Business Health Check Report: IHG's Performance and Strategies

This report provides a comprehensive business health check of InterContinental Hotels Group (IHG). It begins with an analysis of IHG's objectives, both short-term and long-term, including their SMART objectives. The report then delves into the factors impacting the business, utilizing PESTLE, SWOT, and Porter's Five Forces models to assess the political, economic, social, technological, legal, and environmental factors, as well as internal strengths and weaknesses, external opportunities and threats, and competitive forces within the hospitality industry. The report also discusses potential improvements to IHG's business organization and operations, recommending strategies for market penetration, market development, product development, and diversification. The report further evaluates the effectiveness of IHG's business, including its services, marketing, and sales performance. Finally, the report explores the current skills of management and staff and proposes plans for skill development to enhance IHG's overall performance and achieve its objectives. The analysis provides a detailed overview of IHG's current state and potential for future success.

Business Health Check

Table of Contents
INTRODUCTION...........................................................................................................................3
TASK 1............................................................................................................................................3
1.1: Analysis of objectives of IHG.........................................................................................3
1.2: Factors impact on the business........................................................................................4
1.3 Potential improvement to the business organisation and operations................................7
TASK 2............................................................................................................................................8
2.1 Effectiveness of the business............................................................................................8
2.2: Developing plans to improve business............................................................................9
TASK 3..........................................................................................................................................10
3.1: Evaluating the current skills of management and staff.................................................10
3.2: Devising and justifying plans for the development of skills of management and staff 11
CONCLUSION..............................................................................................................................11
REFERENCES..............................................................................................................................12

INTRODUCTION
Business Health Check is the process of identifying the situations and capabilities of an
organisation in order to determine whether the company can successfully achieve its desired
goals and objectives in near future with the available resources or not. This will direct the
management of an organisation to make required changes in business procedure so as to bring
company in right direction so as to achieve its short and long term objectives. The present
assignment report is based on Inter Continental Hotels Group (IHG) which deals in offering
multiple number of Hospitality services such as guest rooms, resorts and various amenities etc.
The present report describe the influencing factors of business environment along with their
analysis through PESTLE, SWOT and Porter Five Forces model. In addition with this, the proper
evaluation of management and staff's skills are also discussed under this report. All other aspects
focusing on business health check for IHG are also summarised (Abdelhak, Grostick and
Hanken, 2014).
TASK 1
1.1: Analysis of objectives of IHG
About IHG:
IHG is UK-based multinational hospitality company operated more than 799,923 guest
rooms and over 5,367 hotels in more than 100 countries. In the year 2018, IHG has announced
that it has agreed to buy a 51% majority stake in Regent Hotels for $39 million and wishes to
expand its brand to 40 hotels from the current six hotels. According to the financial reports, the
sales of IHG in 2015 are £1803 which are decreased to £1715 in the year 2016. Such fall are due
to rising in taxation policies. IHG has employed more than 375000 employees and currently
attained net income 593 million till 2017.
Short term objectives:
IHG has main objective is to achieve brand image and identity in local areas. According
to the CEO statement, IHG has focuses on implementing plan and policies to expand business in
order to achieve huge customer base.
Long term objectives:
To attain one of the leading Hotel in United Kingdom by providing high quality
hospitality products and services at an effective prices to every guests, every time.

SMART objectives of IHG:
Specific: The objectives must be specific which help IHG to identify their roles and
responsibilities in order to achieve desired objectives. For example, objective of IHG is to
enhance the satisfaction level of customers reaching at their outlets thus treating employees well
by staff and help them in serving products are required.
Measurable: Such objective should be measurable so as to determine whether it has been
achieved in near future or not. For example, Expanding business in new countries can easily be
measured.
Achievable: The objective must be achievable with the help of resources available with
them. It directs the management to give efforts, allocating cost by management etc. which
increases the chances of achieving desired target. For example, opening new outlets in India took
time but possible (Chang, Kuo and Ramachandran, 2016).
Relevant: The objectives must be relevant that means the set objectives will ensure to
bring profitable outcomes to company with the help of strategies formulated by management of
IHG.
Time bound: The management of IHG are required to set time frame for achieving
desired goals which encourages employees to give their maximum contribution. For example,
IHG has determine to expand their outlets in certain cities within 1 year.
1.2: Factors impact on the business
There are many influencing factors which may affect the stability of IHG in competitive
market. Thus, it is required to analyse them carefully in order to deal with them in an effective
and efficient manner. Such analysis can be done through following ways:
PESTLE Analysis:
Political factor: IHG is a multinational organisation which operated more than 5,367
hotels in more than 100 countries. Thus, their business operations is hugely affected a lot by the
fluctuations in political system in particular country. For example, new government in UK if
changes in taxation rate on hospitality products affects the sales figure of business operated in
such country.
Economical factor: Large number of outsiders visit to other countries for the purpose of
tourism. Therefore, the revenue of IHG depend of the tourism business. For example, UK has

