IHG's Strategic Analysis in International Hospitality Management

This report provides a comprehensive analysis of InterContinental Hotel Group (IHG) within the context of international hospitality management. It begins with an introduction to the industry and IHG's background, followed by a SWOT analysis to assess its strengths, weaknesses, opportunities, and threats. The report then delves into the background of emerging markets, specifically focusing on Bali, Indonesia, and applies a PESTLE analysis to understand the political, economic, social, technological, environmental, and legal factors influencing IHG's operations in this region. Furthermore, it explores the hotel strategies IHG should adopt, including Porter's Generic Strategy, and provides justifications for these strategies. The report concludes with a discussion of the practical application of the proposed strategies, offering valuable insights into IHG's potential for growth and success in the international hospitality sector.

International Hospitality Management

Contents
INTRODUCTION...........................................................................................................................1
MAIN BODY..................................................................................................................................1
Background of IHG.....................................................................................................................1
Swot Analysis..............................................................................................................................2
Background to emerging markets................................................................................................2
PEST of emerging selected market..............................................................................................3
Hotel strategy to be adopted as well as to be implemented.........................................................6
Practical application of strategy...................................................................................................8
CONCLUSION..............................................................................................................................10
REFERENCES..............................................................................................................................11

INTRODUCTION
International hospitality management is considered as the areas which facilitates individuals
various services related to lodging, travelling and others with assistance of Hospitality industry.
Moreover, hospitality management applies to various sectors such as tour, hotels, restaurants and
other services. Several employments into hospitality facilitate guidance of resort’s or hotel’s
managerial activities. Basically, the international hospitality sector is categorised into three
aspects that are food & beverages, hotels and transportation and lodging which are also
contributes towards respective industry growth (Bavik, 2020). As per the given case, the
undertaken company for this report is Intercontinental Hotel Group (IHG). It performs into
hospitality industry and developed in the year of 2003. Also, its focus is to facilitate true
hospitality to all as well as become leader into respective industry. The topics which are going to
be discussed in this report are SWOT analysis, emerging markets background, PESTLE analysis
of emerging marketplace, hotel strategy to be adopted and implemented. Moreover, the
justifications related to selected strategy are also provided. Apart from this, the practical
application of strategy is also discussed in this report.
MAIN BODY
Background of IHG.
The InterContinental Hotel Group (IHG) is known to be one of the growing entity within
world as well as their key intent is to provide effective hospitality through understandings as well
as recognising individuals and developing satisfying experience of consumers for each and every
one. Moreover, it also facilitates luxury hotels services and facilities which grab the attention of
huge customers across the world. Within international intense dynamic marketplace,
InterContinental Hotel Group (IHG) is well known to develop development of their key firm as
longer as optimising profitability upon new tactics through adding extra products to portfolio,
retain Crown Plaza Hotels project development into China as well as new posts into emergent
economies such as Bali, EMEAA and other places. Along with this, respective firm have about
842,749 bedrooms as well as 5,656 hotels in around 100 countries. Furthermore, International
Hotel Group (IHG) operates various brands such as regent hotels, Kimpton hotel, Voco, Holiday
Inn express and many others.
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Swot Analysis
SWOT analysis is considered as the anticipating method that may be utilised through
InterContinental Hotel Group (IHG)’s executives for evaluating their present situations. Within
their recent market environment, this is useful strategy for assessing the present strengths,
weaknesses, opportunities and threats of respective entity. Additionally, this retains their
influential share of market through diligent analysis as well as determination of SWOT analysis
(Dev, 2020). Also, it is highly collaborative procedures which incorporate effectual collaboration
among several firms’ areas of logistics, marketing, information management system and many
others.
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.
Consumer satisfaction: The firm have to developed their relationship with consumers as
well as have attained a higher consumer satisfaction level and effective brand equity within
potential clients as if customers are satisfied they again like to use their services that results in
gaining profit.
Weaknesses:
Ineffective financial planning: The ineffective financial planning has drives towards
ineffectual utilisation of funds as present assets rations recommends that entity may utilised
much funds than recent uses.
Opportunities:
New technology: Entity desires to do effective investment within new technologies for
making quick functioning as well as to explore business into other nations. Also, with assistance
of this respective business may able to facilitate advanced services.
Threats:
Consumer behaviour: Changing customer attitude from online channels would act as
threats to supply chain model which is physical framework of firm.
Background to emerging markets.
