Strategic Management Report: Hotel Crescent's Analysis and Strategies

This report provides a comprehensive strategic analysis of Hotel Crescent, a London-based SME hotel. It begins with an introduction to strategic audit and its importance. The report then delves into the use of various models such as SWOT, Porter's Five Forces, PESTLE, and stakeholder analysis to assess the organization's strategic capabilities and its position in the competitive environment. The report identifies the hotel's strengths, weaknesses, opportunities, and threats, and evaluates the industry using Porter's Five Forces. Furthermore, the report explores various entrepreneurial strategies, including word of mouth, innovation, social media marketing, and location-based strategies that Hotel Crescent can use to develop and consolidate its position. The report critically evaluates each strategy, considering their advantages and disadvantages. The report concludes with an analysis of the hotel's strategic situation, capabilities, and position, and develops a set of objectives to improve its performance and attain competitive advantage. It explores the political, economic, social, technological, and environmental factors affecting the hotel, and suggests ways to improve its performance in the competitive London market.

STRATEGIC
MANAGEMENT

Contents
INTRODUCTION...........................................................................................................................1
A. Identify and critically evaluate a range of models to analyse an organisation's strategic
capability and its position in the environment in which it operates Hotel Crescent/Harrow. 1
B) Develop and critically evaluate a range of entrepreneurial Strategies which SME hotel
Crescent can use to develop or consolidate, their situation, and critically appraise subsequent
strategy implementation in SMEs..........................................................................................3
C) Analysis an organisation’s strategic situation, its capability and position and develop a set
of objectives............................................................................................................................4
D) Develop a strategy which will be consistent with an organisation’s strategic situation and
design an approach to implementing a choose strategy.........................................................6
CONCLUSION................................................................................................................................8
REFERENCES................................................................................................................................9

INTRODUCTION
Strategic audit is defined as the process of performing in depth review of an organisation in
order to determine whether it is performing well and be able to meet with the pre decided
organisational objective. It also supports in examining whether the organisation have adequate
resources for performing operations well and whether it is able to utilise those resources in
efficient manner. The Crescent hotel is a SME hotel operating within London and is situated
nearer to the Heathrow airport, Wembley and Central London. It offers accommodation related
services by offering comfortable rooms along with customer friendly services. The current report
involves a detail discussion regarding the strategic capability of organisation and its current
position within business environment with the help of models like, PESTLE, SWOT, Porter’s
five force analysis, Stakeholder analysis etc. In addition to this it further includes a description
regarding several entrepreneurial strategies for improving its growth and performance, along
with performing a critical analysis of data gathering from audit that support in formulating
strategic decisions.
A. Identify and critically evaluate a range of models to analyse an organisation's strategic
capability and its position in the environment in which it operates Hotel Crescent/Harrow
Business manager of Crescent hotel can easily determine organisation's strategic capability
and its position in the environment by making use of SWOT and Porter’s five force analysis
which are specified as below in detailed manner:
SWOT
Strength Weakness
The hotel offers highly safe stay to its
customers in comfortable manner.
It offers variety of services to its customers
at the same place which converts its
customers into the loyal one.
Unfavourable tax rates is the major
weakness for this hotel
Opportunity Threat
Crescent hotel can easily attain higher
opportunities by entering into new
Increasing competition within the same
industry is determined as the major threat for
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marketplace effectively.
Enhancing product range can also bring
more opportunity for Crescent hotel in the
same marketplace.
Crescent hotel.
Changing taste and preferences of customers
can become another threat for Crescent
hotel.
Porter’s five force analysis
This is an effective framework basically used for analysing overall industry deeply so
that business manager can effectively determine available opportunities and attain success in
quicker manner.
Threat of new entrant: Influence of this force is higher for Crescent hotel as this sector
has minimal entry barriers and its easier for the new entrant to enter into the sector with good and
innovative services which will support them in influencing interest of customers towards them in
rightful manner.
Threat of substitute: In this, the threat of substitute is quite moderate for Crescent hotel.
This is so because, for influencing interest of customers in effective manner businesses which are
dealing in it emphasising on introducing personalize services for its customers in order to attract
them highly towards them and improvise their business performance as well as profitability in
rightful manner.
Bargaining power of buyer: Buyers are the one who spends money to use the services
or product offered by company. In context of Crescent hotel, it can be said that bargaining power
of buyer is very high for this hotel. The main reason behind this is that there is range of hotels
existing in UK which is offering almost similar kind of services to its customers at reasonable
range. It can be said that customers of this company can easily get diverted towards rival in order
to obtain similar kind of services at lower rate.
Bargaining power of supplier: Influence of supplier’s force is relatively high for
Crescent hotel. This is so because, the respective hotel is performing its business activity at
lower level thus they are not able to give big orders to its suppliers. This directly becomes major
issue for them as suppliers do not provide them an affordable quotation which places impact over
their business expenses.
