Analyzing The Ritz London's Business Expansion and Growth Factors

This report examines the business expansion strategies of The Ritz London, a renowned hotel in the UK. It delves into the factors influencing their growth in the competitive market, including PESTLE analysis (political, economic, social, technological, legal, and environmental factors), cross-cultural dimensions, and viable marketing strategies. The report highlights how The Ritz London adapts to various external factors, such as Brexit and political stability in different regions, and how they utilize technology and cultural understanding to enhance their business operations. Additionally, it explores key features like human resource management, Hofstede's cultural theory, and leadership skills, providing a comprehensive analysis of the hotel's approach to sustaining and expanding its business. The report emphasizes the importance of understanding both internal and external factors for effective planning and sustainable growth in the hotel industry.

REPORT

Table of Contents
INTRODUCTION ..........................................................................................................................3
TASK 1 ...........................................................................................................................................3
CONCLUSION .............................................................................................................................11
REFERENCES..............................................................................................................................13

INTRODUCTION
Hotel industry is one of the fastest growing sectors across world. As the cost of living and
mode of income is increasing, more people wish to have some time leisure activities. These
activities have given opportunities to small hotels like The Ritz to expand business in the UK and
all over the world. But it must also be ensured that for expansion, an organisation must consider
different factors like socio economic, culture, political, customer behaviour, technological and
environmental so that they can make effective planning for sustaining and growth of their
business in the competitive market (Wei, 2013). Apart from making planning in external sector,
the organisation must also include internal factors also to core competence in competitive
market. Enlisting and analysing these factor will help in examining the growth and expansion
policy easily.
TASK 1
Ritz London is a renowned hotel in the UK in current scenario. It is one of the prestigious
hotels in world. The hotel is a small scale business organisation for a very long time but effective
planning in recent trends has helped the organisation to work effectively in competitive market.
The growth of the organisation is to effective planning of external market by using different
analytical tools which helped them to analysis exert aspect of the external market (Assaf, 2011) .
Ritz London for covering every aspect in market structure their planning includes three
important factors like:
 PESTLE analysis
 Cross culture dimension
 Viable marketing strategies
PESTLE Analysis
PESTLE is an analytical tool which helps in studying the external factors of
organisation. Ritz London has effectively analysed different external factors which influence the
expansion policy of hotel. The factors which are analysed in external factors are political, social,
technological, legal and environmental. These factors help the hotel to use environmental
resources in effective way.

Illustration 1: PESTEL ANALYSIS
 Political factor- Politics play a dramatic role in the expansion of business and
understanding its impact is necessary to sustain in competitive market. A stable
government helps organisation to make planning for longer term in that country but
change in existing government and their policies will affect business of the hotel. In the
current scenario, Brexit is one of the areas of concern in business as many of the
organisations do not have any idea how the market will perform in the future. Like other
hotels, it is one of the areas of concern for organisation. So, the hotel have planned to
expand their business in other markets like they have spread their grass routes in New
York, New Delhi and Paris where the existing government tends to support FDI (Foreign
Direct Investments). This turn out to be a profitable venture for the organisation as they
are making huge profit from these markets (Shairullizan KamalulAriffin, 2012). The
organisation wishes to expand their business African and South- Asian where there is
political stability and FDI is welcomed there.
 Economical - This is the other factor the hotel has considered while investing in mew
market. The organisation first made sure that they have adequate amount and funding
which will help them to sustain in market as well as they must also understand the
economic condition of people (Teng, 2012). Hotel has made sure that they reach out to
larger section of people, and their pricing strategy must match to the cost of living of
people so that more and more people can afford the prices. The hotel have effectively
analysed the market, customers demand and trading practices which helps them to make
effective plan and approach in doing business that area (Segarra-Oñ , 2012). The Ritz
London have effectively understood that the trading practice in UK is different form
trading practices in New Delhi or Paris hence there will be change in their economical

