International Hospitality Management Report: IHG Hotel Market Entry

This report provides a comprehensive analysis of the Intercontinental Hotels Group (IHG) and its strategic approach to international hospitality management, particularly its planned entry into the Brazilian market. The introduction gives an overview of the travel and tourism industry and IHG's position as a multinational hotel chain. The report examines the internal and external market factors, including a SWOT analysis to assess strengths, weaknesses, opportunities, and threats, and a PESTEL analysis to evaluate political, economic, social, technological, environmental, and legal factors influencing IHG's strategy. The report also explores strategic models like the Ansoff matrix, Porter's generic strategies, and Nykiel's overview to guide decision-making. The report justifies the chosen strategies and discusses their practical application, ultimately providing insights into IHG's potential for success in the Brazilian market and the broader context of international hospitality management. The report concludes with a summary of key findings and recommendations based on the analyses.

International
hospitality
management

Table of Contents
INTRODUCTION ..........................................................................................................................3
Overview of industry and company............................................................................................3
SWOT analysis............................................................................................................................4
Background of Emerging market................................................................................................5
Pestle analysis.............................................................................................................................5
Hotel strategy to be developed....................................................................................................7
Justification...............................................................................................................................11
Practical application of strategy in past years...........................................................................11
CONCLUSION..............................................................................................................................11
REFRENCES.................................................................................................................................12
Books and Journal.....................................................................................................................12

INTRODUCTION
Travel and tourism is the place and scenario in which people want to live their life
beyond their jobs and working environment. Travel is essential part of an individual life which
provides them an opportunity to explore new things. In order to execute these opportunities into
a well experience, international travel industry makes it possible by providing high quality stays
and hotel services. This industry include hotels and travels supporters who enable bookings and
packages for travel seekers. Internal continental group is one of the multinational hotel sector in
tourism industry also known as IHG. It is a British chain of hotel group which has established in
Denham, England. The hotel serving its five star facilities since 17 years around from 2013 and
still counting. The hotel has high class services into around 100 countries and looking forward
for its growth and expansion into emerging market. This report will be covering factors of
internal and external market to understand its potential in order to enter into the market. IHG
plan to enter into Brazil market where, there are lot of opportunities for tourism sector by
assessing all the ways (Johnson, and Park, 2020). IHG decided to enter into Brazil market with
the aim to establish luxury footprints by acquiring new hotels into smart cities. This expansion
will be result in delivering services through digital sources. This will be done through SWOT
and PESTLE analysis to get an accurate image of the hotel. Moreover, to conduct decision
making strategies, effective model will be used like Ansoff matrix, porter's generic and Nykiel's
Overview of industry
Travel and tourism industry are both significantly interconnected. Travel involves roaming to
one place to another in relation to exploring new cities or for work reason. Travel has become an
essential part of human survival to see the world from different view and enjoy to full extent. In
this context, tourism industry play a critical role in attaining people expectation into a lifelong
experience. The industry includes services like transportation, accommodation, campaign,
hostels, entertainment and visits. Customers get all these services at reasonable rates and
attractive facilities like casino, bars and clubs, gaming zone, room services are provided.
Overview of company
IHG Intercontinental hotel group has a main aim to provide their clients with high quality
services experience as per their respective demand (Martín-Rios, and Ciobanu, 2019). The hotel
has expanded largely with 889,582 rooms and 36,643 human resource. The hotel group has

