Business Health Check Report: IHG Group Analysis and Recommendations

This report presents a business health check analysis of InterContinental Hotels Group (IHG). It begins by outlining the company's objectives, both short-term (customer satisfaction, skilled staff, marketing strategies) and long-term (increased profitability, global expansion, cost reduction). The report then employs PESTLE, Porter's Five Forces, and SWOT analyses to assess the external and internal factors impacting the business. The PESTLE analysis examines political, economic, social, technological, legal, and environmental factors. The Porter's Five Forces analysis assesses the competitive landscape, while the SWOT analysis identifies strengths, weaknesses, opportunities, and threats. Finally, the report explores potential improvements using Ansoff's Growth Matrix, including market penetration, market development, product development, and diversification strategies, offering insights into how IHG can achieve its long-term objectives and improve its overall business health. The report also touches on the current skills of management and staff and plans for their development.

Business Health Check

Table of Contents
INTRODUCTION...........................................................................................................................3
TASK 1............................................................................................................................................3
1.1: Analyse the objectives of the business.................................................................................3
1.2: Factors that impact on the business......................................................................................4
1.3: Potential improvements to the business organisation..........................................................7
D1. Contribution of Ansoff’s Growth Matrix in the improvement of Merlin Entertainments
Plc:...............................................................................................................................................8
TASK 2............................................................................................................................................9
2.1: Review the effectiveness of the business.............................................................................9
2.2: Develop plans to improve the business, justifying their value..........................................10
M2. Evaluation of how effectiveness of business can contribute to the organisational growth.
...................................................................................................................................................11
D2. Evaluation of development plan which can lead to the improvement in business.............11
TASK 3..........................................................................................................................................11
3.1: Evaluate the current skills of management and staff.........................................................11
3.2 Plan for developing management and staff skills...............................................................13
M3. Analyse of current experience, skills and abilities of management and staff...................14
D3. Various methods that can be used to develop the skills of management and staff............15
CONLUSION ...............................................................................................................................15
REFERENCES .............................................................................................................................16

INTRODUCTION
In business world, it is very much essential for the management to maintain a healthy and
safe working environment so that work can be managed and controlled in appropriate manner. It
aid in creating a clarity among operation and activity that support in accepting changes in
hospitality industry (Bargiela-Chiappini, Nickerson and Planken, 2013). Business health check is
related with developing an authentic and suitable working environment so that business
operation and process are done in profitable. In order to better develop the knowledge about
business health check IHG group is selected. It is one of the leading British Multinational
Hospitality Company that is located in England. It have around, 842749 guest room and 5656
hotels in around 100 countries.
The entire report have three important parts, First is related with defining the focuses,
objective, factors of business that have a major impact on operation. Second Task is related with
developing a business plan that review the effectiveness of important activities and third task is
related with that define the actual skills of manager and other staff member that help to deal
different happing of business.
TASK 1
1.1: Analyse the objectives of the business
Overview of company:
Inter Continental Hotels Group PLC is a British organization that runs its business as a
multinational hospitality company with its headquarters in Buckinghamshire, England since
2003 (origins trace back 1777). The company has 5,656 hotels across 100 countries (august,
2018). It also include several other brand names with it such as six senses, crown plaza, EVEN
hotels, holiday inn, holiday inn express etc. Continuous business health check provides
suggestion for working 'in' the business with working 'on' the business to selected company. For
that purpose, the organization has decided some short-term objectives as well as long-term
objectives. These objectives are:
Short-term objectives: Maximum customer satisfaction is the first priority of hospitality
industry. To build a meaningful customer relationship, the company listens its customer needs
and requirements.

