Hospitality Business Strategy Analysis and Recommendations

This report provides a comprehensive analysis of the business strategy for the Inter Continental London Park Lane hotel, a luxury establishment within the UK hospitality sector. The report begins with an introduction to business strategy and its importance, followed by an in-depth PESTLE analysis to evaluate the macro-environmental factors impacting the hotel's operations, including political, economic, social, technological, legal, and environmental influences. A stakeholder analysis is also conducted to identify key stakeholders and their levels of interest and power. The internal environment is examined through a SWOT analysis, assessing the hotel's strengths, weaknesses, opportunities, and threats. The McKinsey 7-S framework is then applied to evaluate the organizational structure and processes. Porter's Five Forces model is utilized to assess the competitive landscape. The report further applies strategic management theories and concepts to develop strategic planning recommendations, including tangible objectives and tactical priorities. Finally, the report critiques and interprets data to produce valid strategic directions, objectives, and tactical actions for the hospitality organization, culminating in a set of actionable recommendations to enhance competitive advantage and market position.

Hospitality business
strategy

Table of Contents
INTRODUCTION..............................................................................................................................3
P1 Analyse impact of the macro environment on the selected hospitality organisation..........3
M1 Critical analyses of hospitality macro environment for determining strategic management
decisions...................................................................................................................................6
Analysis of internal environment and capabilities within organization..................................7
M2 Critical evaluation of internal environment by assessing strength and weakness of
organisation internal capabilities, structure and skill set........................................................11
P3 Application and evaluation of porters five forces in market for hospitality
organisation...........................................................................................................................11
M3 Devising appropriate strategies for improving competitive advantage & market position
based on outcomes..................................................................................................................13
M3 Devising appropriate strategies for improving competitive advantage & market position
based on outcomes..................................................................................................................14
TASK 2............................................................................................................................................14
P4 Applying a range of theories concepts and models interpret and devise strategic planning for
a given hospitality organization..............................................................................................14
◦ Produce a strategic management plan that has tangible and tactical strategic priorities and
objectives and objectives........................................................................................................17
D1 Critique and interpret information and data applying environmental and competitive
analysis to produce a set of valid strategic directions, objectives and tactical actions for a
hospitality organization..........................................................................................................18
Conclusion........................................................................................................................................18
REFERENCES.................................................................................................................................20

INTRODUCTION
Business strategy refers to a combination of all the decision and action taken by an
organisation with the purpose to attain their desire goals or objective and secure their competitive
position within market place. Specifically, business strategy is all about what need to be done so
that business goals can be meet, it’s also mean that it aid manager in making the sound decisions
regarding hiring of employees and allocation of the resources (Juliana, Gani, and Jermias, 2021).
It is backbone of any business as this roadmap lead to attainment of the desired goals. In
organisation, business strategy is a kind of the management plan that helps in enhancing the
organisational performance. It show s the way to attain objectives and without this, it is difficult to
compete in market with the other rivals. Hospitality organisation chosen in this report is Inter
Continental London Park Lane hotel which is very luxury hotel within UK. It was founded during
1975. This report will include analysis of the micro-environment elements, PESTLE analysis,
identification of the internal environment,political factors in intern apply porter's five forces on
organisation and other beneficial model that the the organisation in its development.
P1 Analyse impact of the macro environment on the selected hospitality organisation
PESTLE Analysis
The PESTLE helps the business to identify influences of the external environmental
component on the operational activities of a business. In relation to the Inter Continental London
Park Lane hotel a PESTLE analysis has been conducted so that impact of the macro economic
factors can be determined. Impact of such factors is mentioned below:
 Political factors- This element is linked with the taxation policies, political stability, trade
restriction, trade regulation and other element that many impact entire organisational
performance of the Inter Continental London Park Lane hotel. Respective hotel should pay
more attention towards its dynamics operation activities and enjoy the benefit of political
stability in UK that maintains a stable business environment. The military policies and
terrorist are other political factors that can create difficult circumstance for the respective
hotel.
 Economical factors- This element is mainly concerned with the economic growth and
development, interest rate, recession and inflation and employment rate. Inter Continental

London Park Lane hotel is considered as most popular hotel within UK as it provide their
great contribution in respective economy that generate more international currencies.

