Strategic Planning for Red Carnation Hotel

This report presents a comprehensive strategic plan for Red Carnation Hotel. It begins by reviewing the hotel's current market position and analyzing the impact of external factors using a PESTEL analysis. A stakeholder analysis identifies key stakeholders and their expectations. The report then evaluates the hotel's competitive strengths and weaknesses using SWOT analysis and Porter's Five Forces Model. Several strategic options are developed using a modeling tool, and criteria for reviewing these options are established. A suitable structure for the strategic plan is proposed, ensuring stakeholder participation. The report also outlines the hotel's mission and vision, sets SMART objectives, and develops measures for evaluating the strategic plan's effectiveness. Finally, it details the implementation schedule, dissemination processes, and monitoring and evaluation systems.

Strategic Planning
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Table of Contents
INTRODUCTION ...............................................................................................................................5
ACTIVITY 1........................................................................................................................................5
2.2 Review of position of Red Carnation Hotel in its current market.............................................5
1.1 Importance of external factors and its impact on business .......................................................5
1.2 Stakeholder analysis .................................................................................................................6
1.3 Major changes in the external environment that affect strategic planning of organization .....7
3.2 Development of comparative understanding of activity from organizations which competes
with Red Carnation Hotel in the market..........................................................................................7
ACTIVITY 2........................................................................................................................................8
2.1 Tools to analyse the effects of current business plans of Red Carnation Hotel.........................8
2.3 Evaluation of competitive strengths and weaknesses of Red Carnation Hotel on the basis of
current business strategies...............................................................................................................8
5.1 Comparison of core organizational values with current business objective for Red Carnation
Hotel.................................................................................................................................................9
3.1 Use of modelling tool to develop strategic options for Red Carnation Hotel............................9
3.3 Options to form the basis of future organizational strategy for Red Carnation Hotel ............10
4.2 Criteria for reviewing potential options for a strategy plan for Red Carnation Hotel.............10
4.1 Suitable structure for a strategy plan that ensure appropriate participation from all
stakeholders....................................................................................................................................11
ACTIVITY 3......................................................................................................................................12
4.3, 5.2 and 5.3 ..............................................................................................................................12
5.4 Develop measures for evaluating a strategy plan for Red Carnation Hotel............................13
ACTIVITY 4......................................................................................................................................13
6.1 Development of schedule for implementing a strategy plan for Red Carnation Hotel............13
6.2 Creation of appropriate dissemination processes to gain commitment form stakeholders in
Red Carnation Hotel......................................................................................................................14
6.3 Design monitoring and evaluating systems for the implementation of a strategy plan in Red
Carnation Hotel .............................................................................................................................15
References..........................................................................................................................................17
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Illustration Index
Illustration 1: Dissemination processes of information......................................................................15
Illustration 2: Monitoring and evaluating systems for the implementation of a strategy plan in Red
Carnation Hotel .................................................................................................................................16
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Index of Tables
Table 1: Strategic options for Red Carnation Hotel...........................................................................10
Table 2: Formate of strategy plan for Red Carnation Hotel...............................................................11
Table 3: Strategic plan for Red Carnation Hotel with resource implications.....................................12
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INTRODUCTION
Every organization has needed to make some important decisions in which sort of affect the
growth of business in near future. There are different external forces such as shifts in market,
change in government policies, increase competition level, changes in the demand and preferences
of the target segments etc (Lorette, 2015). These elements influenced the firms to make strategic
planning for taking business decision and to survive in the market (Rouse, 2015). The present
research has based on strategic planning and to understand its importance in industry, Red
Carnation Hotel has taken into consideration. The areas which will cover during the research are
effects of external factor on organization, review of existing business plans and strategies,
formulation of strategic plan for company and many other things.
