Strategic Analysis of InterContinental Hotel, London: A Report

This report provides a comprehensive strategic assessment of InterContinental London Park Lane, examining its mission, objectives, and the external environment using PESTLE analysis. It delves into the internal environment, identifying stakeholders and their influence. The report analyzes the application of strategy theories, including Mintzberg and Porter's models, and explores different levels of strategy. A SWOT analysis is conducted to evaluate the hotel's strengths, weaknesses, opportunities, and threats, leading to the identification of strategic options such as innovation, data strategy, partnerships, and product diversification. The assessment aims to provide insights into the hotel's current position, trends, and future prospects, supporting informed investment decisions. The report concludes with recommendations for strategic improvements and growth within the competitive hospitality industry.

STRATEGIC
HOSPITALITY
MANAGEMENT

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Contents
Introduction...........................................................................................................................................2
Mission..............................................................................................................................................2
Objectives..........................................................................................................................................2
LO1: Strategy and its associated theories..............................................................................................2
Definition..........................................................................................................................................2
Theories.............................................................................................................................................2
Elements of strategy..........................................................................................................................3
Different levels of strategy................................................................................................................4
LO2: Internal and external business environment in which an organisation operates............................5
Stakeholders......................................................................................................................................5
PESTLE analysis..................................................................................................................................7
LO3: Alternative strategic options.........................................................................................................7
SWOT analysis..................................................................................................................................7
Strategic option..................................................................................................................................9
Conclusion.............................................................................................................................................9
REFERENCES......................................................................................................................................9

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Introduction
Hospitality industry is facing many kids of challenges. Competition seems to be going to the
cut-throat level. This has increased the concerns for the firms and hence they will have to
analyse the internal and external environment and on the basis of it they need to design the
new strategies that can help them in ensuring their growth. InterContinental London Park
Lane is a luxury 5-Star hotel in London, England. It is situated in London, England. It is
situated at 1 Hamilton Place on Hyde Park Corner with Park Lane (Quek, 2012). This
company was built in the 1974 as it was made as a part of the hotel chains of InterContinental
Hotel Group. However this hotel has been sold to Constellation Hotel UK in the year 2013.
Mission
The mission of this company is to become the best hotel in the London by meeting the
customer’s luxury demands.
Objectives
 They have the objective of improving the sales by 30% at the end of 2020.
 They also aim to improve the revenue by 40% at the end of 2021 (Maksimović, et al
2017).
In this report there will be description of the external and environment of the InterContinental
Hotel Group PLC. It will also underline the strategic options that are available with this firm.
LO1: Strategy and its associated theories
Definition
Strategy is understood as a plan of action that is designed for achieving overall and long-term
aim. In other words it is a high level plan to achieve more than one goal under the situation
(Johnson, 2016).
Theories
Theories related to the strategy justifies the underlying forces that produce such advantage or
are the primary considering factors that is producing the advantage to the firm.

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 Mintzberg theory: This theory suggests that formation of strategy is emergent
learning, judgemental designing, and intuitive visioning. It is about perpetuation and
transformation. It should also include social interaction, individual cognition, conflict
and cooperation. It must also involve three things i.e. analyse beforehand, make
program afterwards, and negotiate in the meanwhile. All these three things should be
in response to what can be said to as demanding environment (Johnson, 2016). He
also gives general theories where he explains planned strategies, entrepreneurial
strategies, ideological strategies, process strategies, and umbrella strategies.
 Porter’s strategy criteria: It is a theory about organisational change and strategy. This
contains set of strategies which contains contingency theory (Environment creates
organisational need which managers respond to with the help of strategy), Evolution
theory (strategy consists of generating the requisite variation from which
configuration, patterns, advantageous position can be chosen and retained for the
extent of their contribution to advantage), organisational theory (strategies are
dependent variables and acts as consequence of performance of firm), resource-based
view (focused on organisation’s distinctive competencies) as well as many others
(Freedman, 2015).
Elements of strategy
Strategy has integrated set of options and these choices are associated with five basic
elements which a manager must consider. These include such as:
 Arenas: Where the strategy will be active.
 Differentiators: How they will reach their.
 Vehicles: The ways in which they will win the market (Teece, 2010).
 Pacing and staging: What will be move sequence and their speed?
 Economic logic: The ways in which returns will be obtained.

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Figure 1: Strategy Diamond
Different levels of strategy
There are three levels of strategy. These are:
 Corporate level: These strategies describe the business areas in which the
organisations will function. It deals with aligning the resource deployment across a
different set of areas of business, unrelated and related. Formulation of strategy at this
level includes managing and integrating the diverse businesses and realising synergy
at the corporate level.
 Business level: These strategies are made for specific type of strategic business units
and associate with a different product-market area. It includes describing the
competitive position of a strategic business unit. The formulation of business level
strategy is on the basis of the generic strategies (Casadesus-Masanell and Ricart,
2010).
 Functional level: These strategies are related to the diverse functional areas which a
strategic business unit has like operations, human resources, production, finance and
marketing. The formations of these strategies are on the head of that functional unit.

