Strategic Analysis: IHG's Market Entry Strategy in Latvia, Semester 1

This report provides a detailed analysis of InterContinental Hotel Group's (IHG) strategy for expanding into emerging markets, with a specific focus on Latvia. It begins by outlining the background of the hospitality industry and IHG, followed by a SWOT analysis to assess the company's internal strengths and weaknesses, as well as external opportunities and threats. The report then examines the characteristics of emerging markets and conducts a PESTLE analysis of Latvia to evaluate the political, economic, social, technological, legal, and environmental factors that could impact IHG's business. Based on this analysis, a suitable hotel strategy for the Latvian market is proposed and justified, along with practical applications. The report concludes by summarizing the key findings and recommendations for IHG's successful entry into the Latvian market. Desklib is a valuable resource for students, offering access to past papers and solved assignments to aid in their studies.

International
Hospitality
management
Assessment

Table of Contents
INTRODUCTION ..........................................................................................................................3
MAIN BODY...................................................................................................................................3
Background of the industry : ......................................................................................................3
Background of IHG : ..................................................................................................................3
Swot analysis of IHG: ...............................................................................................................4
Background of emerging market : ..............................................................................................5
Pestle analysis of selected emerging market: .............................................................................6
Hotel strategy to be implemented within the emerging market. ...............................................8
Justification of chosen strategy : ..............................................................................................11
Practical application of selected strategy. ................................................................................11
CONCLUSION .............................................................................................................................12
REFERENCES..............................................................................................................................13

INTRODUCTION
Hospitality is one of the global industries also it focus to deliver an experience that
makes memories. The industry is complex and multi disciplinary, innovative and agile. This
helps to have opportunity to illustrate a critical awareness and understanding of the main
functional areas of industry of hospitality management with a particulars focus on the hotel
sector and management process with in a variety of various contexts (Smit, and Melissen,
2018.). Improving the essential technical, interpersonal skills and eduction to make an effective
contribution to an industry as a team manager of middle management. The aim of the company
is to empower with a competitive benefits and other benefits for company. In this report the
consider company is Intercontinental Hotel which is UK based company . The company is
palnning to expand the business in new place where they can have the good rate of profits. In
this report will cover the background of company. After that it will analyse the pestle and swot
analysis of the company.
MAIN BODY
Background of the industry :
Hospitality and touristy industry is a multidisciplinary intention of making people with t he
profession , seriousness and skills for direction marketing and transaction positions in the
expanding industry that provides food, adjustment, and touristy employment away from home
(Porcu, del and et.,al., 2019). It builds on wide range of ba sic subject to give the central
education and acquisition that are needful to execute the divers condition on the customer needs.
The industry provides the opportunity to the employees to develop their own skills and other
improvement. The main aim of the company is to make a memorable experience for guests. The
logo of the company which is red triangle it was the first style mark of the company certified in
1875. Juan tripe is a founding father of pan American airways launched the chain of American
intercontinental hotels in 1946 as a section of pan am and from Belle, Brazil it operates its first
hotel.

Background of IHG :
Intercontinental hotel is the hospitality industry which was founded in 1946 by Juan
tripe . Its headquarter is in Denham, UK. The company launched its first place in Middle east in
1961. the series become one of the first operate in east Europe. The hotels provides the luxury
services to the tourists and also they provides the accommodation to the guests. There are 180
properties in global country. The company has constructed new luxury at pan destination
around the global nations. In its hotel design, intercontinental aspired to combine American
luxury with decorative factors drawn from regional countries. The employees in hotels are
skilled and talented which serves a quality services to the people and guests. The company has
around 325,000 employees working across more than 100 nations to deliver true hospitality
services. The company provides the updated services and clean rooms along with superior food
with a focus on the most fascinating, high growth marketers and industry segments. The
strategy of asset light enable them to increase their concern while create high returns. Beyond
luxuriant places to cause any assemblage, team give a unlined company from start to finishing
and the know-how to make every gathering or event a prosperity. In addition, our Insider
Collection offers a range of representative education, which reflect the unique property of each
designate. company leverages local professionalism to the events so emissary semen departed
with a amended discriminating of all and their specify. The beauty of the hotel impresses the
people and guest to come again to stay in property ( Nowak, 2019).
Swot analysis of IHG:
It is the frame work that helps in analysing the internal factors that impact on the
business. The major aim of analysing internal factors is to determine the strategies that a
company can use to exploit external opportunity, counter threats and make on and protect
intercontinental hotel groups . Further discussion is elaborated in below table.
Strength
 Highly skilled employees by successful
training and learning events
intercontinental hotels group is
investing high resources in training and
improvement of its workers which
leads in workforce which leads in
Weaknesses
 The industry is required to invest more
amount in new technologies. Provided
the scale of expansion and various
geographic the company is planning to
expand into intercontinental hotels
required to put more capital in

