Developing a Strategic Plan: Analysis of Sheraton's Hospitality

This report provides a comprehensive analysis of Sheraton's hospitality business strategy, utilizing frameworks such as PESTEL, VRIO, and Porter's Five Forces to evaluate the macro and micro environmental factors influencing the organization. The PESTEL analysis examines political, economic, social, technological, environmental, and legal factors, highlighting the impact of COVID-19 and political changes on Sheraton's operations. The VRIO analysis assesses Sheraton's internal resources and capabilities, while Porter's Five Forces model evaluates the competitive forces within the hospitality market. The report also includes stakeholder analysis to understand the influence and interest of various stakeholders. Furthermore, it proposes strategic directions and objectives for Sheraton to improve its competitive edge and market position, emphasizing innovation and customer satisfaction. The ultimate goal is to develop a strategic management plan with tangible and tactical priorities for Sheraton's success in the global hospitality industry, with the aim of expanding the company's market share and achieving annual growth.

Hospitality Business
Strategy

Contents
Contents...........................................................................................................................................2
INTRODUCTION...........................................................................................................................1
MAIN BODY..................................................................................................................................1
P1. Application of appropriate framework, analysation of impact and influence of macro
environment on a hospitality organisation and its strategies.......................................................1
M1. Critical analysation of hospitality of macro environment to determine and inform strategic
management decisions.................................................................................................................4
D1 Critique and interpret information and data applying environmental and competitive
analysis to produce a set of valid strategic directions, objectives and tactical actions for a
hospitality organisation................................................................................................................5
P2. Analyse internal environment and capability of hospitality organisation using appropriate
framework....................................................................................................................................5
M2. Critical evaluation of internal environment to assess strategy and weakness of internal
structure, skills set and capability of organisation.......................................................................8
P3. Application of Porter’s five forces model, evaluation of competitive forces of market
sector of hospitality organisation.................................................................................................9
M3. Devise appropriate strategy to improve competitive edge and market position based on
outcomes....................................................................................................................................11
P4. Application of range of theories, concept and model that interpret and devise strategies
planning for a hospitality organisation......................................................................................11
M4. Produce strategic management plan that has tangible as well as tactical strategic priorities
and objectives............................................................................................................................13
CONCLUSION..............................................................................................................................14
REFERENCES..............................................................................................................................15

INTRODUCTION
Business strategy can be defined as clear set of plan, goals and action that assist business to
understand different ways in which they can compete in specific market and also helps to serve
specific products and service (Ahmad, Bakar and Ahmad, 2018). Marriott is one of biggest hotel
chain which has numbers of hotel in different areas of business. It has different band under their
brand name like Ritz-carlton, Westin Hotel, Sheraton and others. This project report includes
study of Sheraton that is a hospitality organisation providing effective customers service to their
customer. This project report includes analysation of impact and influence of macron
environment factors in hospitality business. It asses internal environment and capability of
company. It evaluates and apply outcome through using porter’s five forces model in market
sector. Moreover, it applies theories, models and concepts that assist for understanding strategic
direction.
MAIN BODY
P1. Application of appropriate framework, analysation of impact and influence of macro
environment on a hospitality organisation and its strategies
PESTEL analysis:
It is a strategic framework that is used for purpose of evaluation of external environment
of business that create opportunity as well as threat for business. It consists different components
like political, legal, technological, social, environmental and other things. This framework is
used by managers of Sheraton that assist them for purpose of corporate planning and also for
finding out pros and cons of business safety. Sheraton is an organisation which is operating at
international level where they can face various challenges. In order to identify factors that cete
impact of business of Sheraton, managers can use PESTEL analysis which is mentioned below:
Political factor: It is a factors that includes rules and regulation of government that create
impact over business. It also includes action as well as policy of government that intervene
economy that create negative impact over operation of business. It includes different things like
tariffs, trade restrictions, bureaucracy and tax policy (Anning-Dorson and Nyamekye, 2020).