 Social factors- It conation specific cross cultural activities, customer's buying behaviour,
purchasing power and preference of customer (Latifah and et. al., 2020). In relation to the
Inter Continental London Park Lane hotel , it pay more attention on its customer and their
changing preferences so that respective hotel can meet the changing acquirements of
customers.
 Technological factors- It is related to the innovation, advanced technology and utilisation
of the latest equipment that increase organisational efficiency. In context of the Inter
Continental London Park Lane hotel , respective hotel take use of the artificial intelligence
as it allow company’s machines to work efficiently and make it enable to produce more
with best quality.
 Legal factor- It play essential role in development of the hotels industry within an
economy (Liang and et. al., 2018). The Inter Continental London Park Lane hotel must
consider all types of the legal elements before entering within any international market.
Health and safety other aspect of the legal factors within UK that must be meet by the
respective hotel.
 Environmental factors- Since last some decade- environmental and sustainability factors
are becoming more critical for the business. Pressure group and government are fast asking
companies to adhere to environmental standard. Certain element of the environmental
constituent are- safe disposal of the unsafe material, laws regulating impurity, safe water
attention, safe waste disposal, confining carbon footprint and increasing concentration on
sustainability.
Stakeholder Analysis
It is an integrated part of the stakeholder management theory that can help the organisation
in recognizing their stakeholder, who are involved in the business.(Montenegro and Barragán,
2018). Main purpose of conducting stakeholder analysis is to identify those stakeholders who are
engaged in a business enterprise directly or indirectly. In context of the Inter Continental London
Park Lane hotel, respective firm undertake this analysis with the purpose to understand
involvement of their stakeholders within their business so that they can share the profit and other
practices together. Mainly two types of the stakeholders are engaged in this analysis. These
stakeholder are primary and secondary type stakeholder. The primary stakeholders take part in the

business practice directly. Whereas secondly type stakeholders are engaged in the business
practices indirectly. In case of the Inter Continental London Park Lane hotel , its stakeholders are
differentiate based on their interest, power and participation that are explained below:
 Highly power and interested stakeholders- These stakeholders are actively participate in
the business activities and also hold a high power with high interest. In relation to the Inter
Continental London Park Lane hotel , this type of the stakeholder mainly include its board
of directors, CEO and top management staff as they are owner of the organisation and has
a power to take the decision.
 Highly powered with less interest- These stakeholders contain power to make the
business rules but they do not show and interest in organisational activities ( Ngo, 2019).
In case of the Inter Continental London Park Lane hotel, this kind of the stakeholder are
executive, department heads, partnership and investors.
 Low power but highly interested stakeholders- In organisation, these stakeholder howl a
low power but show a high interest in the organisation activities. In relation to the Inter
Continental London Park Lane hotel, stakeholder of this category mainly includes leader
and employees.
 Low power and less interest stakeholder- These types of stakeholder contain low level
power and less interest as their participation in the organisational activities are very
minimum. In relation to the Inter Continental London Park Lane hotel, this type of
stakeholder includes its labour and contractors.
M1 Critical analyses of hospitality macro environment for determining strategic management
decisions.
The PESTEL analysis is framework of macro environment which helps in analysing
strength and weakness of company in context to Inter Continental London Park Lane hotel . The
strategic management decision will get accelerated at top level that can be use for having better
decisions. The PESTEL model provides an effective idea about the external environment role
within context of Inter Continental London Park Lane hotel . Different aspects to market and
company are provided as there are several factors. The use of PESTEL analysis provide
information regarding large aspects of external environment which helps in understanding
business situation (Anaya, Wang, and Lehto, 2022). The changes in PESTEL factors can not be

determined easily which is biggest disadvantage. The analysis supports several opportunities and
accomplishes benefit from the external value. There are several factors such as political,
economic, technological etc. which affects company growth & profits. By implementing effective
strategies it can cope up with factors that will help in attaining economies of scale.
Analysis of internal environment and capabilities within organization
Organisations need to analyse their internal activities as by this they can maintain their
business performance (Nikabadi and Hakaki, 2019). In relation to the Inter Continental London
Park Lane hotel , it has analyse impact of the internal environment that influences its employees
and leader. By SWOT analysis respective hotel will become able to understand level of their
capacity. In order to identify impact of the internal environmental elements, it is responsibility of
the organisation to conduct a SWOT analysis that help them in identifying their strength and
weakness in which they need to improve. By this company will become capable to win over their
threat and get various future opportunities to grow their business.
SWOT analysis
Strength Weakness
 Inter Continental London Park Lane
hotel has highly skilled staff through
successful learning and training
programs. Respective hotel is investing
the huge resources on the employee's
training (George, 2021).
 Automation and the activities brought a
consistency of the quality to respective
hotel. Its product has enable Inter
Continental London Park Lane hotel to
scale up and down on market demand.
 Inter Continental London Park Lane
hotel has built an expertise that help
them entering in new markets that make
success of them (Holloway, 2018).
 Inter Continental London Park Lane
hotel has invested less in research and
development department as competition
is very tough in market so respective
hotel need to invest more in innovation
activities.
 Financial planning of Inter Continental
London Park Lane hotel is not done
properly, its liquid assets and current
assets ratio suggest that respective firm
can use its cash in more efficient way
than what it is doing currently (Huang
and Hands, 2022).
 Net contribution and profitability ratio
% of the Inter Continental London Park

