International Hospitality: IHG's Strategic Entry into Emerging Markets

This report provides a comprehensive analysis of Intercontinental Hotel Group's (IHG) strategy for entering emerging markets, focusing on its potential expansion into Bali, Indonesia. It begins with an introduction to IHG, its background, and its global presence within the hospitality sector. The report then conducts a SWOT analysis to evaluate IHG's strengths, weaknesses, opportunities, and threats, followed by a PESTEL analysis of Bali to assess the political, economic, social, technological, legal, and environmental factors influencing IHG's market entry. Furthermore, the report explores various hotel strategies that IHG could adopt and implement, utilizing strategic models and frameworks such as Porter's generic strategies, including cost leadership, differentiation, and focus. The justification for the chosen strategy is provided, along with practical applications, concluding with key considerations for IHG's successful expansion into the emerging market.

International
Hospitality
Management
Assessment

Contents
INTRODUCTION.......................................................................................................................................3
MAIN BODY..............................................................................................................................................3
Background to IHG.................................................................................................................................3
SWOT analysis of IHG............................................................................................................................4
Background to Emerging markets...........................................................................................................4
PESTEL of selected emerging market.....................................................................................................5
Hotel strategy to be adopt and to be implemented (using strategic model and frameworks) within the
entering market........................................................................................................................................7
Justification of strategy..........................................................................................................................11
CONCLUSION.........................................................................................................................................12
REFERENCES..........................................................................................................................................13

INTRODUCTION
International hospitality management is undertaken as the field that renders person to
travel and conduct in aboard into careers with aids of hospitality sector. Additionally, hospitality
management applied to several industries like tour, restaurants and other. Various employments
within hospitality render directions of hotels or resorts managerial activities. Essentially the
global hospitality industry is classified into three which are hotels, transportation and so o that
are also contributes to particular industry growth (Bowen and Morosan, 2018). As per the
provided case study the chosen firm is Intercontinental Hotel Group (IHG) which conducts their
operation within hospitality sector as well as formed in year 2003. Moreover, they concentrate
upon facilitating true hospitality to whole and become leader within particular sector. The topics
that are going to be covered in this report are SWOT analysis, background of emerging
marketplace, PESTLE analysis and hotel tactics to be adapted as well as executed. Additionally,
the justification associated with chosen strategy is also facilitated. Beside it, the practical
application of strategy is also described in this report.
MAIN BODY
Background to IHG
The Intercontinental Hotel Group (IHG) is also considered as one of the leading firm
across the world and its main purpose is to facilitate effectual hospitality by undertaking
acknowledging and recognising person and developing satisfaction to clients for all.
Additionally, this also renders premium hotels that attracts large number of clients and also
enjoyed by customers across the world. Moreover, this guarantees that their programmers
distribution often used to clients, environment and community across the world through their
international influences. Into global intense dynamic market areas, Intercontinental Hotel Group
(IHG) is also undertaken to form development of its main entity as long as optimise profit on
new strategy as others adding extra items to portfolio, retain Crown plaza hotels project
development within China and new posts in emerging economies like EMEAA , Bali and so on.
in addition to this, particular organisation have around 842, 749 bedrooms and 5656 hotels in

about 100 countries. Also, Intercontinental Hotel Group (IHG) performs their several brands like
Kimptom hotel, Holiday Inn and so on (Konovalova and et. al., 2018).
SWOT analysis of IHG
SWOT Analysis is undertaken as the essential tools which are used by Intercontinental
Hotel Group (IHG)’s executive to determine its current circumstances. Herein, its present market
atmosphere, it is helpful strategy to evaluates the current strengths, weaknesses, opportunities
and threats of particular firm. In addition to this, it also retains their influential market share by
diligent analysis and determination of SWOT analysis. Along with this, it is highly collaborative
method that includes efficacious collaboration among various entity areas of marketing,
information technology and many more (Njagi, Maingi and Musyoka, 2021)
Strengths:
Personnel: The firm have higher proficient personnel as it invest larger resource into
training & development of their staff as well as encourage them for attaining more effectively.
Weaknesses:
New technology: Entity desires to do effective investment within new technologies for
making quick functioning as well as to explore business into another nations.
Opportunities:
Competitive advantages: Development into market would drives towards minimisation
into competitor’s edge as well as allows InterContinental Hotel Group (IHG) for enhancing their
competitiveness in comparison to other competitors (Gupta, 2019).
Threats:
Consumer behaviour: Changing customer attitude from online channels would act as
threats to supply chain model which is physical framework of firm (Shneikat and Alrawadieh,
2019).

