Business Strategy Plan for InterContinental Hotel Group Plc

This report presents a strategic analysis of the InterContinental Hotel Group (IHG), examining its business strategy within the hospitality industry. The analysis begins with an introduction to IHG's vision, mission, and strategic goals, emphasizing its position as a leading global hospitality business. It then delves into the external macro-environment using PESTEL analysis, considering political, economic, social, technological, legal, and environmental factors impacting IHG's operations. Internal capabilities are evaluated using the McKinsey 7-S framework and stakeholder analysis. The report also applies Porter's Five Forces model to assess competitive dynamics and conducts a SWOT analysis to identify strengths, weaknesses, opportunities, and threats. Finally, the report synthesizes these analyses to formulate strategic recommendations for IHG, focusing on market expansion, competitive advantage, and sustainable business practices, and concluding with a strategic management plan.

Hospitality Business
Strategy Plan Report

Table of Contents
INTRODUCTION...........................................................................................................................1
MAINBODY....................................................................................................................................1
TASK 1............................................................................................................................................1
P1. Adopt the proper model and examine the impact and effect of macro environment on
Hotel InterContinental Group Plc and its strategies....................................................................1
TASK 2............................................................................................................................................6
P2. Examine the internal environment and capability of InterContinental hotel using
appropriate framework................................................................................................................6
TASK 3............................................................................................................................................9
P3. Applying Porter’s five foreces model and evaluate the comeptive forces of a given market
sector for InterContinental..........................................................................................................9
TASK 4..........................................................................................................................................11
P4 apply a range of theory and model and interpret and device strategic planning for
Intercontinental hotel................................................................................................................11
CONCLUSION..............................................................................................................................14
REFERENCES..............................................................................................................................15

INTRODUCTION
An organisation form business strategy for their company which define them the set of the
actions that act as the roadmap for them in order to achieve the particular strategically goals and
securing the competitive position in the market. It has been found that the hospitality industry is
experiencing huge competition and in order to take competitive advantage and for acquisition
and retention of the customer following assignment creates the strategically hospitality
management report of Hotel InterContinental Group Plc which is the largest hospitality business
in the world. Strategically hospitality business report outline the roadmap that should how
business should operates in order to get the desired goals that is market expansion and market
survival. Moreover, in hospitality industry, business strategy is a combination of proactive action
of Hotel InterContinental Group Plc. Therefore, following report outline the key issues which are
being encountered by the InterContinental Group Plc while planning which involved analysing
of the internal and external analysis of environment along with the industry analysis in order to
come across the suitable jurisdiction to frame effective business strategy. At the end, report also
creates a strategic management plan which has tangible and straregical prototype of the business.
MAINBODY
TASK 1
P1. Adopt the proper model and examine the impact and effect of macro environment on Hotel
InterContinental Group Plc and its strategies.
The InterContinental Hotel Group (IHG) is a real tourist destination in the UK. Room number is
836,000, the largest hotel company in the world, with more than 15 landmarks at 5,600 hotel
rooms worldwide. IHG takes the form of lighting, owning or owning third-party hotels. IHG
distinguishes its products from the competition by creating unique scenarios for almost every
customer. Encouraging employees to go the extra mile creates recurring customers and
trustworthy brand attorneys (Tsai, Linliu and Chang, 2021).
Vision and mission of company
IHG hotel has the vision to provide the true hospitality experience to every guest and prove
themselves as the best hotel destination place in the UK with the lucrative service that help them
to provide better customer service to the guests. In that sense the mission of hotel is to provide an
extremely remarkable customer service to the guest that will would help them to provide that
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service that separated its product and service offering from other brand not within the UK but
across the world.
Strategic intent and strategically goal
InterContinental Hotel formulate the business strategy for the business operations in order to
conduct the business operations in the systematic manner that support them to being competitive
and people one of the best hospitality service provider across the world. The strategic goal can
be understood as the basis of a strategic management process. It means a purpose, an
organization trying to achieve it. The report, which provides an overview of the guidelines for
the organization, will lead to an overview over time. It aims to find a balance between internal
resources and strengths and opportunities and external threats. This mind-set will lead to greater
emphasis on available resources and opportunities (Line, Cho and Hair, 2021). The strategic goal
is to help managers focus on developing new skills to use future opportunities. For effective
business straregy IHG need to analyse the business environment which help them take on
sustainable position in the marketplace. to examine the external or macro environmental factor
they can use PESTEL analysis which help them to examine the external environment factor on
their business strategies.
