Strategic Plan for InterContinental Porto - Palacio das Cardosas

This paper presents a strategic plan for InterContinental Porto - Palacio das Cardosas, managed by InterContinental Hotel Group. It outlines the responsibilities of senior management in developing and implementing the plan, emphasizing effective capital and human resource utilization. The report includes a SWOT analysis, Porter’s Five Forces analysis, and an overview of the hotel's current market position, pricing strategy, and financial condition. It highlights the hotel's competitive advantages, such as its location, modern facilities, and efficient transportation connectivity, while also addressing challenges like intense competition and new market entrants. The strategic plan aims to maximize profit and ensure sustainable growth for the organization, contributing to the overall revenue and reputation of the InterContinental Hotel Group.

Running head: HOTEL MANAGEMENT
Hotel Management
Name of the Student
Name of the University
Author Note

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Executive Summary:
The paper is dedicated in the discussion of a chosen company in the form of InterContinental
Porto - Palacio das Cardosas. The organization is currently managed by the renowned
hospitality industry market giant, Intercontinental Hotel Group and is considered to be one of
the most populated boutique hotel of Porto. The paper formulates the strategic plan of the
chosen organization and along with that defines the responsibility of the senior level
management of the organization. In addition to this, the paper designs the much needed
activities for the formulation of the strategic plan along with the implementation of the plan
with a strong emphasis on the effective usage of capital and the human resources of the
chosen organization. Apart from tat, the paper summarizes the position the organization with
a precise focus on the pricing strategy and the financial condition of the chosen organization.
The paper is of great significance in portraying advantages that the organization with the
strong supply chain along with notably competitive market of the chosen organization.

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Table of Contents
Introduction:...............................................................................................................................3
Background of the Research and the company:.........................................................................4
Development of the Strategic Plan:............................................................................................6
Porter’s five Forces:...............................................................................................................6
Threat of the competitors:..................................................................................................6
Threat of the New Entrants:...............................................................................................6
Bargaining Power of the Suppliers:...................................................................................7
Bargaining Power of the Customers:.................................................................................7
Competitive Rivalry:..........................................................................................................7
SWOT Analysis:....................................................................................................................8
Strengths:............................................................................................................................8
Weaknesses:.......................................................................................................................8
Opportunities:.....................................................................................................................9
Threats:.............................................................................................................................10
Activities and the role of the senior level management in the planning process:....................10
Conclusion:..............................................................................................................................12
References:...............................................................................................................................14

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Introduction:
The modern business world is observed to be significantly competitive and the prime
reason of the competition is considered to be the increasing interest of the business
organizations in trying different sectors of the business. Many of the business organizations
of the modern business world are seen to be focused in the increment of the product chain
and in doing so, they are observed to opt for the idea of conducting business with different
types of the product. Majority of the organizations create a completely new company under
the parent company for the better management of the business conduction of new products
and the services that they offer (Dayan et al. 2016). The choice of the products or the services
for those organizations are observed to be based on the most profitable products and the
market trends. The basic idea behind the choice of the products is seen to be ṭhe profitability
that the products or the services are associated with (Visnjic, Wiengarten and Neely 2016). In
addition to this, the modern business organizations are observed to be significantly focused
with the idea of the tourism as it is pretty evident that the tourism is booming industry with
significant amount of opportunity of generating profit.
Adding to this, the benefits such as the social development, increment in the
employment, economic development of a particular region along with the scope of improving
the infrastructure of that particular place are considered to be the fundamental reasons
responsible for the minimization of the strictness that the local and national governments
employ in implementing the designed legislations (Naidoo et al. 2016). Hence the relaxation
in the strictness of implementing the legislations are observed to be trigger many of the
business organizations in starting business conduction with the various sectors of the tourism
industry. In addition to this, majority of the modern business organizations are able to