professionalism and get motivated to
attain company goals.
 Brilliant execution in new market for
intercontinental hotel has constructed
professionalism at emerging markets
and making success of them. The
expansion has assisted the company to
make new income and diversify the
economic uncertainty in the markets it
operates in.
technology to integrate the process
across the global reach.
 Intercontinental hotels group has a
weaknesses in its geographical
concentration. The brand positioning is
the lacking in global country. I
comparison of the competitor the
company is not well recognised in
global country. The hotel is not good at
demand forecasting hence close up with
keeping high inventory.
Opportunity
 Investing in new technology can
provides an opportunity to
intercontinental hotel groups the
company practices to differentiated
pricing policy in the new market . It
will enable the company to manage its
loyal base of customers with great
services and new customers by other
values oriented statement.
 Expanding business in new market due
to governing agreement the
implementation of new technology
benchmarks and governing free trade
agreement has provided hotel an
opportunity to move in a new market.
Threat
 Changing behaviour of the consumers
can be threat for industry as it tends to
the reduction of customer demands as
well as reduction in profits of industry.
 Liability laws in various nations are
varied and intercontinental hotels
groups might be open to different
obligation assertion provided change in
policies in those markets.
The positive points of the IHG boosts by their worldwide system and scale modify the
company to enact well in the other countries. With its intentional practices at capabilities its
business via processing its brand portfolio corroborated by mark assets. IHG ensures that it

payment from chance accessible in its organisation situation in spite of appreciable risks in the
abroad.
Background of rising market :
An rising market is the system of a improving country that is becoming more engaged
with global marketplace as it grows. Nations classified as rising market economics are those
with certain , but not all of the classification of a develop market. Classification of improved
markets might includes powerful economic growth high per capita income, liquid share market
and liability markets, availability by international investor and a dependable regulatory system.
As an emerging market economy develops, it complexly becomes more integrated with
emerging market economy. That states it can have raised liquidity in local debt and equity
markets, raised trade volume and international direct investment. It can improve modern
financial and regulatory institution ( Liu, and Jiang, 2020.). An emerging markets economy is
transmission from a low income, less improved often pre industrial economy towards a modern
industries economy with a high standard of living. These strategies includes export led growth
and import substituting commercialisation. The former policy is more complex of economics
that are included emerging since it promotes more engagement and trade with the worldwide
economy. It also consider greater risk component, yet, with visual percept for scenery for
internal ventures, authentic involvement among people and construction of content, upgrade
appreciation feature, motion of cordial reception based companies could be possible. Latvia is
reasoned as an future market for worldwide hotel sectors (Lee, Yoon, and Lee, , 2022.). It
execute favourably in measuring of press state, living modular, amity, internet state and hence
forth. It has authoritarian authorities, high income precocious economy, enlightened elite with
well settled concern. In this, number of people travel for business intent is increasing that excite
system towards bear down and growing aids in appoint fascinating tourist position.
Other rising market is Russia which serves breathless scopes for hotel industry. The market
has democratic government and more market supported economy. It provides better experience
via innovative technology to attract broad business in hotel industry. It ha s managed the urban
centres with resorts security destination. The typology of Russia gives ample scope with
alteration and developed instrument. With increment of welcome, there will be high number of
restaurants and socialize.

