Unit 41: Hospitality Business Strategy Report - Fairmont Hotel

This report examines the business strategy of Fairmont Hotels and Resorts, a luxury hotel chain. It begins by analyzing the impact of the micro-environment on the organization, utilizing PESTLE analysis to assess political, economic, social, technological, environmental, and legal factors. The report then evaluates Fairmont's internal environment using SWOT analysis to identify strengths, weaknesses, opportunities, and threats. Additionally, the VRIO framework is applied to assess the value, rareness, imitability, and organization of Fairmont's resources. The report further employs Porter's Five Forces model to analyze the competitive landscape, including the bargaining power of suppliers and buyers, the threat of new entrants and substitutes, and competitive rivalry. Finally, the report explores strategic planning frameworks relevant to the enterprise, providing a comprehensive overview of Fairmont's strategic approach to the hospitality industry.

Unit 41 - Hospitality
Business Strategy
Table of Contents
INTRODUCTION.................................................................................................................................3

TASK 1.................................................................................................................................................3
P1 Impact of micro environment and its strategies on organization.................................................3
TASK 2.................................................................................................................................................4
P2 Evaluation of internal environment of given organisation............................................................4
TASK 3.................................................................................................................................................6
P3 Use Porter Five force model in relevance with given organisation...............................................6
TASK 4.................................................................................................................................................7
P4 Use frameworks for strategic planning with enterprise...............................................................7
CONCLUSION.....................................................................................................................................9
REFERENCES....................................................................................................................................10
Books & Journal:..............................................................................................................................10

INTRODUCTION
Business strategy is crucial for organisation as it helps them to achieve goals and
objectives in proper manner. It is wider and broader concept which is used by firms in most
suitable manner. Fairmont Hotel and Resorts which is luxurious 5 star hotel which is
headquartered in Canada. They provide quality of services and hospitality to their guest and
consumers. This report includes SWOT and PESTEL Analysis, Porter Five Force Model,
concepts and theories. To survive in market, they use the business strategy in most effective
manner so that everything is done in proper way.
TASK 1
P1 Impact of micro environment and its strategies on organization
Business organizations are run within the environment they are directly affected with environment as
they are building up of environment factors. Business environment can be defined as the combination
and agreement of all the events, conditions and influences which surround and directly affect business
organization. Blake’s is one of the most popular 5 Star hotel of London and it is famous for its interior
design luxury services and providing royal series to their customers. This organization is also directly
affect by its micro environment effects of micro environment can be explain by using PESTLE
strategy.
PESTLE analysis
It is a tool of strategic management policies which is used by manages for their environment
scanning procedure. Management department of Blake’s hotel use this technique for identify the
impact of their micron environment factors.
Political factors: it includes those factors which are related and affect by the political
policies, environment law, and labour law rules and regulation made for foreign trade. It
consists of those elements which related with the management of public affairs. Fairmont
hotel and resorts is situated within the London, organization directly affect with BREXIT
agreement as their most of labours belong from European Union countries thus their business
activity affect from this agreement. (Wulandari, 2019).
Economic factors: These factors include those elements which are directly related
with the means of production and distribution of wealth they are directly influence on
demand and supply of firm. Due to the BREXIT agreement the interest rate get higher and
their profitably rate goes down because before the agreement tourist can easily came in
London but now due to heavy tax duties the customers rate decrease. But government of
England provides loan at lower return. (Johnson, 2016).