approach. The hotel are able to study these factors effectively which boost their profit in
business market.
 Social – Social factor includes the behaviour and attitude of the people towards a product
or service or the type of approaches, psychology towards the business. It also involve
cultural that particular area. The hotel have effectively understand the cultural factor and
what type of impact they can do on the working of the hotel. Like in Paris most of the
people come are for fashion industry or tourism the food habits will be different for
person or in case on India they are do not sell beef(cow meat) as it is a sacred animal in
that country, the hotel have coordinated their business effectively with culture of that
country (Bulchand-Gidumal, 2013). Apart for coordination with the culture they the hotel
has also contributed in different social services to help poor through different
philanthropy programmes for poor people all these king of activity has helped the
organisation to generate positive thinking and goodwill among the people of that region.
This policy of expansion has helped the hotel to increase their branches to other sectors
of the geographical area (Wang, 2012).
 Technological – This factor has become essential developing the business. By effective
use of technology The Ritz, London has increased their business. They are using different
technological tools like financial accounting tools, Analytical tools like SMART, and
Graphical analysis tools through that they can effectively analyse their business in
market. Technology has helped organisation to have better coordination and information
among them hence it has allowed the organisation to have better planning as it has able to
monitor both the internal and external environment of the business e.g. to monitor the
working of different branches the Ritz, London has used Artificial Intelligence which has
helped them to monitor working of different branches. Apart from they are using
technology in their promotional activity through different media which has decreased the
cost of promotion in their business activity.
 Environmental - Environmental factor also has an huge impact on the market of any
business. The hotel has analysed both the geographical and demographic factor better
planning. In terms of geographical factor the organisation has concentrated on placing
their business in posh area or high profile cities like London, Paris New Delhi. These
places are placed at the core oh the country where standard standard of living is very high

hence it will have low risk factor (Chan, 2014). In terms of demographic part the
organisation has done critical survey to understand the type of people like their age group
or their area of interest hence they are able to properly judge the scenario of the business.
 Legal – These are the set of rules and policies which have been enacted by the
government in their trading practices. The Ritz, London has effectively understand the
legal aspect of different country and laid the foundation of the business. It is one of then
feature of the success of the organisation that the hotel has not fallen in any legal
deputes in any of the country (Boella, 2013). The hotel has a legalise business activities
which shows transparency in their business which will create faith and goodwill among
the people of that country hence increase their brand in that business place. e.g. In latest
business policy of India they have concentrated on welcoming foreign investments with
some legalised terms and condition hence the hotel have till now respected those terms
and conditions which allow to do their business activity easily.
The PESTEL analysis is very effective tool in analysing the external factor of the business as it
is able to cover all big and small aspect which are essential for business activity in external
market.
Key features of business activity of Ritz
Apart from the PESTLE analysis there are some of the other features which are also
managed and handled by organisation to be success in external environment. Some of the
important features are given below:
Cross culture – It is about paying attention and observing dynamic of the employees.
Different employees have different ability, approaches towards their working (Bratton, 2017). So
it is the role of manager to analyse employee, work culture efficiency of the internal environment
to sustain in longer run. Two of the main factor of cross culture are human resource and
customer service.
For better understanding of culture many cultural theories will help in better analysis of
of culture in The Ritz hotel.
Hofstede cultural theory – This theory helps in making framework for making better
cross culture communication. This theory was made by Geert Hofstede for understanding
culture of society. In hotel business different travellers and employees come from diverse
sectors having diffrenjt cultural diversity so for better analysing them it is important to

understand different theory in business structure. This theory is divided into 5 different
classification for understanding understanding and evaluating cross culture in efficient manner.
The five dimension of cross culture are as follows.
Power distance index (PDI)- It is a extent at which one group of society is dominant
over another, this suggest that there is unequal distribution of power among different groups so
in hotel that have to check that every employee is getting equal attention.
Individual vs collectivism – It is a measurement factor that is used to analyse the way by
which different people in society coordinate with each other. People of harmonic society will
help in maintaining better coordination in hotel that can help in providing better hospitality and
services to people.
Avoidance of uncertainty index- This is used to examine tolerance in society. Different
society have different tolerant level the management have to analyse different factors for proper
evaluation of different people in organisational structure.
Masculine and feminine – It is important to understand that different society have
different thinking about male and female in society. Hotel must concentrate on understanding
different roles that must be assigned to male and female in hotel business.
Long term and short term orientation- It is about development of business activities
with same kind of people. The Ritz hotel they have to connect past and present factors of culture
for better understanding of different cultural environment.
Indulgence and restrains – This helps in measuring the degree of happiness of person
in their society. A more happier person will transfer more happiness environment in society.
Employees having these kind of behaviour help in maintaining healthy environment in their
organisation.
Human resource – It is being observed that The Ritz, London has a better human
resource who are dedicated, positive and goal oriented hence it allow the organisation to
compete market. This storing resource is backed by better coordination among the employee,
hence they are able to share their skills among themselves. Apart for these factor they have
quality managers who are able fetch more output from minimal resources by implementing
innovative ideas in their policy and working. For doing so manager must have several qualities
for better management of business. Some of them are as follows:

