Strategic Planning for the Hospitality Industry: Novotel Analysis

This report provides a comprehensive analysis of strategic planning within the hospitality industry, using Novotel London Blackfriars as a focal point. It begins with an introduction to strategic direction, outlining the mission, vision, values, culture, goals, and objectives of the hotel. The report then delves into external and internal environmental factors, applying Porter's Five Forces model to assess the competitive landscape, including the threat of new entrants, bargaining power of buyers and suppliers, and industrial rivalry. Further analysis includes a SWOT analysis, highlighting the strengths, weaknesses, opportunities, and threats facing Novotel London Blackfriars, followed by a PESTLE analysis, examining the political, economic, social, technological, legal, and environmental factors influencing the hotel's operations. The report concludes by exploring various strategic options for Novotel London Blackfriars, emphasizing the benefits of acquisition as a strategic choice for business expansion, and providing a detailed conclusion based on the critical analysis.

Strategic Planning for the Hospitality
Industry 18

TABLE OF CONTENT
 Introduction
 Strategic direction
 Porter's five forces model
 Internal & external environmental factors
 Strategic options
 References

INTRODUCTION
Strategic planning can be considered as an effective process where documentation along with
establishment of overall directions majorly takes place for a business. This helps in boosting
marketing position of a company through considering various desired goals and objectives. On
the other hand, strategic planning helps an organisation in building vision, mission, values,
long-term goals and it also aid in achieving them with an effective action plan. In this particular
presentation, organisation that has been taken into consideration is Novotel London Blackfriars
offering customers with intensified hygiene & prevention measures to ensure safety.

Strategic direction
Strategic direction can be defined as number of
actions that are specifically being taken in
order to attain desired goals and objectives of a
company. In present context, Novotel London
Blackfriars will be focusing on developing an
appropriate strategic direction as this hotel is
looking forward to gain competitive
advantages in the market.

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Mission: To launch two new hotels in United Kingdom in next 2 years.
Vision: The vision of Novotel London Blackfriars is to become leader in United Kingdom through
delivering clients with best and luxurious experience.
Values: Novotel London Blackfriars' values offered to their clients are specifically reflected on
delivering a luxurious experience considering a blend of upcoming trends and particular needs and
requirements of consumers. Also, Novotel London Blackfriars has done commitments to offer
staff with zero discriminated environment with equal opportunities as well. This organisation is
also believing in offering clients with impeccable services, comfort and best accommodation as
well.

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Culture: Diversified culture is basically followed by Novotel London Blackfriars, which helps
them in sustaining within the market as they provide equal opportunities to all the staff members
without doing any sort of discrimination at the hotel.
Goals: Primal goal of this particular hotel is to become the leader in the hotel industry.
Objectives: To improve sales by 5% in 6 months through offering customers with best quality
accommodation and services as well.
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Porter's Five Forces Model
Porter's Five Forces model helps an
organisation in analysing the
competitiveness in the business
environment. Basically, this model may aid
Novotel London Blackfriars in taking right
decisions to achieve desired goals or even to
enhance proficiency level of the hotel in
order to gain competitive advantages.

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Threat of new entrants: This is considered to be one of the crucial force which majorly influence
a hotel like Novotel London Blackfriars. Within hotel industry, it has been found that new entrants
majorly takes place in a rapid manner, which may result into high competition for business hotels
like Novotel London Blackfriars. Therefore, it can easily be said that threat of new entrants for
Novotel London Blackfriars is really very high. It will be needed by this hotel to deliver unique
experience to their existing and new clients because then only Novotel London Blackfriars may
become able to survive in the market for a longer period of time.

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Bargaining power of buyers: Another crucial force which majorly influence operations of a
business organisation. In context with Novotel London Blackfriars, bargaining power of buyers is
really very high and the reason behind this is ample number of hotel options available in the
market. This is why it is needed for management department of Novotel London Blackfriars to
improve the service quality as well. It has been found that, consumer's needs and requirements
gets change from time to time due to ample number of reasons like change in trend and so on.
Therefore, it is needed for Novotel London Blackfriars to keep on enhancing the proficiency level
and make changes in existing operations and services offered by them because then only, they
may become able to serve the best and suitable services to customers and meet their requirements
for a longer run.

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Bargaining power of suppliers: In relation with hotel industry, it has been observed that
bargaining power of suppliers is really very low for the organisations like Novotel London
Blackfriars. The reason behind low bargaining power is the availability of ample number of
suppliers within the market.
Industrial rivalry: Threat from rivals within hotel industry stays really very high in United
Kingdom and the reason is that every single hotel is looking forward to attain a good position in
the market for a longer period of time. Some of the rivals of Novotel London Blackfriars are:
Hilton London Hyde Park, Park Plaza, Aloft London Excel and so on.

Table based on Porter’s Five Forces Model
Threat of New
Entrants
Bargaining Power of
Suppliers
Bargaining Power of
Buyers
Threat of substitute Rivalry among
existing competitors
• Threat of new
entrants for Novotel
London Blackfriars
is really very high.
• Need to deliver
unique
accommodation
related services to
customers.
• Low bargaining
power of suppliers
due to high number
of distributers and
suppliers available in
the market.
• Bargaining power of
buyers is really very
high and the reason
behind this is ample
number of hotel
options available in
the market.
• High threat of
substitution is
present in the
market.
• Requirement of
improving existing
customer care related
service to enhance
consumer loyalty.
• Threat from rivals in
hotel industry stays
really very high in
UK and the reason is
that every single
hotel is looking
forward to attain a
good position in the
market for a longer
period of time.
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Internal & external environmental factors
SWOT ANALYSIS
Strengths:
 Primal strength of Novotel London Blackfriars is that it's brand image is really very
high in today's competitive environment which helps them in improving customer
engagement.
 Highly trained staff with effective luxurious services offered by Novotel London
Blackfriars, which enhanced the customer loyalty and this has helped hotel in improving
sustainability.