Sheraton is one of hotel which is providing their services at international level and due to which
they need to consider political factors as tit can create impact over business. For instance, due to
covid-19 government of many countries has put restriction over hospitality business that create
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problems for managers of Sheraton. Government also put restriction over travelling activities
that create huge loss for company. There is also a political change occur in UK that is also
creating impact for business as government has made changes in their rules and regulation.
Economic Factor: It is a factor that includes different aspects related to economy and different
areas that is creating impact over business. These economic areas are measured through central
bank as well as other agencies of government. It includes interest rate, inflation rate, economic
growth rate, unemployment rate, exchange rate and other things (Bratton and Watson, 2018).
Due to situation of covid-19, economy of many countries is facing recession that is creating
impact over business. As with recession, business is facing loss and firing their employees. It
increases unemployment rate in many countries that is creating threat for business of Sheraton. It
also results in decrease in purchasing power of people that do not allows people to spend money
on hospitality service. There is fluctuation in currency that is also creating impact over business
of tourism s value of one currency is different in another currency which create impact over
profit of company.
Social Factor: Social factors are another factor that is related to demographic, culture, norms
and belief of people of society. These social norms as well as other factors assist business for
understanding behaviour of consumer. It includes different factors like growth rate, culture
aspects, norms, perception, health consciousness, career attitude and other things. These factors
are considered by Sheraton in order to develop effective marketing message for consumer,
developing marketing strategies that create influence over customers (Cabral and Jabbour, 2020).
These factors assist managers of Sheraton for purpose of targeting consumers and also for
increasing appeal of products of potential buyers. Due to covid-19, there is changes occur in
consumer trends which is also consider by managers of Sheraton as there is increasing health
awareness among people due to which hotel needs to adopt all precautions and needs to maintain
extra cleanliness. It increases cost of company that results in reduction in profitability of
company.
Technological Factor: Technological factors are those factors that includes advancement
in technology that provide innovation in overall economy of a country. It is essential for business
to be update with latest trends in an industry that provide them opportunity for business. Detailed
analysis of technological environment is essential for business like Sheraton as it assist them to
adopt different trends related to technology in business and provide them opportunity for
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increasing profitability, improving efficiency of operation process. Managers of Sheraton can
adopt technology by adopting digital marketing. There are numbers of people using digital
technology and social media platform that allow company to connect with customers on these
platforms. Company can also adopt technology for other operation like by offering digital
method of payment that is for convenience of customers. These technology helps to avoid
physical contact that is important in today’s time as there is fear of spread of disease among
people.
Environmental Factor: It is a factor that is including ecological impact on business. Different
things like weather create one of factors that create changes in business plan. It consists different
factors like temperature, climate changes, weather condition, pollution, natural disasters and
other things. Important of this factor increase for Sheraton as there is increasing awareness
among people for environment (Cerchione and Bansal, 2020). There is also increase in initiatives
of business for corporate social responsibility. There are different types of norms made in
different countries for environment protection which is to be consider by managers of Sheraton
as it creates impact over survival of company in international business. There are also changes
occur in preference of people as they are not focusing on sustainability.
Legal Factor: Legal factors are another important factor that are includes laws and legislation of
government and legal authorities which is to be taken into account by business. It provides
guidance to business which they can do and which things they cannot do. There are different
factors included in this like licenses and permits, regulation of industry, laws of labour and
intellectual property (Cherapanukorn, 2019). All laws and legislation are to be consider by
managers of Sheraton that helps them to ensure smooth flow of operation in international
business. They are following all employees by ensuring safety of employees and also provoking
them sufficient wages that is more than minimum wages rate.
