Strategic Directions and Planning for InterContinental Hotels Group

This report provides a comprehensive analysis of InterContinental Hotels Group's business strategy, employing various strategic management tools and frameworks. It begins with a PESTEL analysis to assess the macro-environmental factors impacting the organization, followed by a SWOT analysis to evaluate its internal strengths and weaknesses, as well as external opportunities and threats. The McKinsey's 7s Framework is used to examine the internal alignment of the company, while Porter's Five Forces model assesses the competitive landscape. The report also explores different strategic directions available to the organization, evaluates these directions, and recommends appropriate growth strategies using Ansoff's Product Matrix. Furthermore, it interprets and devises strategic planning along with the strategic planning process for InterContinental Hotels Group, utilizing relevant theories, concepts, and models, ultimately concluding with key insights and recommendations.

Hospitality Business
Strategy

Table of Contents
INTRODUCTION...........................................................................................................................3
TASK - 1..........................................................................................................................................3
PESTEL Analysis........................................................................................................................3
SWOT Analysis...........................................................................................................................4
McKinsey’s 7s Framework..........................................................................................................5
Porter's Five Forces Model..........................................................................................................6
TASK – 2.........................................................................................................................................7
Measure the various form of strategic directions available to the organisation..........................7
Evaluate strategic direction..........................................................................................................8
With the help of Ansoff's Product Matrix justify and recommend the most appropriate growth
strategies......................................................................................................................................9
Applying a range of theories, concepts and models, interpret and devise strategic planning
along with strategic planning process for chosen hospitality organisation................................10
CONCLUSION .............................................................................................................................11
REFERENCES..............................................................................................................................11
Books and Journals....................................................................................................................11

INTRODUCTION
Hospitality businesses strategies are the strategies which are being framed by the
managers in order to increase it's customers base, along with operating all it's functions smoothly
(Bergs and Lub, 2020). Now a days there are number of hotels which are operating globally so it
is required for them to be creative in order to stand out and this is how they wants to seeks
attention of customers. For preparation of this report the chosen hotel is Inter Continental Hotels
group. It is a multinational hospitality organisation which was started it's operations in 2003 by
Juan Trippe. It's headquarter is in England, UK having 6028 number of hotels with 884,820
rooms in it. This file includes the SWOT as well as PESTEL analysis which affects the internal
as well as external performance of organisation. The internal position of the organisation has
being evaluated with the help of McKinsey's 7s Framework. In order to make analysis of the
competitors of company Porter's five force model has being used. For making decision Porter's
generic strategies has being used. Lastly, for the purpose of getting growth in the businesses
Ansoff's matrix has being used.
TASK - 1
Environment affects the functions of organisation either internally or externally
(Bounatirou and Lim, 2020). In order to make macro as well as micro analysis of environment
upon the chosen organisation that is Inter Continental Hotels group PESTEL and SWOT analysis
will be performed respectively.
PESTEL Analysis
 Political factor – With the arise in the pandemic due to Covid -19 the Inter Continental
Hotels group remains close for abound two years which makes the hotel operates in loss.
The UK government does not wants to remain these industries in loss as they are the one
who generate taxes for the government and make contribution towards economy. This is
why they lowers the tax rate and make they profitable again.
 Economic Factor – Due to high living of standard of people in UK, the Inter Continental
Hotels group is getting advantages, as huge number of customers are their who are ready
to pay high prices in order to get best facilities. This promotes these industries and they
are involved in providing best facilities to it's customers.

 Social Factor – Some customers wants to get rooms of hotel at reasonable prices and
some of them can pay higher prices for it. It totally depends on the level of income of
customers so Inter Continental Hotels group have set the prices of different rooms as per
the income status of customers.
 Technological Factor – With the effective use of technology the Inter Continental Hotels
group is involved in designing the modern infrastructure. With this, they are proving free
5G internet connectivity to it's customers to make them feel satisfied. Along with it, they
are using social media marketing as a promotional tool, as this is the most cost effective
promotional strategy, this is how they are able to make optimum utilisation of technology
in it's business operations.
 Environmental Factor – The Inter Continental Hotels group is being surrounded with
greenery so that fresh environment can be provide to it's customers. With this, they make
sure to take care of waste management in order to prevent environment. Legal Factor – All types of rules and regulations are followed by Inter Continental
Hotels group so that no legal action could be taken against them. This helps in protecting
their brand image as creating positive image in the mind of customers.
SWOT Analysis
Strength Weaknesses
Trained staff – The staff of Inter Continental
Hotels group is provided with efficient among
of training through which they are become
skilled and able to achieve organisational goals
(Teng, 2018).
Global presence - Inter Continental Hotels
group is involved in operating in more than
100 countries this is how they are able to
capture a large market capitalisation.
Ineffective IT securities – The information
technology securities of company is weak
enough that the information details of
customers such as credit as well as debit card
details, internal codes and so on, were stolen.
Rewards club – The club which is being
owned by Inter Continental Hotels group
comprises of number of negative reviews form
customers which negatively affects the brand
name of company.
Opportunities Threat
More geographical coverage – The Inter Huge competitors - Inter Continental Hotels

