Hyatt Hotels Corporation Case Study: Strategic Management Analysis

This case study examines the management and strategic challenges faced by Hyatt Hotels Corporation, a family-owned business with a global presence in the hospitality and tourism industry. The study identifies microeconomic challenges such as socio-cultural elements, technological innovations, economic factors like seasonality and currency fluctuations, and environmental regulations. It also addresses micro-level challenges including supplier power, consumer preferences, competitor rivalry, and threats from new entrants and substitutes. Strategic recommendations are provided, focusing on competitive strategy through lower pricing, superior services, market segmentation, and investment in knowledge and experience. The study also suggests strategic direction considerations for business expansion or contraction, and strategic methods like utilizing existing resources, integrations, and joint developments to enhance organizational adaptability, effectiveness, and customer satisfaction. Key elements for successful strategy implementation, such as SWOT analysis and resource planning, are also emphasized.

Hospitality
and Tourism
management
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Case study overview
 Hyatt Hotels Corporation which is a family business has
diversified and established its brand and positioned its market
internationally
 . It runs several hotels and resorts in many cities and countries.
 The management of Hyatt hotels combats many issues related
to the tourism industry like product perishability, inseparability
and intangibility, currency exchange rates fluctuations,
economic conditions changes, high competition in the
hospitality industry, brand or ownership changes, business
patterns changes, and cash flow volatility due to climate and
geographical locations, seasonality and cyclicality for instance,
changes of hotel rooms demands and rates, and fixed running
costs.

 Hyatt has a high portfolio of hotels in which they
are strategically located globally with prominent
and wide brand recognition, strong client base,
and innovation development.
 They have been pursuing to maintain financial
stability and invest in key markets globally with
extensive hospitality experience and
empowering of their managers to operate
independently based on their experience,
understanding and market knowledge of the
Hyatt brands.

 It also carries business model,
realignment and segmentation to
facilitate innovation, enhance
organizational adaptability and
effectiveness, optimization of structures
and resources in order to achieve its
goals by being the preferred brand and
enhancing customer satisfaction.

Summary of identified Management
Issues in Hyatt Hotels Corporation
 The management of the Hyatt hotels is
facing different microeconomic challenges.
The social-cultural elements like
demographic factors and educational levels
they have a great impact on the firm.
 Technological innovations and changes in
use in host counties by some of their
competitors have affected the business
performance.

 Economic factors like seasonality,
recession, changes in consumer
spending, currency exchange rate
fluctuations, high competition, labour
costs have played a vital role in
affecting managerial operations and
decisions of the Hyatt hotels.

 Waste and environmental management regulations
imposed in different nations affect the supply chain
process of the Hyatt hotels. Terrorist attacks, political
instabilities, pricing, safety and trade regulations, tariffs
and labour mobility and employment legislation affect the
supply chain and distribution channels of the Hyatt hotels.
 The managers of the Hyatt hotels also encounter micro-
level challenges like suppliers bargaining power, different
consumer preferences, competitor rivalry due to
technological innovation and advancements, new
entrants threats, substitute products and services threats
affect the growth of the business.

Strategic recommendations
Competitive strategy.
 The management of Hyatt hotels should focus on how to
achieve a competitive advantage in their targeted markets
hence operating a profitable business.
 Having lower prices than their competitors will lead to
making a high volume of sales and gain market share as
well as reducing operational costs.
 Factoring in offering superior and unique hospitality
services, doing market segmentation based on products will
lead to entry in new markets and specializing in the
targeted group. Investing in knowledge, learning and
individual experience performance will improve and
enhance business performance. (Arrants,2005)

Strategic Direction.
 The managers of Hyatt hotels should
make decisions on strategic
development base expansion or
contraction of the business. For the
investment purpose, they should
consider growth, stability and
retrenchment orientations. (Ahmad,
2015)

Strategic methods.
 The Hyatt hotels management can make
decisions on either to utilize existing
available resources, integrations like
merging, takeover or acquiring other
companies, or making joint development like
strategic alliances, cooperative networks,
franchising, collaborative strategies and
partnerships, etc. with other organizations

 This may help in creating interdependence
between economic units and also bring new
benefits such as technology, intangible
assets and cost reductions. (Kumar, 2017)
 Strategic assessment, evaluation, analysis,
selection, choice, successful
implementation, SWOT analysis and
resource planning are key to a successful
strategy.

REFERENCES
 Ahmad, S. Z., 2015. Entrepreneurship in The Small and Medium-Sized Hotel
Sector. Current Issues in Tourism, 18(4), pp. 328-349.
 Arrants, M. & Raleigh, L., 2005. Top Ten Global Issues and Challenges in the
Hospitality Industry. 7(4), pp. 45-82.
 Freeman, R. & Glazer, K., 2013. Customer Service. Introduction To Tourism and
Hospitality in BC, 4(15), pp. 80-112.
 Kapiki, S., 2012. Quality management in tourism and hospitality: An
exploratory study among tourism stakeholders, 4(2), pp. 34-51.
 Kumar, A., 2017. Issues and Challenges in the Hospitality Industry. Tourism and
Travelling, 1(1), pp. 51-57.
 Morrison, A. M., 2010. Hospitality and travel marketing. 4(7), pp. 12-15.
 Umasuthan , H. & Park, O.-J., 2017. The Challenges Faced by Hotel Service
Industry in Sri Lanka. 2(6), pp. 77-88.
 Yang, H.-O. & Cherry, N., 2008. HRM Challenges in The Hotel Industry in
Taiwan. 3(5), pp. 399-410.
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