PESTEL analysis of InterContinental Group Plc.
Political-
Political factors have a major impact on the stability and long-term performance of the
Intercontinental Hotels Group, PLC. In international forums, increasing the company's sensitivity
to changing political climate in the country. Currently, the Intercontinental Hotel Group
companies in different countries, each with its own political differences. Growing tensions and
instability in the global political arena will affect the growth of the gold sector, and reduce the
chances of growth ahead of the Intercontinental Hotels Group, PLC. The acquisition of a higher
tax rate, which will have a direct impact on the profitability of the Intercontinental Hotels Group,
PLC. Higher tax rates affect international trade, it is one of the largest suppliers (Kumari, 2021).
UK is one of the most stable country globally, government agencies support the development of
tourism and hospitality. In addition, UK is considered a safe haven in the tourist industry and
wants to build a country Safe target image and increase the number of interested visitors to visit
around the world by providing safety and security. Moreover, there are no sever impact of Brexit
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on the business of IHG as it is one of the favourite hotel for EU nations and also they are
operating in the EU countries too.
Economy
UK is an economically stable country with a low inflation rate and a GDP per capita, 7
93,714.06. The economic situation is supportive the various aspects of hospitality and tourism
development are investment for us. Investment of UK estimated at $ 17 billion in hospitality and
tourism 400% increase in hotel skills and architecture. In addition, InterContinental
Hotel groups can form partnerships with any local companies in UK for economic reasons
In addition, the business operations of InterContinental Hotel Group PLC is also affected in host
country because it is based on the how much that government of the host country spends on
major infrastructure development.
Social
Hospitality sector and the accommodation service provider like IHG depends on the
culture factor because interest or experience of guest of particular destination based on the
culture of the religion of their visiting nation. Moreover, the news of the COVID-19 spread all
over the world make people to take world tour from the home only and they are avoiding staying
at hotel for the longer day because this is the normal today and COVID-19 restriction has decline
the demand for IHG now a days. But the crises management system of IHG are able to handle
this situation in best favourable manner.
Technology
Digital booking has transformed the business of the IHG as being active online is the new trend
in the hospitality sector. Moreover when accepting the digital booking they are increasing the
room occupancy level of their and also create engagement with the clients virtually. Moreover, in
the pandemic crises technology is the only way that still mark the competitive position of the
company in the marketplace as social media platform help them to show the society their
contribute towards the pandemic by both monetary and charitable operations (Okumus, 2021).
Moreover, CRM technology supported with the cloud technology also great tech advantage for
the company to create better relations with the clients.
Legal
Immigration laws and the health and safety legal regulations are the major legal obligatory
rules that often disrupt the business operation of IHG. Data privacy act is emerged as the biggest
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issue for the hospitality business as it has seen that many organisation has breach the data laws
just for sake of their interest and share those data with the third party. But there is law in UK
which is in favour of the hospitality business in which federal and central government ask the
state to create better infrastructure for the hospitality business as hospitality contribution is much
in the country’s GDP.
Environmental
Some countries provide funding to encourage investment in renewable technology.
InterContinental Hotel Group PLC can gain advantage from their investment in renewable
energy machineries to make certain long-term sustainability. These investments will surge
shareholder consummation and increase customers as a result of the improved product image.
Excessive limitations of InterContinental Hotel Group PLC resources (Lin and et. al., 2021).
They can get negative feedback from the media, environmental groups, consumers and the
general public. InterContinental Hotel Group PLC To understand what resources (such as water,
electricity, etc.) are considered endangered or any endangered species, one must learn certain
environmental regulations of the country.
Structured conduct performance model
The concept of structure - conduct - performance (SCP) states that market structure is a
decision of strong behavior, which also determines performance. Market structure can be
measured by many factors such as the number of competitors in the industry, product diversity,
and entry and exit costs. It has been found that there are various industry rival for the IHG and
they are getting tough fight but they have great business credibility which supports them to take
competitive advantage in the marketplace (Teixeira, 2021). Conduct model says about the
product differentiation and price differentiation and they have adopting differentiating pricing
strategy for exploitation of market power.