 Education – A manger must have a good level of knowledge of hotel business so that he
can be able to tackle different kind of situation that prevails in business structure.
 Role – A manager has to play different role in business structure so he has to perform
different duties in their business organisation. In The Ritz Hotel there are different factors
that includes training and development, planning and strategies, financial etc.
 Interpersonal skills – For better management a manager must have better
communication skill so that he can be able to communicate different level of
organisational structure for having better coordination in hotel, transferring these values
to employee will help in making harmonic business environment.
 Leadership skills – This is one of the key factor for development of business activities.
Having good leadership skills will help in taking decisions in fast moving business
environment. For example tourist season in October and end in March so the leader must
plan to collect more revenue in this season.
 Resolving issues – The Ritz is having big hotel business so it is expected that that
conflicts may arise between different departments. A manager must have the ability to
resolve issues
Customer service – The hotel are able to reach to most of the people as part of their
promotional activities and provide assistances to them through different digital platform as soon
as possible (Noone, 2011). In recent times they have implemented artificial intelligence like the
chatbots which are able to assist customer in better way. Customer services help in increasing he
reach of customer in different geographical region. Through digital medium they can able to
provide information about their business activities by communication with customers directly.
The hotel can assist people starting from travelling practice to accommodation. This proper
connection will generate loyalty and goodwill among their customers.
Economical and political – These are the external factors which have been analysed
under PESTEL analysis (Mok, 2013). These factor influence the working of the organisation, a
better economic condition of an organisation will allow the organisation to invest in new
ventures and expend further in different market place hence a right economic approach allows
the organisation to succeed in business . The policies of the government are also important,
lenient policies of different countries has helped the organisation to develop their business.

Economical factor- It is all about business activities that are performed by The Ritz
hotel and how they are doing business for earning profit from business activities. Several factors
like economic growth, interest rate, disposable income, exchange rate, business rate and
consumers. These factors are further divided into internal and external business environment for
better evaluation their economic activities. Manager of The Ritz hotel must plan economic
activities that includes proper utilisation of available resources, management of workforce
management.
Political factor – It is the factor that include intervene of government in business
activity of organisation. Political factor includes different elements like political stability, foreign
trade policy, tax policy, labour law, trade restrictions, environmental law etc. From the above
discussed factor it is concluded that politics plays important roles in business activities of
organisation. Talking about political factor in UK it is about to effect hotel business. Brexit will
play major role because their will be altogether change of government and their policies. The
organisation must plan efficiently as there is uncertainty how political environment will affect
activities of The Ritz hotel.
Hotel trend – From the analysis it has been observer that The Ritz, London adapted the
trend in hotel effectively and put some innovative ideas so so as to gain competitive advantage in
business environment (Ransley, 2012). It has been observer that wherever The Ritz, London has
established they have used used technology to a good effect. Hotel has used different digital
platform like websites, mobile apps to reach out to the common people and chatbots . Hence by
combining with the innovative ideas with the hotel trend the hotel is able to succeed in different
business market (Ransley, 2012). One of key feature of the hotel is making profits in season of
tourism like in Autumn season a lot of people migrate to Paris for attending the Fashion
festivals and carnivals and at that time a stiff competition can be seen among the hotels, the
hotel have been front runner in doing business as they uses the technology in effectual way in
discounts, bookings and customer feedbacks. With effective use of artificial intelligence they
have been able to communicate with their customers in efficient way. The hotel can use this
advanced technology in a better way in peak season. As winters in England are the peak time of
doing business through better promotion of Hotel Business they are able to fetch more customers
to their business. They can display discounts or benefit on several digital platform for better
market reach.

