Strategic Analysis Portfolio: Comparing IHG and Marriott Hotels

This project presents a comprehensive strategic analysis of two prominent hotel chains, Intercontinental Hotel Group (IHG) and Marriott, operating within the UK market. The analysis delves into the strategic choices made by each company, utilizing frameworks such as the Ansoff matrix and Porter's Generic Strategies to evaluate their approaches to market penetration, product development, and market development. The project contrasts the decisions of IHG, which has successfully expanded its market share through strategic initiatives, with those of Marriott, which has faced challenges due to less effective strategies. Furthermore, the project explores the application of the Blue Ocean strategy and the impact of strategic decisions on a firm's ability to meet its vision, mission, and objectives. The analysis also considers the consequences of decisions that lead to market failure, emphasizing the importance of effective strategic planning for business success. The project concludes by highlighting the significance of adapting strategies to enhance consumer base and deliver high-quality products and services to achieve customer satisfaction.

Strategic Analysis
Portfolio

TABLE OF CONTENTS
OVERWIEW OF STRATEGIC ANALYSIS..............................................................1
BACKGROUND OF INTERCONTINENTAL HOTEL GROUP, UK.............................1
BACKGROUND OF MARRIOTT, UK.....................................................................2
COMPARING AND CONTRASTING STRATEGIC CHOICES...................................2
Ansoff matrix............................................................................................2
Decisions taken by firm which results into failure....................................5
Blue Ocean strategy.................................................................................5
Porter Generic Strategy............................................................................6
Branding...................................................................................................7
Product and market decisions..................................................................7
Strategic choices support firms in meeting vision, objectives and mission8
Decision made by business that affects products, markets and structure8
CONCLUSION....................................................................................................8
REFERENCES..................................................................................................10

OVERWIEW OF STRATEGIC ANALYSIS
Strategic analysis can be defined as a process of carrying out research on the
business environment in which firm operates. Such type of analysis helps business
to formulate strategy so that organizational goals can be attained in an effective
manner (Hensmans, Johnson and Yip, 2013). However, it is essential for
entrepreneur to understand business environment in which they are operating and
develop interaction with its environment so that efficiency and effectiveness of
business can be enhanced in order to achieve desired goals. In the present portfolio
analysis, two organizations have been chosen that are operating in the same
industry. Intercontinental Hotel Group and Marriott hotel have been undertaken
which are prominent hotels of UK and recently through carrying out research, it has
been assessed that Marriott is facing issues in losing market share because of
implementing ineffective strategies (Hill, Jones and Schilling, 2014).
Hence, IHG implements effectual strategies that help them to develop their
brand image in the market and make good product and service decisions in order to
attract consumers towards the firm. Also, different strategic tools have been
undertaken such as Ansoff’s matrix, Porter generic strategies etc. All such strategic
tools helps in identifying the key strategic issues faced by companies in
international market and also affects the development of overall industry (Kim and
Mauborgne, 2013). However, comparing and contrasting the strategic choices made
by firm in order to attain desired results. Also, it can be stated that strategic choices
assist companies in meeting their vision, mission and objectives.
BACKGROUND OF INTERCONTINENTAL HOTEL GROUP, UK
Intercontinental Hotels Group Plc is a British multinational chain of hotels and
it owns 4800 hotels across 100 countries. Its headquartered is situated in Denham,
UK. Business possesses around 710000 rooms and thus, includes varied hotel
brands operating under it such as Crowne Plaza, Holiday Inn and Hotel Indigo etc.
Company operates in worldwide market and thus later it joined forces in the
privatization of Army Lodging program in order to render best quality services and
experiences to soldiers as well as their families. Such type of program provides
effective hospitality services to US Army (Elbanna, 2010). Therefore, it is essential
for hotel to maintain its service and product quality along with overcoming issues in
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order to gain consumer satisfaction. For this, effective strategic choices have been
made by firm such as Ansoff’s matrix and Porters Generic Strategies in order to
identify the reason of firm's success.
BACKGROUND OF MARRIOTT, UK
Marriott International, UK is an American diversified hospitality company that
helps in managing and franchising a broad portfolio of hotels that involves varied
facilities such as lodging etc. Company owns more than 4087 hotels across 80
countries and it possesses more than 697000 rooms. However, due to tough
competition in the marketplace, business faces issues such as decreasing market
share and thus, it is essential for firm to enhance its product and service quality in
order to attain desired results (Ghezzi, 2013). Management of firm implements
different strategic choices such as Ansoff’s and Porter Generic strategies so that
problems faced by firm could be identified and thus, it includes effective strategies
to overcome those issues and perform better than its rivals.
COMPARING AND CONTRASTING STRATEGIC CHOICES
Ansoff’s matrix
BASIS Meaning IHG Marriott
Market
penetration
It helps business to
grow by using existing
offerings in the current
market (Haley, 2006).
Thus, here marketers of
firm attract new
customers by providing
them additional
schemes and benefits
so that competitive
edge can be attained.