The emerging economies are transforming the hospitality sector, not just in regards of
several areas for exploring as well as developing business and also as possible upcoming guest’s
source within marketplace. Moreover, the hospitality marketplace is wide as well as facilitates
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various facilities to clients based upon its audience’s desires. In addition to this, it is also
advantageous for economies implicitly as visitors purchase retailing goods, workshops and
others in local manner. Along with this, the tourism would stimulate the formation of
infrastructure as well as transmit of mass. Also, for describing the emergent of InterContinental
Hotel Group (IHG) into developing nations, it may explore its business within Bali which is a
part of Indonesia that covers around 0.3% of this area. Moreover, Indonesia is undertaken as
developing nation whose development is smaller as compare to developed country. As nation
exists among Pacific ocean as well as India, various cultural, economical, political and others
factors that influences may be identified upon islands. Along with this, Indonesia started for
promoting Bali as Island for global tourism, the society is penetrating through modern influences
as well as unfolding to modern industrialised society.
PEST of emerging selected market.
In order to define the emergence of IHG in developing nations, they can extend their
business in Bali with covers wide surface of particular region. Indonesia is a developing nation
whose level of development is low in compare to the developed countries (Morgan and
Pritchard, 2019). Moreover, The nations which exists among India and Pacific Ocean have
many different cultural, religious, political and economic aspects that has affect upon business..
Indonesia started to promote Bali as the island for international tourism, the community is
penetrating by modern trends and disclosing to a modern industrialised community. To
determine the external factors, PESTEL Analysis can be considered which will affect IHG
existence in the new market:
PESTEL Analysis
It is a tool which is used to find out the impact of macro environment components on the
business. PESTEL demonstrates as political, economical, social, technical, ecological and legal
components. Before implementation of any kind of strategy and tactical plan, it is preferred to
organise a situational analysis of the marketplace. This analysis basically used to determine the
external environment where they are running or planning to introduce new project and services,
In IHG, the management can consider this framework to analyse the direct and indirect of
external factors on organisation’s functioning.
Political factors
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This aspect makes an effective contribution in analysing the components which may
influence the organisation’s long term profitability in certain nation or market. The respective
venture is running in Travel & Leisure in several nations and representation itself to diverse sorts
of political atmosphere. As per the above components IHG determine the situation in to new
market:
Political stability: The political environment within that region like Bali impacts their tourism,
hospitality and others industry. So, the higher political stability described a much prosperous
tourism as well as hospitality sector. Also, Bali have long been known for their stable political
atmosphere and due to this respective industry are much promising for travellers.
Economical factors
ICH group may utilise nation’s economic components such as growth rate, inflation or
deflation, interest and industry’s economic indicators etc. to forecast the development of the
firm.
Labour cost- In Bali the cost of labour is quite low in compare to other nations which
will show to be profitable for venture because it will direct in reduction of expenditures and cost
as well as also enable in offering job options with the nation (Law, 2019). Therefore, it is
profitable for both nation as well as organisation.
Exchange rate- The stability in exchange rate of the nation’s currency has an optimistic
influence on the firm. It would not be complex for them to analyse the modifications as well as
time and cost effective.
Social factors
The culture of the community and way of doing things has influence on the culture of the
company in an atmosphere. Shared beliefs and viewpoint of the population has a great role in
how marketers at ICH group will acknowledge the target audiences of new market and the way
they design the marketing message for travel & leisure sector.
Development- The FDI and DDI development within the nation is sustainable that is
quite good for travel and leisure sector and will direct into sustainable growth of venture. The
most of the individual in Bali belongs to customer section which is a favourable condition for a
firm.
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Culture- The respective nation is among top 4 crowded nations with high male
population than female’s and has medium human development. Bali s most popular for tourism
and the culture is appropriate for the development of the company.
Technological factors
Technology has a fast disrupting impact on almost every sector crosswise the board. An
organisation should not only rely on the examination or investigation of technical determination
of the sector but also the speed at which technology disrupts that sector (Gursoy, 2019). ICH
group basically utilises fast speed technology which offers little time to be profitable.
Utilisation of electronic mediums- The utilisation of high tech in forms of e-payment
utilise by organisation is most desired through individual in Bali that will make the billing
system simple and fast for the consumers and venture.
Utilisation of digital platform- The nation utilises digital mediums because it is fourth
largest users of social stands that will direct to optimistic influence on the venture (Lynn, 2019).
As the establishment already consider all preferable social platforms to build a large base of
consumers to aware about the existence of firm and about its services and facilities.
The hospitality sector has instant significance and influence on the national and
international level because this industry is at developing phase and has optimistic influence on
nations. There are wide range of national and global instruments and agreements which are
shaped to endorse tourism at global extent. Tourism is one of the important aspects for the
growth of hospitality sector which is based on tourism only. This makes contribution in the
development of the financial position of the companies of particular sector as well as nations.