worldwide coverage into different brands consisting crown plaza, Regent hotels, six sense hotel,
hotel Indigo and many others. The hotel group is mainly popular in its dinning, multi cousins
area and a great interior view that attract number of trespassers reason being is in central located
area. IHG group specialised in its luxury services over the past 17 years. The company take
advantage of all the market opportunities to rise up their growth and be a worldwide provider
into tourism industry.
SWOT analysis
This model is effective in analysing internal factors of the company which helps in
ascertaining strength, weakness, opportunities and threats in relation to expand new market by
understanding main areas and positive existence of company. These factor in relation with Hotel
IHG are described below:
Strength: this factor shows the strong area of an organisation which makes them
potential to stay into competitive market. Strength reflect good area of their internal
environment through which an organisation has maintained its growth. Intercontinental hotel has
highly qualified employees. As the hotel group always focus on providing effective training
session for the aim to maintain effectiveness into organisation services (SWOT analysis of
InterContinental Hotels Group Plc, 2021). Along with this, due to high competence into the
market, hotel has achieved high scale of economies that makes positive influence into its
expansion (Van Niekerk, 2017). This strength will help in providing luxury services by the
engagement of professional and skilful employees into Brazil market.
Weaknesses: weakness are the factors which consist weak area that hinders the growth
of organisation. These weak points needs to be addressed effectively. Weakness becomes the
main hurdle in the organisation performance. They are the only cause that needs to be resolve
within specified period of time. IHG does not have effective promotional activities that hinders
their speciality into product and services (SWOT analysis of InterContinental Hotels Group Plc,
2021). Their products are highly qualitative but that does not represent unique selling point.
Through which they could not take advantage stand against competitors. In order to successfully
implement strategies into Brazil market, they aim to convert their services into digital
technologies to overcome with these weakness by adopting digital source of promotion.
Opportunities: This reflects market opportunities into a concise manner, organisation
needs to adopt and evaluate market analyse so that they could easily grab new scenario,

strategies and build innovative environment of working (Kadry, Bagdasaryan, and Kadhum,
2017). These opportunities could be come up through present performance of the company, as
IHG needs to accumulate new pricing strategy so that each class customer retain for longer
period time and loyalty would be enhanced. The company must assure online activity into
effective manner, that shows large customer welcome and rise in productivity. Getting prevailing
opportunities through digital platforms into Brazil market, the hotel will get success in acquiring
new ventures and large sustainability.
Threats: This factor creates much power on companies profitability and efficiency as
these would be major cause for not working well with the environment. Threats lower down the
performance and become hurdle in front of organisation effectiveness. Negative execution of
business activities with influence of ineffective employees, improper strategies, competitiveness
into market are biggest resolution of threats. IHG facing industry comparativeness in terms of
less sales due to seasonal and peek sales. Also, changes in government policies in regard with
environment consequences under Paris agreement 2016 restrict diversifies production. In order to
expansion into new market or existing share into China, company facing rise in pay in per hour
contribution impact on hotel profitability (SWOT analysis of InterContinental Hotels Group Plc,
2021).
Therefore, working environment of IHG needs to considers these factors in order to enter
into new market. Threats needs to be resolve and opportunities must facilitated so that new
policies and strategies would work into better manner.
Background of Emerging market
IHG decides to enter and connect with new and leading market which has emergence
facilities and interactive policies. It is a large market with 2,021 billion dollar reach of GDP and
growth by 1%. The country is the largest in south America that makes it a most dominant
economy into GDP contribution. Due to high demand of tourist place in the country, there is
huge entrance of tourist into recent years so that government has made changes into their policies
for enhancement of tourist and increase foreign investment. Brazil has attractive locations that
tourist come for which includes Jakarta, Bali and more. Due to large exposure of the market, the
country could develop new technologies within next 5- 10 years.

PESTEL analysis
PESTEL is a tool that analyse external factors of the organization which include political,
economical, social, technological, environmental and legal factors. It is a part of strategic
planning that aware an organization about how the external factors affect the business of an
organization (Penela, Morais, and Gregory, 2019).
Political
Political factors are the factors which include government intervenes in the country. It
include stability, tax policy, foreign policy etc. which affect the business and its working.
Intercontinental hotels is multinational group as it serves in different country, so it is important
for them to asses the political factors. Brazil is one of powerful country and is member of many
international organization. It is developing country and has political stability which is good for a
growing business. The tax structure of Brazil is simple for new businesses like Intercontinental
Hotels. But there are some issues related to corruption in the country which stops the economic
development of the country. Corruption results in uneven distribution of wealth which increase
the competition for the business of Intercontinental. There are number of regulatory authority
which ask for bribe from business for passing their projects (Kongsatt, and Yoopetch, 2018).
Economic
Economic factors are those which affect economic performance of the company.
Economic factors include inflation rate, interest rate and many more. For instance, change in
inflation rate would affect the price of goods and service a company or organisation is offering.
Inflation rate in Brazil is increasing which results in increasing cost of raw material. Therefore
the cost of goods and service is also increased that create uncertainty for Intercontinental. But at
the same time their interest rate is decreasing which is beneficial for the business of
Intercontinental as they get finance at cheaper rate.
Social
Social factors are those factor which affect the culture, norms, value, age distribution and
many more. Unemployment rate in Brazil is positive aspect as it provide labours at a cheaper
rate. Poverty is big issue for doing business in Brazil as people have less purchasing power
which create negative impact on Intercontinental Hotels (Zhang, Meng, and Li, 2019).
Technological