ACTIVITY 1
2.2 Review of position of Red Carnation Hotel in its current market
Red Carnation Hotel is a group of 17 luxurious hotels and run its business in UK, Ireland,
South Africa, USA and Switzerland. It is a medium to large sized company and awarded by 2md
Best Medium Sized Company to Work by The Sunday Time 100 Best Companies to Work for 2015
award. The total number of staff is 848 in which 52% are male and 48% are female. The staff
turnover of hotel is about to 20%. The average age of working people in the hotel is 34 ( Statistics.
2015). The best thing about Red Carnation Hotel is it is supporting local communities and
environment where it is operating its business. The position of the hotel in UK market place is good
and to promote the the services of firm in more effective manner, the marketing team of Red
Carnation Hotel is used innovative marketing ideas. For giving the convenience to the customers,
the hotel management has used website, email and phone where the clients can get the complete
details about hotel (Red Carnation Hotels. 2015). From the study of the customers reviews, it has
been found that the service users are satisfied with the services of Red Carnation Hotel. Along with
this, the staff of the hotel is very helpful and provide the good accommodation and other supportive
facilities to the customers according to their needs.
1.1 Importance of external factors and its impact on business
For analysing the importance of external factors and its impact on business of Red Carnation
Hotel can be determine with the help of PESTEL analysis which is as follows.
Political: The political situation of Northern Ireland and other areas of UK the negatively impact on
business of hotel because of unstable political climate. Along with this, the various tax policies,
VAT, corporation taxes affects the business activities of Red Carnation Hotel. The number of
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numerous terrorism activities have increase which create a threat for hotel to decrease the sales of
services.
Economic: In the present time, the GDP of UK is growing with slow speed because of rescissions.
Due to this, many of the people becomes unemployed and some who are employed are not having
enough money to spend it on luxurious hotel. On the other hand, the rate of inflation becomes
increased which affect the business of Red Carnation Hotel in different nations (Porter, 2008). It has
decreased the sales of services with the time and people are not spending too much money on these
things.
Social: The changes in family patterns and demographic changes in UK affect the business of Red
Carnation Hotel. The increase role of social media in the present time help the hotel to promote the
services in more appropriate manner. All these things provide the benefits to the organization and
increase the sales and profit volume with the time (Rouse, 2015).
Technology: By using the new technology, Red Carnation Hotel has easily connected with its
customers 24*7 hours (Thompson and Martin, 2010). Along with this, hotel has also provide the
advance hotel booking functionality facility to its client so that they can book accommodation at an
time from any place. On the other hand, technology is also used by hotel as a marketing tool to
promote the services in current marketplace.
Environment: The changes in weather conditions, increase pollution in environment and effects of
natural disasters have made the impact on Red Carnation Hotel in both positive and negative form
(Dopplet, 2009). Along with this, the seasonality situation also affect the business and sales of
services.
Legal: The changes in UK regulations and rules regarding hospitality industry have changed with
the time. For example, the customer is having the right to get all the details about the services so
that he can take the decisions to buy or not (Kapferer, 2012). Therefore, by following consumer
protection act, Red Carnation Hotel has provide the complete and accurate information about hotel
service to the clients.
1.2 Stakeholder analysis
Stakeholder analysis is systematic method of collecting and analyse it to determine the
interest of the stakeholders so that it will be considered during formulation of various strategies and
plan of organization (Price and Chahal, 2006). The key stakeholders of Red Carnation Hotel are
employees, customers, government, business partners and owners of hotel.
Employees: The need and expectations of workers of hotel from the management is they should
involve in various decision making process. Along with this, firm should complete their needs and
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requirements with the time so that they will motivated and show the commitment towards the work
(Hartman and Pava, 2005).
Customers: According to the perception of the customers, the hotel should deliver them a quality
services with better experience which can give value of money (Hill, 2001). Services expected that
the organization should provide them complete and right information about the services so that they
can take decision of buying the service.
Government: While connected with Red Carnation Hotel, the government has expected that hotel
should followed all the rule and regulations such as minimize the environment impact, protect
customer and employee rights, provide complete safety to the services users, giving the taxes, avoid
discrimination and other unethical issues while running the business etc (Lorette, 2015).