attained large number of attractive destinations which attracts lots of guests from different
countries.
Social factor: The interest and buying behaviour of customer affect the sales figure of
company. Thus, it is required for IHG to make changes in their business procedure according to
the taste and preferences of targeted customers. For example, IHG deals in multiple number of
countries due to which it is required for their staff members to have proper knowledge about
multiple languages in order to deal with customers of different countries.
Technological factor: Adoption of technology in execution of business activities make it
easier to deal with targeted customers. Thus, this is required for IHG to invest in implementation
of advanced technology. For example, providing online payment facilities, online booking etc.
makes easier to customers to locate hotel and pay for their hospitality products and services.
Legal factor: There are different legal laws and legislation within different countries
which need to be complied by IHG in order to create strong their existence in multiple number of
countries. For example, IHG operates its business in UK thus required to follow all legal laws
and legislation in order to avoid penalties.
Environmental factor: Every organisation has ethically liable to use environmental
friendly resources in production process in order to achieve good and reputed image in
competitive market. For example, IHG affecting environment due to CO2 emissions, CFC
emissions, noise, smoke, transportation etc. thus need to adopt measures in order to protect
environment (Hendy and Barlow, 2012).
Porter Five Forces Model:
Bargaining power of Buyers: The bargaining of buyer is high due to having presence of
large number of competitors in market such as Hilton Hotel, Marriott Hotel etc. Thus, it directs
IHG to cut their prices in order to attract new potential business clients and guests and retain
them for longer period of time. For example, In 2008, the economy of UK went down which
jeopardise IHG to lower their prices according to the needs and preferences of targeted clients.
Threats of new entrants: The threat of new entrants are low due to requiring high capital
investments to open a new outlets in different country. The already established Hotels has
attained huge customer strength due to which the chances of shifting consumer towards new
entrants are low. Lack of experiences and knowledge of operating in such markets also brings

difficulties towards new firms to survive. Thus, IHG find no difficulties in stabling position in
competitive market.
Threats of substituted products: The threats of substituted product are low due to
preferring high quality hospitality services by guests in order to maximise their satisfaction level.
As there are substitutes for hospitality services of IHG offered by Hilton Hotel, Marriott hotel
etc. which charges high prices than IHG thus decreases the threats of substitutes.
Bargaining power of suppliers: As IHG has already attained strong brand image in
competitive market with a high turnover thus the suppliers wants to make better relation with
such companies in order to reach their products to the maximum customer base. IHG is mainly
focuses on offering high quality and excellent hospitality products and services due to which
they are not much rely on the suppliers. Due to this, the bargaining power of suppliers are very
low.
Competitive rivalry within an Industry: Due to high competition in market, various
problems are faced by IHG in operating their business operation more smoothly. There are
number of competitors in exist market such as Hilton Hotel, Marriott Hotel etc.. which gives
tough competition to IHG due to which modification in pre-determined policies and strategies
are essentially required (Jepsen, Troske and Coomes, 2014).
SWOT Analysis:
Strengths Weaknesses
 Attained strong base of assets and
capital structure.
 Strong presence in geographical areas.
 Attain brand name in occasion wise.
 Skilled and knowledgeable employees
who knows how to deal with guests in
more effective and efficient manner.
 Charging high prices from guests on
their hotel rooms.
 Inadequate reliable information and
poor security standards.
 Decreasing in presence in hospitality
sector.
Opportunities Threats
 Improvement in international travelling
industry.
 Investing huge amount on adoption of
 Fluctuations in economic growth.
 Uncertainty in events and miss-
happenings.

