Strategic Management Report: Oberoi Hotels' Competitive Framework

This report provides a comprehensive strategic analysis of the Oberoi Hotel, evaluating its competitive framework within the hospitality industry. It examines both internal and external factors to inform potential strategic decisions. The report utilizes various academic tools including McKinsey's 7S framework, SWOT analysis, value chain analysis, PESTLE, and Porter's Five Forces to assess the company's resources, core competencies, and the broader market environment. The analysis includes a review of financial performance and identifies key strategic considerations for the Oberoi Group, offering a fresh perspective on potential strategic directions. The report covers revenue, internal management systems, and the company's commitment to ethical standards, along with an examination of the competitive landscape and the impact of external factors on the business. The conclusion summarizes the findings and highlights the importance of continuous evaluation and adaptation of strategies to maintain a competitive edge.

Subject Name – Nishant Seth
Subject Code – TH6BA02O
Student Id- 21465501
Date of Submission – 21/04/2021
Word Count - 1831
Executive Summary
The competitive framework in which the Oberoi hotel operates will be evaluated
in this analysis. It would explicitly consider the existing internal and external
circumstances in order to influence any potential strategic decisions. A report will
be produced based on the hotel's research and the use of academic tools,
indicating what these results suggest for the organization and providing a fresh

perspective on any potential strategic decisions.
This report analyses the Oberoi Group's strategies as well as the different tactics
utilized by this leading hotel industry. The report assesses the competitive
environment based on the company's internal and external factors through
companies' resources, core competencies. Through use of McKinsey's 7S
structure, a value chain, a SWOT analysis, and a financial performance analysis for
internal factors and PESTLE and Porter's for external.
Index
• Introduction .............................................................
• Ability and Resources of Oberoi
• Evaluation of Internal Environment ...........................
• 2.1 - Ability and Assets of Oberoi Group
• 2.2 - MCKINSEY 7S’S Framework
• 2.3 - SWOT Analysis ........................................................................
• Evaluation of External Environment ..........................
• 3.1 - PESTEL ....................................................................................
• 3.2 - Porter’s Five Forces ................................................................
• Conclusion
• References

Introduction
Strategic management involves defining an organization's objectives as well as the
strategies and plans that will enable it to achieve those objectives.(Lynch 2021)
Strategic management refers to the collection of managerial decisions and
behavior that decides a company's long-term success. It entails external and
internal environmental scanning, policy development (strategic planning), strategy
execution, and assessment and monitoring. In order to generate and execute a
new strategic strategy for an enterprise, strategic management stresses the
monitoring and evaluation of potential prospects and risks in terms of a
corporation's strengths and vulnerabilities. (JD Hunger 2020)
The hospitality industry's business environment is characterized as' monopolistic
competition,' which refers to market conditions in which multiple companies offer
differentiated goods with little entry barriers. So, in this type of market hotels can
utilize their own quality of being diverse according to the brand and market profit
out of it.
Assessment of Internal Environment
⦁ The company's main line of business is the hospitality industry. In 2019-20,
the Company's total revenue was 2580.68 million, down from 2737.00 million the
previous year, a 5.71 percent decline. (EIH 2019)

⦁ The total detailed revenue for the year was 377.44 million, down from
378.24 million the previous year. If the COVID-19 pandemic had not broken out in
the fourth quarter of the financial year, revenue and profitability may have been
stronger.
⦁ The Oberoi Dharma says that we, as members of The Oberoi Community is
dedicated to the highest standards of ethical, scholarly, financial, and spiritual
behavior.
⦁ Internal management systems have been established to ensure the orderly
and effective conduct of activities, asset safeguarding, fraud and error prevention
and identification, correct and prompt completion of accounting reports, and
timely preparation of reliable financial information.
MCKINSEY 7S’S FRAMEWORK
The McKinsey 7S scheme is a framework for evaluating organisations and their
effectiveness. (Singh, A. 2013) It examines the seven main factors that contribute
to the performance of an organization: policy, structure, processes, common
principles, style, personnel, and abilities. It can be used to address any operational
problem that needs to be addressed. To maintain a company's long-term viability
and continue innovating, it's just as necessary to manage the soft S's as it is to
manage the hard S's (Henning Buehring and Liedtka, 2018).
1.Strategy:- The corporate development plan and future vision of Oberoi Hotels
are well defined and communicated to both employees and stakeholders. This
helps the organisation manage outcomes, direct decisions, and implement
different plans that are aligned with the business strategy. Their strategy is also
flexible and highly adaptable so it quicky react and amend according to the
changes in the consumer behavior while maintaining the product via localization
according to different region.
2.Structure: - Oberoi has a flatter organisational structure that is supported by
progressive and learning organisations. With less hierarchical levels between them
and more proximity to senior leadership and managers, employees are more at
ease and confident, and they have greater access to expertise. This enables rapid

