BUS300: Strategic Planning and Analysis for Sheraton Hotels & Resorts

This report conducts a comprehensive strategic analysis of Sheraton Hotels and Resorts, an international hotel chain owned by Marriott International. It examines the macro-environment through PESTLE analysis, considering political, economic, social, technological, environmental, and legal factors impacting the business. The internal environment is assessed using SWOT and VRIO analyses to evaluate strengths, weaknesses, opportunities, threats, and the value, rareness, imitability, and organization of its resources. Furthermore, Porter's Five Forces model is applied to analyze the competitive forces within the hospitality market, including buyer power, and competitive rivalry. The report aims to provide insights into Sheraton's strategic planning, offering a detailed understanding of its market position and competitive advantages. The report concludes with strategic recommendations to enhance the business's performance and achieve its goals.

Hospitality Business
Strategy

Table of Contents
INTRODUCTION...........................................................................................................................3
PART A...........................................................................................................................................3
Frameworks to analyse macro environment and strategies of organisation...........................3
Analyse internal environment and capabilities of organisation using appropriate frameworks
................................................................................................................................................5
Application of Porter’s Five Force Model to analyse competitive forces in market..............7
PART B............................................................................................................................................8
Interpret and devise strategic planning for organisation........................................................8
CONCLUSION..............................................................................................................................10
REFERENCES..............................................................................................................................11

INTRODUCTION
In today’s world high demand of tourism and hospitality sector can be seen which is
increasing the business for hospitality organisations. This report is conducted on Sheraton hotels
and resort which is an international hotel chain owned by Marriot international. The following
organisation have more than 400 hotels and also on more than 1.5 lakhs room throughout the
world. They have their hotels in all over the world including North America, Asia, Central,
Africa and South America as well. It is headquartered in situated in White Plains, New York,
United States (Konovalova and et. al., 2018) . The following report consist of various impacts of
macro as well as micro environment on the organisation. Along with it all the internal factors
which are affecting the business including resources of an organisation are effectively explained
in this report. The following report also consist of various analysis done on Sheraton hotel and
resort including pestle analysis, swot analysis, porters five forces model as well as competitive
advantage analysis of the hospitality business. Through critical analysis of all the above-
mentioned components business confirm a strategy in order to achieve all their goals and
objectives effectively.
PART A
Frameworks to analyse macro environment and strategies of organisation
Sheraton hotels and resort are internationally recognized resorts who have to take sure
analysis of all the micro as well as macro environment of organisation. Macro environment
usually refers to the external environment of a company which affects the operations as well as
functions in a number of ways. It is often seen that in order to make sure that maximum benefit
from all the opportunities presented and external environment of an organisation the organisation
requires to study the environment carefully. In order to identify all the opportunities it is required
to conduct a PESTLE analysis on the external environment which is as followed:
PESTLE analysis refers to an analysis on the external environment of an organisation
which includes all the factors which directly or indirectly have an effect on functions and
activities of the company. It stands for political, economic, social, technological, environmental
and legal factors in the macro environment of an organisation which are affecting the working of
an organisation either positively or negatively. Below mentioned are all those factors which
affect the working of Sheraton hotels and resorts:

Political factors: It includes all those factors which are related to the rules and regulations
or the policy is formation by the ruling party of government in a particular country where the
organisation is setting up its business. When taking into context Sheraton hotels and resorts it is
seen that they have a number of hotels in various locations of world (Papaioannou and et. al.,
2018). Due to this they have to deal with a number of political policies in a number of nations. It
can be seen that Sheraton hotels and resort face positive impact as they get a chance to work with
government of a number of nations building good relationships with them. The negative effect of
political factors on Sheraton hotels can be that they need to make sure that they have the right
attitude for the country or nation so that the political parties are favoring them.
Economic factors: Economic factors related to all those factors which directly affect the
earnings of a company. This includes gross domestic product of a nation, employment ratio,
foreign direct exchanges, interest rates, spending by consumers and so on. When taking into
context Sheraton hotels and resorts the company is based in United States which is a developed
economy. The stability of economy is helping the business to grow. Also the spending level of
people is increasing as they are more impacted by luxurious services which are provided by
Sheraton hotels and resorts. There for economic factors are favoring the organisation.
Social factors: Social factors refer to all those values and beliefs of people who are
surrounding the environment in which a business is running. It also includes the changing trends
and preferences of customers for a business. When talking about tourism sector in United States
is it is increasing heavily. Due to this Sheraton hotels and resorts are facing demand from a
number of guests internationally. This is profitable for company. They need to make strategies in
order to provide efficient services to all their international guests.
Technological factors: Technological factors refer to all the new technologies and
innovations which are being invented day today. It is necessary for hotels to make sure that they
include all the new technologies while they serve their guest. Using these new technologies will
have positive impact and also increase the productivity of employs along with increasing the
credibility of organisation and its brand image. The negative factor related to technological
factors are that they are very costly. Huge investments are required by businesses to comply with
new technology into their business.
Environmental factors: Environmental factors usually includes the geographical location,
the climate pollution and the ways in which an organisation is affecting the environment and