Continental Hotels group is planning to
establish it's new business unit in China for
300 new hotels.
New products and services – Inter
Continental Hotels group is also involved in
generating 13% revenue from providing non-
room services such as food and beverage, so
that can add on some products in it.
group is having huge number of competitors so
they should also involve in continuos
innovation to beat competition.
Global crises – Due to arise in situation of
Covid – 19, Inter Continental Hotels group
was remain close for around two year due to
which sales of company affected adversely.
McKinsey’s 7s Framework
McKinsey's 7s Framework comprises of two types of elements that is soft element and
hard element (Bratton and Watson, 2018). Soft element comprises of four elements and Hard
elements comprises of three elements. For evaluating internal position of the organisation
McKinsey's 7s Framework is being used by Inter Continental Hotels group which is stated below
-
Soft elements
 Style – A well and positive working environment is being provided by Inter Continental
Hotels group to it's employees as well as to customers. The democratic leadership style is
being followed by organisation in order to make the workforce feel comfortable.
 Skills – Skills make the organisation helps in attaining the base of customers. Their are
certain skills which are required by an organisation to have an effective working. Inter
Continental Hotels group requires technological as well as management skills.
 Staff – The employees working within the organisation reflects companies, as they are
the one who handles customers. The poor management or behaviour of staff may lead to
decreasing the satisfaction level of customers. This is why Inter Continental Hotels group
provides efficient sum of training to it's workforce so that they can handle it's customers
properly.
 Shared values – The things which the organisation wants to achieve is being mentioned
in shared values such as mission, vision and objectives. Inter Continental Hotels group
delivers all it's objectives to it's employees in order to make smooth functioning of
organisation.

Hard elements
 Strategy – There are lot of hotels operating globally, so with the effective use of
strategies Inter Continental Hotels group is able to cop up in this competitive era. By
having ample of competitor the customer base keeps on dividing and enhance this results
in decreasing profit of company.
 Structure – The structure is being implement as per the strategies framed by the
organisation. This is because the operations takes place after setting the strategies which
organisation will prefer to use in it's businesses. The organisational structure used by
Inter Continental Hotels group is Hierarchical structure. As this type of structure is easy
to follow along with it the organisation can make coordination with it's employees
effectively by the use of this structure. System – System is the process that is being used by the organisation in order to operate
the functions of organisation. The process which improves the working such as customer
relationship management tool, risk management tool and so on. These types of tools are
being used by Inter Continental Hotels group in order to improve efficiency of work.
With this these tools makes the work easy and work is being performed with full
accuracy.
Porter's Five Forces Model
The Inter Continental Hotels group is being involved in using Porter's Five Forces Model
for the purpose of making competitive analysis, which is being mentioned below -
 Threat of competitors – As per increasing in living of standard of individuals they are
easily able to afford companies providing hotel facilities (Cerchione and Bansal, 2020).
This is why competition in Hospitality industry is increasing rapidly, to overcome from
this fear Inter Continental Hotels group is involved in continuous innovation with the
help of these research team. Along with it they are involved in collaborating with it's
competitors so that customers base could be enhanced and eliminate the treat of
competitors.
 Threat of substitute goods – A number of substitute hospitality industries are available
in the market this is how treat of substitute products are high. In order to take prevention
from this threat the Inter Continental Hotels group can enhance switching cost of the
customers towards substitute products. It is possible when the company provides some

facilities through which customers are able to avail facilities at low prices, such as they
can provide memberships to customers through which prices could be reduced and
switching cost of customers increases.
 Threat of new entrance – The entrance of new competitors in hospitality industry is bit
difficult, as for opening a new hotel certain formalities are to be made. With this, certain
rules and regulation are being framed by legislative bodies which are mandatory to be
followed by them (van Rheede and Lim, 2020). The Inter Continental Hotels group has
involved in achieving economics of scale through which they can provide it's facilities to
it's customers at low prices and get competitive advantages. The customers will opt them
in-spite of it's competitors and customers satisfaction will be enhanced.
 Power of buyers – Due to having a large number of hotels the customers are getting
wide range of options, this makes them liable to negotiate for the prices. Along with it,
the competitors of Inter Continental Hotels group are also involved in providing attractive
schemes which leads in attracting customers and hence they provide facilities at low
prices. Hence, the buying power is in the hand of customers not with company.
 Power of suppliers - Inter Continental Hotels group is able to take advantages of
suppliers power by able to build a strong supply chain. As the company have a strong
position in the market this is how they need to make supply at wide area. This is why
they required large number of suppliers and company can bargain with them as if the
supplies will charge higher prices with them, they will switch to some other suppliers and
hence suppliers power is in the hand of company.
TASK – 2
Measure the various form of strategic directions available to the organisation.
The action plan framed by the management of organisation which helps in accomplishing
the goals effectively is considered as strategic directions (Chang and Werther, 2021).
The different type of strategic directions are as follows -
 Mission – The path which is being adopted by the organisations in order to reach it's
vision is considered as mission. The mission of Inter Continental Hotels group is to
provide such experience to it's customers which they love. This mission states why the
organisation is existing so it provides an aim which is to be attained by organisation.