Pestle analysis of selected emerging market:
It is the framework that helps in analysing the external factors that impact on the
business and its surroundings. With the help of this theory business form an impression of
elements that may attracts business or market. In intercontinental hotels group managers uses
the strategic framework as wider facts searching practices. With this, director introduce
extrinsic component which effects decisions for moving into emerging market of Latvia. Via
knowing effects which externally factors which might impact on business, it becomes simple
for introduction to plan elaboration better. For Latvia explanation of factors of pestle synthesis is
listed in below :
 political factors – In this factors things are included just as degree of engagement of
governmental leaders in an industry or emergent market. It considers political stability,
tax policy, labor legal document and many others. In case of Latvia, governmental place
is rather firm. It is analysed that the emergent marketplace do not have any democrat
power growing as another European marketplace. When intercontinental hotel will move
into emerging market the institution will achieve chance to make dealings with cultural
units along with that holds local governing in the emerging market (Konovalova, and
et.,al., 2018.).
 Economic factors – This basically measures jointly with according by central banks
along with another governing agencies. It includes economical improvement designed,
state ratios, and many others. Efficiency of Latvia is small having free marketplace in
which communicator contributes some amount of GDP. Intercontinental hotel director
when devising plans to prosper in the rising markets that is Latvia they are needed to
view Accord on hospitality business.
 Social factors – These are connected with cultural improver to demographic trends refer
within the club. During strategy expansion in rising marketplace that is Latvia managers
of Intercontinental hotels groups are needed to see user behaviour, career attitudes,
health visibility and many others. It is analysed that grouping of Latvia includes the
diverse ethnic units comprising Belarusian, poles and many more. However, population
of market refers to travel trends that could be acts as chance for the company to reach
make demand for tourism.

 Technological factors - this means innovation along with improvement in application
component on the basis which effects on business operations. Change in infrastructure is
highly developed. Similarly the emerging market. In Latvia, technological structure is
hugely developed. At intercontinental hotels it is important for managers to considers
progress of markets to use cloud services along with that social media. Some mew
development just as organization acquisition, deep acquisition and thus,these can assist
the company to introduce place in the rising market that us Latvia.
 Legal factors - Modification to legislation and rules effecting occupation availability
for beginning, taxation and many others. Apart from laws and responsibility an
company spread out in rising market are needed to manage their own set of rules via
which force are foreseen to abide by. In Latvia, there are different kind of effective
process for legislations implement. Legal substructure, in the rising market applies ample
figure of taxes, open excise tax and many others.
 Environment factors - dimensions of surroundings factors are linked to impact of
surroundings addition to influence link to ecology. It prize biology activity, wastage,
energy activity and many others. Latvia has many atmosphere impurity interest for
water and air. In the rising marketplace, conveyance , element stuff for high air impurity.
To grow in Latvia intercontinental hotel groups requires to reach out working by
implementing working by implementing inaugural that can assist in reducing carbon
emission. The organization can launch water area and parks for help in earthy
surroundings (Karadimitriou, Kyriakaki, and Michopoulou, 2021.).
Hotel strategy to be implemented within the emerging market.
Porters generic :
This strategies is used for facing the rival challenges in market. It assist to finish in wide
marketplace and make the particular position. If fellowship want to grow the business as they
required with low cost with creative thoughts that makes institution varied from another. If
IHG hotel managers usage this strategies they can expand the marketplace in broad range.
Further discussed In below details .

 Cost leadership- this strategy is the devalued cost goods with creative thought that impact
the rivals activity as well as raise the ratio of users. If IHG uses this scheme by providing
the hotels suite with the good offers is influencing users and contend the marketplace.
 Differentiation – this is basically means is different. In this factor the company give
various goods and work that influence the users . If IHG uses this strategy by providing
services and creative functions from another that raise the income of company and
challenge the another market.
 Cost focus : This scheme is utilised in lower market due in that marketplace company
can simply advance and dispense the goods. If IHG hotel utilise this scheme they can
easily produce the income of organization and prosper the enterprise simply.
Ansoff Matrix :
It is a instrument used by company to analyze the scheme for approaching growth. It aids
the executives, seniors subordinates ans marketers for approaching maturation. Intercontinental
hotel is a transnational hotel that usage this framework for the upcoming development. The
instrument of Ansoff matrix is listed in below :
 Market development : It is holding an active goods in new market that designs the
goods in broad range of marketplace. IHG is the multinational company which have 1173
active hotels and 214000 accommodations and suite which is presented in global
country by the market improvement scheme. After using this strategies company
reputation is design in all market and galore grouping knowing regarding that.
 Product development. In this implement, fellowship launches the fresh great in present
market. it is hazardous for the fellowship to create a infinite in activity. If IHG has
launched fresh ideas in marketplace, then industry will promote easy and citizenry
cognizant regarding the brand name due to the new goods (Horng, and Hsu, 2020.).
 Market penetration : It is the growth of existing goods in active market by the aim of
raising the sales of services as well as growing the commodity marketplace. IF IHG
institution use this tool the marketplace enlargement if company can e heighten.
 Diversification : It is the introduction of new goods in new market. This instrument
required many researchers and judgment of market, users behavior, system
argumentation and many others. If IHG uses this plans which required so much