decision-making.
3.Systems: - Oberoi Hotels has well-defined procedures in order to ensure that
business operations are done properly and that conflicts and disagreements are
avoided. Since it is such a large company, it has several divisions such as HR, Sales,
Marketing, Finance, and so on.
4.Shared Value: - At Oberoi Hotels, values are identified and expressed in order
to foster a creative and supportive organisational structure that encourages
workers to work at their best while still increasing their morale and commitment
to the organisation.
5.Style: - The leadership model at Oberoi Hotels is interactive. Oberoi Hotels uses
a participative leadership style to include employees in decision-making and
management. This also allows managers to interact with employees and other
management units on a regular basis in order to identify and address potential
conflicts, as well as gain feedback on strategic strategies and procedures.
6.Staff: - Oberoi Hotels employs a sizable workforce through its worldwide
operations. Employees are hired both internally and externally for specific job
roles and positions, depending on the degree of urgency and experience required.
Before starting work, all new hires receive in-house instruction to help them
adjust to their surroundings and operations.
7.Skills:- Each employee is recruited based on their qualifications and skills.
Oberoi Hotels is a firm believer in hiring the best people and providing them with
the experience they need to succeed.
VALUE CHAIN
Using a value chain, it is important to examine specific core activities that can
have a competitive advantage for the hotel. (Romero and Tejada 2011) The macro
value chain covers the entire spectrum of value-added operations needed to bring
a product or service from creation or design, through various stages of
development, and distribution to end users.
Inbound Logistics: - The hotel is part of a complex structure's makes sure it
runs smoothly They are mostly concerned with domestic issues. Contracting, as
well as independent service providers Since they work exclusively with their
vendors like Forest Essentials is used for toiletries.
Operations: - As it falls under East India Hotels the hotel's high-quality service
levels provide a high degree of personalization in different ways each guest is
valued as an individual, like an esteemed friend or family member
Outbound Logistics: - In general, this applies to the tasks carrying out the tasks to

provide the final good or service. High-quality service delivery gives you a strategic
edge than others like arranging transport for guests or maybe a city tour.
Marketing and Sales: - Oberoi Hotels has implemented a number of
advertising policies in order to raise brand value. It also launched advertising
campaigns in newsletters, with tour and travel companies, and on social media
sites. Also has a loyalty program called Oberoi One which offers various benefits to
their guests.
Service: - Oberoi has received an award for the best hotel in 2017 by Telegraph
Travels due to the service and the guest experience which they offer to the guest.
3. Assessment of External Environment
PESTEL
Political Factors
Not only transnational firms, but also businesses like Oberoi Hotels, rely heavily
on political considerations when making investment decisions. The cost of doing
business is influenced by a variety of factors, including the political situation and
other aspects.
Economic Factors
Economic developments in a nation or region have a strong impact on a market's
potential appeal. The new market's inflation rate, GDP growth rate, discretionary
money ratio, and other economic metrics must all be analysed.
Social Factors
Not only the country's economy, but also worker talent access and business
demand, are influenced by demographic trends, societal power dynamics,
women's participation in the workforce, and other social indicators.
Technological Factors
Technology is increasingly evolving business models in a diverse variety of
markets. Advances in artificial intelligence, deep learning, and big data analytics
are all being used to predict consumer behaviour.
Environmental Factors
Oberoi hotel and resorts maintain their garden and also have many green belts
also they have waste management systems so that the environment is not
harmed.
Legal Factors
Legal considerations also control the conditions for entering the sector, the
regulations for participating in the market, and the processes for resolving any
conflicts with other parties. If the legal system is thin, Oberoi Hotels can face a
number of challenges.
Porter’s Five Forces
Classical microeconomics has a big impact on the Porter Five Forces model. The
five forces that characterise the industry structure of the firm in the case study
are:
⦁ Threat of substitute products and services- Hotel should study the

market constantly and adapt according to the needs of the customer and must
have a unique selling point.
⦁ Bargaining power of buyers – People in tend to bargain a lot in India so the
hotel must keep the price accurate and the customer should feel it is the right
price for all the services provided because there is a lot of competition in the
market.
⦁ Bargaining power of suppliers - Hotels generally run-on corporate
booking but in this case it's half and half because many tourists wish to stay at
these hotels to get a local experience but when it is an off season corporates tend
to negotiate a lot as they are a constant supply of customers.
⦁ Rivalry among existing players – The market is full of 5-star properties
like JW and Hilton coming with their sub brands and also Taj .
⦁ Threat of new entrants - Established members will be able to tolerate
lower earnings in order to offset the costs of new entrants where there is a
greater chance of new entrants.
Conclusion
Strategic approaches can help guide a business in the right direction. Since they
have a good view of the company's existing internal and external strategy,
management will integrate new systems to further refine their already established
Oberoi Hotels internal and external strategies. To gain a comparative advantage
over rivals in the same field, you must work tirelessly. It's crucial to measure
yourself against them. The efficient use of internal resources by managers.

Improving the company's performance in the external world is critical. After the
strategies have been implemented, those in charge should continue to evaluate
them to ensure that they are effective.
REFRENCES
Henning Buehring, J. and Liedtka, J. (2018). Embracing systematic futures thinking
at the
intersection of Strategic Planning, Foresight and Design. Journal of Innovation
Management,
6(3), pp.134-152
JD Hunger - 2020 - elibrary.gci.edu.np
Lynch, R. (2021). Strategic Management 9th edn. 9th ed. London: Pearson
Education Limited.
Romero, I., Tejada, P. (2011). “A Multi-Level Approach to the Study of Production
Chains in the Tourism Sector.” Tourism Management, 32 (2): 297-306.
Singh, A. (2013). A study of role of McKinsey's 7S framework in achieving
organizational excellence. Organization Development Journal, 31(3), 39-50.
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