Strategic Management & Business Growth: M&A Hotel UK Expansion

This report outlines a strategic plan for M&A, a Saudi Arabian hotel, to expand its business into the United Kingdom. It details a five-step strategic management process including goal setting, external (PESTLE) and internal (SWOT) analysis, strategy formulation (differentiation), strategy implementation (marketing and workforce allocation), and evaluation and control. The report suggests a concentration strategy focusing on market penetration and development, with a backup plan of horizontal integration. It also applies the BCG matrix for resource allocation across different business units, prioritizing investments in areas with high market growth potential. The ultimate conclusion emphasizes the importance of strategic management for successful market expansion, highlighting how tools and analysis can be used to effectively formulate and implement strategies.

Running head: BUSINESS MANAGEMENT AND STRATEGIC MANAGEMENT
Business Management and Strategic Management
Name of the student
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Author note

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Executive Summary
The report had taken an imaginary company in the hotel industry named M&A. M&A is
looking to expand their business into United Kingdom and the report had developed goals,
evaluated the external and internal factors to formulate and implement strategies suitable for
making an expansion into the foreign market. The report had derived relevant conclusion
about the ideal expansion strategy to be used and the justification for it.

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Table of Contents
Introduction................................................................................................................................3
Part 1..........................................................................................................................................3
Nature and background..........................................................................................................3
Five step strategic management plan.....................................................................................3
Addressing right strategy.......................................................................................................6
Part 2..........................................................................................................................................6
Strategic growth plan.............................................................................................................6
BCG matrix and managing business in respect to market share............................................9
Conclusion................................................................................................................................10
References................................................................................................................................11

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Introduction
The report has taken an imaginary company in the hotel industry named M&A. M&A
is looking to expand their business into United Kingdom and the report will develop goals,
evaluate the external and internal factors to formulate and implement strategies suitable for
making an expansion into the foreign market.
Part 1
Nature and background
M&A is one of the largest business hotels in Saudi Arabia which is known for its
quality of service and décor. This is a boutique hotel consisting of almost 100 rooms in the
poshest areas in Saudi. It is one of the most stylish hotels in the country with added amenities
and facilities. The architectural design gives the hotel a unique upscale vibe and segregates
M&A from other hotels in the industry.
Five step strategic management plan
The five stages of the strategic management plan are goal setting, external and
internal analysis, strategy formulation, strategy implementation and evaluation and control
(Hill, Jones & Schilling, 2014).
Goal setting
The firm wishes to offer the best quality service to their target consumers at
affordable prices and as well as gain sustainability and profit according to the goals set by the
stakeholders. M&A has set some objectives for the next five years and they are as follows:

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 To expand their business to United Kingdom and other European countries
 To gain long term sustainability in the market
 To develop a unique position in the market
Situational analysis
External analysis(PESTLE)
Political and Legal United Kingdom is politically stable but BREXIT has caused some
instability in the market. There is free trade in the market which has
weakened the entry barriers
Economic The economy is strong but growth has weakened due to BREXIT. The
inflation rate of the economy is high which may cause hindrance.
Social and environment The society has high disposable income and standard of living. The
organization can take advantage of this factor to develop premium
consumer base in the market. Migration of the population from
different countries will facilitate in gathering cheap labour.
Technological Technologically the country is superior and have made immense
technological progress. This would enable the organization to develop
innovative processes to improve their service quality and operations
(Table 1: Aithal, 2016)
Internal analysis (SWOT)

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Strength Unique selling propositions, quality of service, Operational excellence
Weaknesses Lack of marketing, weak image of the brand compared to the
competitors in the market
Opportunities Strategic alliance, expansion capabilities, improvement in promotion
Threat Threat of industry giants
(Table 2: Moutinho & Vargas-Sanchez, 2018)
Strategy formulation
The company will use differentiation strategy to offer products and service with high
value. The company will target the premium consumers both business executives and tourists.
Strategy implementation
The workforce will be provided specific job roles where they will be divided into
different teams that will implement strategy based on the organizational requirements. M&A
will use aggressive marketing strategy to increase the brand awareness and provide discounts
to consumers during mid-week to increase the occupancy rate.
Evaluation and control
The plan will be monitored and evaluated ion a regular basis to identify the success of
the strategy. The deviation from the original strategy will be amended to keep the new
strategy right on track.

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Addressing right strategy
The external and the internal factors of the organization will be evaluated thoroughly
which will include pestle analysis, porter’s five forces and swot. This will facilitate in
identifying the different threats, opportunities, strengths and weaknesses of the company in
the operating environment. The strategy for market expansion can be effectively developed
based on the external and internal analysis.
Part 2
Strategic growth plan
The strategic growth plan will use concentration strategy where the organization will
focus on only single industry and operate within it to gain competitive advantage. The
organization can become one of the dominant player in the market by using this strategy. The
concentration strategy consists of three aspects such as market penetration, product
development and market development (Kobayashi, 2018). These aspects can be effectively
used to develop a strong position in the market and capture a considerable amount of share in
the market. The company will use market penetration and market development to increase
their share in the market.
The firm will try to increase their market share using their existing services and
products. This will consist of using aggressive promotional strategy where both traditional
and digital marketing medium will be used. The traditional marketing medium will include
billboards and posters in business areas and premium locations (Ward, 2016). This will
attract the attention of large number of consumers with the country and these billboards will
also be used outside train stations and Airports to attract tourists. The organization will also

