Strategic Analysis of Holiday Inn: Business Development Report

This report provides a comprehensive strategic analysis of Holiday Inn, a multinational hotel brand. It begins with an environmental and competitive analysis using PESTEL and Porter's Diamond models to assess external factors. An internal analysis, including a SWOT analysis, evaluates the company's strengths, weaknesses, opportunities, and threats. The report then applies various strategic models and theories, such as the strategic choice model, Porter's generic theory, game theory, Blue Ocean Strategy, and global strategy, to determine Holiday Inn's competitive positioning and potential growth strategies. The analysis covers the hospitality industry, examining how Holiday Inn can achieve sustainable success through innovation, creativity, and effective strategic decision-making. The report offers insights into how the company can navigate market dynamics and leverage opportunities for expansion and development.

Strategic management

Table of Contents
TASK 1............................................................................................................................................3
Environmental and competitive analysis of Holiday Inn............................................................3
Application of strategic choice model.........................................................................................8
Application of Porter's generic theory.........................................................................................9
Application of game theory.......................................................................................................11
Application of Blue Ocean Theory............................................................................................11
Application of Global strategy...................................................................................................12
TASK 3..........................................................................................................................................13
TASK 4..........................................................................................................................................14
CONCLUSION..............................................................................................................................15
REFERENCES..............................................................................................................................17

INTRODUCTION
Strategy dictates the determination of long and short term goals of an organization with
the adoption of different actions and proper allocation of respective resources that are necessary
for attaining the goals. Strategic management is the formulation and implementation of different
strategies which are considered in order to take the initiatives to attain goals and make the
organization competent to sustain in the work environment by assessing the internal and external
environment. The present report is about Holiday Inn which is the multinational brand in the
chain of other hotels. It is the subsidiary of Inter Continental Hotel group. This report critically
examines different models, theories and concepts that help to properly analyze the environment
and determine the sustainability of organization in a long run and helps to design the proper
framework of strategic success of organization in the hospitality industry. This report will
discuss about various possible strategic trajectories which are chosen in order to expand and
grow in order to meet different opportunities and to attain success. Different aspects are critically
reviewed in order to discuss the innovation and creativity components of strategic performance
of the organization.
TASK 1
Environmental and competitive analysis of Holiday Inn
Now a days, the competition is expanding at a fast pace and there are different aspects
which help to properly analyze the internal as well external environmental factors that ensure the
effective performance of Holiday Inn(Alkhafaji, 2003). These factors help to properly analyze
the strengths and weaknesses which ensure the effective performance to attain diverse objectives
of Holiday Inn. It is essential to broaden the performance criteria in order to sustain the
competitive advantage. It is the crucial part which determines overall strategy that should be
included in order to do thorough assessment of respective factors which determine the
sustainability of Holiday Inn. Internal and external environment analysis will determine the
competitive advantage of Holiday Inn to make the strategic decisions in order to sustain in the
long run. With the proper analysis, various models and theories are adopted to properly develop
the strategies to compete in the environment in which it operates.
The external factors are determined with the help of different models which have been
discussed as below:

The external environment comprises of different aspects which properly evaluate as per
several perspectives that determine the overall performance of Holiday Inn. There are various
services which are being offered by them in order to make the stay more effective and efficient
in order to meet the competitive advantage within specific time frame in order to sustain in the
long run (Bordum, 2010). This determines the overall functioning of Holiday Inn within work
environment. With the help of various models, the external environment of Holiday Inn will be
effectively analyzed and discussed below:
PESTEL ANALYSIS:
There are various factors which affect the different decisions which are related to the
strategies that are framed in order to properly analyze the environment and to become competent
enough to meet the changes which need to be implemented in order to sustain in the competitive
and dynamic environment (Makos, 2015). It is critically evaluated and examined:
Political factors: These factors help to effectively implement various strategies in order
to expand within the boundaries of nation by providing the best quality and services and various
other facilities in order to make the stay easy. The positive and effective collaboration with the
government helps in the expansion of functional criteria of Holiday Inn. With the tremendous
growth in the demand in the hospitality industry, Holiday Inn designs proper framework in order
to generate more profits.
Economic factors: Due to fluctuation in the economy, these factors affect the overall
performance of organization as they ascertain various aspects which will be essential to carry out
various perspectives in order to grow and expand the service criteria which they are offering to
the guests. This is an encouraging factor which determines the expansion of Holiday Inn. The
budgets are determined in order to effectively design various plans in order to expand in order to
grow. They adopt many discounts and various other schemes to generate more revenues and to
attain high profits.
Social factors: As the lifestyle and social circles are very standardized, the living costs
are increased in order to meet various changes which are occurring in the environment in order to
sustain in the long run. Holiday Inn formulates its strategies in an effective manner in order to
provide easy accessibility to customers as per their preferences in order to build up a strong
image in the minds of customers as the main focus of customers is on the quality of services
which they are offering in order to make their stay more comfortable and effective (Makos,