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identify the hotel sector to be the most profitable business sector for their business conduction
and that is the main reason of the increasing opening of the hotels (Zhou et al. 2014).
The paper is focused in the elaboration of the strategic plan that needs to be followed
and along with that, the paper analyses the role of the senior leadership in the development of
the strategic planning. Apart from that, the paper informs regarding the activities that are
much needed for the formulation of the plan along with the implementation of the plan. The
plan has the objective of managing and leading the capital and the human resources in an
effective manner to maximize the profit of the organization along with maintaining the
sustainable growth for the future operations. The paper also discusses regarding the current
position of the hotel, the competition that the hotel is facing, the pricing of their services,
marketing of their services along with the information regarding the profit of the
organisation. The chosen company for the case is InterContinental Porto - Palacio das
Cardosas. The hotel is situated in the city of Porto, Portugal.
Background of the Research and the company:
The chosen organization is a renowned name in the hotel industry of Portugal. The
organization is seen to operate in an efficient manner and that is pretty evident with the
increment in the number of the customers (Intercontinental.com 2019). However, it is seen
that the improvement of the business operations with a precise focus on the generation of the
profit for the organization is much needed for the organization. Under such situation, the
strategic analysis of the chosen organization becomes significant. As the improvement of the
business operation of the chosen organization is notably dependent on the identification of
the areas that require the strategic focus, the research on the role of the senior management in
the effective business planning and design of the activities that are needed for the
development and the implementation of the plan (Smith 2014).

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The chosen organization is a subsidiary of the market leader of the hotel industry,
Intercontinental Hotel Group. The organization is placed in the city of Porto, Portugal. The
mentioned hotel is seen to be one of the most preferred hotels of the city as it offers
considerable number of spacious rooms with the significant views of Porto’s historical
centres. The location of the hotel is also significantly helpful for achieving increased number
of customers as it is situated within 200 meter range of the Clerigos Tower
(Torredosclerigos.pt. 2019). With the addition of the modern features such as fitness centres,
on site spa along with restaurant, the organization is able to improve their business
conduction in significant manner. Apart from hosting general tourists and travellers, the
chosen hotel is seen to be of great significance in hosting the corporate business and the
business travellers. The chosen organization is a part of a revenue of 4337 million US dollars
in the year 20178 which increased by 6.4% from the same of 2017 (Ihgplc.com 2019). Along
with that, it is a part of an operating profit of 566 million US dollar in the year 2018
(Ihgplc.com 2019). In addition to this, the chosen company is also contributed a major sum in
the 27.4 billion US dollar gross revenue of the parent company (Ihgplc.com 2019). Apart
from that, the organization is observed to be in the list of the 5 star rated hotels of the city and
is one of the populated hotels of the city. In addition to this, the excellence of the restaurant
Astoria and the significantly short distance of the organization from the UNESCO world
heritage Ribeira Area increased the social value of the organization (Torredosclerigos.pt.
2019). With efficient transportation connectivity to the Sao Bento Metro Station and the
Porto International Airport along with the application of the economy pricing, the
organization is able to position it in the list of the most preferred hotels of the country (Porto-
airport.com. 2019).

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Development of the Strategic Plan:
Porter’s five Forces:
Threat of the competitors:
The hotel industry of Portugal is seen to be significantly congested with the existence
of the notable number of organizations that existed more than 10 years along with the
considerable number of new entries. The hotels and resorts such as Maison Albar Hotels Le
Monumental Palace, M Maison Particulière Porto, Bnapartments Carregal and Torel
Avantgardeb are seen to be the major competitor organizations of the chosen organization
(Torelavantgarde.com. 2019). The chosen organization is seen to face tough competition
from the above mentioned organizations due to significant development that those
organizations are able to conduct. Adding to this, the increasing demand of the hotels in the
mentioned region is seen to contribute in the intense competition of the industry.
Threat of the New Entrants:
The hotel industry of the country is observed to face significant impact of the new
organizations entering the market and that is pretty evident with the increasing number of the
hotel openings throughout the nation. The statistics claim that the number of the hotel rooms
in the nation has increased in significant manner. In the year 2012, the nation had 2028
number of hotels operating which in the year 2013 went up to 2331. In the year, 2015, the
same number increased to 2430 and kept on increasing (Statista.com. 2019). As a result of the
increment, the number of the hotels in the region increased to 2437 and 2538 in the year 2016
and respectively (Statista.com. 2019). One of the major reason responsible for the increment
is evaluated to be the entry of the organizations such as the Casa Dos Loios by Shiadu and