Stakeholder analysis of InterContinental hotel
The stakeholder analysis method is. This is a great way to analyze the dangerous interior
of a hotel business.
• Customers:
They are considered to be important business partners that greatly affect the profitability
and stability of the InterContinental Hotel. According to shareholder analysis, customers will
remain satisfied with the company. That is why main needs of the company's customers are
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standard or conditional services. To meet this need, the hotel offers its customers customized
products, it also provides flexible services to customers.
• Employees:
According to the findings, employees of the InterContinental Hotel have the highest
income. Staff are not very satisfied with this hotel. According to stakeholder analysis, employees
are carefully monitored so as not to tarnish the image of the product.
Suppliers:
To maintain adequate availability of hotel and food supplies, must be paid in a timely manner to
suppliers and distributors (Li and et. al., 2021). The InterContinental Hotel maintains good
relationships with its suppliers, especially relationships with utility suppliers are maintained very
well. Relationships with suppliers are always satisfied with the company.
• Government:
Every government in the country where the InterContinental Hotel operates is required to
pay taxes. All financial activities of the organization must be reported to the government of that
country. According to the stakeholder analysis, the government is heavily controlled by the
organization.
SWOT analysis of InterContinental
Strengths Weaknesses
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 InterContinental adopts the follows
Asset light model of business
 Great global market presence of the
brand
 Strong brand reputation and
credibility.
 Customer relationship and experience
focus
 Low labour turnover ratio and more
staff engagement
 Great RevPAR and robust financials
resources (Aljarah, 2021).
 The services offered by them are not
economical to every class
 InterContinental move down to third
place globally and lost its rank to
Marriot
 Poor cyber security system
Opportunities Threats
 Increase the global level by
acquisition of various small hotel and
motels.
 Inviting digital booking facility
 Split branded hotel market
 High Dependency on third party such
as Airnab and Trip advisor
 Growing marker competition and
entry of new entrant in the market.
TASK 2
P2. Examine the internal environment and capability of InterContinental hotel using appropriate
framework
McKinsey 7-S
McKinsey 7-S is an important tool used for internal environmental analysis of
InteContinental hotel features needed for successful implementation of strategies. The 7-Ss
includes the following;
Strategy: The success formula of IHG hotel is its “asset light” strategy to drive high
quality growth, the strategy focuses on the management and control of hotels. Instead of buying
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hotels they create franchisees own, it helps to create their favourite products depending on
customer requirements and strict delivery methods. However, it is not so much emphasized
The cost-cutting strategy seems to be part of the “asset light” strategy.
System: IHG has a inclusive operational scheme that benefits in increasing demand hotel
industry worldwide. Computer Rewards Program, Web Balance, Booking plans, products and
hotel distribution are part of their system.
Structure: IHG uses a regional construction framework in which its activities are
organized
As per the geographical area, this program enables faster recycling of resources
Growth and Benefit Size (Chang and Cheng, 2021). However, this undermines the growing
Asian market the African market is a major tourist destination.
Style: IHG management is focused on openness and use co-operative leadership and
career style to support its development strategy. Moreover, IHG believes in providing pleasant
environment to correspond the goals of enhancing the stakeholder value while maintain a
customer centric focus
Staff and Skills: As part of developing the skills of its employees, IHG has power over
them IHG’s People tools, induction and ongoing training support through various platform like
IHG Hospitality , online training sessions, e-guides and forums.
Shared value: IHG performance is based on 5 shared values designed to create a better and
more attractive workplace and promote the business the value include:
 It works well together
 Make a difference
 Do what is right
 Aim higher
VRIO analysis for analysing the strategically capability of InterContinental Hotel
Valuable
InterContinental 's most competitive advantage is its large measure operating around the
name, InterContinental owns the largest hotels with 30 worldwide in more than 131 countries, it
aims to increase this benefit over the years, InterContinental has a collection of more
developments than any other hotel chain.