Hospitality industry required a high level of technical skills to perform its business
which is only possible with the suitable skilled staff. In order to provide better experience to its
customers, the company has decided to hire and retain the talented and experienced employees.
In order to increase its sales and attract new customers, chosen organization adopts new
marketing skills and technologies. Developing new sales and marketing strategies is a short term
objective for the organization (Cosh, Fu and Hughes, 2012).
Managing its day to day activities is also a short term goal for the company so that it can
operate business effectively. For fulfilling this purpose, the firm needs to improve better
understanding and communication among the various units and departments.
Developing new ideas and creative thoughts to attract the customers and co-ordinate the
groups working within the organization is also a short-term objective of Selected Hotel.
Long-term objectives:Increasing its productivity and profitability is the biggest long term
objective for every industry and organization. IHG Group is collecting its 13% revenue from
food and beverage sector. Selected organization's long term goal is to enhance demand of food
and beverage by enhancing its quality and range.
The Company is also planning to increase its profitability by enhancing its business
globally. In order to achieve maximum profit and revenue, the organizations long term objective
is to reduce the housekeeping costs and utility bills costs.
Research and development is a necessary component to achieve the maximum
profitability objective. Increasing customer satisfaction with help of continuous research and
adopting developed technology is also a long term objective of the organization.
Providing best facilities, training and work environment to its employees in order to
maintain high professional attitude in its premises is necessary for the company so that costumers
may feel value of their money. For dominating the industry, achieving best service provider's tag
is added in its long term objectives by the firm.
1.2: Factors that impact on the business
There are so many techniques or tools are available for analysing the factors that can
affect internal and external environment of the organization in order to achieve its set objectives
(Di Foggia and Lazzarotti, 2014). The tools which is used to analyse performance and effective
business health, are:

PESTLE analysis: It is a technique that is used to understand external factors' impact on
the business. PASTLE analysis of Respective Hotel is discussed below:
P-Political Factors: Political factors include governmental policies, corruption level, risk
of military invasion, taxation policies, pricing regulations, etc. in a market or economy. These
factors affects the financial statement and may impact the revenue of the firm.
E-Economical Factors: Interest rates, foreign exchange rates, inflation rates, business
cycle periods, infrastructure quality of economy are the major factors covered by economical
factors. In order to enhance its business globally, IHG Group has to consider these factors so that
it may understand the requirements of the market.
S-Social Factors: Culture, attitude, thought process, skill set, education level, leisure
class and interests of population in an economy affects the environment in any organization. In
order to create customer base and increase the productivity, the company should collect all
information about these social factor of specific market.
T-Technological Factors: Global market is adapting new technologies very quickly. The
company have to comply with technical policies, technology adopting by competitors, cost of
adapting new technology, disposal of old technology and other technical factors so that it can
compete with changing trends and satisfy the customers.
L-Legal Factors: Legal factors are the rules, regulations, law and legislations which are
implied by the government to protect employees, customers and other local organizations in the
economy. IHG Group should carefully evaluate impacts of health and safety laws, employees'
welfare law, patent and copyrights, consumer laws, data safety laws and other laws before
entering in any market to avoid legal conflicts.
E-Environmental Factors: In context of respective Hotel they should analyse about
natural resources, climate, weather change, environmental laws, waste management policies,
pollution level and other seasonal changes so that it can evaluate and prepare its operational
activities in its favour (Dignum, 2013).
Porter's Five Forces Analysis: In order to understand the competitive power of IHG
Group in a particular market, porter's five forces analysis can help by analysing these factors:
Threats of new entrants: In respective company is a well known dominant organization
in hospitality sector. New entrants needs a lot of time to grow in the market because this sector

needs a huge investment and experience. Hence the threat from new entrants is very low for the
company.
Bargaining power of suppliers: Hospitality industry's major needs are skilled staff and
quality food, beverage and other products. There are limited suppliers available in the market to
provide experienced labour but supply of other products are satisfactory. It can measured that
bargaining power of suppliers is moderate for the firm.
Bargaining power of buyers: Today's customers are more updated and focused about the
products and services and can compare the facilities with one touch. There are so many other
companies providing same services in the market. The customers of IHG Hotel are in situation to
effect the bargaining power of the organization and reduce its profit margin.
Threat from substitute products: The organization provides a high professional services
to its customers but it costs higher than other competitive companies. There are so many
substitutes are available with the same quality within same range without any switching cost.
Hence the threats from substitute products are high in nature.
Rivalry among existing firms: There are so many firms exist in the market which are
giving a tough competition to With particular Hotel. These firms are providing quality services
within lower costs to attracting the customers but with more than 5000 hotels and 8000,000 guest
rooms and other brands, the company is still on higher position. Rivalry with existing firms can
be defined as moderate for the organization (Edwards and Hulme, 2014).
SWOT Analysis: With the help of SWOT analysis, or4ganization is able to find out its
strengths, weaknesses, opportunities and threats within the competitive market. SWOT analysis
for Inter Continental Hotels Group PLC is as under:
Strengths Weaknesses
 The company has a wide global
presence
 The company acquires other branded
hotels within it.
 Selected company's information
security system is very weak.
 The organization has lost its prestige
worldwide.
Opportunities Threats
 The firm can increase its sales by using
technology facilitated booking.
 Shortage of skilled workforce is a big
threat for the organization.