nature around them. It is required by Sheraton hotels and resort to make sure that they are not
harming the nature or environment in anyway. It is required by them to keep in check the
pollution which they are releasing in the environment (Li and Singal, 2019). Also through
planting more trees and implementing some corporate social responsibility activities through
which they can enhance the environment will help the company in building its brand image.
Legal factors: Legal factors are all those factors which include the rules which are set up
by legal authorities in a nation. When talking about hospitality industry it is required by Sheraton
hotels and resort to make sure that they are fulfilling all the rules and regulations which are
mentioned in their constitution. If they fail to do so they may have to face a number of
proceedings against them which can cost losses for the company.
It is necessary for Sheraton Hotel and resort to make sure that they perform various functions and
formulate a number of strategies so that the negative impact of all the above-mentioned factors
on the company can be reduced. It is also necessary for organisation to formulate some strategies
so that they can grab all the opportunities in the macro environment which will affect the
business positively. It will help in increasing revenues and profits for the business along with
giving them competitive advantage in the market.
Analyse internal environment and capabilities of organisation using appropriate
frameworks
Every organisation in hospitality sector as well need to assess all the internal factors and to
sources of a company which will help them informing the strategy and also achieving all their
goals and object. In order to do so SWOT analysis and VRIO analysis is conducted on Sheraton
hotels and resort. Below mentioned are both of these analyses:
SWOT Analysis
It includes strengths weaknesses, threats and opportunities for the organisation.
Strengths
 The global presence of Sheraton hotels and resorts is one of its strength. The more
number of places it is setting up its business the more is increasing its revenues and sales
which is also increasing the brand image of organisation throughout the world.
 The company have developed a separate brand image throughout the hospitality industry
(Martínez-Martínez and et. al., 2019). As it is owned by Marriot hotels Sheraton resorts

and hotels have effectively set up their brand image giving a tough competition to all the
other companies in hospitality industry.
Weaknesses
 Due to low performance of some of the branches present throughout the world the brand
image of the overall organisation is hampered.
 It is seen that there are a number of conflicts between employs due to different culture as
the company has hotels in different locations of world. This decreases the productivity of
organisation.
Opportunities
 Company can use proper training and development programs for their employees in order
to increase the productivity of organisation.
 There are a number of recreational activities which can be included in different resorts of
Sheraton hotels and resorts so that they can increase their brand image and also use
specific promotion tools effectively to showcase these recreational activities.
Threats
 There is a lot of competition present in hospitality industry. Due to this Sheraton hotels
and resorts have to face threat from a number of competitors.
 There is a lot of political intervention by the government of a number of nations. Due to
this heavy duty are paid by Sheraton hotels and resorts in a number of nations which
causes them their profits.
VRIO Analysis
This analysis consist of a critical study of all the resources of an organisation and how do
they provide various benefits to the company when compare to their competitors. It includes four
basic factors which are mentioned below:
Valuable: These are all the resources which are valuable to the organisation and helps in
providing customer satisfaction along with increasing revenues and sales for the company
(Okumus and et. al., 2019). The valuable resources for Sheraton hotels and resorts include their
financial standing, the housekeeping staff, the vendors community, and use of technologies by
the organisation. All these resources of Sheraton hotels and resort help them in standing up to
their competitors.