Background to Emerging markets
The emerging economies are transforming the faces of hospitality industry, not just in respect of
various places to explore and develop hospitality and also as possible future customer’s sources
market area. Additionally, the hospitality market area is board and renders several services to
customers depends upon their expectations. Along with this, it is also beneficial economies
implicitly as guest buy retailing products, workshops and so o into local manner. Moreover, the
tourism world stimulate infrastructure formation and transmit of mass. ‘Furthermore, in order to
explain the emergent of Intercontinental Hotel Group (IHG). Within developing countries, they
can expand their venture into Bali that is a part of Indonesia which includes about 0.3% of these
places. Additionally, Indonesia is considered as developing country whose development is small
in comparison to developed one. As country exists among Pacific ocean and India, several
economical, political and so on factors which influences can be determined on islands. in
addition to this, Indonesia initiated for promoting Bali as Island for international tourism, the
society is penetrating by modern influences and unfolding to modern industrialised society
(Büyüközkan, Mukul and Kongar, 2021).
PESTEL of selected emerging market
For defining the IHG emergence into developing countries, they may extend its business
within Bali along with the covers board surface. Indonesia is one of the developing nation which
development level is smaller as comparison to developed countries. the countries that exists
within Pacific and India, various distinct culture, religious and other aspects impacts may be
determined upon islands. Indonesia initiated to promote Bali as the island for global tourism; the
society is penetrating through modern trends as well as disclosing to advanced industrialised
society. For this, PESTLE analysis is undertaken that would impact IHG into new marketplace:
PESTEL Analysis
Pestle analysis
Pestel analysis is a strategic tool that assists an organisation to evaluate the impact of factors
favouring in business environment which is inclusive of political, economic, social,
technological, legal and environmental elements. With the help of this tools organisation can
develop strategies to overcome which prevailing in business environment and conduct business
operations in effective manner. Mentioned below pestle analysis of Intercontinental hotel group

is being conducted as respective organisation is looking forward to expand their business
operations in Bali, Indonesia.
Political
Intercontinental Group of hotels offer wide range of products and services to consumers with
exclusive quality. It has been identified from political environment of Bali, Indonesia that in this
government follow presidential and constitutional democratic system of government. Along with
it has been identified that respective country established friendly relationship with neighbouring
countries and perform business operations under a trading organisation like WTO. Furthermore,
has been identified that political system of country is stable which will significantly assist
Intercontinental Group of hotels to conduct their business services with trusted law enforcement.
Economic:
In order to expand business services Intercontinental group of hotels is required to effectively
analyse economic impact of country upon their business offerings. As the analysis of Bali,
Indonesia it has been identified that in this individual have efficient economic stability along
with it has been evaluated that government of country encourage foreign investors and private
enterprises and provide a significant environment. With the help of taking advantage of efficient
form of economy of country Intercontinental group of hotel can perform their business
operations in a well-defined and effective manner.
Social:
Social sector is mainly inclusive of values, believes, customs, tradition, demographic and
education level of community within a particular location. It has been identified that Indonesia is
world largest diverse country which encourages linguistic and abilities. With the help of this
Intercontinental Group of hotels can hire employees from diverse background and can perform
business operations and conserve consumers and effective manner. Furthermore, it has been
identified that middle class individual is growing rapidly in country which is changing consumer
behaviour, This can provide significant opportunity for Intercontinental group of hotel in which
they can provide effective form of products and services to consumers and can enhance their
sales.
Technology

Technology is significantly advancing on faster rate it has been identified that in Bali, Indonesia
individuals are more active on Facebook, Instagram, WhatsApp, YouTube etc. This provide a
significant platform for Intercontinental Group of hotels to attract large base of consumers
towards a production services. Furthermore, it has been identified that respective geographical
location accept and understand technology in a faster manner. In this it is essential for
Intercontinental group of hotels to encourage and attract consumer attention with the help of
artificial intelligence in order to become leaders (Lewis-Cameron and Ramgulam, 2019)..
Legal
Legal laws and regulations play important role for an organisation especially when they are
looking forward to expand their business in different market. In terms with Bali, Indonesia it has
been identified that government of country protect employees right as this company is required
to provide social security, specific working hours and systematic pay scale to employees. It is
essential for Inter Council group of hotels to emphasize upon this aspect, as negligence of this
will make them face penalties.
Environment
Environmental factor plays important role for the entire organisation is operating the
business services in any industry. It has been identified that Bali, Indonesia is environment
protective in which government have a more protective attitude towards air pollution, marine
resource, water pollution, deforestation etc. In this it is essential for Intercontinental group of
hotel to adhere the environmental laws and regulations (BURKE, ROBINSON and Choi, 2020).
Hotel strategy to be adopt and to be implemented (using strategic model and frameworks) within
the entering market
Porter’s generic strategies
The relative position of the company in the industry where it operates mainly determines as to
whether the organization’s profitability is below or above the industry average. When a business
is above the average profit in a long run, it is determined as a sustainable competitive advantage
and there are mainly two types of competitive advantage which a company may possess which
includes differentiation and low cost. The two basic kinds of competitive advantage when
combined with the scope of various activities leads to the three generic strategies for which an