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LO2: Internal and external business environment in which an organisation operates
Stakeholders
There are different types of stakeholders that are attached with the InterContinental London
Park Lane. Some of them are:
 Government: The government of UK are important stakeholders as the policies made
by the government decide the way in which operations are done within the firm.
 Local authorities: Local authorities such as police also have a critical role in the
operations of the firm as providing security is their job. At the same time providing
electricity and water is also the role of the local authorities such as municipalities
(Fleşeriu, Cosma and Bota, 2014).
 Customers: they are the main stakeholders as whatever the company does is for the
customers only. The demands of the customers are placed in the centre of developing
any strategies, processes. This has highest significance among all the stakeholders.
 Employees: These are again the major stakeholders of the hotel which can be
understood by the fact that they are the ones on the shoulders of whom delivering
services lies. If the employees are skilled them there is better chance that they will be
able to do all their services in an appropriate manner.
 Investors: They are also significant to the firm as if the firm wants to make any kinds
plans it needs funds which they raise from the investors only. These are the
stakeholders who need to be informed about everything so that they have trust in the
company (Guillet Zhang and Gao, 2011).
 Suppliers: They are also the significant stakeholders attached with any firm. This can
be understood in terms of the fact that the quality of the end products or service
delivered by the company depends on the quality of the suppliers attached with them.
 Business partners: There are many business partners attached with any hotel
especially in the functional areas like marketing. They are significant as they are
responsible for making the better image of the company in front of the people.
 Board members: They are again important stakeholders of the hotel as they are the
ones who will be making the strategies and decisions. The impact and responsibility
on them is the highest.
 Local people: The people that are residing in the nearby reasons are again
stakeholders for the company but they are not so much to be looked at.

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 Competitors: They again are major stakeholders as the company will have to make
strategies seeing the strategies that are made by the stakeholders. This can be
understood by the fact that if they are unable to make better strategies than other then
they will not be able to succeed in the market.
Power
Investors
Board members
Customers
Keep Satisfied
Employees
Manage Closely
Government Local authority
Competitors
Monitor
Local people
Suppliers
Keep Informed
Business partners
Interest
(Fig: Stakeholder Matrix)

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PESTLE analysis
In order to understand the external environment the use of PESTLE analysis can be effective.
 Political: The increase in the uncertainty in political environment especially after the
announcement of the Brexit. This is because many of the suppliers, business partners,
employees comes from other parts of the European Union and unless the British
government is unable to have soft Brexit, it will not be easier for them to work so
efficiently as they could do right now (Torres, Adler, and Behnke, 2014).
 Economic: The economic challenges are increasing in terms of the fact that UKs and
international economic condition is not supporting the sales of the company’s future
plans. The purchasing power of the people is decreasing and they are not willing to
spend much on the luxury facilities. This will have negative impact on the operations
of InterContinental London Park Lane.
 Social: There is increase in the numbers of people that are coming to London as a
tourist from different parts of the world (Leung and Law, 2011). This has increased
the chances of the sales however in the type of competition they are in they need to
place everything right.
 Technology: In the hotel industry within different functions the use of technology has
become the necessity. People these days love to book rooms and resolve queries on
the online mediums. At the same time the use of data technology has become the need
of the company (Sutthijakra, 2011).
 Legal: The legalities against the issues such as Human Resource Management and
customers rights have strengthened which needs to be followed by the company in
order to avoid any kinds of legal compliances
 Environment: The amount of carbon footprints that is generated by this hotel needs to
be reduced in order to ensure that they are adhering to the concerns of the
stakeholders. For this company needs to design a better waste management plan.
LO3: Alternative strategic options
SWOT analysis
In order to understand the strategic choices those are available with the firm. First it is critical
to understand the internal capabilities of the firm.
Strengths

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 The variety of luxury facilities those are available with them.
 Bigger brand name they have in the market helps them in attracting more consumers
(Sutthijakra, 2011).
 They have highly skilled employees working with them.
Their strengths suggest that company has great resource base which they can use for fulfilling
their future missions.
Weaknesses
 The sales growth is low due to which the InterContinental has to sell their unit
InterContinental London park lane (Verbeke, 2013).
 Weak IT security: Since there is a very large amount of people hence needed to have a
strong IT security infrastructure in which they have failed till now.
Weaknesses illustrates that company needs to seriously work on their IT infrastructure as
well as innovation as it is important for ensuring that they achieve all their future missions.
Opportunities
 They have the opportunities in areas like increasing their partnership with the
international players such as hotels that could help them in increasing the sales.
 They have opportunity of adding more technology in the hotel’s operations which will
allow them to improve their efficiency (Richard, 2017).
The opportunities suggest that if the company wants to achieve their future missions, they
need to grab the opportunities available with the firm.
Threats
 The slow growth in the global economic environment has created challenges for the
company.
 Competition alone in London has increased tremendously as the numbers of foreign
international players are investing a lot of money on their business (Gröschl, 2011).
In order to ensure that company is able to achieve all its future objectives they need to work
on their strengths so as to reduce the impacts of the threats in front of them.

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Strategic option
On the basis of the SWOT analysis it can be said that there are several kinds of options
available with the company.
 Innovation: Company needs to innovate the business processes regularly so as to
ensure that they are able to deal with the modern day challenges that might be led by
the firm.
 Data strategy: Company needs to improve the utilisation of data that they have
gathered in their business. This is necessary for targeting the exact customers and
hence ensuring higher sales (Luck and Lancaster, 2013).
 Add new partners: Partnership strategy works in the hospitality industry especially
between the two companies that are operations in different parts of the world as they
can refer clients to each other (Öğüt and Onur Taş,2012).
 Product diversification: If the company aims to achieve the desired goals within the
firm then it is critical that the numbers of options that are being given by the hotel to
its clients be increased (Niewiadomski, 2014).
Conclusion
From the above based report a conclusion can be drawn that InterContinental London Park
Lane is one of the biggest luxury hotels in London. Strategies are the actions that are being
done by the company to achieve certain goals. Arenas, differentiators, vehicles, pacing and
staging and economic logic are the five elements of strategy. Government, local authorities,
customers, employees, investors, suppliers, business partners, local people, competitors are
some of the major stakeholders attached with this hotel. The internal environment and
external environment analysis suggests that business environment is challenging and hence in
order to grab opportunities available with the firm the strategic options that are available with
the firm are Innovation, data strategy, product diversification and add new partners.

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