Rareness: This includes all those resources which are quality and help the organisation in
standing out to their competition by being unique and specific. The resources for Sheraton hotels
and resorts which are rare include its financial standing, the vendor of company and
housekeeping staff. These are all those resources which helps in functioning of Hotel smoothly.
Imitable: These are all the resources present with a company which any of its
competitors cannot copy. This gives a competitive advantage to the company. For Sheraton
hotels and resorts the financial resources of company and the housekeeping staff our imitable
resources. It is seen that company have built their financial standing in a long period. It is
difficult for any competitors to copy it. Also, a lot of training and development programmes are
organised for housekeeping staff of Sheraton hotels and resorts which require huge cost. All
these factors help Sheraton hotels to develop resources for company that cannot be imitated by
others.
Organized: When talking about organised resources it means all those resources which
are organised well by an business and provide competitive advantage to them. For Sheraton
hotels and resorts the key resources for its success are the financial resources of company as well
as the housing staff.
The above frameworks help in concluding that there are a number of internal factors in a
company which can be effectively used by Sheraton hotels and resorts to make sure that all its
objectives and goals are attained in stipulated time period.
Application of Porter’s Five Force Model to analyse competitive forces in market
Porter’s five force model is a business tool used to analyse competition in a business
environment. This also helps in explaining ways in which different industries can sustain their
profitability level.This includes five factors all of which are related to the competition in market
and the competitive advantage that the company have about its competitors:
Power of buyers: When taking hospitality industry into context the power of buyers is
always moderate. In context of Sheraton hotels and resorts company is working globally and
there are a number of different services and recreational activities provided by company.
However there are a number of competitors present in the market (Ahmad and et. al., 2018). Due
to this the bargaining power of customers is moderate as they have a number of options available
but none of them provide facilities and services like Sheraton hotels and resort.

Power of suppliers: The bargaining power of suppliers in hospitality industry is low. It is
seen that the orders of Sheraton hotels and resorts are done in bulk. There are a number of
suppliers present in the market and a supplier cannot afford to lose such a huge client as Sheraton
hotels. There for this makes the bargaining power of suppliers is low as Sheraton Hotel can
effectively manipulate the supplier into charging them less.
Threat of new entrants: It is often seen that the investment required to set up a new
Hotel is very high. There is huge infrastructure required along with a number of facilities
including very highly skilled and trained employees. There for Sheraton hotel does not face
much threat from new entrants in the market. However it have some threat from new chains of
already existing players in the market.
Threat of substitute: every organisation present in hospitality industry are built to provide
the similar products. This industry is very competitive nature with very less variety of services to
provide. Therefore, Sheraton hotels and resorts make sure that their activities and services for
leisure of their clients is different from that of their competitors (Boella and Goss-Turner, 2019).
They have innovated a number of such services in order to make sure there are no substitutes
present market. They have established low threats from substitute with the help of the services.
Competitivee rivalry: as discussed earlier there is high level of competition in the market for
Sheraton hotels and resorts. There are a number of hotels such as Intercontinental hotel, Hyatt
group of residencies, choice international hotels which are huge competition for Sheraton hotels
and resorts. Competitive rivalry in the market is a great disadvantage for any organisation in
hospitality industry.
From the above framework it can be identified that the major competition company faces
through the rivals as well as the bargaining power which buyers have with them. Sheraton hotels
and resorts need to take required steps in order to make sure these threats do not cause losses for
them.
PART B
Interpret and devise strategic planning for organisation
Ansoff’s Matrix
Ansoff’s matrix is a framework used by companies in order to choose one of the strategic
decisions for growth of the organisation. It helps in achieving all the objectives and goals of the

company in coming future. There are four types of strategies mentioned in this framework which
is mentioned below:
Market penetration: This strategy majorly focuses on improving the market share of
current products and services within the already existing market (Law and et. al., 2018). This is
the most easy way for growth of a company. When taking Sheraton hotels and resorts into
consideration it is seen that company needs very small modifications to increase their market
share. They are improving their promotional tools for communication to consumers in order to
apply this strategy.
Product development: In this strategy a company focus on increasing their product line.
For hospitality sector the companies choose on opening new hotels at a larger level. When
taking into consideration Sheraton hotels and resorts they work on various recreational activities
provided by them such as adventure tourism, providing guides and so on in order to increase the
number of services provided by them.
Market development: Market development refers to finding new markets for the same
products and services available in the company. When considering hospitality sector, Sheraton
hotels and resorts try to expand their business through opening their chains in a number of
countries. They have adopted a global strategy to internationally make their brand famous. They
make sure that they maintain good relationships with their client and fulfil all their needs and
requirements efficiently to provide them satisfaction.
Diversification: Diversification is the strategy in which new product is launched into a
new market. This is the most risky strategy of all and requires a lot of investment. Sheraton
hotels and resorts does not use the strategy more often because they have a set of products and
services which are provided by them they do not make much changes in them as they cannot
invest such huge capital without any predetermined guarantee of profits.
Market development is the best strategy that can be adopted by Sheraton hotels in order
to expand their business. It will give them opportunities to enter into new markets and gain new
customers. However, they are required to look into new markets conduct market research and
change their products and services to need to requirement of customers in the new market place.
Strategic Plan
This refers to a plan for functioning of a business organisation. It considers each and
every step which a business needs to take in order to achieve all its objectives in the stipulated