Stakeholder analysis:
It is one of analysis which is to be conducted by organisation while working on a project
in which they consider all interna and external people involve and affected with this project. It is
a process that identify people before beginning of any project that assist them for grouping,
influence, interest and participation in any project. Sheraton conduct this analysis to understand
which stakeholders can create impact over their business. Explanation of this analysis in context
of Sheraton is mentioned below:
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High power, high interest: This category includes those stakeholders who are most important
for business. It is essential for business to identify those stakeholders as they can prioritise them
and make them happy with progress of project. Shareholders and investor are included in this
category of Sheraton as they have high power as well as high interest in business. They are
taking high interest as their income is linked with business (D’Annunzio-Green, 2018). They are
also having high power who take make changes in business. So, managers of Sheraton are
considering this category as most important.
High power, low interest: It is another category that includes people who has high
influence over operation of company but they do not have much interest in project of company.
Sheraton is also giving importance to these stakeholder as they have power to create influence
over business but these are not taking interest. This category includes government who has high
power but not taking much interest.
Low power, low interest: In this, stakeholder who has low power to create impact over
business are included. These stakeholders also do not take much interest in business. It includes
customers as they are not taking much interest in business. A single individual, does not have
much over to create impact over business.
Low power, high interest: In this, those people are included to whom business are informing
and checking them to ensure that they are not facing any trouble in business (Demir, Díez-
Esteban and García-Gómez, 2019). This category includes employees as a single individual does
not creating impact over business but they are taking high interest in business as their salary is
related with business of Sheraton.
M1. Critical analysation of hospitality of macro environment to determine and inform strategic
management decisions
Sheraton is an organisation that is operating in international business where there is
increasing competition in global environment. In order to analyse macro environment, managers
are conducting PESTEL analysis that helps them to identify strength and weakness of business.
At time of analysation of legal, social, technological condition company. There are various
opportunity and strength that provide support to business. It is also providing benefits to business
in order to develop external values. Sheraton is one of organisation which has specialisation in
hospitality service and also make them unique in market. It is an organisation which is getting
high margin in market as it is offering luxury services to their customers and also their main
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focus is on enhancing experience of customers. It makes their financial condition is stronger in
compare to another organisation. There are some factors that is creating impact over company
like political changes, social norms and other things which can be cope up by company by
adopting effective strategies.
D1 Critique and interpret information and data applying environmental and competitive analysis
to produce a set of valid strategic directions, objectives and tactical actions for a hospitality
organisation
On basis of information and data collect, it is identified that different factor are creating
impact over business. In order to be more competitive in market, manager of Sheraton needs to
develop different objectives which are mentioned below:
Quantitative objectives
 To expand market share of company with 15% in the upcoming 5 month.
 To get annual growth in market with 10%.
 To be a market leader in hospitality industry in next 3 years.
Qualitative objectives
 To adopt innovation in business in order to improve performance of business and also to
enhance satisfaction of customers.
 To make improvement in operation process of company that helps them to improve
quality of products and service.
P2. Analyse internal environment and capability of hospitality organisation using appropriate
framework
VRIO analysis:
VRIO analysis can be described as analytical tool that is used by companies for purpose of
evaluation of resources of company that provide them competitive advantage. It includes
different factors like value, rareness, organisation and imitability (Kiefhaber, Pavlovich and
Spraul, 2020). It is a tool which is used by company for purpose of assessing skills, resources
and capability of people. There are different types of resources used by Sheraton including
financial, human resources, patent and technology resources. Explanation of this tool in context
of Sheraton is mentioned below:
Value: Value of a resource is related to particular needs that is contributing to products and
service and capability provided by company. These are most expensive resources for company
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and is creating values for organisation. Sheraton has various valuable resources which are
mentioned below:
 Human resources: Sheraton has valuable human resources which has different set of
skills and capability creating opportunity for business. It allows business to take
competitive advantage in market as their employees working with dedication.
Financial Resources: Sheraton has valuable financial resources as they have various sources
from where they can access to funds. A business requires funds for different activities that is
from day-to-day work to purchase of assets (Li and Singal, 2019).