Technological factors are important for business as it helps to reduce the cost of the
company. Technological factors also important to create a unique advantage for the firm. Brazil
has biggest information and communication technology market which create opportunity for
Intercontinental hotels as they can get the advantage of technology. But it also increase their cost
which can be a costly affair.
Environment
Environmental factors are important as government is now regulating the aspects related
to environment like pollution. Brazil is the country that attract the tourism as there are many
beautiful place like Amazon River, Beach, National Parks and many more. Tourism is important
for Intercontinental hotel as hotel business earn from tourism.
Legal
Legal factors include all those laws which a company need to follow in order to run a
business for long period. Legal factors include laws like employment law, safety law, consumer
law etc. It is important for a business to know what actions are legal and what are not. So it is
necessary for a business to take legal factor into consideration (Usakli, and Kucukergin, 2018) .
The laws like employment law and consumer law are important to follow for Intercontinental
hotels as it affect their business.
Hotel strategy to be developed
Ansoff matrix
This is a significant model of market structure that specialise in building growth and
expansion so that an organisation develop effective strategies. This matrix provide four factors
under which an organisation could think of its expansion. These four factors shows how to
grow, where to grow and what risk it could be evolved with growth and expansion. This tool
mainly used in long term, where IHG could establish market segment in which way they want to
achieve large marketplace. In context to hotel IHG which decides to enter into new market, there
are evaluation of four market strategy described below:
Market Penetration: Under this strategy, organisation focus on providing present
product into presently served market. This strategy helps in building more brand image with
loyalty of customers. A well established business could only be settle when the organisation put
all their efforts in fulfil consumer demands by retention and satisfaction. IHG group provide
services into large area provide 24/7 services providing facilities for parking, room dining and

great quality food. Into current market, the hotel will focus on more of luxury services and
technological up gradation to make effective changes into hotel stays. in order to implement this
strategy, R&D department plays crucial role here in analysing market opportunities and research
about current trends. (Batle, Orfila-Sintes, and Moon, 2018).
Product Development: As per this strategy, organisation influence on launching and
providing new products into presently served market. New product and service will lead to
innovative ideas and maintain technological up gradation for successful retention into market.
IHG group of hotel brands provide modern services and prepare good quality food material that
will match with customer preference. Through these factors, the hotel would easily overcome the
threats and market opportunities. IHG provide wifi facilities, room interiors and modern
technologies room services. These development keeps a creative environment into hotel which
helps in attract local tourist, foreign investors and online customers. IHG will develop new
product by understanding what is required into modern world and build a plan by undertaking
cost and competitive factors into consideration.
Market Development: Into this method, organisation decide to grab new market share
with presently served products. Market development become an essential aspect when company
looking forward to its growth. Developing market by entering into new one and serve the must
demanded existing product. IHG has shown a large development by contributing their services
into more than 100 nations. Wherein, they serve high quality services that creates overall
image of the brand (Nguyen, and Nguyen, 2019).
Diversification: this process is highly qualitative and complex procedure where company
wants to enter into different market with differentiation into existing product. Diversification
require huge investment and financial pool to or research and developing a new market segment.
The procedure become complex because it require a lot of efforts and market knowledge. IHG
grip could not have huge investment or time management to think of diversification as they are
not effective risk taker.
Porter's Generic strategies
In today's leading world, market competition rising at fast pace and increasing in entrance
of new businesses. This model provide a relevant assistance for analysing market competition
with buyers preference as well as suppliers. Competition rises due to entry of new firms with

