Hospitality Business Strategy: Macro Environment and Strategic Plan

This report provides a comprehensive analysis of The Peninsula London's business strategy, focusing on the impact of the macro environment and the implementation of various strategic frameworks. The report begins with an introduction to business strategy and the chosen organization, The Peninsula London, highlighting its focus on British culture and luxury. Task 1 analyzes the macro environment using PESTLE analysis and applies strategic planning techniques such as benchmarking and stakeholder analysis. Task 2 evaluates organizational capabilities through the McKinsey's 7s model and VRIO model. Task 3 implements Porter’s five forces model to assess competitive forces, and Task 4 explores the application of different strategic planning models including Ansoff's growth matrix and SWOT analysis. The report concludes with a summary of the key findings and recommendations for The Peninsula London's strategic development.

Hospitality Business
Strategy

Contents
INTRODUCTION...........................................................................................................................3
TASK 1............................................................................................................................................3
P1) Applying appropriate frameworks, analyse the impact and influence of the macro
environment on a given hospitality organisation and its strategies........................................3
TASK 2............................................................................................................................................7
P2 Evaluate of the capabilities for organisation through implementing appropriate framework
................................................................................................................................................7
TASK 3............................................................................................................................................9
P3 Implement of Porter’s five force model and the evaluation of competitive forces in the
given market...........................................................................................................................9
TASK 4..........................................................................................................................................10
P4 Implement of different range of theories, model and concept that devise strategic planning
for organisation.....................................................................................................................10
CONCLUSION..............................................................................................................................12
REFERENCES..............................................................................................................................13

INTRODUCTION
Business strategy is the combination of action as well as decisions that are regulated and
controlled by an organisation. The main motive of an effective business strategy is to accomplish
organisational goals and objectives in minimum time period through utilising full potential of
available resources. Along with this business strategy also leads management to ensure top
position in market by making sound and effective decisions. The Peninsula London is the
selected organisation for this report ( Aldea and et. al., 2018). This is well-known for formulating
infra-structure which demonstrates British culture and it is also known for its art and cuisine.
Moreover, report highlights on different aspects such as analysis of macro environment that
impact and influence on organisation and its strategies. In the last, strategic plan is also
developed that is based on different theories, model and concept. PESTLE, SWOT, VRIO and
many more models will also be focused in the report.
TASK 1
P1) Applying appropriate frameworks, analyse the impact and influence of the macro
environment on a given hospitality organisation and its strategies
Vision- The vision of Peninsula hotel is to demonstrate British enrich culture among the all
departments of Hotel.
Mission- Mission of organisation is to accomplish better position in market by providing
high quality services.
Macro environment factors refer to those aspects that are beyond the control of management
and directly impacts on organisational actions and activities (Yeow, Soh and Hansen, 2018).
Along with micro environmental aspects are also included as micro environment also perform an
important role in formulation of organisational strategy. Some internal and external aspects are
mention as below:
Techniques for strategic planning
 Benchmarking- According to the technique of Benchmarking, an organisation must
match their work with the set standard in order to attain longer results. The main use of

benchmarking is to provide similar quality of services and products to all individuals and
it in context of Peninsula hotel benchmarking technique also ensure management services
according to set standards.
 Business analysis- According to this analysis management of respective organisation
monitor and analyse that the strategy implemented by organisation is generating desired
and specific results as it lead management to gain better position in market (Reilly, 2018).
Moreover, business analysis techniques also help management to earn more profits by
analysing demand of services. Example- to gather resources for fulfilment customer
demand in peak season.
Framework implement by The Peninsula Hotel is mention as below:
Stakeholder analysis- With the support of stakeholder analysis Peninsula hotel analyse
all the individuals that are associate with hotel operations and functions. It is also used by
management for generating better relationship between business and its stakeholders using.
STEP 1- According to this step The Peninsula hotel undertakes all of its stakeholder such
as employees, customers, government etc. which demonstrate individual interest towards
company project.
STEP 2- In these step, stakeholders are divided into two aspects that is interest and
power and it is mention as below:
 High power, high interest- The Peninsula hotel specify different stakeholders as per
interest of individual (Papaioannou and et. al., 2018). This also undertakes different
aspect that is used for generating higher involvement in company service.
 Low power, high interest- It include all stakeholders which generate better interest in
project but they are not authorise to perform organisational functions and operations.
 High power, low interest- This type of stakeholder holds more power but they are less
interested in performing organisational work and operations.
 Low power, low interest- According to these step, stakeholder holds low power and
minimum interest in organisational product. So management provide only essential
information to individuals.
STEP 3- Under this step management understand all aspects of stakeholders and include
them for developing transparent communication system. It results the market value of
organisation is increased that helps to earn more amount of profits.