Competitive Rivalry: Competiveness within the hospitality industry is very dense which
simply means that customers have lots of options within the same industry and they can easily
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move another hotel if they do not get desired services. With reference to Crescent hotel, it can be
said that its business manager is required to focus on conducting market research so that they can
easily find out changing expectation and demand of its customers. This also provides them time
to modify their services in the same manner which ultimately improves satisfaction level of
customers as they are able to serve them right product according to their own expectation only.
B) Develop and critically evaluate a range of entrepreneurial Strategies which SME hotel
Crescent can use to develop or consolidate, their situation, and critically appraise
subsequent strategy implementation in SMEs.
Entrepreneurial strategy can be defined as the course of action through which an entity
creates as well as recreates its relation with the business environment. Strategies are especially
crucial for small and medium sized businesses like Hotel Crescent. In this regard, some of the
entrepreneurial strategies that are being taken into consideration by Hotel Crescent are critically
evaluated as under:-
Word of Mouth: This is a strategy whereby a firm seeks to establish a strong image of it
in the minds of customers. The satisfied customers in turn convey about the high quality
offerings of company to their acquaintances, friends and family members. Although this can be
an effective strategy for Hotel Crescent to gain the attention of new customers, it has been
evaluated that word of mouth marketing is quite slow and can take place only within a limited
audience.
Innovation: This is yet another effectual entrepreneurial strategy whereby an entity
undertakes constant measures to incorporate positive changes within the organisational offerings
to come up with an innovative product or service. Hotel Crescent can come up with innovative
services and features to appeal to the guests in an effective manner. Even though innovation
assists an enterprise to increase its customer base, it is an expensive procedure. This may lead to
increment in overall cost for Hotel Crescent.
Social media: This constitutes the apps as well as website which allow users across the
globe to share content. Social media is nowadays being leveraged by almost every business to set
networking with a large base of audience in a short period of time. Hotel Crescent can execute
social media marketing to reach to large number of individuals and attract towards the services
provided by them. One of the drawbacks that need to be taken into account by the concerned
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hotel is the requirement of staying active and engaged on all of the social media platforms of
company, all the time.
Location: This is an underrated strategy that can be leveraged by Hotel Crescent in order
to enhance its market share in a short span of time. Hereby, an entity seeks to gain entry into new
markets to build its networking and consequently increase its profitability. One of the biggest
critiques of this strategy is regarded to be the chance of failure of the entity to appeal to public in
new country.
On the basis of above discussion, it has been analysed that location would be the most
suitable entrepreneurial strategy as it would offer Hotel Crescent the opportunity to enhance its
market share and positioning.
C) Analysis an organisation’s strategic situation, its capability and position and develop a set of
objectives.
The Crescent hotel is performing well within the marketplace but as the competition
enhanced among the players already operating in London, the service quality standard also gets
more complex to approach. As a result of which the customers demand are getting higher which
require Crescent hotel to improve its current practices in order to cope up with changing
requirement if target market. On the other hand, the demand from the industry is also getting
higher which Crescent hotel is required to fulfil so that it would be able to achieve sustainability
within industry. Therefore, it remains crucial for Crescent hotel to evaluate about the
opportunities or threats that are present in external business environment so that appropriate
strategies can be formulated to enhance the performance and achieve competitive advantage. To
perform environmental analysis PESTLE analysis can be used as an analytical tool which
consists of six major factors that holds importance within the external business environment for
an organisation. The PESTLE analysis for Crescent hotel is mentioned below:
Political factor: - It performs an evaluation related with the government regulation,
relation and policies that belongs to the business practices. The government of UK is stable and
is consider to be one of the most powerful country in world. This political stability ism considers
to be a biggest strength for Crescent hotel as it doesn’t require to change its operational policies
in frequent basis as the government regulation will remain stable for longer. As a result of which
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Crescent hotel can formulate its strategies can work over accordingly for long without worrying
about any change that may affect its business operations.
Economic factor: - This factor performs an analysis over factors like inflation-deflation,
foreign exchange rate, GDP, tax rate and many more forces that are related with the economy of
country. The UK is considered as 5th largest economy in world in term of its GDP. But due to
economic recession that get arises within country due to Brexit has affect its economy so badly
which is a major challenge in front of Crescent hotel as the inflation rate has been increased as a
result of which if it won’t be able to perform its operations well then it end up with increasing
the cost of company. But on the other side UK is consider as one among the top destination for
FDI (Foreign direct investment) with the help of which the Crescent hotel can attract foreign
investors to invest in its business. This will support it in improving the quality of services and it
can also contribute toward expanding the business at larger scale while dealing with existing
competition.
Social factor:- This perform an evaluation over the taste, preferences, demand of
customers that get affected due to their culture, norm etc. and manner in which it influences
business practices. The UK is a country which maintains a population where people belong to
different background lives together from years. This is an opportunity for Crescent hotel as it can
recruit people belongs to different background in order to enhance the quality of services. This is
so because by maintaining a diversified workforce it becomes easier to cater the need of tourists
that belongs to different background by understanding their need effectively.