2015). . They frame business strategies by keeping in mind the social values and customer
preferences.
Technological factors: With the advancement in technology, it has influenced the overall
functioning of Holiday Inn as it plays a very important role in order to meet the competitive
advantage in the business environment in which it operates. Holiday Inn has adopted innovation
strategy in order to make the working more effective and efficient (Makos, 2015). . They have
provided online reservation facility in order to facilitate the customers to make their bookings in
more convenient manner. This helps Holiday Inn to maintain a proper database regarding
different customers who are staying with them and can make them also aware about many other
perspectives.
Legal factors: Diverse policies and procedures are adopted in order to meet different
perspectives. Holiday Inn properly formulates distinct perspectives by keeping in mind many
regulations and by effectively defining the different strategies related to the development of
employees as well as the overall functioning of Holiday Inn.
Environmental factors: Environment is an important factor which determines the overall
performance. Holiday Inn properly formulates the strategies by keeping in mind all aspects
which does not affect the environment. They properly flow different environmental laws in order
to make it more environmental friendly with the adaptation of varied aspects to meet the
competitive advantages.

Porter Diamond Model: It is the effective tool which helps to effectively analyze the
environment in order to meet the competitive advantage and adopt the effective growth strategies
in order to grow. This model includes the different elements which are discussed below:
Factor Conditions: These aspects determine the involvement of the several perspectives
which help to analyze the effectiveness and the efficiency of Holiday Inn. As all the resources
are essential to carry out the various activities by adopting the diverse strategies to achieve the
objectives of Holiday Inn. With the effective use of the human resources, physical resources and
the capital resources the growth strategy is framed in order to meet the objectives.
Demand Conditions: This factor depicts the conditions which influence the overall
demand of the customer as per their specification. As the hospitality industry is very wide and
very fast growing industry that comprises of different customer groups which have different
needs and the requirement. With the adaptation of the differentiation strategy they effectively
meet the various demands of the diverse customer groups which are served by them. In order to
grow they properly analyze the demand and effectively accomplish the various objectives by
proper allocation of demand and resources in order to sustain for a long period of time.
Related and Supportive industries: There are various industries which are related and act
as a support system in the functioning of the organization. Each and every perspective is properly
evaluated to determine the overall functioning of Holiday Inn in the industry and attain the
competitive advantage. Various methods and techniques are adopted to relate the various
activities and effectively influence the supportive channel which provides the various resources
to execute the several activities and carry out the entire operations in an effective and efficient
manner.
Firm Strategy, Structure and rivalry: These factors help in determination of the various
perspectives which are essential to carry out the various operations that determine the overall
functioning of the organization. This reflects the various strategies which are being adopted by
Holiday Inn to meet the competitive advantage in the environment in which it operates. The
structure is designed keeping in mind the competition which is faced by the rivalry companies.

The internal factors help to analyze the internal functioning of Holiday Inn. As it has
various perspective which is involved and which determine the overall functioning with the help
of effective strategies that are adopted in order to grow to compete in the business environment
(Freeman, 2010.).
There are various tools and methods which help to measure efficiency to meet the
competitive advantage. With the help of SWOT analysis it is critically evaluated:
Strength:
Holiday in multinational hotel which is operating in several nations and has the strong
business base. As it is a well diversified firm and it aims to effectively determine the several
perspective to measure the overall performance. With the adaptation of the promotional strategy
they build up the strong image in the mind of the customers. They properly advertise the
different schemes which they have incorporated in order to build up the strong image in the mind
of the customer who are availing the services which are offered to them.
Weakness:
As the competition is expanding at a greater speed. There are several firms which are
building the huge competition market environment in which Holiday Inn operates. As they are