Lane hotel are below the industry
average.
Opportunities Threats
 Latest technology provide great
opportunity to the Inter Continental
London Park Lane hotel to practices a
differentiated pricing policy within new
market (Fernández, 2019).
 Online service is another opportunity for
the Inter Continental London Park Lane
hotel as nowadays, customer prefers the
online purchasing rather than visit to
shop.
 A stable free cash enable the Inter
Continental London Park Lane hotel to
invest more in adjacent product
segments.
 Rising raw material is posing a big
hurdle to the Inter Continental London
Park Lane hotel 's profitability (Cato,
2020).
 As customer buying behaviour is
changing due to the online channel as
they prefer online service. It could be
another threat to existing physical
infrastructure driven supply chain
model.
 Shortage of the skilled employees in few
global market show a threat to steady
growth of the profit for respective hotel
in such markets.
McKinsey 7 S Framework
 Strategy- It is first framework that helps in formulating specific strategies for Inter
Continental London Park Lane hotel. It improves the effectiveness of respective
organisation within market area as it has clearly defined and communicated to all its
employees and stakeholders. (Sheng, and et. al., 2019).
 System- It include daily process, workflow and decision which make up a standard
operation in organisations. Inter Continental London Park Lane hotel follow a systemic
work procedure in its workplace in order to done their business task and other operational
activities in effective manner.
 Structure- Organisational structure help the companies on organise their every operation a
well structured manner (Bourgeois III, Eygenson and Namasondhi, 2021).

 In relation to Inter Continental London Park Lane hotel , it has adopted a specific
organisational structure in order to follow an efficacious information and communication
operation procedure with their leaders, employees and manager.
 Style- It is all about the adoptive efficacious leaderships and management style that can
improve brand value of Inter Continental London Park Lane hotel. An effective democratic
form is advantageous for every staff members of company so that they become enable to
perform their work easily.
 Shared value - This theory of model aid full to shared a specific value which is useful in
spreading the ethical consideration in organization (Hogan, ed., 2019). In case of Inter
Continental London Park Lane hotel, it also shared its specific value that can help full in
improving their market. Respective hotel has established a transparency in its workplace
and ensure that its activities are conducted with a high ethical and moral standard.
 Skills– It is last framework that determines skills of employees. In relation to Inter
Continental London Park Lane hotel, it provides an excellent level of the training so that
worker can effectively evolve new skills for actual market status. It’s all employees are
recruited on the basis of their qualification and merits.
 Staff - It concentrates on the workforce of the respective hotel and develops the peculiar
strategies that are followed by employees so that they can better their performance level
effectively. Inter Continental London Park Lane hotel has hired employees for different
position and job role internally as well as externally.
VRIO analysis
The VRIO analysis is considered an analytical technique that leads a resources orientation
theory which is mandatory for recognizing appropriate information required to take the
appropriate decision. In relation to the Inter Continental London Park Lane hotel , it is described
below:
 Valuable- These resources help in exploiting the opportunities and strategies etc. If the
resources are only valuable but not rare and hard to imitate then an organisation can only
achieve competitive parity. In context of Inter Continental London Park Lane hotel , its
valuable resources is its high brand position which help them in growing its market share
in the market rather than other competitors and has various opportunities for their brand