1.3 Major changes in the external environment that affect strategic planning of organization
In the present time, Red Carnation Hotel is adopting the e-commerce strategy in business to
increase the connectivity with hug number of customers within a single time. But, there is threat
which has faced by organization that is increase competition level in the hospitality industry (Jacobs
and Herbig, 2000). The major competitors of hotel are Hilton, Marriott, Sheraton, McDonald etc.
These rivals have affect the current strategic planning of Red Carnation Hotel and due to this, it has
influenced the firm to change their selling and other business strategies. By some modification help
the hotel to survive in the market and face the competition.
3.2 Development of comparative understanding of activity from organizations which competes with
Red Carnation Hotel in the market
From the analysis, it has been found that there are some string competitors of Red Carnation
Hotel which are Hilton, Marriott, Sheraton, Haymarket Hotel, The Milestone Hotel etc. These all
rivals are dealing in hospitality industry and provide the similar services to the customers with
different price range and quality. The first comparative analysis can be done on the bases of
benchmarking (Nataraja and Al-Aali, 2011). The competitors of Red Carnation Hotel have used
various kinds of benchmarking to improve the services and survive in the marketplace (Lorette,
2015). The process benchmarking technique has followed by the rivals but the Red Carnation Hotel
has taken the preference for product benchmarking because during providing the services to the
customers, the management has avoid unethical things. Another comparative analysis can be done
on the basis of business portfolio. The present range of services of Red Carnation Hotel is slightly
different from its competitors with less price range. The customers of the hotel are like the quality
and service time and they are completely satisfied with it. Beside this, market segmentation is
another criteria for conduct comparative analysis. For example, the market segmentation of Red
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Carnation Hotel is based on demographic but Hilton has divided its market segment according to
the geographical bases (Ketzes, 2003). Therefore, the present market share of Red Carnation and its
competitors on the basis of market segmentation criteria has varied. Hence, by following the above
stated methods, the comparative analysis help the Red Carnation Hotel to compete in the market
with the rivals.
ACTIVITY 2
2.1 Tools to analyse the effects of current business plans of Red Carnation Hotel
There are many tools available that helps in analysing the current business plans of Red
Carnation Hotel. SWOT and Porter's Five Forces Model are two method to analyse the competitive
strengths and development needs of the business. The present business plan of hotel is to provide a
advance hotel booking system to the customer's for their convenience. To analyse the effects of
current business plan, SWOT and Porter's Five Forces Model can be used (Kotabe and Ketkar,
2008). From the SWOT assessment, it has found that company is having the diversified portfolio,
organize various loyalty events, high brand recognition and great employee retention. These all
things provide the opportunities to Red Carnation Hotel such as bring innovation in customer
services, using of technologies for improve services and expand the business in developing nations.
On the other hand, from Porter's Five Forces Model, it has found that the threat of entry, supplier
power and threat of substitute is low (Needle, 2010). After this, the effects of current business plan
of Red Carnation Hotel will be increase the market share, bring the improvements in existing
services, determine the customers needs, increase the interaction with the target segment, identified
emerging markets and various opportunities to expand business etc (Thompson and Martin, 2010).
2.3 Evaluation of competitive strengths and weaknesses of Red Carnation Hotel on the basis of
current business strategies
By using SWOT analysis, the strengths and weaknesses of Red Carnation Hotel can be
determine. The current business strategies of the organization is to provide a advance hotel booking
system facility to the customer's. With the help of SWOT analysis and current business strategy, it
has found that there are various strengths and weaknesses (Rouse, 2015). The major strength of Red
Carnation Hotel is strong brand awareness in the services users because it is a well known firm in
hospitality industry. Organization has provide the diversified services to its customers and maintain
the quality of deliverables. The effective IT system help the hotel to connect the client with the firm
and provide them complete and right information about accommodation and other supportive
services. The company is having the good employee retention ratio and operate the business in 5
nations (Kourdi, 2010). The technical innovations in services help the customer to gain new
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experience. But on the other hand, there are some weaknesses which affect the business of Red
Carnation Hotel. The late international expansion is a biggest weakness of the firm because from
the last few years, company has focused on domestic i.e. UK market (Porter, 2008). Hotel has the
limited market share because of increase competition in hospitality industry. On the other hand, the
operations of Red Carnation Hotel has affected because of different government policies and
regulations.
