even
within the extreme competition in the market. There are three strategies within the model and
this includes differentiation, cost leadership and focus (Benavides-Chicón and Ortega, 2014).
This can also be subdivided into two, which are the categories that include differentiation focus
and cost focus. These strategies can help the company to have a better competitive advantage
over the market and the four intensive strategies will allow the company to have increased sales
and a good consumer base.
Generic Strategies:
The primary generic strategy that the company would be focusing on its cost leadership as it has
overhead costs that decreases the profitability to a huge extent and the company would not want
the same while operating in a new market like Italy. This type of generic strategy is generally
used by large organisations so that they can increase the profitability and develop the services to
the customers (Inkson and Minnaert, 2018). The company will also be trying to differentiate the
products and services, increase the product range, and attract a larger base of customers. The
company will also be trying to introduce promotional campaigns so that it can increase
popularity in the new market and therefore, cost leadership benefits are extremely important as it
can help to have the larger numbers of consumers, increased sales and company recognition.

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Ansoff’s Matrix:
Market penetration: The company will be using this strategy to introduce themselves into the
new market and attract as many customers as they can as fast as possible. This can not only help
the company to increase the sales, but would also help in increasing brand recognition in the new
market. That is why the company will be focusing on introducing promotional campaigns and
providing the customers with affordable prices (Lew, 2014). It will also provide seasonal
discounts and all the activities will be focused on increasing sales and productivity in the new
market.
Market Development: It is an essential strategy for the company as it is going to introduce itself
into the market of Italy. The company will be providing the customers with similar quality
products but at lower prices. The company will also be using a different marketing and
promotional technique so that it can help in the growth and grab leadership position in the hotel
industry of Italy.
Product Development: The company will also introduce this strategy as it can help to increase
diversification of the product range not only in the hotel segment but also in the food and
beverage sector. This can allow the company to increase revenue and sales while maintaining a
large product portfolio. It will provide the customers with customizable options as well (Ryan,
2015).
Diversification: The company will be providing the customers with an option for local travel,
food and fine dining, and thus, this can help the company be to be more profitable in the new
markets (Prebensen et al., 2018). It will also focus on differentiating the products from the
competitors and will venture the introduction of healthy standard of living of the people.
Nykiel’s fourteen strategies
Horizontal
Expansion
The company will be expanding with multiple services and will be
providing the customers with hospitality as well as food and beverage
services

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Geographic
Expansion
The company will be going on to a new country, which is Italy and
therefore, the geographical location is quite greater
Product
Hybridization
The company will be expanding the range of products and services to
enter the new market of Italy and attract a large base of customers
Specialisation-
Specialist
It will be specialising in using different pricing policies so that it can
enter the market hassle-free and increase profits.
Product Tiering The company will try to deal with forces associated with economic,
demographic, growth and population changes and therefore, they will
segment customers according to their requirements
Product Re-
Branding
The company will be re-branding the products and associate with the
proliferation of the services to enter the new market of Italy. They will
be suited according to the needs of the local, national and transnational
demand
Non- Franchising The company will be keeping control of their own services by entering
into the new market of Italy
Franchising The company will be following a highly developed and competitive
business strategy to attract customers in the new market, however, no
franchising policies will be developed
Brand Collection The company will be benefited from limited stock for the purchase of
branded functions which can help the company to achieve in the new
market
Management
Contracts
The company will be introducing consultants and competent employees
to manage the activities and the quality provided by the company

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Vertical and
Horizontal
Integration
The company will be associated with multiple segments in the
hospitality industry so that it can have a competitive advantage and
emerge into the new market of Italy
Singleness It will have complete control of a sole service that will be developed and
the managers will be taking control of the same in a new market of Italy
Value Related
Products and
Service
The company will be introducing new commodities to satisfy the
customers and this will be developed according to the needs, value and
trends in the current market
Global Positioning The company will be associated with high levels of risk, diverse
strategies and investment to enter into the new market of Italy
Table 1: Nykiel’s fourteen strategies
(Source: Bunakov et al., 2015)
Justification and practical application of strategy
The company wants to establish itself in Italy as well as become one of the key players in the
market. The company wants to be valuable to the customers all around the world, especially in
the market of Italy and the United Kingdom so that it can increase the comparative advantage
and deal with the problems faced in the hotel industry within these countries. Mariani et al.,
(2014) states that the Ansoff strategies for the company will allow itself to have a strong position
in the global market, especially in Italy, and will allow the company to introduce innovation,
which will help it to develop the products and services and diversify them. Therefore, the
company can provide a competitive premium price to the customer while reducing the overhead
costs, and similarly, the company can increase the competitive advantage and help in the
business growth.
Smith (2014) argued that the cost leadership could be a very effective strategy for the company
as it can increase popularity in the new market while allowing the company to increase market
share as well. It is evident that customers always wants to pay less for good quality services and

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therefore, it is important for the company to provide the customers with prices less than the
competitive market while providing them with good quality service. Kotler et al., (2017) argued
that this can not only increase the attraction of customers belonging to high class, but will also
attract customers from the middle class as well. Therefore, it is important for the company to
follow a low premium pricing policy in the new market so that it becomes easy for the company
to attract customers by providing them with affordable commodities.
The market penetration strategy can help the company to attract a large number of customers in
the new market and will allow brand recognition to increase the consumer base. Providing the
customers with affordable prices will not only increase the recommendation but will attract
people from all over the world (Dolnicar and Ring, 2014). Italy is a very prominent place for
hotels and food industry and this can be beneficial for the company to operate in such a market.
Promotional techniques can allow the company in increased brand image and competitive
advantage in the new market. Product development and diversification will allow the company
to be profitable while increasing its operations in other parts of the country.
Conclusion
The above study has provided a good understanding of the concept of international hospitality
management and it has shown the impact of globalisation on strategic hospitality management
especially in the market of United Kingdom. Different contemporary and traditional management
approaches has been used in the study to allow a company to expand itself to another country
and be profitable in that area. It has also shown and evaluation of contemporary issues in the
hospitality management, and the concept of change management within hospitality industries
have been shown in detail. Other factors like global trend analysis, international marketing, and
branding have also been shown in the study.