 Culture – The culture of organisation is being reflected by it's employees, this is why
Inter Continental Hotels group is providing training to it's employees which makes them
effective and are able to deal with customers properly by providing them facilities what
they want.
 Vision – The ultimate goal of organisation is vision, so the vision of Inter Continental
Hotels group is to become the world greatest leading company in the market this can be
achieve them them through providing the desired facilities to it's customers and them
providing them great facilities as they want (Reilly, 2018).
 Values – Values are the beliefs of the organisation, which is being followed by them
through which the productivity of employees as well as of organisation enhances. Inter
Continental Hotels group wants to reach economies of scale in order to enhance it's
customers base.
 Ideology – The Inter Continental Hotels group has framed the polices in the favour of
employees to make them feel satisfied. Enhancement in the satisfaction of employees
leads to increase in growth of the organisation.
 Principles – The rules and regulation framed by organisation which is required to be
fulfilled by every employees working within organisation is it's principles. The most
important principles of Inter Continental Hotels group is to keep all the facts of
organisation confidential. Strategy – The action plan made by the organisation to achieve all it's mission, vision
and objectives is considered as strategy. It includes both long as well as short term
strategy, the strategy of Inter Continental Hotels group is to make use of technology to
become more effective.
Evaluate strategic direction
Porter's Generic Strategies is being used by Inter Continental Hotels group to evaluate
it's strategic directions (Gürlek and Koseoglu, 2021).
Porter's Generic Strategies
With the help of this strategy the competitors of organisation can be evaluated, it's
strategies are mentioned below -

 Cost leadership - Inter Continental Hotels group aims to achieve the economies of scale
through which the prices of it's product and services declines and they can get cost
leadership advantage.
 Differentiation – The Inter Continental Hotels group is involved in continuous
innovation which makes the look different form it's competitors. The membership facility
is being provided with them, which leads in increasing switching cost of customers. With
the help of membership facility the prices of products and services offered by
organisation decreases.
 Cost Focus – The customers available within the market is being targeted by providing
cost advantages this is considered as cost focus. The customers belonging to low income
group is being targeted by Inter Continental Hotels group through make them available
low prices rooms present within hotel. Differentiate Focus – Using modern architect and providing free 5G internet
connectivity to it's customers, the Inter Continental Hotels group is able to make
themselves different form it's competitors.
With the help of Ansoff's Product Matrix justify and recommend the most appropriate growth
strategies.
The platform or the strategies use by Inter Continental Hotels group for growth is being
expressed with the help of Ansoff's product matrix which is being mentioned below -
 Market Penetration – The customers of Inter Continental Hotels group has not to wait
for a longer duration of time in order to make check-in and check -out, through this their
experience have being enhanced (Hoseinizadeh Harat, Moeinaddin and Heyrani, 2020).
 Market Development – With the help of research team Inter Continental Hotels group is
able to determined that that customers belonging to high income group are ready to avail
the services provided by hotel at high prices, just they want best facilities. This is how the
company tries of improving and innovation in it's facilities.
 Product Development – As 13% revenue of Inter Continental Hotels group is being
collected from food and beverages offered by them. Here, again with the use of research
team the organisation is able to identify that this revenue can be raise to 25% by adding
more variety of products in it's portfolio.