organization seeks to accomplish it so that it can perform above average in the industry. The
Porter’s generic strategies consist of three main strategies of which include cost leadership,
differentiation as well as focus. The last strategy includes two variants which involves
differentiation focus and cost focus.
 Cost leadership- In this strategy, the company is aimed to become a producer of low cost
in the industry. The source of the cost advantage is dependent and variant on the basis of
industry structure and this may involve persuade of the economies of scale, preferential
access to the raw materials, technology and many other more factors. If the company may
achieve as well as sustain the overall cost leadership, it may become the performer of
above average in the industry. Moreover it may also command the prices near or at an
industry average (van Rooyen and van Zyl, 2017). Intercontinental hotel when using this
strategy has to lower down its prices in the industry so that it can attract more of the
customers by making use of its technology, efficient access to the raw materials as well
as economies of the scale.
 Differentiation- Under this strategy, the company is aimed to become unique and
innovative in the industry together with some of the dimensions which are valued widely
by the customers. The strategy involves selecting one or more of the attributes which
many of the consumers perceive in the industry as essential and then positions uniquely
itself in the market so that it can meet the needs of the customers. By using this strategy,
the firm is rewarded for the uniqueness which it offers at a premium price.
Intercontinental hotel may make use of this strategy by introducing something innovative
or unique in its hotel so that it can take a competitive edge in the market and battle the
competition effectively.
 Focus- This strategy mainly rest on a choice of the competitive scope which is narrow in
an industry which makes use of this strategy and involves selecting the segment or the
group of customers in the industry and then tailor the strategy of it in order to serve the
consumers by excluding others. It comprises of two variants of which first includes cost
focus wherein the business is aimed to seek the cost advantage in the target segment and
second is differentiation focus wherein the company seeks the differentiation in the target
market. Both of these variants of focus strategy depend on the difference between the
target segment of focuser and the other segments in an industry. The cost focus strategy

exploits the differences which may arise in the cost behaviour in some of the segments
whereas the differentiation focus strategy is involved in exploiting special needs of the
consumers in many segments. Intercontinental hotel when making use of this strategy in
an international market can focus on a particular segment of the customers so that it can
put its effort in attracting them and raise its profitability effectively (Bohdanowicz and et.
al., 2017).
The ansoff matrix
It is also known as a market product expansion grid. It is the tool which is used by the
companies in order to plan and analyze the growth strategies of it. It comprises of four different
strategies which may be used by the business so that it can grow as well as analyze risk which
are associated with each of the strategy. Intercontinental hotel may make use of any of these
strategies in order to grow and expand its business in the new market or in the existing market
with the unique or innovative service. Different strategies under this matrix are illustrated below-
 Market penetration- This strategy involves the firm to make use of its existing offering
in an existing market. The main aim of the company while making use of this strategy is
mainly to enhance its share of market. There are different ways in which this may be
executed which includes lowering down the prices of the offering in order to attract the
new customers or enhancing the distribution and promotion efforts or may acquire the
competitor in same market. If intercontinental hotel makes use of this strategy it has to
make efforts in its existing market for its existing service so that it can attract new
customers and this may be done by lowering down its prices and attracting the middle
income people. Product development- This strategy involves developing the new product in order to
cater the existing marketplace. The company when making use of this strategy has to get
involved in the extensive research so that it can get the strong understanding of the
current market and must also have an ability to provide the innovative solutions for it so
that the needs of an existing market can be fulfilled (Josephi, 2019). There are various
ways in which this strategy may be implemented by intercontinental hotel which includes
making more investment in the research and development department so that new product
or service can be developed or acquiring the offering of the competitor or maybe merging