advanced and updated technologies.  More dependent on intermediators.
1.3 Potential improvement to the business organisation and operations
There are certain areas on which IHG need to be improved through formulating an
effective plans and strategies so as to maintain their brand image in competitive market world.
But foremost important thing is to identify first and accordingly improve the areas through
applying Ans-off Growth Matrix which are given as below:
Market penetration: This strategy direct and help IHG to maintain their existing strong
position among their rivals in UK. IHG engaged in providing different hospitality services such
as hotel rooms, banquet halls, conference halls and and restaurant business thus requires to use
strategies like customer loyalty and value enhancement which supports them to remain ahead
than their rivals.
Market development: IHG can able to expand its business in new countries through using
market development strategies. As the company mainly focuses on providing high quality
hospitality services due to which the chances of growing business into new markets are more.
Having huge brand image enable IHG to open new outlets in new markets with an objective of
attracting new customers. It recently operates a various brands holiday inn, IHG royalty club are
the main some areas thorough which IHG is expecting to penetrate the existing market.
Product development: IHG may uses such strategies in order to provide hospitality
services across worldwide. For example, IHG should provides associated room services related
to home and restaurant services in bulk quantity. Similarly in hospitality and restaurant business,
IHG should bring new segments in terms of exploring hospitality services as offers and discount
in vacation and seasonal period, tour package and holiday plans for potential customers are the
essential services to develop services.
Diversification: Through such strategies, IHG can able to expand its business to new
market. As IHG recently engaged in providing hospitality services across the globe by
considering the needs and requirement of customers and guests. In order to expand their business
area thus with the help of such strategy, the company easily achieve huge customer base across
worldwide.

TASK 2
2.1 Effectiveness of the business
IHG plc is one of the effective and famous hospitality industry in the UK.
Intercontinental hotel group attained progress as far as benefit and money related dependability.
Viability of business can be assessed by following regions.
Services and products: there are friendliness benefits significantly gave by association
as rooms administrations, excursion administrations are the basic viewpoints as far as deciding
the price of services as per their scales.
Marketing: Kimpton inns and eatery networks, Indigo inns and the HUALUXE are the
lodging networks which are major brands which are playing vital role in building market share in
hospitality industry. IHG has a solid market structure according to the supportability report
association have the capacity to accomplish the objective of building up 150 inn establishment in
term of inferring the methodologies and plans.
Sales: the Sales was diminished amid the year 2016 because of ascends in impose rates
and strategies changes. There is - 4.9% change was recorded for the year 2016. Sales records
indicates positive figures according to 2016 budgetary reports Sales was considered £1715
million and £1803 million for the year 2015.
Finance: Worldwide similar RevPAR expanded by 1.8% and drove by rate up 1.2% and
the records were qualified as full inhabitance of rooms. According to investigation of monetary
reports $400 millions extraordinary profit to be proposed till the finish of budgetary year 2017.
there was an augmentation of 11% recorded as far as proposing profits for the money related
year 2017. Net Room development was recorded as £24.5 billion altogether and the gross
incomes are considered 2% incremental development.
Staffing: There are kind of enlistment and situation methodologies received by
association as far as keep up advanced methodology in hospitality industry. there are 375000
individuals are working at exhibit crosswise over in 100 nations. Qualification, aptitudes,
capability and capacities are fundamentally broke down before putting workers inside the
association.
Business image: It is renowned for giving extravagance accommodation administrations.
At display association is giving administrations in Asian, European, China and north American
nations. IHG has a brand and reasonable picture in the UK showcase as well as over the globe.

Record keeping: there is an appropriate information striking back strategy is received by
IHG so as to keep up records of staff individuals, budgetary records, records identified with
items and administrations gave by association amid the year.
2.2: Developing plans to improve business
IHG can able to maintain their strong brand position in market when the management are
able to make an effective strategies and plans in order to eliminate weak areas and achieve
improvements. Such plans are developed through following ways:
Assessing situations: The business performance can be assessed through following
ways: SWOT Analysis: Such analysis are conducted with an objective of identifying the
strengths, weaknesses, opportunities and threats which directs the management to make
corrective actions and measures in order to eliminate deviations if any which restricts
IHG to achieve its desired target (Vos, 2015). Benchmarking: It includes the target set by company towards its staff and management
in order to motivate them to work hard and give their maximum efforts in execution of
business operation which in result increasing overall performance of company. Market research: It is also an effective way of enhancing business performance as it is
compulsorily required for management to conduct research in order to identify market
trends. This will enable management to make an effective plans and policies so as to
achieve profitable result in near future.
 Set clear goals: The goals must be specific which means specific, measurable,
achievable, relevant and time bounded. Prioritise the activity help in formulating
strategies and plans which in results achieving desired goals and objectives within given
time frame.
Identification and implementation of strategies for achieving goals: It is essential for
IHG to consider all aspects relating to marketing trends and accordingly make an effective plans
and strategies. Strategies are related with allocation with resources, roles and responsibilities,
time frame etc.
Measuring the results: After implementing all pre-determined plans and policies, the
management of IHG are required to examine whether such plans brings profitable outcomes to