trying to increase their performance criteria but due to the emerging economies their execution
related to the several activities get affected which are accomplished in order to meet the
unfulfilled needs of the customers. The different actions are affected as they are trying to
increase their execution criteria in the business environment to meet the competencies.
Opportunities:
Holiday Inn is the much diversified hotel which offers different facilities to the customer
by providing several benefits so that the effectively execute the various policies in order to meet
the various opportunities which are available to them. They can adopt the differentiation strategy
to effective make the difference in the offerings which they are making to the customer base and
effectively meet up the demands of the customers.
Threats:
There are several aspects which act as a threat to the overall performance of Holiday Inn.
There are various operations which are being carried out in order carry out the various operations
that determine the entire functioning of Holiday Inn. There is intense competition which acts as a
threat as there are very renowned as well as local hotels which are competing in the environment
and it affects the performance of Holiday Inn.
Task 2
Holiday Inn is identified as a multinational brand which is offering wide range of
hospitality services in all over the word. Therefore, the management of hospitality makes efforts
to identify new market opportunities through company is able to assess new path for business
growth and development that would play important role in growth and success of organization
(Eshun, 2009). In this context, some important strategies are discussed below that assist hotel
firm while handling of different tasks and strategies for attainment of corporate goals:
Application of strategic choice model
The management of Holiday Inn can apply strategic choice theory starts by considering
different relevant forces associated with the external environment that affects employment
relationships. Changing external environment are greatly influencing to management for making
adjustment in their competitive business strategies. In this process, wide range of options is
considered with reference to values, beliefs, and philosophies that are engrained in the mind of
key decision-makers (Rigby and Tager, 2008). In the context of hospitality business,
management considers current market position and goodwill of company while taking different

kinds of strategic decision as per the current market trends. It includes growth in new emerging
markets such as India and China has played important role to influence management for business
expansion. In this process, the evaluation of wide range of feasible options is carried out while
selection of best decisions as per the current market trends.
In this context of hospitality business, this approach has found very effective in
evaluation of change in interest of consumers, change in service rendering, customer trends in
new emerging markets, growth in tourism in new emerging markets etc (El-Ansary, 2006). In
order to take wide range of strategic decisions, this approach assists managers of Holiday Inn by
dividing the activities related to management, labour, and government organizations into three
different tiers. In this first or top tier, strategic decision making is carried out by company for
handling of different business operations and a middle or functional tire is associated with the
collective bargaining or personnel policy making through which management is able to manage
work in different aspects as well as a bottom or workplace-level tier assists manager in
development of different policies are playing important role for handling individual workers,
supervisors as well as union representatives (Hiriyappa, 2013).
Application of Porter's generic theory
In the context of hospitality business, the porter's generic strategic model has been found
very effective in evaluation of several factors that influence market position the company. In this
context, it is evaluated that primary determinant of the profitability of a hospitality firm like
Holiday Inn is the attractiveness of industry in which company is operating different business
operations. Apart from that market position of company in particular industry is considered as
secondary determinant (Hitt, Ireland and Hoskisson, 2012). As per the Porter's generic theory,
the management of Holiday Inn can strengthen business position within frequently fluctuating
market trends by considering two factors such as cost advantage. By considering these terms,
company is able to enhance efficiency of business with the help of three different elements such
as cost leadership, differentiation and focus. All these important elements are evaluated below:
Cost leadership
Porter's generic strategies are playing important role in order to provide competitive
advantage. By applying this approach, the managers of Holiday Inn are able to select appropriate
strategies through company can increase profits by reducing costs. This approach has found very
effective in order to increase market share hospitality firm by charging lower prices of different

hospitality services such as food, accommodation etc. along with a reasonable profit on each sale
(Hubbard, 2014). The Cost Leadership strategy assists management for assessment of good
market position with the low cost services. In context of hospitality business, business entity
cannot avoid the quality of services because goodwill of hospitality firm is greatly depending on
quality of hospitality services. The greatest risk during application of a Cost Leadership strategy
is that these sources of cost reduction are not unique for company along with that other
competitors can copy firm's cost reduction strategies.
The Differentiation Strategy
Differentiation is termed as systematic process for making Holiday Inn's services
different from and more attractive than competitors such as Hilton, IHG etc. In this process, an
organization enhances efficiency of services by paying extra attention on different product
features, functionality, durability, support, etc. through management is able to enhance goodwill
of company and creates unique image among perception of consumers (Stensaker, 2014). For
application of differentiation strategies, the management of hospitality firm needs to carry out
good research for development and innovation wider range of unique and creative services
associated with hospitality business. In addition to that the management of Holiday Inn's has to
pay extra attention on present service process and has to enhance capabilities of firm in order to
deliver high-quality products or services. Apart from that Effective sales and marketing is
considered as most important element in which market or target consumers are able to
understand the benefits offered by the differentiated offerings (Moutinho, 2011). Therefore, it
can be stated that product differentiation strategy has found very effective for creation of unique
image of company in the mind of target consumers that played important role in order to enhance
efficiency and market position of hotel organization.
The Focus Strategy
The approach has found very effective during expansion of business in new emerging
market. As per this approach, hospitality firm applies focus strategies that are concentrating on
particular markets. As per this approach, the management of Holiday Inn's has to carry out detail
investigation for understanding the dynamics of particular market as well as unique needs of
customers. This approach assists managers for development of unique low-cost or well-specified
products for the market (Uliwick, 2005). For example: If Holiday Inn wants to expand business
India then management has to consider local market trends while formulation of various