extension in new emerging markets. It has maintaining a strong financial position which It
rapidly growing in E-commerce space and leverage the opportunities.
 Rare- When certain valuable resources are possessed by various organisation then it create
a competitive equality situation (Stepnov, 2021). If the resources are both valuable and
rare then it gives competitive advantages. In relation of Inter Continental London Park
Lane hotel, it has a good relationship with the customers which is very rare because every
organisation has not such ability to build special relationship with it's customers. It help
them in growing their image in the market. It has a leading brand with high quality product
in the industry which is not so common.
 Inimitable- When resources are protected by the legal means such as trademarks or patent
then it become inimitable for other organisations. If the resources are valuable, rare and
hard to imitate then these are considered a competitive advantages. In context of Inter
Continental London Park Lane hotel , it has the ability to attract talent in local and global
market which is very difficult to imitate for other competitors. Its distribution and logistics
costs can be imitate by competitors but it is very difficult for them.
 Organisation- Resources do not create any benefit for a organisation, it must be supported
by the processes, structure and culture of the company. If a firm is capable to exploit
valuable, rare and imitate resources then it can achieve sustained competitive advantages.
In relation of Inter Continental London Park Lane hotel , it has a lot of potential to use the
excellent sales forces and utilized its stellar brand position in assorted segments. The
company has positioned its brands on the basis of consumer behaviour and it properly
using flexible supply chain network.
M2 Critical evaluation of internal environment by assessing strength and weakness of organisation
internal capabilities, structure and skill set.
The internal analysis of organisation examines internal components in order to access
resources, assets, capabilities & competitive advantage. This analysis provides management
knowledge to leverage the organisation strength, opportunities along with enables management in
developing strategies for mitigating threats in context to Inter Continental London Park Lane
hotel. The use of swot analysis supports organisation in discovering external opportunities that can
exploit while simultaneously identifying internal factors which causes weakness. This model helps
Inter Continental London Park Lane hotel to distinguish themselves from competitors by having

understanding of unique capabilities (Anning-Dorson, and Nyamekye, 2020). For the Inter
Continental London Park Lane hotel McKinsey framework is effective which helps in determining
state of alignment between departments and processes. This mode helps in examination of several
internal elements from company culture to its staff, leadership capabilities and process efficiency.
The intercontinental have effective strategy to work with ultimate efficiency as well as efficient
and flexible working system.
P3 Application and evaluation of Porters five forces in market for hospitality organisation.
This model helps in determining and analysing the competitive forces which shape every
industry along with helps in determiner industry weakness and strengths. The use of this model
helps in understanding competition level within industry and company long-term profitability is
enhanced. Michael E. Porter develop this model which is used as strategic management tool. This
theory determines competitive intensity and attractiveness of market which is useful strategy for
understanding organisation current competitive position (Porters five forces, 2020). In context to
Inter Continental London Park Lane hotel this model is used for having understanding whether
new products and services are potentially profitable. The several forces explain below are as
follows-
 Threat of new entrant- It reflects how new market player threats to the existing market
player. If the industry is profitable & barriers to entry are low, then more players can be
attracted and threat of new entrant will be high for intercontinental hotel park lane. The
threat will be high if existing regulations support the entry of new players, initial capital
investment is high etc. to tackle this intercontinental park lane can develop brand loyalty
by working on customer relationship management along with having investment in
research & development activities to get valuable customer data so that innovative
products & services can be introduced to set strong differentiation basis. (Chien, and et.al.,
2020).
 Bargaining power of supplier- The Inter Continental London Park Lane hotel faced low
power due to cheap switching costs, a lack of rival products, and product differentiation.
With enough market knowledge, the pricing was extremely responsive. If there are limited
providers and demand is high, transcontinental power can be costly (Williams, &

Figueiredo, 2019). The hotel can address this issue if supply chain efficiency is improved
by increasing client base size through marketing initiatives that foster brand loyalty
 Bargaining power of buyers- Intercontinental has a high power because its customer base
is so concentrated. Because there are so many vendors and switching costs are so minimal,
the buyer has a lot of leverage. The consumer has a high level of market awareness, price
sensitivity, and buys standard products, resulting in a high level of bargaining power
(Porter, M. E. 2020). To combat this, an international hotel might use marketing and
promotional methods to target new market segments, resulting in increased loyalty and
customer experience by lowering switching costs.
 Threat of substitutes products or services- Customers have the option to use the product,
so the Inter Continental London Park Lane hotel faces a high threat of substitution. When a
low-cost substitute product is available from another industry that provides greater quality,
such as an Inter Continental London Park Lane hotel, and switching costs are minimal, the
threat increases. To combat this threat, it should be emphasised that the services provided
are superior to the alternatives (Jiménez-González, Rivera-Ladino, and Gaibao-Pérez,
2019). Customers should be offered high value and experience in order to persuade them,
and switching costs should be reduced by focusing on loyalty.
 Rivalry among existing firms- It shows number of competitors giving tough competition
to the intercontinental London Park Lane hotel. There is high rivalry that face strong
pressure from rivals which limits potential of growth. The profitability is low as firms
adopts aggressive targeting and pricing strategies (E. Dobbs, M. 2019). It will face high
rivalry when existing players are strategically diverse & targeting same market. the
customer is not loyal and gets easily attract towards other brand due to low switching cost.