company in near future. If not, then further improvement are made through changing policies and
plans.
TASK 3
3.1: Evaluating the current skills of management and staff
The performance of an organisation depends on the employees' performance thus it is
essential to evaluate the current skills of management and staff so as to increase their
contribution in achieving desired goals and objectives. Such skills includes technical, operational
and managerial which are further discussed under the below:
Technical skill: It is such skills and capabilities which are used to perform allotted task
and activities related with engineering, mechanical, scientific or other activities related with
computers. For example, Using MIS required such skill in an employees of IHG.
Operational skill: Such skill or abilities is used to cut cost in the process of delivering
services to the clients such as hiring transportation facilities at reasonable amount which requires
good relation with suppliers as well.
Managerial skill: Such skill or ability is used to make an effective decision regarding
managing and controlling the business activities in order to achieve desired outcomes. It includes
human skills, technical skills, conceptual skills etc.
To assess the skills of management and staff, IHG need to follow below steps:
Research: Doing research on previous performance performed by staff through observing
documents help in identifying and evaluating the skills of each and every employees. Due to this,
training needs are easily identified (Craven and Harris, 2017).
Interviews: Conducting interview sessions in which the specific questions are asked to
the employees related to their past performance and their received outcomes. If any deviation are
found then training must be provided by IHG.
Put employees in real situations: Assigning roles and responsibilities to employees under
uncertain circumstances which involves huge risk help in identifying and assessing the skills of
staff. It help in determining whether the employees are capable to deal with risk or not.
3.2: Devising and justifying plans for the development of skills of management and staff
In order to enhance the skills and capabilities of management and staff, IHG need to
implement plans through following given methods and techniques:

Training and capacity development: Conducting training programs at workplace in order
to enhance the skills and capabilities of employees so that they can successfully perform their
allotted roles and responsibilities in an effective and efficient manner.
Performance management: Analysing performance through comparing actual
performance with standard directs to eliminate deviations through making an effective plans and
strategies regarding conduction of induction and orientation programs.
Mentoring: Conducting classes at workplace in which all employees should required to
participate in order to gain knowledge and skills for better performance.
Counselling: Asking employees about the issues and problems faced by employees at
workplace help in conducting learning programs in order to improve the overall performance of
employees (Brand Health Check: InterContinental Hotels Group, 2011).
CONCLUSION
It has been concluded from the above project report that it is essential for management to
identify the effectiveness of business firms in order to maintain their strong brand position in
market for longer period of time. Business effectiveness can be analysed through SWOT,
PESTLE and Ans-off matrix, Porter five forces etc. Therefore, IHG should required to consider
influencing factors in order to deal with them in an effective and efficient manner.

REFERENCES
Books and References
Abdelhak, M., Grostick, S. and Hanken, M. A., 2014. Health Information-E-Book: Management
of a Strategic Resource. Elsevier Health Sciences.
Chang, V., Kuo, Y. H. and Ramachandran, M., 2016. Cloud computing adoption framework: A
security framework for business clouds. Future Generation Computer Systems. 57.
pp.24-41.
Craven, R. and Harris, A., 2017. The Check-in Strategy Journal: Your Daily Tracker for
Business and Personal Development. John Wiley & Sons.
Hendy, J. and Barlow, J., 2012. The role of the organizational champion in achieving health
system change. Social Science & Medicine. 74(3). pp.348-355.
Jepsen, C., Troske, K. and Coomes, P., 2014. The labor-market returns to community college
degrees, diplomas, and certificates. Journal of Labor Economics. 32(1). pp.95-121.
Polonsky, M. J. and Waller, D. S., 2014. Designing and managing a research project: A
business student's guide. Sage publications.
Tones, K., Robinson, Y. K. and Tilford, S., 2013. Health education: effectiveness and efficiency.
Springer.
Vos, M., 2015. Communication Health Check: Measuring Corporate Communication
Performance. Journal of Business Studies Quarterly. 7(1).
Online
Brand Health Check: InterContinental Hotels Group. [online]. Available
through:<https://www.campaignlive.co.uk/article/brand-health-check-marks-spencer/
1084886>.