Technological factor:- It perform an evaluation over factors like changes and
development within the technology used for performing operations. The UK is considered as one
among the technologically advanced country and London is denoted as hub of technological and
financial institution. This is a biggest opportunity for Crescent hotel as it can make use of
infrastructure to enhance its services quality. At the same time, it can also be able to install new
technologies in order make its services approach for customers easier. This in turn helps not only
in brining maximum satisfaction among the customers but also help in dealing with competition
present in market place.
Environmental factor:- It perform analysis regarding number of attributes that are
related with eth environment safety and development. The economic activities have a direct
influence over the environment in both positive and negative manner. As the negative influence
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of businesses specially hotels increased over the environment, The UK government has worked
toward improving the condition of environment by reducing negative influence of business
practices over it by creating several restrictions or imposing rules or standards over business
operations. This is a biggest challenges present in front of Crescent hotel as it have to comply
with all the environmental standard and must focuses toward reducing the wastage that made in
hotel in order to maintain its positive image in front of the authorities and community as well for
achieving sustainability.
Legal factor:- It involves number of laws, regulations or legal practices that are
formulated by the government of UK in order to keep an eye over the ethical practices to be
performed by a business for the welfare of stakeholders as well as economy of country as well.
There are number of laws that the Crescent hotel must put emphases such as Equality Act,
Minimum Wages Act, Employment Act etc. in order to protect the right of employees and
provide them fair environment to work within any kind of exploitation. These are some acts that
get formulated by the government of UK in order to protect the rights of employees legally. On
the other side, Crescent hotel must also focus toward comply with consumer protection act along
with its services so that best offering can be granted to customers without any kind of
exploitation or cheat to them. This is so because it may directly influence the image of Crescent
hotel in front of stakeholder which may result into its failure in achieving sustainability.
Mission of Crescent hotel
To put hospitality services on the highest level in order to satisfy the demands and
expectations of guests
Vision of Crescent hotel
“To be become world’s best hotel which provides highly innovative and personalised
hospitality services to its customers”
D) Develop a strategy which will be consistent with an organisation’s strategic situation and
design an approach to implementing a choose strategy.
The management of Hotel Crescent has decided to implement market development in order
to facilitate growth and expansion of the entity. In this regard, it would require an approach
through which the chosen strategy can be effectively implemented. For this purpose, the hotel
management is performing stakeholder analysis. This would ensure that the interest and
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influence of major stakeholder groups are taken into due consideration with the implementation
of chosen strategy. Thus, stakeholder analysis is presented as follows:-
Stakeholder Interest Influence Description
Customers High High The customers within new market would
require the hotel services to be capable of
meeting their needs and expectations.
Suppliers Low High The vendors would require the payment to be
made within due course of time in case of credit
purchase in new marketplace.
Employees High High The employees would be keen to work in a
manner such that entity can attain a top position
in market place and facilitate enhancement of
market share with the execution of market
development.
Government Moderate High The government of the new markets would
ensure that the hotel functions in an ethical
manner for the fulfilment of customer demands.
Ansoff Matrix:
This is determined as the effective framework that is often used by business associations
while making planning for improving their business performance and attains huge success in the
rapid manner. Ansoff growth matrix is consist of 4 different strategies that simply suggests
business manager in choosing best possible strategy that simply helps them out in attaining
success in the quicker manner. All four strategies of this framework is specified as below:
Market penetration: This strategy states that business must offer existing product within the
existing marketplace for attaining success. If Crescent hotel acquires this strategy then its
business manager is required to focus on finding out untouched customers within in the same
location for influencing their sales performance as well as profitability in effective manner.
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Market development: According to this strategy, Crescent hotel should introduce its existing
hotel services at new marketplace in order to attract more number of customers towards them
and influence their sales performance in rapid manner.
Product development: This strategy simply states that business organisations can attain success
by introducing new product at the existing market place. In order to adopt this strategy, Crescent
hotel could start offering personalise service to its customers at nominal rates within the UK
only. This will simply support them in grabbing attention of maximum number of customers
towards them.
Diversification: This is determined as the most risky strategy which states that businesses are
required to offer completely new product at new market place in order to attain success in
effective manner. With reference to Crescent hotel, this hotel must not go for this strategy as it is
very risky because it requires huge investment and chances of failure is also higher in respect of
other strategies.
On the basis of above specified strategies, it can be said that market development is
determined as the most feasible strategy for Crescent hotel. This is so because, by entering into
new market manager of the company can easily attract new customer and attain success in
quicker manner.
CONCLUSION
On the basis of above specified discussion, it is concluded that business associations are
required to take range of strategic decision which helps them out in improvising their business
performance and attaining success in the rapid manner. Usage of PESTLE analysis has supported
in determining different opportunities and threats present at marketplace and could also place
positive as well as negative impact over the performance of the company. In addition to this,
usage porter’s five forces have supported a lot in analysing over industry. Whereas, market
development is determined as the most effective growth strategy with the usage of Ansoff’s
growth matrix.
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