time period (Kallmuenzer, 2018). Below mentioned are some of the important factor of a
strategic plan for Sheraton hotels and resort:
Vision: Vision of Sheraton hotels and resort is to provide their customers with luxurious
experience while they stay with them.
Mission: The mission of Sheraton hotels and resort is to bring together people through a
number of communal experiences because they believe that travel is better when it is shared.
Strategy: Company have already adopted market development strategy so that they can
globally expand their business.
Implementation: The implementation of land in Sheraton hotels and resort is done from top
to bottom. The top executives make the plan along with managers and then the information is
travel to subordinates.
Evaluation: The evaluation of strategic plan for Sheraton hotels and resort is done after
every six months when a new plan is to be formulated (Sánchez-Franco and et. al., 2019). The
executives are responsible for reviewing the plan through taking feedbacks from all the employs
as well as managers working in different chains of this hotel.
PORTER’S GENERIC MODEL
Porters generic strategy is a strategy which is adopted by various organisations in order to
make sure that they have a competitive edge over their competitors in the marketplace. There are
two different kind of focus paid in this strategy which are differentiation and cost leadership
strategies. Sheraton Hotels can follow either of this strategy and achieve competitive advantage
over their competitors in the marketplace.
Cost leadership strategy: Cost leadership strategy is a strategy which is adopted by a number of
organisation in which they try to reduce the cost of their products and services. When taking
Sheraton hotels into context they are working to reduce their costs. In order to do so they make
sure that they are achieving economies of scale through which they can easily lower their costs
for their potential customer. Asset utilization is a great approach to use in order to reduce cost in
which Sheraton hotel is required to use all the assets which are available by them to increase
customer satisfaction and reduce the cost.
Differentiation strategy: Differentiation strategy leads to bringing in products and services
through which company can provide their customers something new and different from their
competitors. Sheraton hotel is critically adopting differentiation strategy as the major customers

for it or not price sensitive and they look for services. In order to do so they are providing a
number of recreational activities to their customers along with health benefits in their premises.
Sheraton hotel is effectively using differentiation strategy in their organisation in order to make
sure that they achieve a competitive edge over all their competitors in the marketplace.
CONCLUSION
From the above-mentioned report, it can be concluded that there are number of factors in
external environment of hospitality business which are affecting it in a number of ways. It is
necessary for organisation to critically analyse all these factors so that they can grab all the
opportunities present in the external environment. It is also necessary for a hotel two make sure
that they are using all the resources present with them effectively and efficiently. The report also
concludes that it is necessary for businesses to make a clear vision mission and strategies so that
they can conduct their business successfully in hospitality sector earning revenues and profits for
themselves.

REFERENCES
Books and Journal
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development of tourism and hospitality industry in the regions. Journal of
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Tourism and Hospitality Industry. In Innovative Approaches to Tourism and
Leisure (pp. 417-432). Springer, Cham.
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Martínez-Martínez, A. and et. al., 2019. Knowledge agents as drivers of environmental
sustainability and business performance in the hospitality sector. Tourism
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Okumus, F. and et. al., 2019. Strategic management for hospitality and tourism. Routledge.
Sánchez-Franco, M. and et. al., 2019. A naive Bayes strategy for classifying customer
satisfaction: A study based on online reviews of hospitality services. Journal of
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Ahmad, S.Z. and et. al., 2018. An evaluation of teaching methods of entrepreneurship in
hospitality and tourism programs. The International Journal of Management
Education. 16(1). pp.14-25.
Boella, M.J. and Goss-Turner, S., 2019. Human resource management in the hospitality
industry: A guide to best practice. Routledge.
Law, R. and et. al., 2018. Systematic review of hospitality CRM research. International Journal
of Contemporary Hospitality Management.
Kallmuenzer, A., 2018. Exploring drivers of innovation in hospitality family firms. International
Journal of Contemporary Hospitality Management.