 Low inflation rates may provide more
stability in the market.
 New liability laws and environmental
laws can cause a reduction in profit of
the firm.
1.3: Potential improvements to the business organisation
Ansoff's Growth Matrix: Hence the organization has an long term objective to increase
its products and marketplace globally, it has a lot of opportunities ans possibilities of
improvements in its business. Ansoff's growth matrix is a strategic tool which is introduced by
Igor Ansoff, can provide help in assessment of new possibilities in existing market as well as
new market. This model divides the possibilities in four categories which are:
Market Penetration: In this section, selected firm has the option to grow its existing
products and services in existing market (Fletcher and Williams, 2013). The organization tries to
update its current services in order to increase its market share. Market share can be increased by
attracting new customers, reducing the costs and advertising sale promotions. This option
provides the safest growth possibility with least risk.
Market Development: Market development strategy allows the company to expand its
business in other markets, countries or economies. Respected firm can increase marketplace with
existing or slightly moderate products and services. This may be possible by providing services
to different customer groups, regions of the country and foreign markets. This strategy may be
adopted with unique technology, least differences within new market and increased output. This
approach increases risk of the business.

Product Development: As the name suggests, this approach focuses on introduction of
new products or development of the products within the existing marketplace. This strategy
prefers investment i9n research and development, purchasing copyrights and joint branding with
other companies. This option is also riskier than market penetration (Hitt, Ireland and Hoskisson,
2012).
Diversification: This growth strategy is deemed riskiest among all the possibilities. The
company tries to introduce new products and services in new markets. This strategy includes
huge investment on the development of products as well as understanding of new economy.
However, it can be highly rewarding activity if the strategies are implemented effectively.
Diversification can be divided into two parts which are related and unrelated diversification.
Related diversification is where company started to provide new products and services which are
related to existing business which is hospitality while unrelated diversification is that where
company provides products which are not related to its industry like the company starts to
manufacture furnitures and interiors.
D1. Contribution of Ansoff’s Growth Matrix in the improvement of Merlin Entertainments Plc:
By Implementing Ansoff’s Matrix, Inter continental Hotel Group are able to modify its
centre business procedure that aid to gain objective. Manager can make use of any one from four
strategies for improving the working of various business activity. Such as respective company
make use of diversification scheme that support to offer new product in new market and increase
profitability.

TASK 2
2.1: Review the effectiveness of the business.
Business effectiveness: It is defined as a degree of effectiveness by which business
objectives are achieved and problems are solved. This is a capability of producing desired result
or the ability to produce desired output. It means doing the right thing. The measurement can be
done by analysing customer satisfaction, financial performance and the activities of an
organisation (Meier and et.al., 2013). This ensures proper management, long term planning,
coordination with environment, distribution of goods & services and determining uncertain risk.
Inter continental hotel group measures business effectiveness by the response of it's products &
services offered, profit generated and schemes provided etc. IHG incudes maintenance of rooms,
providing spa and massage. They can estimate the growth by key performance indicators,
benchmarking or financial governance.
Products & services: It offer facilities like bedroom, wash room, valet parking, buffet,
fitness centre, lounging area, internet, in-room dining, swimming pool and spa sessions etc.
These can be measured effectively by filling up feedback forms, post review rating given by the
customer, social media monitoring or food quality. IHG can improve it's amenities by training
staff, providing personalized consumer service, motivating the employees by providing them
incentives or updating the technology.
Marketing: It involves website development, maintaining the loyal customers by
offering them perks like an year's membership with a service booklet, attending the client
personally and running ad campaigns etc. This requires giving advertisement in newspaper,
magazine and posting on social media. It can also make pamphlets to attract the consumer. These
can be measured effectively by easy availability online, targeting the right audience, allocating
more budget during peak seasons, marketing the location as well or making the website look
attractive etc. IHG can improve it's retail by quick response to online bookings, being active on
the media, post updated high quality pictures or record videos with client response etc.
Sales: These are responsible for bringing and entertaining guests, selling hotel services
such as dining option coupons, exercise room facility, food and bar products (Pettigrew, 2014). It
aims to generate high revenue by offering amenities to each customer according to their
bookings. They can effectively measure the growth by offering better price than competitors,