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form partnership with travel companies so that they can gain access to new clients and get
recommended clients. The digital marketing will consist of promoting the organization on
social media websites and interacting with the consumers to identify their needs and wants.
The organization will also search engine optimization, email marketing and search engine
marketing to grab the attention of the online clients. The organization will develop an
application which will provide the clients with information regarding the schemes, discounts
and benefits which the organization is providing to their clients.
The organization will also use the market development strategy to enter new markets
in the United Kingdom to compete with major companies in the hotel industry. The trend of
boutique hotels in United Kingdom and elegant look of the hotels and the services could
provide competitive advantage as it portrays a different cultural aspect that the western
companies. Therefore, the organization will aim to portray their own culture, living habits
and cuisines to the customers to create a differentiated market (Black, Schifferes & Rossiter,
2017). The product and services offered by the company will be unique when compared to
the other organizations in the industry. Therefore, the organization will offer value for
money to the consumers and they will aim to create a perception that services offered by the
organization have added value of highest quality within them.
The hotel will be a luxury hotel serving only to the premium clients having high
disposable income and will use economies of scale to reduce their cost of operations so that
they can increase their profit margin. Often it is seen that business strategies do not work they
are suppose to do and with the increase in unpredictability in the consumer needs the above
strategies may not provide fruitful results to the organization. Therefore, the organization will

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have to keep a backup strategy in case the first-choice strategy does not work out. M&A will
use horizontal integration to form partnership with other famous boutique hotels (Nel, 2016).
This will provide them better opportunity of sustainability and they will have a ready set of
existing consumers in the new market. This is a defensive strategy in case the market
fluctuations and entry barriers become too problematic for the company to invest more into
their expansion. This will enable them to access new distribution channels and suppliers that
would offer products and services at lower prices due to their partnership with the local
company.
This is the most suitable strategic plan for the company as they have something new
to offer in the United Kingdom in terms of their décor and design. Moreover, the organization
has strong operations which will enable them to sustain in such highly competitive
environment. However, the backup strategy would be used as a safe side if the organizations
prime strategy fails.

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BCG matrix and managing business in respect to market share
(Figure 1: Shanbhag, Dutt & Bagwe, 2016.)
The Bostin consulting matrix is a method of resource allocation to the products
offered by a company. The organization will have to identify their revenue generation of all
the business units of the hotel. In their domestic market, the company is the market leader so
it will require less revenue than the new foreign expansion (Shanbhag, Dutt and Bagwe
2016). The revenue generation of the company will have to identified in United Kingdom
depending upon the market growth rate. The market growth in the hotel industry is high and
initially the company is expected to fall in the question mark region. Therefore, if we
consider that 40 units of capital has been allocated to all the units under the company, then
the hotel franchise lying in the question mark region will get the majority of the investment.

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The hotel falling in dog region will have least investment as the market growth for that
product has become saturated and there are no growth opportunities for the organization.
Cash cow represents the hotel with maximum market share but the growth rate is low so the
investment will be low in this segment due to less growth opportunity and it is the market
leader in this segment. The hotel in the star region will have high investments as it is the
market leader and the growth in the market is also high. Therefore, the division in investment
will be like this:
Star (15) Question Mark (15)
Cash Cow (5) Dog (5)
This shows maximum resources will be invested on sectors and hotels having
potential market growth.
Conclusion
The report has been able to depict the importance of business strategy in market
expansion and how the different tools can be used to formulate and implement strategies
effectively. M&A can effectively expand in United Kingdom if they use concentration
strategy and the conclusion drawn from the report is that strategic management is a key for
the success of the company.

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References
Aithal, P.S. (2016). Study on ABCD analysis technique for business models, business
strategies, operating concepts & business systems. Browser Download This Paper.
Black, P., Schifferes, J. & Rossiter, W. (2017). Refreshing the D2N2 Strategic Economic
Plan: the case for inclusive growth.
Hill, C.W., Jones, G.R. & Schilling, M.A. (2014). Strategic management: theory: an
integrated approach. Cengage Learning.
Kobayashi, R. (2018). Financial Advisory Services: Business Analysis and Strategic Growth
Plan (Doctoral dissertation, California State University, Northridge).
Moutinho, L. & Vargas-Sanchez, A. eds. (2018). Strategic Management in Tourism, CABI
Tourism Texts. Cabi.
Nel, H.J. (2016). Alignment between the strategic performance plans of selected Eastern
Cape Provincial Government Departments and the Provincial Growth and
Development Plan 2004-2014, South Africa.
Shanbhag, M., Dutt, M.L. & Bagwe, S. (2016). Strategic Talent Management: A Conceptual
Analysis of BCG Model. Imperial Journal of Interdisciplinary Research, 2(7).
Ward, J. (2016). Keeping the family business healthy: How to plan for continuing growth,
profitability, and family leadership. Springer.