The national authority of Bali, promotes tourism and provokes hospitality sector to set up
business there in context of assisting the nation in fast economic development. Promotion of
tourism and hospitality sector has clear execution and applications in the employment industry
and straight work field (Kandampully, Zhang and Jaakkola, 2018). The hospitality sector offers
following advantages at both the levels such as national as well as international. They are as:
 It enables in maximising the development of foreign investment atmospheres.
 It develops mutual confidence among business ventures and communities within they
operate and function.
 They also offer suggestions on social complexities and issues like employment &
industrial relation activities, human rights and customer interest etc.
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 It assists in improving the image of the organisations as national and international level
which enable in making development in the economic system.
Hotel strategy to be adopted as well as to be implemented
This is essential for InterContinental Hotel Group (IHG) to determine their business
position as well as identify the ways for developing as well as for that they required to
effectively develop strategy for obtaining success. Moreover, the growth factor includes risk, but
appropriate strategy would provide stability, security as well as longer term profitability (Franco
and et. al., 2020). In addition to this, the determinations of opportunities become prior for
assuring sustainable growth into organisation. These are some strategies that are utilised through
InterContinental Hotel Group (IHG) for identifying the options of growth into new market area:
Porters Generic Strategy:
This is considered as the model that is utilised to identify relative position o firm into
hospitality sector. In addition to this, any business may sustain into marketplace for longer
duration in case there is presence of effectual tactics. Moreover, this is a technique that is utilised
for determining the organisational profit either their above or below to average of sector.
Essentially, there are two factors of competitive components an entity may has lower cost or
differentiation. So, for reaching towards above average porter’s generic model is used in respect
of InterContinental Hotel Group (IHG):
Cost leadership: Within respective strategy an entity try to appeal to cost restricted or
cost conscious clients for gaining market share. Therefore, the key intent of firm is to be low cost
producer into respective sector. In respect of InterContinental Hotel Group (IHG), it has
minimised the cost of few of its services that depends on areas and clients.
Differentiation: For attaining a competitive edge, whole firms try to develop its product
indifferently or much eye catching from another similar products into firm. as per this, the firms
generally targeted to large marketplace as well as concentrates upon differentiation (Filimonau
and Naumova, 2020). Also, this varies across sectors, offerings and other and incorporates
various characteristics, durability and functionality. In respect of InterContinental Hotel Group
(IHG), it facilitates services such as complimentary breakfast along with tow night stay so this
makes them different from other ones.
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Focus: This is undertaken as that firms who are concentrating to target a segment group or
chosen segment into sector for facilitating them exclusive services. Moreover, this strategy has
two variants that are: Differentiation focus: This tends to that entity that has much focus towards differentiation
within their chosen segment. Moreover, with respect to InterContinental Hotel Group
(IHG), it has developed kinds of room from other hotels for facilitating effective services.
 Cost focus: This is considered as those entities who seek towards competitive edge into
their chosen marketplace. Moreover in respect of InterContinental Hotel Group (IHG), it
targeted both lower as well as higher profile individuals to render service that based upon
cost. Also, it is a feasible ways for them to improve brand reputation within new
marketplace.
Therefore, for InterContinental Hotel Group (IHG), this has been determined that cost
leadership is effective for them among others. It is helpful for them to expand their market share
within Indonesia. Also, it is useful for respective entity for becoming lower cost producer of
particular sector. Additionally, it may examine whole aspects of cost advantage sources. Also,
when entity is become competent for meeting as well as sustaining whole cost leadership, then it
may simply be effective performer within marketplace.
Ansoff’s matrix strategy
This is considered as strategy that is utilised through firms for analysing as well as
determining its plans for development as well as growth (Mooney, 2020). Moreover, respective
matrix is commonly undertaken as market or product expansion grid that incorporates four
tactics which may aids firm to develop as well as also determine the risk related with every
strategy. Market Penetration: Respective strategy is utilising when concentration is upon
enhancing sales if existent products within existing marketplace. Moreover for attracting
the consumers into existent marketplace with assistance of market penetration strategy,
firm may minimise the cost, enhance promotional activities as well as distribution
potential or can obtain business rival into similar market. Product development: Within product development strategy, firm forms as well as launch
new product for catering to existent market area. Moreover, the key concentration is upon
extended research & development of firm’s product range. In addition to this, respective
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strategy is utilised when entity has stronger knowledge of its present market as well as
have ability to facilitate effective and creative solutions for meeting the desires of
existent marketplace. Along with this, for introducing respective strategy, firm invest into
research & development for formulating new goods within existent marketplace through
obtaining offerings of rivals as well as emergent resources for creating new products to
grab the attention consumers or developing strategic partnership with other firms to gain
competitive edge. Market development: Within respective strategy, firm plans for entering into new
marketplace with their existent offerings. In addition to this, it is much success for
business who have their own prior technology which they may leverage in new markets,
potential clients of new marketplace possess disposable revenue as well as customer
behaviours within new market area would not deviate much from customers of existent
markets (Sonnenschein, 2020).