making the guest feel at home or by keeping the staff happy. To understand consumer needs and
increase revenue, investment in better quality software should be done. The hotel can improve
it's sale by offering online discount on reservations, provide 2 for 1 meal coupons, promote mid-
week weddings or tempt the customers to stay for a longer period by organising a hotel party etc.
Finances: The main aim of a hotel industry is to obtain finance for running it's business
operations. It can be availed by various sources like shareholders, bank loans or crowdfunding
etc. For this financial planning is required so that expenses are in control of the hotel. This
includes focus on the payroll cost, ensure that there are no outstanding liabilities and organising
fund raising campaigns to measure the effectiveness of activities. IHG can improve it's finances
by understanding the trend of demand and supply factors.
Staffing: It is a technique which requires reporting of staff either to top or bottom level
management. They act as a supervisor for the employees that help in their overall development.
In planning the effective measurement of a hotel, staff performance should be evaluated on a
monthly basis. For better results, IHG can provide perks to the people working there which will
motivate them to function productively (Velasquez and Hester, 2013). It can be improved by
organising workshops like personality development, designing and decorating the products used
etc.
Business image: It plays a very important role in any industry. Goodwill can increase the
value of a business. This can make an organisation stand out in front of it's competitors.
Business image depends on the level of customer satisfaction, quality of product and service
offered and website response etc. IHG can improve it's reputation by treating the customers
kindly, giving them attention, solving their issues immediately. This will result in good publicity
that can change the reputation.
Record keeping: This involves maintaining record of all income, expenses, customers
and inventory. It can be effectively measured by keeping separate register for client details,
stock, inflows and outflows of cash. This should also be put in computer software. IHG can
improve this by keeping a track of all the activities happening in hotel and installing cameras
around (Piotrowicz and Cuthbertson, 2012).
2.2: Develop plans to improve the business, justifying their value.

Business planning: It is defined as a process which plans and performs the operations of
a business. This determines objectives, strategies and actions taken by the management to
develop a business plan. It focuses on making profits and dealing with uncertain risks that might
negatively impact an entity. This acts as a very important tool for the entrepreneurs in achieving
both short and long term targets. For good execution, clear description of product or service is
necessary as well as gaining information about the market participants. To develop a proposal,
marketing of it's goods and services should be done effectively. Offering hotel amenities to
customers, selling their products must be considered to generate funds for operations. There will
requirement of financial management to control the finances of an organisation. Appropriate
staff should be placed in every department for better result. IHG should also maintain good
contact with it's customers which will provide greater satisfaction (Proctor, 2014).
Area Target Recourse required/
Actions
Duration
Product & Services  Staff Training
 Providing
Personalized
Consumer Service
 Motivation to
employees
Conduct pre and post
employment
compulsory training
sessions at regular
interval.
6 month
Marketing  Online bookings
system
 Increase in
activeness on
Social media
 Increase in content
quality in
advertisement
Setup of separate unit
for regular and
responsible social
media updates. Also
outsource or in source
of booking portal.
3 month
Sales  Effective selling
strategy
 Attractive
discounts and
packages
Formulate strategy for
sales as per customer
segmentation.
6 month
Finance Reduce dependent on
borrowings
Attack new investment
by proposing a
effective business
plan. Maintain
contingent reserves.
One year
Staffing Enhance staff
performance
Reward policy and
incentives programs.
4 month