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Descobertas Boutique Hotel Porto into the hotel industry of the nation
(Descobertasboutiquehotel.com 2019).
Bargaining Power of the Suppliers:
The availability of the raw materials and the organizations capable of efficient supply
of them in the nation is observed to be significant. As there are considerable number of
organizations providing quality services of the raw materials for the restaurants along with
the bars, the bargaining power of the suppliers in the region is observed to notably be limited.
Adding to this, the industry is able to experience efficient supply of the materials for the
fitness centres and the other infrastructural developmental activities which leads to the
limited bargaining power of the suppliers. This becomes significant for the chosen business
organization in spreading the business conduction throughout the country with the effective
plan of expansion to the popular cities of the nation.
Bargaining Power of the Customers:
As mentioned earlier, the hotel industry in the region is observed to experience
notable number of organizations participating for their business growth. With a precise focus
on the growth of the industry, the limited strictness in the implementation of the legislation
along with the opportunities that the particular industry offers to the customers of it in terms
of the generation of the revenue are considered to be the main reasons for such increase in the
number of the hotels over the years (Rutty et al. 2015). This makes sure that the customers of
the industry are left with sufficient number of options for their services in the mentioned
industry and that is instrumental in the decrement of the bargaining power of the
organization. Hence it can be said that the bargaining power of the customers in the
mentioned industry is significantly limited.

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Competitive Rivalry:
The increasing number of the new entries into the industry is one of the key factor
responsible for the significant increment in the competition. Apart from that, the
implementation of the competitive pricing strategy is considered to be of great significance in
the increment of the competition of the chosen industry. Many of the above mentioned
organizations are seen to employ pricing for market penetration strategy to make sure that the
larger number of customers are attracted by them. Adding to this, the significant
improvement in the quality of the services from the part of the organizations and the notable
infrastructural development are evaluated to be significant strategy for the increment of the
market share.
SWOT Analysis:
Strengths:
The proactive infrastructural development is one of the key strengths of the
organization in terms of increasing their business. The availability of the highly developed
fitness centres or gymnasium is one of the major influential factor for the customers of the
organization in choosing it to be the preferred destination. Apart from that, the well-
established modern facilities of the fitness centres has the potential to create considerable
amount of customer loyalty amongst the customers of the organization (Mason 2015).
Adding to the availability of the fitness centre, the well decorated restaurant of the
organization belongs the top of the list of the priority for the customers of the organizations.
The organization is able to secure a significantly efficient chain of suppliers for the
efficient sourcing of the raw materials for the restaurant and the bar. The specific qualities
such as the on time delivery, accurate amount of delivery and the higher quality of the
materials are observed to provide the significant opportunity to the organization in designing

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the food products in accordance to the preferences of the customers. This provides a
significant competitive advantage to the chosen organization over the other competitors.
Weaknesses:
Along with the achievement of the benefits such as the improved infrastructure in the
fitness centres, restaurants and the bars, the organization is seen to face significant amount of
issues in the human resource management. The employees of the organization were observed
to be notably disappointed with the wage and overtime characteristics of the organization. It
is pretty evident that the increasing preferences of the global customers in the tourism
industry is the fundamental reason responsible for the significant demand that the
organizations of the mentioned industry are facing (Zaitseva, Goncharova and Androsenko
2016). It is also visible that the increasing demand of the industry is notably increasing the
work pressure on the employees of the organizations and the chosen organization being one
of the renowned member of the industry is also affected by the above mentioned fact.
However, the organization’s ineffective rewarding policy and the absence of the effective pay
structure is observed to be one of the major factor responsible for the generation of the
dissatisfaction amongst the employees of the organization.
In addition to this, the organization was observed to recruit in an inappropriate
manner to cope up with the increasing demand of the industry and in doing so, the
organizations are observed to face the need of conducting the training and the developmental
activities for the newly recruited employees (Baum 2015). Hence the organization is seen to
face significant amount of issues in the quality of the services of the employees.
Opportunities:
The significant growth of the mentioned industry is considered to be a prime
opportunity for the chosen organization. Along with that, the availability of the online