5.1 Comparison of core organizational values with current business objective for Red Carnation
Hotel
The business objectives of Red Carnation Hotel are as follows.
 To enhance the profitability of the firm
 To bring the improvements in the existing services.
 To support the local community and protect environment.
 To meet the satisfaction level of service users (O'Hara, 2002).
 To increase present market share in different nations.
Core organizational values of Red Carnation Hotel are ethical, business, cultural,social and
environment. These are the basic belief of the organization which help the employees and
management to distinguish between right and wrong. There is a significant different between
organization core values and business objectives. The core values help the management and
employees of hotel in the decision making process. It is also assist the organization to take
competitive advantages and understand the purpose of the business (Riley, 2014). On the other
hand, the business objectives are used to meet the goals of hotel. It help the management to develop
a good working environment at the workplace for the employees (Lagan and Moran, 2005). The
business objectives motivate the staff members to increase the efforts in serve the customers and
manager their performance. Along with this, the written business objectives help the management of
hotel to predict the expense and develop the budget for the different operational activities.
3.1 Use of modelling tool to develop strategic options for Red Carnation Hotel
Strategic option are alternative solutions or action oriented plans that is used by the
company in uncertain or emergency situations. In the case of Red Carnation Hotel, with the help of
SWOT analysis modelling tool, the strategic option can be easily developed (Lorette, 2015).
Opportunities:
1. Expand the business at global level.
2. Increase the market share with the help of digitalization.
3. Bring the improvements in the existing services
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4. More use of internet and other supportive technologies (Lerche and Paleologos, 2001).
5. High potential in emerging market .
Threats:
1. Strong competitors in hospitality industry.
2. Increase disputes between the employee's and management.
3. Improper communication between the staff members.
4. Ineffective implementation of strategies (Thompson and Martin, 2010).
5. Threats of entering new organisation in hospitality sector
6. Changes in government rules and regulations
Table 1: Strategic options for Red Carnation Hotel
Opportunities and threats Strategic Options
1 O1, T5 and T6 Introduce more service lines for taking the advantages of
competition (Rouse, 2015).
2 O4, T2 and T4 By using management information system, the communication
between management and employee's can be improved
(Lewandowska and Ward, 2008).
3.3 Options to form the basis of future organizational strategy for Red Carnation Hotel
The primary option of future organizational strategy for Red Carnation Hotel is market
expansion. In the present time, the demand of hospitality services in increasing with the time and
this is beneficial for the organization to expand the business in different geographical location
across the world. The benefits of adopting this strategy will be attracting the new customers and
develop a strong base of potential service users, achieve good economic scale, support the financial
position of the firm and minimize the risk of dilution of core competencies (Porter, 2008). The
second option which form the basis of future organizational strategy for Red Carnation Hotel is new
service development. In this context, the organization will increase or introduce more services lines
related to hospitality industry. The benefits of adopting the product development option by hotel
will be taking the advantages of competition, improve the performance level, build a good image in
the customer mind, maximize the profitability etc.
4.2 Criteria for reviewing potential options for a strategy plan for Red Carnation Hotel
To take review of the above stated potential options, the different kinds of tools can be
preferred. The first technique is success matrix where the performance of any plan can be easily
measured. The aspects which are considering during assessment of performance plan of Red
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Carnation Hotel are customer's satisfaction score, employee's satisfaction score, churn rate,
productivity and life time value of a service users for the company. By including these elements, the
management of hotel will take review of potential options for strategy plan. On the other hand,
balance score card also be a good option for review the alternatives for strategic plans (Li and Hu,
2012). The criteria for assessment of performance plan are cost, quality and outcomes of plan.