Social factors: These factors consists those elements relationship of human beings culture of
organization, age, demographic factors. They directly influence the hospitably industries as many
tourist came room different regions to stay in hols they get satisfies when department of hotel and
their employees provide them full facilities and behave in earlier manner. It is important to focus on
social factors so that all decision making and correct measures are taken in the process.
Technological- These environment include elements of software as well as hardware. They
are used by hospitably sector organization to solve their problems and for securities and also for
promotion of their organization. Fairmont hotel and resorts use social media advanced software for
promotion of their hotel facilities to attract customers. But advance technology device is also the
cause of increase of cyber-crime in the hospitality industry.
Environmental: These includes elements which is related with the nature, geographical,
ecological factors, whether, climate conditions port faculties, air, water pollutions problems. Different
environment conditional need to change the marketing strategies thus it is environment factors affect
the business organization. It is essential for Fairmont Hotel and Resorts that they made policies which
is in favour of environment and do not use any irrelative chemise or material which dangers for
natural environment.
Legal- Every country follow their own constitutional law. Thus, ever organization needs to
follow rules and regulation foliage environment. It includes laws regarding wages, health and stay
measure prices and opportunities. In hospitably sector they have direct impact on the
productivity .Regarding with the Fairmont hotels, their manger department makes strategies within
which they follow all the rules and lag regulation. They also contract with their workforce in large
manner.
After a brief analysis of above matter, it is seen, that PESTEL Analysis is essential for
business so that all factors which have impact on firm progress and performance are
examined properly. Moreover, this also assists identifying the other problems related to
business (Holmes, 2018).
TASK 2
P2 Evaluation of internal environment of given organisation
Internal environment can be defined as the part of business environment which is
related with the elements exists within the business firm. They are controllable factors.
Internal environment also defines as micro environment. To evaluate the impact of internal
environment business organizations use SWOT analysis technique. SWOT is a part of
environment scanning technique through which business manager easily recognises their
strength, weakness of business organization. Following are the SWOT analysis of chosen
hotel (Ardley, 2019).

STRENGTH WEAKNESS
 Fairmont hotel and resorts have strong
brand image within the market economy.
 They have great strength of employers
who provides best services, thus this
hotel have a competitive advantages of
customers satisfaction.
 Fairmont hotel and resorts have strong
relation with politicians and famous
celebrities of all over the world they will
help in build good will within the market
place.
 Due to BREXIT agreement their
workforce has been resign from job as
they all belongs from European Union
countries.
 There is dispute within the organization
due to lack of management.
 Fairmont hotel and resorts depends on
foreign customers market and due to the
CORONA virus pandemic their future
sales will be decreases.
OPPORTUNITIES
 They have opportunity to enhance their
market area within the world economy by
using attractive social media platform.
 They increase their ales revenue by
offering attractive offers and strap up
new events in the hotel premises.
 Fairmont hotel and resorts have
opportunity to increase their revenue by
dealing with local personals’ they will
help in attractive customers and incising
their revenue rates.
THREAT
 At present time, Marriott, Black pool,
Hotel Western, many rival organization
build strong position in the market place,
they chase the market area of Fairmont.
 Due to the pandemic the rate of foreign
customers will be decreases it is also a
threat as their profitability rate goes
down.
 They need to pay customer duty and
heavy tax rate on purchasing raw
materials from European countries after
the implication of Brexit government
After examining the above paragraph, it is seen that it is also important to identify the
internal capability of enterprise so that strategies and tactics are implemented in properly.
Furthermore, going through the SWOT Analysis, it becomes easier to examine the
performance level of business in market. To conduct this tool, accurate information is
required by entity so that conflicts or problems do not arise in near future (Pan, 2019).
VRIO Analysis
Another way of analysing the internal capability of firm is the VRIO Analysis. In
marketing, there are many tools and it is responsibility of manager to selects that most
appropriate one. VRIO is defined as tool in which evaluation of resources is done and then
further process is carried out. In relevance with Fairmont hotel and resorts through this
analysis they will able to evaluate their resources in efficient way. It is time consuming
process but is used by many firms for effective utilisation. It includes several elements which
are discussed below-