 Diversification: With utilisation of respective strategy, firms enter in new marketplace
with new offerings. Additionally, it is quite risky as this incorporates both products as
well as market development and on another side; this has huge efforts to enhance
incomes.
Thus, InterContinental Hotel Group (IHG) would use market development strategy. For
entering into new market firm desire to determine as well as evaluate marketplace in respect of
geographical regions, consumer segment and others. As BALI is known for tourism as well as
this would be sustainable for entity for expanding their business in respective areas with their
existent range of offerings.
Practical application of strategy
For the practical implication of strategy, InterContinental Hotel Group (IHG) implements
Nykiel’s fourteen strategies. Moreover, it is utilised through entity for determining as well as
identifying the circumstances as well as develop tactics consequently before entering within new
marketplace (Guzzo, Abbott and Madera, 2020). In addition to this, some of the factors are
discussed below: Horizontal expansion: The InterContinental Hotel Group (IHG) try to explore their
business within developing nations from singular hospitality services to other with their
existent range of product line.
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 Geographic expansion: The firm with appropriate strategic planning can develop from
relative small dimension to greater areas in order to enter within new market of Bali. Product Hybridization: Respective strategy is presently of no usages for InterContinental
Hotel Group (IHG) as it does not desire to explore their services range within new market
as well as desire to enter into market with existent product range. Specialisation: InterContinental Hotel Group (IHG) would need specialising to associate
with upper level development within services facilitated with moderate cost in order to
enter within new marketplace. Product packaging: The firm in respect of Bali would be dealing with forces related with
development of population as well as changes in economy and enhanced market
segmentation. Product re-branding: The entity would utilise re-branding strategy for introducing their
existence within new marketplace as well as for enhancing the consumer base. Non- Franchising: InterContinental Hotel Group (IHG) is constantly concentrating upon
its services, quality ownership and service management to enter into new marketplace. Franchising: The firm maintaining as well as following a higher developed operational
tactics within business for growth which is being comply inside hospitality sector to enter
into new market area. Brand collection: InterContinental Hotel Group (IHG) is also known for their premium
services across the world as well as is undertaking advantages of limited resources in
order to buy branded offering which are effective for facilitating potential development. Management contracts: InterContinental Hotel Group (IHG) has longer term as well as
effectual team of management. Moreover, it recruits individuals based upon contact bases
so that this would not impact their activities as well as operation within longer duration as
new employees needs time for acknowledging the structure of firm. Horizontal as well as vertical integration: InterContinental Hotel Group (IHG) is
considered as one of the growing hospitality services facilitator all over the world. Also,
it is a part of above singular hospitality segment with intent of obtaining competitive edge
by investment within sector in order to enter new marketplace.
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 Singleness: InterContinental Hotel Group (IHG) is known as single service facilitator
along with whole ownership and control of management all over the world as well as
comply same while enter within new marketplace. Value related offerings: Based upon the desires of consumers into new marketplace, the
firm would perform changes as well as introduce new services in order to satisfy specific
value or trends into clients.
 International positioning: The entity is already have developed their presence across the
world with their effective quality services as well as regularly undertaking the aspects
which would affects their positioning within marketplace (Arlt, 2020).
JUSTIFCATION
As from the above analysis this has been analysed that the respective firm may utilise
various strategy by evaluating various model such as Ansoff’s matrix strategy, Porters Generic
Strategy and others. this incorporates several strategies so, among them InterContinental Hotel
Group (IHG) would use market development strategy. For entering into new market firm desire
to determine as well as evaluate marketplace in respect of geographical regions, consumer
segment and others. As BALI is known for tourism as well as this would be sustainable for entity
for expanding their business in respective areas with their existent range of offerings. In addition
to this, would use market development strategy. For entering into new market firm desire to
determine as well as evaluate marketplace in respect of geographical regions, consumer segment
and others. As BALI is known for tourism as well as this would be sustainable for entity for
expanding their business in respective areas with their existent range of offerings.
CONCLUSION
As per the above report, it has been concluded that international hospitality management
plays essential role within respective industry as it incorporates various facets of particular
sector. Moreover, the contemporaneous issues would be highlighted and those would be
changing every year. In addition to this, business expansion is performed within firms to enhance
profitability. Also, there is requirement to determine the strengths as well as opportunities of firm
before performing market expansion. So, some model are used like SWOT, PESTLE, Ansoff
and others as all these is helpful in understanding to manage the international hospitality business
while entering new marketplace in effective and efficient way.
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