Business sells existing
products to current as
well as new customers
in order to enhance
brand image in the
market (López, 2005).
While, Marriott
always tries to
attract existing
customers and
providing them
different offerings
to satisfy their
needs. Also, they
develop different
products and
services within
the existing
market to attract
high class people
(Griffin and
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Pustay, 2005).
Product
developme
nt
It focuses on delivering
new or modified
products or services
within the existing
market (Hill and Jain,
2007).
It helps IHG in
enhancing product
range and providing
unique services to
consumers so that
market share of the
company can be
enhanced. For instance:
firm provides high class
services or customized
services as per the
guest’s requirements so
that brand image can
be developed
(Ghemawat, 2003).
On the other
hand,
management of
Marriott does not
aim on adopting
product
development
strategic option as
it provides similar
products and
services to every
consumers
(Johnson,
Lenartowicz and
Apud, 2006).
Market
developme
nt
It assists business to
expand its products
into new market
(Kehoe and Perri,
2002).
IHG launches new
program of providing
quality products and
services to US Army
officials as well as their
families. Such scheme
of firm states that
business develops its
market by expanding its
product range in the
new market (Kennerley
and Neely, 2003).
Here, Marriott
does not aim to
focus on new
market or expand
its product line. If,
it attracts existing
consumer group
and tries to retain
them for long
term in business
(Leung and et. al.,
2005).
Diversificati
on
By adopting
diversification,
business tries to grow
its market share by
It is a risk strategy
therefore, business does
not adopt it and thus,
focuses mainly on
On the other
hand, Marriott
International
adopts such
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offering new products
into the new market
(Klapper, Laeven and
Rajan, 2004).
providing hospitality
services to the
consumers (Morrison,
2002).
strategy and
provides
transportation
facilities to the
guests. It involves
different related
and unrelated
diversification so
that offering new
product line helps
in attracting new
customers (Wild,
Wild and Han,
2014).
It can be evaluated from the above analysis that implementing Ansoff matrix
helps in analyzing the strategic choices made by business in order to achieve
competitive edge over its rivals. For instance: Marriott management fails in making
crucial decisions regarding market development and only focuses upon the current
market or existing customers. Thus, such strategic option results into the failure of
business and leads to decline in market share. On the other hand, IHG hotel
undertakes market development tactic and provides best quality services to its new
segment of clients i.e. US Army officials and their families which helps in increasing
the market share of firm and impacts upon the profitability of business in the
market (Mama and Kruger, 2012).
Furthermore, hospitality firms are required to employ effective quality
products and services so that best decisions can be made in regard to service
delivery and consumer satisfaction. For instance, Marriott faces issues in enhancing
consumer base and profitability because still it focuses upon the existing product
range and client base i.e. high class people. The marketing team of business
develops different strategies in order to attract and retain existing customers but
does not focus upon new clients to increase the market share. Thus, it faces issues
and such decision impacts upon the company's performance in market. Hence, it is
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significant for business to undertake best strategies so that it does not influence the
business activities and expand its operations in worldwide market (Kourdi, 2010).
Decisions taken by firm which results into failure
Thus, it has been assessed that the decision taken by Marriott International
to not expand its market segments and focus upon existing customers proves to be
a failure in terms of gaining market share. While, Intercontinental Hotel Group
focuses upon the decision to extend its market segment by providing additional
services to army officers and their families that results into enhancing the market
share and profitability. It also assists business to increase the brand image of firm in
market and give tough competition to rivals and achieve successful outcomes.
Therefore, it can be assessed that business is required to focus upon strategic
planning and make appropriate decisions in regard to support the companies and
develop their mission, vision and objectives so that set goals can be achieved
(Stonehouse and Houston, 2013). In addition to this, if firms are not able to make
effective decisions regarding expanding the market segment or developing the
product line affects the economy of country as well as profitability of company.
Therefore, it is suitable for hospitality firm to undertake effectual decisions in regard
to enhance the consumer base and offer them best quality products and services in
regard to achieve satisfaction (Nickols, 2012).
Blue Ocean strategy
Furthermore, it can be assessed that after considering the decisions taken by
businesses such as IHG undertakes decision to expand the market share led them
into Blue Ocean because for this they do not have to fight with the rivals to
overcome the market. Here, they achieve success with the help of their effective
strategy implementation and thus goals can be attained. However, such strategic
moves helps firm to create a leap in value for company, its customers and
employees while unlocking new demand and also making the competition irrelevant
(Kim and Mauborgne, 2013). While, it is essential for Marriott to undertake red
ocean strategy and thus try to outperform their competitors in order to grab a
greater share of existing demand. However, as the market space gets crowded,
prospects for profits and growth reduces. For instance, implementing varied
strategies makes the companies to raise cut throat competition and turns the ocean
bloody red. Thus, as per Ansoff matrix, IHG is doing much better than the Marriott
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hotel and expands its market share by focusing upon the needs and wants of target
consumers (Ghezzi, 2013).