more high qualitative service which eventually reflects on customers satisfaction and changing
policies in cost efficiency. This model gives analysis of four forces that impact on organisation
performance and potential to face competition. Here are four analyse on IHG that is explained
below:
Cost Leadership: this factor consist the fact that every organisation desires to gain
number of customers towards their products and services by maintaining effective cost schemes
so that they would not lack with market share. due to which, IHG group provide quality services
at reasonable rate that cover up their cost and generate minimum revenue. They are more
effective as compared to The Ritz Hotel, London. they are not serving desired amount of service
that results unaffordable for low or middle class customers. In order to enter into emerging
market i.e. Brazil, the hotel could provide luxury facilities by ensuring affordable prices to attract
customers at initial stage. To do this, the company need to utilise resources into fuller manner so
that both profit and cost gets balanced.
Cost Focus: Under this strategy, organisation maintain their low cost high services
criteria but they also differentiated the area. Through which, only smaller part of section will get
the advantage of low pricing in order to retain maximum revenue target. This strategy focus on
mainly monopolies structure who could differentiate their price level. IHG hotel group provide
their luggage, laundry and food services at a very reasonable rate into under developed area
where as, they maintain maximum price for these services into developed economy where people
prefer high quality maintenance (Myung, Kim, and Barrett, 2020). In order to acquire hotel into
Brazil market that has good growth under GDP rate into recent years. They could take mover
advantage of ascertaining high prices to provide luxury facilities.
Differentiation Focus: according to this strategy, organisation try to make comparison
with market competitors as what they do and what their competitors do. For this instance,
organisation make use of new policies into their product and services with aim to leave behind
their competitors. Organisation must get clear about unique selling proportion into their services
so that objective could achieve and competition maintains. IHG try to be indifferent from their
competitors by producing services with high standard and flexible timing for check in and check
out. Also, they have good cousin lifestyle in which schemes and scorecards provides with
discounted auction.

Differentiation Leadership- under this strategy, organisation make possible efforts in
targeting huge market with superior prices. This strategy involves high amount of risk
organisation charge high process from the locality of customers who prefer to get healthy
lifestyle and maintains their standard so that it would only beneficial to these type of customers
and disadvantage for those who look for minimum prices, IHG charge high prices from some
sections of the society but in return provide a unique selling aspect that makes the customer
happier and visit to hotel again. In order to be risk free and make effective contribution, the hotel
first analyse the market and region demand then set their desired goals. As the company has
come up with the strategies for acquisition into Brazil market, they decided to attract customers
with luxury lifestyle and provide thrilled experience of resorts, spa and accommodations with
reasonable pricing policies that will help in gaining loyal customers at initial start-up.
Nykiel’s 14 growth strategies
The intercontinental hotel group assess effective strategies generated by Nykeil;s 14
growth aspect (Fraser, 2020)
Strategy one: Expansion to diversification: IHG focus on rendering their product and services
into different region or sector as they decided to expand their hotel group into emerging market
of Brazil through acquiring luxury hotels with digital technology in delivering and implementing
new ways of hotel accommodations, tourist stays, resorts and spa.
Strategy two: Geographic expansion: under this strategy, the organisation decided to expand
their operations into large area of country so that new people will attract towards new services
with high quality standards.
Strategy three: Product Hybridization: It provides different products and services into a
greater section of society where, people are more influence by luxury services and will help in
maintaining sales and revenue. IHG group make the relevant products segments that will be
helpful in acquiring goodwill of the company.
Strategy four: Specialization: this will focus on upgrading the services by keeping low cost and
high quality services. This way, the organisation could balance their changes into price and
services. Through which, large customer attention will be generate.
Strategy five: Product Tiering: this strategy put influence on different aspect of customer
demand. in order to deal with economic problem which is essential to put focus on society

welfare, These factors have effectively analysed by IHG group so that their services are
inherently standardised.
Strategy Six: Product Re: Branding: the company will focus on rebuilding their brand name in
order to provide customer with new inventions and experience. This change will impact on
service of IHG so that more funds would get generate for making innovation.
Strategy 7: Franchising: This is a highly recommended growth strategy that needs to be asses
by hospitality industry as it the business which is a pool creativity and innovation IHG has
various franchising operation that makes contribution into economic GDP through maintaining
regular innovations in order to develop emerging markets.
Strategy 8: Non-franchising: This strategy make influence on monitoring over their product
and price so that future growth would automatically results in effective value.
Strategy 9 : Brand collection: this strategy provides an opportunity to take merits of brand and
sponsorships through different reputed brands. That is beneficial for IHG group in order to
attract investors and marketers for entering into new market.
Strategy: 10 Management Contracts: this strategy is suitable for hotels who include contracts
of banking, financial, and funding facilities so that it will be helpful in managing the operations
effectively.
Strategy: 11: Vertical and Horizontal integration: This factor helps in managing and
achieving growth from all direction. IHG group work on taking competitive advantage in market
by analysing all the area which could directly and indirectly affects their growth. (Pham,
Tučková, and Jabbour, 2019).
Strategy: 12: Singleness: These strategies helps in investing into international branding into
market which attract foreign investors and large revenue operation.
Strategy: 13: Value related products and services: this strategy is mainly inductive for
innovation into product and services that serve some unique value to customers. So that IHG
group capture huge customers engagement.
Strategy: 14: Global positioning: this strategy is highly concerned about getting global
expansion of the organisation. By maintaining good strategies and attractive framework, IHG
could attain global branding into the market that will impact into its goodwill and perpetual
succession rises.