Valuable- It states that at what degree the resource or product is valuable to for firm
and what value does it have in market. It is necessary to identify such resources so that
company use them in most efficient manner. In relation with Fairmont hotel & Resorts, their
most valuable resources are their employee. They maintain a positive relationship amongst
the subordinates so that perform in better way.
Rare- Then comes the rare element, which show that how rare and important are the
resources is because if the degree of resource is high then it will have more price in market. In
context to selected hotel, they have skilled and expertise staff and chefs which is profitable
for them. Also, when rareness of a resource is analysed it becomes easy for entity to
strengthen the base of corporation and management (Turkyilmaz, 2019).
Imitable- Further arise the intimacy which specifies up to what degree of resource
can be intimated by other brands or companies. It is crucial so that resources are used in such
a way that no other firm can use them or make copy of those resources. There are many firms
which duplicate the product and sell it into the market. In relevance with selected hotel, they
make ensures that no other employee at same time for other party.
Organised- At last is organised which depicts the company has well-structured
system and management or not. Through this, it becomes possible enterprise to achieve goals
and objectives in effective manner. Mostly, HR manager of company assures that work is
being carried out in appropriate way without any problem. An organised organisation is
always able to achieve the mission & objective within a period of time. Thus, Fairmont has a
well-managed and structured management which helps them to run their business smoothly.
Therefore, after going through the above matter, it is seen that bot VRIO as well as
SWOT Analysis are useful for business and are to be used after proper considering the all the
factors appropriately. Through, VRI0 entity is able to analyse their main resources which are
increases their profitability & sales revenue (Büyüközkan, 2019).
TASK 3
P3 Use Porter Five force model in relevance with given organisation
Market is wider and broader which shows the degree of competition which is high. It
also means that to deal with competitors and rivals new tactics are to be implemented so that
most suitable way. This also shows that new ideas and thoughts are also generated when such
tools are used by organisations. In relation with Fairmont Hotel and Resorts, they use Porter
Five Forces Model so that they take competitive advantage in market and run their business.
Porter Five Forces Model- It is a framework which is used by many organisations to
achieve competitive advantage. To implement it properly it is necessary to have knowledge
regarding the market, trends and about a particular field. It involves five force which are
explained below-

Bargaining power of suppliers- This force states that suppliers also do have
bargaining power and their wish to keep their power with motive of earning more profit and
sales revenue by providing buyer low quality of products. It is seen that mostly power is high
when there less numbers of buyers, resources is rare etc. In relevance with chosen hotel,
manager of firm make ensure that they management selects the most suitable vendors
because entities maintain relationship with them for longer period.
Bargaining power of buyers- Further comes the buyer, in which power depends upon
the several factors such as when there are fewer buyers and suppliers are many. Also, they
keep their power so that they get resources or products for their business at affordable prices.
In relevance with chosen hotel, their power is moderate so that they manage effective
relationship between the people. Aggressively making the power might cause a huge problem
for business and this is the reason they have moderate power (Bellver, 2019).
Threat of new entry- Many new organisations comes into market & which affects the
existing business of companies at depth. Mostly new entry is more where there are less
restrictions of government, few companies’ area present, need and demand of customer is
raising etc. New entry often disrupts the market environment which leads to switching
behaviour of customers. In context to Fairmont hotel and Resorts, they do not worries about
new entries as they have a goodwill in market and but as new and local streets restaurants are
taking place in Canada and providing quality of service at affordable prices it is reducing the
customer ratio of business. Thus, they need to be more aware about the market trends and
situation.
Competition rivalry- In business, competition is crucial for higher growth and
development. But sometimes, from the competition rivalry comes out which negatively
impact the business at deeper level. In relevance with selected hotel they also have
competitors such as Omni hotels, Hyatt, Ritz Carlton, and Loews Hotels etc. Degree of
competition is high which also generate more rivalries within the same sector. A main benefit
of competition rivalry is that it gives a huge contribution to the economy. Also, new strategies
& decision making is done so that everything is done appropriately. Manager of firm assures
that accurate and reliable information is present of competitors so that measures are adopted
accordingly (Cleberg, 2019).
Threat of substitutes- A product has numerous substitutes of a single product. Threat
of substitutes is more when customers switching behaviour is high and product cannot satisfy
their wants. In context to Fairmont hotel, mostly they also have threat of substitutes which
slows down their sales ad revenue.
Therefore, the above explained model states that to survive in this competitive era it is
important to use proper market research so that firm use their resources and sources in most
efficient way.