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business portals and websites for the business conduction, customer interaction and the
marketing of the services and the products that the mentioned organizations offers to the
customers provides significant opportunity to the mentioned organization. Adding to this, the
effective achievement of the varying preferences of the customers of the organization with
the precise application of the modern technologies and the innovative solutions have the
potential to offer significant growth to the mentioned organization.
Threats:
The rising labour charges is seen to be a menace for the chosen organization (Baum
2015). Along with that, the significant decrement of the work life balance of the employees
of the chosen organization is major threat for the organization in retaining their quality
providing employees. Adding to this, the increasing the competition of the market is playing
a major role in the decrement of the bargaining power of the chosen organization in the
organizational context and the market monopoly is no longer present.
Activities and the role of the senior level management in the planning
process:
The chose organization has the modern infrastructures perfectly in place for hosting the
general tourists and the corporate business meetings. As it is a preferred destinations for
many of the multinational organizations of the mentioned country for the conduction of the
business meetings, the organization is able to develop their infrastructures in accordance to
the requirements for hosting the corporate business meetings in an effective manner.
However, it is seen that the organization had faced notable amount of issues in terms of the
management of the employees and the senior level management of the organization is
expected to design relevant activities for the effective management of the grievances of the
employees. The senior level management of the organization in need to make sure that they

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be able to help the line manages and the operations manager with the scope to restructure the
business operations of the chosen organization. Under the described situation of the
organization, the activities that are much needed for the improvement of the operations, are
observed to be the effective formation of the rewarding policy, the increment in the pay
policy of the organization, the designing of the developmental and training activities for the
newly recruited employees and the application of the suitable measures for the minimization
of the operational cost of the organization.
The senior level management of the chosen organization is in need to make sure that
they be able to fund in an appropriate manner for the mentioned activities along with that, the
effective evaluation of the impact of the activities on the members of the organization is also
required to be evaluated by the senior level management of the organization.
The organization is observed to be concerned with two main aspects which are the
effective management of the human resources and the appropriate management of the
operational activities of the organization for the increment of the generation of the profit. The
concerns are justified from the part of the management of the organization as they
experienced notable amount of employee grievances inside the organization. The first activity
will be the formation of an attractive rewarding policy that will have the potential to trigger
the employees of the organization to perform in the desired manner with a precise focus on
the improvement of the quality of the operations and the production. The formation of the
effective rewarding policy is in need to incorporate the intrinsic and extrinsic rewards to
make sure that the effectiveness of the new rewarding policy increases for the employees of
the organization (Edirisooriya 2014). This will be significantly helpful in the reduction of the
dissatisfaction of the employees. Adding to this, the organization is in need to improve the
pay policy as well. The effective reflection of the labour and employment related legislations
of the chosen nation is need to be present in the formation of the new policy to make sure that

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the hard work and the immense work pressure of the employees of the organization are
compensated in an appropriate manner.
Apart from that, one of the much needed and crucial activity from the part of the
organization that needs to be undertaken is the conduction of the training and the
developmental activities for the newly recruited employees of the organization. As many of
the corporate business organizations and the general tourists are seen to consider it to be the
most preferred destination for them in terms of selection of the hotel, the quality of the
services of the employees of the organization is one of the major aspect which influences the
customers in the repetitive purchases of the services of the chosen organization (Han and
Hyun 2015). Hence the production of the optimum quality in the services of the employees of
the organization is seen to be much needed from the perspectives of the shareholders of the
organization. Adding to this, the effective formation of the training and developmental
activities will be key to the success of the organization as that will enable the employees to
operate in an effective manner and generate increased amount of customers satisfaction
(Kasiri et al. 2017). This will lead to the formation of the higher level of customer loyalty
amongst the corporate travellers and the general tourists.
On the other hand, the organization is in need to limit the operational cost as that is
observed to be the main barrier for the organization in the increment of the profit. Even with
the idea of the existing strong supply chain of the organization, the idea is to make sure that
the organization purchases in bulk to minimize the costing associated with multiple supply
and utilises the raw material in an economical fashion.
Conclusion:
On a concluding note, the chosen organization is one of the most high profile hotel in
the chosen country and adding to that, is seen to grow more under the visionary leadership of

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the parent organization Intercontinental Hotel Group. The organization is seen to have a
significantly strong supply chain which enables it to supply the optimum quality food
products and services to the customers of the organization. However, the growth of the
organization has faced a significant challenge due to the issues in the human resource
management of the organization. Apart from that, the increasing operational cost of the
organization is seen to be a major issue for the management in terms generating the desired
profit. However, the effective management of the operational cost by reducing the cost
associated with the supply of the materials for the organization along with the formation of
the efficient rewarding policy, lucrative pay structure and the design of the training and the
developmental activities have the potential to overcome the challenges for the organization so
that the achievement of the desired growth be easy for the organization.

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