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Weakness:
 Less adaptive behaviour is said to be the primal weakness that came in front of Novotel London
Blackfriars.
 This hotel's customer service department is not that much effective which results into negative
outcomes like inappropriate experience given to clients and so on.
Threats:
 Political turbulence because of Brexit is considered to be one of the crucial threat present in the
market for hotels like Novotel London Blackfriars.
 Personal disposable income of individuals got affected due to COVID-19, which resulted into
increase in high employee turnover ratio.

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Opportunities:
 Novotel London Blackfriars has an occasion to partake in more activities and projects, for
example, future food tech program where there were discusses, introductions, conversation of
elective proteins, convergence of well-being, sustenance and investigating of subjects to
comprehend the fate of retail.
 Such activities lead to change of the food framework and better well-being results through
fixing development by associations that are important for lodging industry.
 There is an open door for Novotel London Blackfriars grow their piece of the pie in BRICS
nations that is giving an alluring occasion to additional development of income and deals for
Novotel London Blackfriars.

PESTLE ANALYSIS
Political Factors: In context with Novotel London Blackfriars, Brexit is considered to be one of the
crucial political factor that majorly influenced whole hospitality and tour and travel industry in different
ways. Basically, United Kingdom's business environment become an open market which grabbed the
attention of various foreign hotel groups.
Economic Factors: Due to pandemic COVID-19, it has been found that economic growth of almost all
the hotels got affected and the reason that came in front was reduction within purchasing power of
clients.
Social factors: Outbreak of Corona-Virus raised a situation for visitors and client like their shift of
preferences towards necessities than luxurious accommodation. This change in culture impacted
negatively on revenue and profit margins of Novotel London Blackfriars.

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Technological Factors: It has been observed that, technology is mainly disrupting ample number of
organisations of various sectors. In context with Novotel London Blackfriars, it is needed to take into
consideration of latest technology and imply them among different accommodative services like
offering customers with memory foam beds, laptop compatible safes, complementary Wi-Fi and so on.
Legal Factors: In relation with legal structure, Novotel London Blackfriars has developed various
organisational policies considering different rules and regulations like Equality act, 2010, Health and
Safety at Work etc. Act 1974 and so on.
Environment Factors: This could be understood with a good example of Future Food Tech London
which was formulated in 2019, where Novotel London Blackfriars also took part in it in order to build a
safer environment in rightful manner.

Strategic options
In context with Novotel London Blackfriars, there are ample number of strategic options that
are available in the market to expand their business. In order to attain strategic viability, it is
mandatory to select one suitable strategic option to improve sustainability in rightful manner.
Acquisition is considered to be one of the crucial strategic option that is specifically being taken
into consideration by Novotel London Blackfriars where it was acquired by Accor Hotels. It
resulted into positive outcomes in much effective and efficient ways. On the other hand, the
reason behind considering acquisition as a strategic option is because Blackfriars Road is
located in Southwark, south of the Thames and this borough has also sent improvements within
recent years, including the construction of The Shard, the tallest building in the UK, and the
addition of a large number of tourist and cultural attractions.

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Based on the critical analysis, it can easily be said that considering acquisition as an option for
business expansion, carries high number of benefits like reduced entry barriers, market
power, new competencies and resources, access to experts and so on.
With Acquisition, Novotel London Blackfriars may become able to enter into new markets and
product lines instantaneously with a brand that is already recognized, with a good reputation
and an existing client base. An acquisition can help to overcome market entry barriers that
were previously challenging. Market entry can be a costly scheme for small businesses due to
expenses in market research, development of a new product, and the time needed to build a
substantial client base.
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CONCLUSION
With the help of above mentioned report, it is being concluded that both internal and external
environment carries huge impact on productivity and profitability of a hotel. Therefore, it is
pretty much needed for hotels like Novotel London Blackfriars to critically evaluate these
elements and then try to formulate an effective strategic option in order to enhance the profit
margins and to expand business as per the requirements.

REFERENCES
Kuo, C. M. and et. al., 2016. SMART SWOT Strategic Planning Analysis: For Service Robot
Utilization in the Hospitality Industry. Consortium Journal of Hospitality & Tourism.
20(2).
Ali, A. A., 2018. Strategic planning–organizational performance relationship: Perspectives of
previous studies and literature review. International Journal of Healthcare Management,
11(1), pp.8-24.
Espino-Rodríguez, T. F. and Ramírez-Fierro, J. C., 2018. The intensity of hotel outsourcing and
its perceived benefits and risks. Cuadernos de Turismo, (41), pp.661-664.
Online
Novotel London Blackfriars Hotel. 2020. [Online]. Available through:
<https://all.accor.com/hotel/7942/index.en.shtml?
utm_campaign=seo+maps&utm_medium=seo+maps&utm_source=google+Maps>.

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