strategies. This is because management is able to serve customers in their market uniquely well
that plays important role in order to build strong brand loyalty among their customers.
As with broad market strategies, it is still essential for hospitality firm in order to decide whether
company applies Cost Leadership or Differentiation after selection of focus strategy. This is
because focus strategy is not normally enough on its own (Baker, 2007). As per the goals of
company, the management can select cost focus or differentiate focus strategy.
Application of game theory
Game theory is considered as attempts to assess the relationships between different
participants in a particular model and predict their optimal decisions. In the context of hospitality
business, this approach has found very effective in evaluation of market fluctuations. This
approach assists management of Holiday Inn for handling market competition. In this context,
zero-sum games are considered as most important element that stemmed from the original ideas
presented in game theory and the Nash Equilibrium. In this situation, any quantifiable gains by
one party are equal to the losses of another party that plays important role in evaluation level of
competition among different companies (Gnosa, 2011). The approach of game theory is
identified as an important and powerful tool for predicting outcomes of a group of interacting
firms where an action of a single business entity has lead direct impact on the pay-off of other
participating players. In the contemporary business environment of hospitably business, Game
Theory is playing important for handling different strategic situations where competitive or
individual behaviours can be modelled (El-Ansary, 2006). It assists managers of Holiday Inn for
handling different management situations such as auctions, bargaining activities that could be
union v/s management, pricing buy-back and revenue-sharing negotiations, product decisions for
example entry or exit markets as well as principal-agent decisions associated with the
compensation negotiations in hotel industry. This approach has found very effective in supply
chain management by conducting capacity management and assessing new suppliers etc.
Application of Blue Ocean Theory
For attainment different business goals and expansion of business in new market places,
the blue ocean theory has played important role. In an established industry, companies are
competing with each other for every piece of available market share. The competition is often so
intense in which some companies cannot sustain themselves and stop operating. This type of
industry is described as a red ocean that indicates the saturated market share, bloodied by huge

competition (Palepu, 2010). In this regard, it has been evaluated that companies associated with
hospitality business are facing tough competition with various domestic and international
companies. Therefore, blue ocean strategy assists management of Holiday Inn in order to avoid
costly competition by innovating or expanding business in new market places. A blue ocean
exists where no firms currently operate in which management can expand the business without
any competition.
This approach assists hospitality firm during different strategic decisions by applying
wide range of key analytical tools and frameworks that help managers in formulation of various
strategies to control cost and enhance market share of company. By using this approach, the
management of Holiday Inn is able to create uncontested market space by reconstructing market
boundaries (Strategic Planning Tools, 2015). In addition to that this approach helps manager in
order to focus on the big picture related to hospitality business through which management can
identify new opportunities for business by reaching beyond existing demand. Apart from that it
has been evaluated the blue ocean strategy has found great to for getting the strategic sequence in
right direction which is associated with organizational goals and objectives. By considering this
approach, the management of hospitality firm is able to pay extra attention on various factors
associated with strategic decision making process such as expansion of business in new sector
with some unique services (Eshun, 2009). This approach will be provided competitive advantage
to management of Holiday Inn and company would generate good returns and could gain high
market share.
Application of Global strategy
The emergence of globalization has significantly influenced the requirement of global
strategy. This strategy has found very effective during expansion of business in overseas market
in order to reduce the pressure of domestic market conditions on company along with the
profitability. In the context of Holiday Inn, it is evaluated that global strategy assists managers
during overseas expansion for attainment of different business goals (Rigby and Tager, 2008). In
this process, the management of hospitality firm has to consider various factors for example
Global strategies influence firms for managing an effective coordination among company's
product and pricing strategies across international markets and locations. Therefore, it can be
stated that pursue a global strategy are typically highly centralized with in hospitality sector.