 Diversification – The new market where Inter Continental Hotels group is planning to
start is in China, which it's new food and beverages products and this is considered as
diversification.
Applying a range of theories, concepts and models, interpret and devise strategic planning
along with strategic planning process for chosen hospitality organisation.
Strategic planning process
The steps involved in framing strategic planning process is as follows - Determining position – The first step of strategic planning process is to evaluate the
current position of the Inter Continental Hotels group. This position can be analysed with
the help of SWOT and PESTEL analysis (Koseoglu, Law and Dogan, 2018). The internal
position is being evaluated with SWOT and external position is being evaluated with the
help of PESTEL.
SWOT analysis
Strength Weaknesses
Expertise workforce
Huge coverage area
Insecure IT securities
Lack of social media availability
Opportunities Threat
Expansion towards market in China
Addition of new food and beverages products.
Huge number of competitors
Different government polices at different
locations.
PESTEL analysis
 Political factor – With the, expansion done by Inter Continental Hotels group in China,
they are required to follow the rules and regulation of China, disobey of rules will
negatively affect their image.
 Economic Factor – The sales of Inter Continental Hotels group was declined in Covid –
19 pandemic, so with the reduction in tax rates by government they are able to move back
to normal position.
 Social Factor – The research and market team of Inter Continental Hotels group
identified the requirement of customers that by adding more products in it's portfolio
customer base could be enhanced.

 Technological Factor – The modern infrastructure and use of social media marketing is
effective enough to enhance customer engagement of Inter Continental Hotels group.
 Environmental Factor – The use of recyclable products by Inter Continental Hotels
group makes them able to achieve cooperate social responsibility.
 Legal Factor – The employees of Inter Continental Hotels group are paid with fair wages
and polices are framed though which they get benefits.
 Prioritizing objectives – Inter Continental Hotels group have various long term as well
as short term objectives which are to be attained by them, but it is not possible to achieve
all the objectives together. Thus it is important to make a list of objectives and priorities
in such a way that it can be achieved effectively on time (Poretti and Blal, 2020).
 Develop plan – The next step is to make a plan which will help the Inter Continental
Hotels group is mapping strategies along with it, the they make these strategies deliver to
it's workforce to continue it's operations smoothly.
 Execution of plan – It time of map all the strategies made by Inter Continental Hotels
group at ground level. With the help of Key performance indicator the company is able to
effectively communicate with it's workforce at the time of implementation.
 Reviewing plan and making control - Inter Continental Hotels group uses various
types of tools though which they can measure that the action taken by them is working
properly. With this, the management use of interact with it's employees to take reviews.
CONCLUSION
From the above report it can be concluded that, for measuring internal and external
environment SWOT and PESTEL analysis is performed. McKinsey's 7's Framework is
performed to check internal position of organisation. For competitors analysis Porter's five force
model has being used. For making decision Porter's generic strategies has being performed.
Lastly, for the purpose of getting growth in the businesses Ansoff's matrix has being used.

REFERENCES
Books and Journals
Bergs, Y. and Lub, X., 2020. International Human Resource Management in the Hospitality
Industry. The Routledge Companion To International Hospitality Management, pp.279-
295.
Bounatirou, M. and Lim, A., 2020. A Case Study on the Impact of Artificial Intelligence on a
Hospitality Company. In Sustainable Hospitality Management. Emerald Publishing
Limited.
Bratton, J. and Watson, S., 2018. Talent management, emotional labour and the role of line
managers in the Scottish hospitality industry: A roundtable discussion. Worldwide
Hospitality and Tourism Themes.
Cerchione, R. and Bansal, H., 2020. Measuring the impact of sustainability policy and practices
in tourism and hospitality industry. Business Strategy and the Environment, 29(3),
pp.1109-1126.
Chang, C. and Werther, S., 2021. Talent management innovations in the hospitality Industry:
Insights from the winners of the hospitality HR Award. In Talent management
innovations in the international hospitality industry. Emerald Publishing Limited.
Gürlek, M. and Koseoglu, M.A., 2021. Green innovation research in the field of hospitality and
tourism: The construct, antecedents, consequences, and future outlook. The Service
Industries Journal, 41(11-12), pp.734-766.
Hoseinizadeh Harat, Z., Moeinaddin, M. and Heyrani, F., 2020. Designing and explaining model
of profitability green hospitality based on Grounded strategy. Journal of Tourism and
Development, 9(4), pp.269-284.
Koseoglu, M.A., Law, R. and Dogan, I.C., 2018. Exploring the social structure of strategic
management research with a hospitality industry focus. International Journal of
Contemporary Hospitality Management, 32(2), pp.463-488.
Poretti, C. and Blal, I., 2020. The asset-light strategies and the dividend puzzle: International
evidence from the hospitality industry. International journal of hospitality
management, 91, p.102639.
Reilly, P., 2018. Building customer centricity in the hospitality sector: the role of talent
management. Worldwide Hospitality and Tourism Themes.
Teng, C.C., 2018. Developing and Examining an Experimental Curriculum for Enhance" Green"
Capability of Undergraduate Hospitality Students in Taiwan. Hands-on Science, 11,
p.382.
van Rheede, A. and Lim, A., 2020. Understanding Corporate Responsibility in the Hospitality
Industry: A View Based on the Strategy-as-Practices. In Sustainable Hospitality
Management. Emerald Publishing Limited.