TASK 4
P4 Use frameworks for strategic planning with enterprise
A strategic planning plays vital role in business because it helps them to run their
business smoothly as well as effectively. Strategic planning is defined as method by which
firm manages and enhances their position and strength of business. With help of strategic
planning, it becomes easy for firms to make decision properly with correct measures. In this,
with new ideas & thoughts entity is able to carry out their activities properly. Therefore,
Fairmont use this after considering the marketing situations so that resources in used in
efficient way.
Mission- Main mission statement of Fairmont is to provide customers with quality of
products and service and to increase their market share growth.
Vision- Vision of firm is to access the global market with innovation and inventions.
Objectives-
To enhance the profit maximisation of company
To maintain a positive relationship between firm and customers
So, the above described plans are achieved through effectively using strategic
planning. To achieve them successfully, decision making is to be done in appropriate way so
that conflicts do not occur (Schawel, 2018).
Firms uses Ansoff matrix to implement a strategy in business which is marketing tool
and is used for implementation of strategies as well as tactics. In entity, with help of his
framework it becomes easy to decide which strategy is useful and beneficial for business.
Ansoff Matrix- A tool which is used by many enterprises to take the competitive
advantage through implementing new strategies in business. In this model, various strategies
are involved and which are given below-
Market development- This is a strategy in which existing product is being used in
new market. In this, it is mostly used when entity needs to extend their market line at wider
scale. Therefore, in relevance with Chosen Corporation they can use this strategy as this will
leads to attracting of more customers in market and it will also further generates more profit
to business (Loredana, 2016).
Product Development- This is strategy which depicts that in existing market, new
product is introduced. It is used when organisation wants to increase their product line at
larger level. Risk associated with this one is minimum because low resources and capital is

used during the process. In relation with chosen corporation, they can also opt for this as it
help in expanding business at rapid scale.
Market penetration- In this, existing market and existing products are involved
which also shows that it is the most safe strategy from the above discussed strategies. Risk
associated with this one very low. In relation with Fairmont hotels and resorts, they can use
this strategy so that it is able to provide total satisfaction to the customers and value of their
hotel remains active in market (Zhao, 2016).
Diversification- At last, in this strategy new market and new products are used. It is
most risky one as compared to others. It is used when company wants to expand their
business globally and widely. In this, more resources, capital, time is involved at large scale.
In relevance with selected firm, they need not have to go with this because it will disturb the
management and employees.
After examining the above paragraph, it is seen that making strategic planning is
essential for every organisation so that they mission as well as vision of company is achieved.
Moreover, proper research is to done before going with the strategies so that all problems do
not occur in near future (Moreno-Izquierdo, 2016).
CONCLUSION
From the above mentioned report, it has been analysed that it is necessary to make
effective strategy in order to achieve goal as well as objective of business organisation. In
addition to this, they make appropriate strategy in order to compete with its rival firm. In this
report, PESTEL Analysis is used for assessing external environmental factor which enforces
direct influences on productivity as well as profitability of company. In addition to this,
SWOT and VRIO Analysis is adopted for identifying internal capabilities and resources of
firm which is important to consider while making effective strategy which will useful in
taking decision for benefit of company. Apart from this, porter five force models are used for
gaining competitive advantage over rival firm at marketplace. At last, Ansoff matrix is
adopted by organisation for strategic direction in order to achieve growth in future period of
time. And also, they make objective, vision as well as strategies used by firm for attaining
goal and objective in stipulated period of time.

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