investigation and analysis for their fresh goods in new marketplace. That makes issues
along with profits for institution.
Nykiel fourteen hotel strategies development :
This model handles growth strategies that can be used by a project for assessing growth
opportunities . Ownership involvements within hotels are devised for stimulating revenue. With
theory of Nykiel strategic growth model, managers of intercontinental hotels groups can assist in
raising total belief of hotels. It also helps in rebranding along with direction of long term
prospectus of the company. Listed in below report with its scheme by considering
intercontinental hotel.
 Horizontal expansion : By exploitation the strategy director of IHG will make practices
to attempt expansion from an individuals goods and services line to some other for
illustration from building to theme parks or resorts to eating house.
 Geographical expansion : Using this scheme, managers of IHG will achieve growing
from relative midget areas to broad areas object with the goal of moving in new
marketplace.
 Product hybridization : IF IHG utilise this approach the scope of merchandise is design in
divers scope of employment which combines and matches.
 Specialization specialist : If IHG managers uses this practices they will attain new
expertise for upmarket growth evaluation and services gives in respect to move in new
market place.
 product tiring : In this strategy, company director can deal with factors of people growth,
economical relation as well as sociology factors jointly with developing market partition
enlargement in new location.
 Product re stigmatization : Through this scheme IHG could grow its work to enter in new
marketplace.
 Non franchising : In this factor of theory the manager of IHG can have wants to make
management on their employment and choice of activity to challenge in new market.
 Franchising : Through using this, IHG managing director will follow high structured to
improve the building in new industry.

 Trade aggregation : Via theory director of the industry seeks to have benefits of relatively
circumscribed assets to buy features of trade name which are produced to provide factors
of growth.
 Administration contracts : By this scheme intercontinental hotel groups would achieve
professionalism to negociate hotel for moving in new markets (Campione, 2021.).
 Vertical and horizontal integration : Utilisation of the scheme will assist IHG to get a
portion of different hotel segments along with range to attain competitor borders by
creating essential investing in some business factors to move in new marketplace.
 Singleness : In this, IHG cab improve specific services that have complete possession
and give satisfaction to enlarge in bran-new marketplace.
 value related merchandise and employment : using the strategies, IHG may actuation
new services to give gratification of particular values among users to move in new
market.
 Worldwide aligning : In this intercontinental hotel groups can grow marketplace globally
by including cardinal motive of involvement , scheme and steady on the basis of hazard
for moving in new marketplace.
Explanation of chosen strategy :
Subordinates of intercontinental hotels groups could implement market improvement
plan of action from Ansoff matrix keeping to object through institution to establish its services
to mark gathering that they have not carried or not so far offering presently. It is due to the
strategy assist in determining as well as improvement of new market segment for present unities
or w offers. With this policies management of the hotel are capable to grow income.
Organisational maturation along with addition new base of users. When the strategy is with
success execute for intercontinental then it offers competing benefits for company. The
scheme is more appropriate for intercontinental hospitality by creating fresh marketplace of
Latvia. In instance, an institution will be in the geographical area as grow on millennia or
business people.
Functional petition of selected scheme.
Through implementing market evolution scheme of Ansoff matrix, it is assumed that
intercontinental hotel groups will achieve strong position in future five to ten years in front.

Implementing the strategy, intercontinental hotel group would efficaciously deal with new users
section of Latvia, grow gross gross sales bulk by exploitation new mode to utility employment
or goods as well as expanding in totally new market. The entity is able to develop its market
capability and sustain rivalry in complex business condition. It can also develop its income
generation system and brand value among non buyers (Bataoui, 2022).
.
CONCLUSION
According to the above discussion, which analysed that their are different alteration
knowledgeable within hotel management at global platform. Swot analysis advantages a
business to analyse world of concern amended, capitalize on chance, evolve concern policies,
determine threat and carry out practices for company in order to addressing issues and lacking
points. Pestle analysis of rising market motivates direction of venture to devise strategical
deliberation. For moving into new market, hotel required to implement effective strategies from
appropriate theory.

REFERENCES
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