Porter Generic Strategy
By adopting such strategy, it stated that the proposed strategy helps in
developing a framework in order to contrast between differentiation and cost
leadership. However, it is also considered as a much more market focused tool as it
proposed business strategies in order to perceive value by consumers and price to
customer rather than cost to firm. There are four strategies of Porter Generic
Strategies such as differentiation, cost leadership, focuses cost leadership and focus
differentiation (Interbrand, 2014). However, differentiation strategy states that
uniqueness available in the products and services that helps in providing value to
consumers and allows business to charge premium prices. For instance, IHG is a
luxurious hotel and targets upper middle class travelers and thus it undertakes
differentiation strategy. Business also charges premium prices for its products and
services delivered to consumers. On the other hand, Marriott undertakes the cost
leadership strategy and thus sells its products at the average industry prices in
order to attract more number of business travelers and earn higher profits margins
as compared to rivals. Such strategy helps them to enhance market share and
attain competitive advantage so that desired goals can be achieved (López, 2005).
The proposed strategy for IHG helps them to gain core competencies and
provide best advantage of firm as well as consumers. Also, business efficiently
creates additional sustainable competitive advantage that helps them to achieve
desired goals. Moreover, it is significant for business to develop strategic analysis so
that best results in the form of high market share and profits can be achieved.
However, it helps IHG and Marriott to expand its business operations and provide
best products and services to consumers (Hill and Jain, 2007). IHG adopts
differentiation strategy and thus provide unique quality products and services to
customers that attract them to consume the same and enhance the sales and
profitability of firm in market. While, Marriott adopts cost leadership strategy that
assists them to stand out of crowd and provide best suitable prices in regard to
retain consumers for long term and achieve desired goals. Hence, it is crucial for
hospitality firms to adopt unique strategy so that desired outcomes can be attained.
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Branding
However, it is essential for businesses to pay proper attention on its branding
which can be done through adopting effectual marketing strategies such as online
promotion, e-mail marketing, and mouth publicity. For instance, IHG adopts online
marketing and provides advancements on different social media sites to attract
high class consumers who regularly travel. However, such strategy is effective in
order to enhance customer base and sales in market. On the other hand, Marriott
adopts effective marketing tactic such as mouth publicity as well e-mail or message
marketing in which it sends messages to prospect clients and provide them detailed
regarding the booking offers and available discounts (Ghemawat, 2003). Thus,
undertaking such type of marketing strategy helps firm to achieve desired
outcomes.
Product and market decisions
Furthermore, it is another crucial strategy that helps business to take
effectual product and market decisions in regard to enhance sales and profitability.
However, it is essential for business to analyze the target segment and then
undertake effective product and market decisions so that best results can be
attained. Fr instance, IHG adopts decision regarding targeting army officials and
their families and provides them best quality products and services in order to
satisfy their needs. Therefore, it is essential for firm to obtain crucial decision
regarding developing the product line and market related decisions so that set
goals can be achieved (Johnson, Lenartowicz and Apud, 2006). On the other hand,
Marriott International focuses upon existing market base i.e. upper middle class
consumers so that product and market related decisions can be made effectively
and efficiently.
Strategic choices support firms in meeting vision, objectives and mission
However, adopting best strategic choices helps in supporting the firm in
order to meet their vision, mission and objectives. Thus, it is essential for hospitality
organization to choose best strategic choices that is suitable in order to imply the
same and achieve competitive advantage over rivals. Developing strategic
decisions helps firm to meet the vision, mission and objectives. For instance, IHG
mission is to provide best quality services to its guests and it can be attained
through implementing strategic decisions such as Porter Generic and Ansoff’s
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matrix to attain results (Kennerley and Neely, 2003). Thus, implications of identified
choices help in achieving competitive advantage within firm and enhance their
market share and profits. Moreover, implementing effective market strategies helps
business to overcome strategic issues faced by industries at global level and thus
develop the market in order to achieve desired results.
Decision made by business that affects products, markets and structure
Here, it can be assessed that the decisions made by firm highly affects the
products, market and structure of enterprise. Therefore, it is essential for
organization to make crucial decision and develop best products, services and
market to achieve results. For instance, if firm focuses on such factors it helps them
to enhance the competitive advantage. While, if they are not able to undertake such
options it disrupts the competitive edge gained by firm and rivals become the
options for customers. It is essential for IHG develops its market segment for Army
officials and their families thus, they need to focus upon that they should not leave
the existing consumers and affects the operations of firm in market (Griffin and
Pustay, 2005).
CONCLUSION
It can be concluded from the study that strategic analysis helps firm to carry
out effective research and thus analyze the business environment in which the firm
operates. Further, it led firm to formulate business strategy so that best decisions
can be made in order to achieve organizational goals. Further, comparing two
hospitality firms such as IHG and Marriott International assists that former adopts
market development and product development strategy in order to enhance the
consumer base and achieve high profits. While, Marriott focuses upon existing
products as well as target consumers so that they lack in gaining competitive
advantage over rivals.
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