Another method is setting of goals where a plan will prepared on the basis of set objectives and aim
of organization (Lorette, 2015). At the time of preparing the strategic plan, the set targets will be
considered and compare with the plan. It will assist the hotel to determine the effectiveness and
suitability of options for strategic planning.
4.1 Suitable structure for a strategy plan that ensure appropriate participation from all stakeholders
The suitable structure for a strategy plan which ensure appropriate participation from all
stakeholders of Red Carnation Hotel is as follows. In the whole procedure, each and every decision
will be taken by the different stakeholders. A formate of strategy plan is showing in below table.
Table 2: Formate of strategy plan for Red Carnation Hotel
Activities Description
Gather input Mission, vision, corporate values and principles, customer analysis,
competitor analysis, assessment of company strategies and industry analysis.
SWOT analysis External analysis i.e. opportunities and threats, internal analysis i.e. strengths
and weaknesses, determining strategies issues etc.
Review inputs Taking reviews from the stakeholders and analyse gather information, develop
different milestones according to that.
Strategic matrix Define the strategies according to the SWOT analysis.
Defines strategies Develop key objectives, operational plans, short and long term goals
Final reviews Review of develop strategies and plans, make the changes as per the
requirements.
Explanation:
The first step of strategy plan is gather the information about mission, vision, objectives and
goals of Red Carnation Hotel. These all will work as a milestones at the time of implementing the
strategic planning. Along with this, the different kind of analysis will also conducted to know the
effectiveness of present strategies and their impact of business. Assessment of customer
preferences, competitors and industry analysis help in knowing the areas which required
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improvements (Li and Hu, 2012). The next stage is SWOT analysis in which Red Carnation Hotel
management team will explore the strengths and weaknesses of business in the light of external
world opportunities and threats. This will help in knowing about the strategic issues in different
operations of business. Now, third step is reviewing the inputs which will given by the stakeholders
of Red Carnation Hotel. Along with this, some milestones will also formulated as per the identified
information. The next stage is develop strategic matrix in which the possible strategic options will
define opposite to the given constraints (Lorette, 2015). Now, in the next stage, the strategies will
defines as per the available strategic options. In addition to this, key objectives, operational plans,
short and long term goals will also formulated. The last step of strategic plan is final review in
which the define strategy will be reviewed by stakeholders and make the changes in the plan as per
the need (Thompson and Martin, 2010).
ACTIVITY 3
4.3, 5.2 and 5.3
Mission: The mission of Red Carnation Hotel is to provide particular hospitality services by
meeting the expectations of the customers and develop an environment where the guests can get the
special experience after using services (Mission/Vision. 2015).
Vision : The vision of Red Carnation Hotel is to complete all the request of customers as well to
provide the accurate and complete inform about the services (Mission/Vision. 2015).
The future management objectives for Red Carnation Hotel will formulated by using
SMART objectives which are as follows.
 To cut down the operational costs of accommodation and other supportive services by 30%
within the 6 months (Thompson and Martin, 2010).
 To increase the annual guest arrivals by 25% from 15000 customers to 18750 services users
by the end of 2017.
 To increase the sales of services by 30% within the 50 weeks.
 To decrease the response time of customer complaints by 3 minutes within the end of 2017.
 To increase the market share by 3% in every 12 months.
Red Carnation Hotel strategic plan can be categorized into three sections: Where the
company is now?; Where the company wants to go? and How will firm reach there?. All these parts
will also required the resources to implement the plan. Therefore, the strategic plan and needed
resources are showing in below table.
Table 3: Strategic plan for Red Carnation Hotel with resource implications
Section of strategy plan Elements Resources
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