Justification
The hotel IHG has evaluating all the strategies which will be helpful in their growth. It is
obvious that the company has achieved huge height into worldwide nations through its emerging
efforts towards analyzing market, be ready to make optimum utilization of resources, keep
planning for innovation and other major aspects. Therefore, it has justified that focusing on one
strategies that has built by the hotel is to provide luxury accommodation and hospitality services
into Brazil, this would be done through managing internal and external factors has changed the
concept of working that influence on being better into working. As the country has large
opportunities into technical world, IHG would be dealing with their services through adopting
digital platforms and online channels for promotions and effective services. (Singh, and Lepp,
2020) (Wang, 2018).
Justification shows the concept of management of hotel in hospitality sector that it is
essential to be effective in managing people, power, promotion and services. Overall, the hotel
grouping serving its best of techniques providing first class facilities. Building strategies, making
execution, preparing for uncertainties are basic requirement of company to grow and
development into Brazil. Tourism industry has shown an immense growth into these years into
Brazil as people are preparing them to roam around the world with the best of facilities.
Practical application of strategy in past years
The intercontinental has become world’s largest chain of tourism industry that has build
up their image and goodwill with effective business techniques. The company is going to
practically implement their strategies into future context by overseeing market demands and need
for luxury services through taking clients feedback. Through implementing strategies, the
company will lead into overall world and gain immense advantage against competitors. In
coming 5 and 10 years, IHG will set an image on luxury services into Brazil market, that will
contribute into economic development and more GDP growth. (Zeng, and Wang, 2018).
CONCLUSION
The above report has stated the influence ion internal and external factors ion hospitality
industry that has impacted on its performance. Hospitality industry play vital role in tourism
sector as people expect many possible contribution from their existence. For which, they had to

understand factors which make impact on their growth. Moreover, by analyzing different
opportunities and weaknesses they could get interchange it with positive aspect. In order to
manage expansion or entry into new market. Identifying market competition is necessary which
has concluded in this report. These strategies has evaluated significance of market development
with new or existing product or new market entrance. It is essential to be that much potential that
no competition will stop company’s success.

REFRENCES
Books and Journal
Johnson, K.R. and Park, S., 2020. Mindfulness training for tourism and hospitality frontline
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factors and challenges. Tourism Management, 70, pp.218-229.
Van Niekerk, M., 2017. Contemporary issues in events, festivals and destination
management. International Journal of Contemporary Hospitality Management.
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scheduling in hospitality management. In 2017 7th International Conference on
Modeling, Simulation, and Applied Optimization (ICMSAO)(pp. 1-6). IEEE.
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continuously growing segment in the hospitality industry. International Journal of
Hospitality Management, 76, pp.132-151.
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Nguyen, N.T. and Nguyen, L.X.T., 2019. Applying DEA Model to Measure the Efficiency of
Hospitality Sector: The Case of Vietnam. International Journal of Analysis and
Applications, 17(6), pp.994-1018.
Myung, E., Kim, Y.S. and Barrett, S., 2020. Environmental Management and Performance of
Hospitality Firms: Review and Research Agenda. Journal of Quality Assurance in
Hospitality & Tourism, pp.1-23.
Pham, N.T., Tučková, Z. and Jabbour, C.J.C., 2019. Greening the hospitality industry: How do
green human resource management practices influence organizational citizenship
behavior in hotels? A mixed-methods study. Tourism Management, 72, pp.386-399.
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Singh, S. and Lepp, A., 2020. Identity images of undergraduate college majors: implications for
hospitality and tourism education. Journal of Teaching in Travel & Tourism, 20(1),
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Wang, H.Y., 2018. Investigating the factors of hospitality company-branded Line stickers that
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Fraser, B., 2020. From Hospitality Classrooms to Successful Careers: A Current Appraisal of
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