 Patent: It is another valuable resource possessed by Sheraton which allow them to
protect their innovation. It is important in order to differentiate services of company from
those of other marketing players existed in market.
 Technology: It is another valuable resource of company that is required by an
organisation. It is important for purpose of getting competitive advantage in market that
allow business to differentiate their products and service.
Rareness: Rare resources are those resources which are not available to other organisation and
cannot be access by other company. Sheraton has various rare resources which are only available
to them and cannot be possess by more organisation. Explanation of these resources in context of
Sheraton is mentioned below:
Financial: Sheraton has rare financial resources which provide them sufficient funds for purpose
of operation of business. It is important for them in order to operate business and also allow them
for expand business in effective manner (Menicucci, 2018).
 Patent: Patent rights of Sheraton are rare which is important for them that provide them
right to protect prevent other from using their technology.
 Technology: Sheraton has rate technological resources that allow them to complete work
with efficiency and also provide competitive advantage to business. This technology
allow business to follow trends of market.
Imitability: Imitable resources are those resources which cannot be copied by others. It provides
competitive advantage to business as there is no substitute available in market. It provides
advatage to business as their resources cannot be imitable.
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 Patent: Patent rights of Sheraton are imitable which does not allow competitors to copy
their products and service. It allows company to get opportunity in business on basis of
their unique products and service.
 Technology: Technology posses by Sheraton are imitable that helps them t provide
services to customers in effective manner. It is essential for purpose of attracting more
and more customers towards their organisation.
Organisation: It is important for an organisation to have organised resources that create benefits
to them. In order to get benefit for resources of company, it is essential for organised resources in
a structural manner (Reilly, 2018). Sheraton has organised technology resources that provide
them benefits and attract more and more customers towards them.
Value Chain:
Value chain can be described as business model that is using different types of activities require
to develop a product. This analysis helps company to bring products from conception to
distribution. It incudes two types of activities that includes support and primary activities.
Primary activities: It includes those activities that is creating values for business and also create
competitive advantage for business. Explanation of these activities in context of Sheraton is
mentioned below:
Inbound logistics: It includes different types of activities like managing, receiving and
warehousing different types of inventories. Sheraton is one of organisation that is managing
inventory like towel, soap, body shower and other things (Ribeiro, Vasconcelos and Rocha,
2019).
Operations: It is a procedure that assist for converting raw material into finished products and
service. Sheraton is a service organisation in which they are providing rest to their customers that
enhance their experience.
Outbound logistics: It is including activities that assist business to distribute final products and
service to consumers. Sheraton is distributing their service in both online and offline platforms as
consumer can book rooms from their phones or can visit to hospitality organisation.
Marketing and sales: It consist different types of strategies of company that allow company to
increase awareness of their products and service. It is including different types of activities like
pricing, promotion and advertising. Sheraton is using different method of digital marketing like
social medial marketing, search engine optimisation.
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Service: These are activities that are conducted for purpose of increasing satisfaction of
customers and enhance their experience. It includes customer review, room service, laundry
service and other things.
Support activities: Support activities are those activities which helps business for providing
support to primary activities and also make them more efficient. Increasing efficiency of
supporting activities are ultimately benefit primary activities of business. It is creating overhead
cost of business and explanation of it is mentioned below:
Procurement: It is a process that is related to way of company to obtain raw material. Sheraton
is obtaining raw material through purchase of different types of inventories required to provide
hospitality services to customers (Roma, Panniello and Nigro, 2019).
Technological development: It is another activity that is used in research and development of
firm like designing and developing manufacturing techniques as well as automating of process.
Sheraton is using technology for purpose of booking room of hotel, payment method and other
things.
Human resource management: It is a process that assist for purpose of hiring as well as
retaining employees who are fulfilling business strategies and also helps them for designing
marketing and sell of products and service. Sheraton is managing employees in a way that
provide them sufficient number of employee or operation process and also motivate them for
contributing with dedication (Sabourin, 2021).