with the resources so that a new service can be created which has the capability to meet
the wants and needs of market.
 Market development- It involves entering the new market but with the same product line.
This strategy involves expansion in the new market like geographic region or the
customer segment. This strategy is mainly successful if a business has its own proprietary
technology which may be leveraged in the new marketplace or the customers in a new
market are being profitable or the behaviour of customers in new market do not deviate
from the consumers which are in existing market. Intercontinental hotel may make use of
this strategy by making use of any of these approaches which includes entering new
domestic market or a new foreign market or maybe catering in a different segment of
consumers.
 Diversification- Under this strategy, the company introduces new product in the new
market. This is termed as the riskiest strategy as it involves product as well as market
development and the risk maybe mitigated through somewhat related to diversification.
Intercontinental hotel groups may make use of the strategy by moving into the new
market with some innovative services by conducting the third road market research so
that it can fulfil the demands of new marketplace and become successful (Okumus and et.
al., 2017).
Nykiel 14 strategically model for hotel growth
 Horizontal Expansion – The hotel management sector attempts to expand from one hotel
line with other one in order to enter in a new field of the market.
 Geographic Expansion - The hotel management sector develops from a comparatively
small range to a larger geographic location to enter in a new field of the market place.
 Product Hybridization - The hotel management sector is expanding their key term of the
offerings to enter new field of markets (Chen, Hsieh, and Hsiao, 2021).
 Specialization – Specialist - The respective hotel management sector have key section of
specializes in luxury price increases as well as services to enter new markets.
 Product Tie - ring - The respective hotel management sector addresses the forces
associated with population growth, vital and economic changes that will maximise in the
market fragmentation to arrive in the field of new market place.

 Product Re – branding - The respective hotel management sector provide varied term of
the facilities and services that have expanded too much to enter new markets.
 Non- Franchising – The management of hotel industry are the non - franchise company
that require to maintain control of its services, property quality, and services to enter in
the field of the new markets (Li and Singal, 2021).
 Franchising - The management of hotel industry have key fundamental units that has an
established business development strategy pursued in the hospitality industry to manage
their new field in the area of the market place.
 Brand Collection - The respective hotel management sector are managing they sections
and seeks to leverage its relatively limited inventory to purchase brand features that it
considers to have growth potential in an effective and efficient manner (Diab-El
Schahawi, and et.al., 2021).
 Strategy - Management agreement of the respective hotel management sector will
specializes in managing or maintaining their key trends of the hotels for owners entering
new the field of markets.
 Vertical Integration and Horizontal Integration - The hotel management sector are the
basic section part of the multiple hospitality sort of the divisions that have the opportunity
to gain a competitive advantage by investing in different sort of the features of the
industry and entering new markets in an effective and efficient manner (Luetsch,
Rowett, and Twigg, 2021).
 Singleness - The hotel management sector develops an effective potential terms of the
service with both co - ownership and management that will support them to enter in the
new field of the market place.
 Value - related products and services - The hotel management sector introduces new
services to meet the specific values and trends of consumers to enter new markets.
 Global Positioning - The hotel management sector expands its market internationally and
also taking into account investment reasons, risk levels, strategies and reasons for
expansion to enter in the field of the new market place in an effective and efficient way.
Justification of strategy
As it has been recommended that by applying effective terms of the section that helps the
business to maintain their sales strategies. As on the other hand, it is important to have a strong

foundation for Business to Business (B2B) sales. The respective hotel management sector are
maintaining their Business to Business (B2B) sales that have changed significantly in some of
the recent years. As it has been becoming a more digital field of the area. However, the hotel
management staff faculty will believe that the basic and traditional perceptions are still retained.
As in the post – COVID - 19 infection pandemic, more than 50% of business trips and
more than 30% of office days were get cancelled. This was an important segment for hotels in
the main centre and drove most of the high demands in an effective and efficient way. The
occasional 50% drop is undoubtedly will directly lead to the negative impact on the hotels
overall occupancy and performance (Motlatla, and Maluleke, 2021). Higher and wider term of
the supply and the less demand will leads to a significant decline in the sales performance. So the
above sales strategy of hotel management will help the hotel management to sustain in the field
of the market place for longer and effective period of time.
CONCLUSION
From the above mentioned report it has been concluded that, hospitality manager are
leading the day-to-day operations of restaurants or hotels also including oversight of staff,
ensuring proper maintenance of facilities. They also take frequent terms of the steps to ensure
customer satisfaction and overseeing management and their financial records. Hospitality
management degrees include the core of business degrees such as accounting, economics,
marketing, and human resource management. As the above following report involves the
divisional terms that will define about the hospitality business and management strategies in
frequent term of the line with profit goals, quality charters, and hygiene and safety standards that
they offers to their customer in an effective and efficient course of the manner.