Rare:
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Although almost all hotels stop customers at the reception area to copy and collect their
passports by paying and investing in security and many other reasons, InterContinental allows its
guests to direct it their rooms also relax, procedures are then completed. This feature gives
people great freedom
Imitability (barriers to compliance):
One of the biggest obstacles in standing in the way of following Intercontinental old
skills the cost of trying to copy these skills is overseas. The time InterContinental spent getting
better
Employee and brand name is the hardest thing to follow in any company and it takes many years
Organization (ability to use a resource or ability):
From a consumer perspective, there is a huge difference in enjoying the company’s
premium. InterContinental has not reached the full potential in attracting the customer to them
since many of their prospectus are more frequent without being of the loyal status.
Resources Valuable Rare Imitability Organised
Access to cheap
capital
YES NO YES NO
Financial
resource
YES NO YES NO
Supply Chain
network
YES YES YES YES
Customer
network and
loyalty
Global presence YES YES YES YES
Intellectual
property rights
YES YES NO NO
Value chain analysis
Value chain is a traditional method of porting the levels of business activity. The value
chain acmes the prominence of the function executive actuality elaborate in all features of the
process, from suppliers to the right tank from the buyer. Managers need to understand what steps
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are being taken to build that value if companies are to achieve competitive advantage by
providing value to customers (Park, Song and Lee, 2021). The value chain concept that describes
the types of activities within and around an organization is important, as it builds a product or
service together
With the support of all advanced equipment and tools, processes are signified from all
actions and processes that produce the products and services to be delivered to the market.
Outgoing logistics services and end products at the hotel may be delivered and disseminated to
diverse outlets and to diverse guests. Marketing and Sales: Rooms, conferences, restaurants, all
activities that seek to attract customers and those interested in the hotel, advertising and hotel
advertising with competitors in mind
TASK 3
P3. Applying Porter’s five foreces model and evaluate the comeptive forces of a given market
sector for InterContinental
Porter’s Five forces model Threat of new entrant
InterContinental Hotel Group PLC will face less threat from new entrants. Newcomers to the
lodge are innovative, doing new things and pushing Intercontinental Hotel Group PLC through a
low cost strategy, reducing costs, and proposing fresh price offers to guests. InterContinental
Hotel Group PLC must accomplish all of these encounters and generate actual obstacles to
safeguard its competitive advantage (Cardoso and et. al., 2021). Before a company can go on
sale, it must meet the severe licensing and lawful necessities for administration strategies in the
hospitality. This kinds it tougher for new players to join the industry and, therefore, the threat of
new entrants into a weaker force. Investment requirements are high in the industry, so it is tough
to set up businesses as new costs require higher costs. Threat of substitute
Intercontinental Hotels Group have very few options available for those products,
their manufacturing activities. There are very few options available, this is done in the
low-end sector. There are very few advanced options available, but they are very
expensive. Compared to the manufacturing companies of this industry, which companies
Intercontinental Hotels Group operate at a lower retail price than competitors, with
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sufficient quality. This means that consumers are less likely to turn to other products.
This means that the threat of Substitute Products is weak. Bargaining power of buyer
In the industry, the Intercontinental Hotels Group Company operates, they are the largest
production companies. This means that only small business buyers can choose from them, so
they do not have much control over the price (He, Morrison and Zhang, 2021). Intercontinental
Hotels Group's customer base has increased customer engagement and improved its ability to
claim discounts, deals and deals. Therefore, the ability to negotiate with high customers, the
hotel and cooking industry. Bargaining power of supplier-
There are many supplier within the UK who supply for the hospitality sector hence the
bargaining power of supplier is relatively low in case of InterContinental hotel. This is because
they buy the raw mater in large size and if they do not get the favourable price they will easily
switched to the other supplier. Industry rivalry
There are many great and big hotel name in the UK hospitality business sector who are
offering the same service as Intercontinental doing, hence the degree of competition is very high
in context of the hospitality sector. There are many brand which has strong market presence and
brand value like Hilton hotel, Savoy Hotel and Grand Brighton which are core competitor of
hotel Intercontinental
Ansoff Matrix of IHG
Basic Meaning IHG
Market penetration This refers to marketing
strategy of company to
increase the sales by using the
lucrative offer in the
marketplace.
Therefore, marketers with this
approach are attracting many
new buyers by offering them
additional reimbursements
and plans so that they can
gain competitive lead. In
order to enhance the brand
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