Infrastructure: It is an activity that is including systems of company and composition of
management team like finance, quality control, planning and accounting. Sheraton has well
managed infrastructure that helps them for managing business in effective manner.
M2. Critical evaluation of internal environment to assess strategy and weakness of internal
structure, skills set and capability of organisation
In order to assess internal environment of company, managers of Sheraton can use SWOT
analysis that allow them to identify strength, opportunity, weakness and threat faced by firm in
environment.
Strength Weakness
 Sheraton is an organisation which has
around 400 hotels in worldwide that
increase reach of it (Sheraton SWOT
 It is difficult for an organisation to
adopt innovation as it can be easily
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Analysis, Competitors & USP, 2018).
 It has global present as it is providing
their products and service in
international business.
 It has developed vairones effective
campaign of marketing that allow them
to increase awareness of their products
and service in market. It also helps
them to attract mor and more customers
towards them.
copied by competitors.
 Focus of Sheraton is on expansion of
their products and service instead of
price consciousness in developed
market.
Opportunity Threat
 There is scope for Sheraton to expand
their business in luxury products and
service.
 In developing market, high possibility
for growth of hospitality business.
 There is increasing competition in
business that create pressure on
Sheraton as it impacts on their
profitability and market share.
 It is important for business to reinvest
on customer service as profit in
hospitality industry is depended on
customers service of business.
P3. Application of Porter’s five forces model, evaluation of competitive forces of market sector
of hospitality organisation
Porters five forces model:
It is a model that was introduced by Michel E. Porter in the year 1980 that helps firm to analyse
its competitive strategy. This model was used for purpose of identification and analysation of
competitive forces that provide shape to industry and also assist for determine strength and
weakness of industry (Sánchez-Franco, Navarro-García and Rondán-Cataluña, 2019). It includes
five main forces that is used for identifying structure of industry and assist for development of
corporate strategy. Sheraton is one of organisation that is operating in international environment
where there are various players providing their products and service. In order to overcome of this
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competition factors, firm needs to analyse competition in market. Explanation of these factors in
context of Sheraton is mentioned below:
Competition in industry: Competition is one of important factors that is present in an industry
that reduce ability of company to compete with competitors. There are number of competitors
who are offering same product and service that recue power of company to compete. Sheraton is
providing their products and service in hospitality industry where there are many marketing
players present in market (Senbeto and Hon, 2020). There is increasing competition in market
that create force on company to drive their prices down. It also reduces profitability level of
company and create threat for success of company. Therefore, Sheraton is facing increase threat
of competition in market.
Threat of new entrants: A company can also get affected with threat of new entrants
that is creating problem for business. New entrants enter in market with cost effective
technology, offering various discounts to customers in order to attract large customer base. If a
competitor requires less time, money and cost to enter in a industry, it will create impact over
existing company. Sheraton is providing their products and service in hospitality industry and in
order to compete with this type organisation, new firm require huge funds. It is difficult for new
company to gather such resources for purpose of carry out business. So, Sheraton is facing less
threat from this factor in market.
Threat of substitute products: Substitute products are those products which can be used in
place of products of company. If an organisation which has numbers of substitute, they need to
reduce prices but firm with no close substitute are not able to increase prices of products.
Sheraton has various substitute available in market that create threat for their business. It reduces
power of company to raise prices but this organisation is differentiating their products and
service by adopting innovation (SHARMA and SRIVASTAVA, 2020). They are also become
more service oriented in compare to product oriented. They are also focusing on understanding
needs of consumers which allow them to produce products as per requirement of consumers.
Power of supplier: It is factors that includes power of supplier for driving up of process
of material provided by them. This factor is affected with numbers of supplier present in market
and uniqueness of their products and cost of company to switch to another supplier in market. If
there are only few suppliers present in market, then company need to depend on these suppliers
for inputs that increase their power. But if there are numbers of supplier present in market, it
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