Tourism demands – This is the major thing a tourist expect in his voyages. A hotel must
make sure that they fulfil demand of their customers which will increase their brand value,
productivity and competency in business hotel business. By analysing the factor that The Ritz,
London, has a better coordination with local and international travelling agency so that the can
plan better for the tours and travel of the travellers. Assisting travellers through their journey by
collaboration with different agencies in different continents helps the hotel to have the better
relationship with their customers. Apart from they have includes some value added services to
the travellers increases the bonding between the hotel and employees e.g. In planning the world
tour for some customer the hotel has planned booking in their chain network, this allow the their
customer to enjoy their tours.
Environmental issues – Apart from making profit the organisation must make sure that
they respect the nature and do businesses. The Ritz, London focus on proper utilisation of their
resources and minimise wastage. They have adopted eco -friendly approach inside their
organisation in all extended chain of hotels network (MensahMensah, 2014). Hotel has strictly
banned use of plastic inside the hotel instead they are using eco-frinedly items like paper wraps,
organic polymer etc. which has decreased the use of plastic in their business activity.
Expertise and reputation – From analysis different aspect of the business activity of the
organisation it is analysed that the organisation has expertise in both internal and external
business activities. The Ritz, London have effective management staffs and managers who are
able to handle the pressure situation in systematic way. For maintaining their business activities
the Ritz Hotel have adopted effective marketing strategies and provide services according to the
factors they have in their marketing practices. Due to all these activities they have able to
increase their brand values and image in different business environment.
Locations – From the analysis it has been concluded that the hotel has set up their
business where there is high density of population and have some historical background e.g. like
Paris, London and New Delhi. Hence they are able to fetch tourists and business people at the
same time. In future aspects also the organisation is planning to invest and expand in those areas
which have both both demographic and geographical advantages. Most of the location of The
Ritz hotel are in posh area or within the driving distance
Ownership style- The owners of the business are commonly called as”Barclays twins ”.
In recent times due to their effective business strategy in hotel industry they are regarded as

tycoon in hotel business. They have adopted strategic leadership style where every manager and
employee are open to giver suggestion to the to develop business strategy. Through several
brainstorming sessions they are are to boost their compatibility in business environment. Their
aggressive style of business has allowed them to accept latest technology. They have a simple
motive in business to have competitive advantage in several market where they are investing.
Segmentation of hotel – the hotel has concentrated on providing add on features and
luxury to their customers they have added certain features like bars, dining, swimming pools spa
etc. which has attracted many other customer in their business place (Bilgihan, 2011). Apart
from this they are able to make certain halls and areas for business meetings and events which
has also allowed different business class employees also.
Features and activities of the organisation
Luxury hotel – The Ritz, London was a small scale hotel in UK but due to effective
planning in current scenario they are able to expand to different destination. Not only The Ritz,
London several hotels are planning to do business in the same way (Kotas, 2014). All luxury
hotel in are trying to use technology and put implement innovative ideas in their business so that
they can gain competitive advantage in the hotel business.
Customer expectation – Customers pays for the accommodation and service
beforehand so it is the responsibility for the hotel business give best services to their customers.
Many hotels like The Ritz ensure that they collaborate with different travel agency and make
effective planning in travelling and accommodation.
Feature.
Viable factors - the hotel industry are one of the organisation who are using the
technology to a good effect. Technology has also helped the hotel industry to implement some
innovative ideas in their business so that they can sustain in and prosper in hotel businesses
(Ivanova, 2016).
CONCLUSION
Through the report critical analysis has been done on the expansion policies of the hotel
business in recent trends. This report has put lights on the expansion activities of The Ritz a
London based hotel. Certain factors also have been discussed which has allowed The Ritz to
gain success in a very small period of time. Thought this report one can understand that effective
planning and analyse in both internal and external environment has allowed the organisation to

grow rapidly and gain core competence in business environment. This report has has shown
some glimpse of expansion of hotel industry apart from these there are many other things which
can be explored in future.

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