PESTLE Analysis
 Political aspect- According to the political conditions of UK, government decisions are
stable for longer period of time. This also refers that it develops positive environment for
the tourism and hospitality industry. Moreover, hospitality business organisation are
offering better contribution in tax of UK so government is also formulating flexible
policy (Okumus and et. al., 2019). The Peninsula hotel is also utilise stable political
conditions for earning better amount revenue.
 Economical aspect- The hospitality sector earns better revenue through offering their
services within different departments such as restaurant, accommodation, travel and
amusements etc. It also provides better support to organisation through completing their
work as per influencing visitor to visit UK to fulfil various purpose such as
entertainment, business and many more.
 Social aspect- The social factor consists of size, need of customers and market trend
analysis that exists in the society. UK is open for adopting individuals, culture and value
to enrich the country culture and it also help to learn new things. Moreover, The
Peninsula hotel consist target professional individuals for increase of organisational
customer base.
 Technological aspect- From the perspective of UK technology is used by all
organisation and industries to earn better amount of revenue and it also helps business to
perform organisational work in minimum period. The Peninsula hotel also develop
application that is installed in smart phones. This influence individuals or visitor for
providing better services.
 Environmental aspect- To manage the environment of organisation it is used by
management for completion of task according to global warming conditions. In order to
reduce environment impact (Melissen and Sauer, 2018). The Peninsula hotel use solar
methods to produce electricity that is an environment friendly.
 Legal aspect- There are various task and operations performed by management that is
leading management for controlling according to laws and legislation. This is also used
by management in making areas which make better laws in making areas that makes
challenges in per hospitality industry. In making influence it is also generates longer
results to work with right conditions.

Ansoff’s growth matrix
With implementing and adopting Ansoff’s growth matrix within organisation operations
and functions through utilising all resources in an appropriate manner by completing all work as
per potential strategy. From perspective of The Peninsula hotel implement of Ansoff growth
matrix is mention as below:
 Market penetration- With the analysis of market penetration strategy the sale of existing
organisation services is increased in the local market (Njoroge and et. al., 2019). This is
one of the simplest method that leads management to work in proper manner that also
improve goodwill of respective organisation within local area.
 Market development- According to the implementation of market development strategy
it is easy for management to promote organisational products in urban or rural market.
The Peninsula Hotel management also develop better areas by completing all work in
proper manner that leads to obtain better position in market.
 Product development- It is also easy for organisation to launch better services as well as
products in existing areas for making better areas. This is also used by management offer
in making better position to make unique meals, affordable package and making air
conditions to ensure top position in market.
 Diversification- The diversification strategy is making better services as per new market
it is also used in making better integration in making formulating new strategy. This is
new strategy that provides opportunities to business for performing their work into new
area and market.
With the analysis of Ansoff matrix method it is easy for management to implement
diversification strategy. The Peninsula hotel is performing their work in an effective manner that
leads management to complete all work and operations in proper manner. According to
diversification strategy management is developing strong base in an organisation (Lozano,
2018). This also leads organisation to earn more amount of profits. Further, market of company
is impacted due to completion of work through implementing decided strategy.
SWOT Framework
The term SWOT work as an effective tool which lead management for managing
operations according to internal department of company. SWOT analysis from perspective of
Peninsula hotel is mention as below:

Strength
 Restaurant and accommodation
services provide comfortable
environment to organisation that
provide strength for business.
 The Peninsula hotel and its financial
policy are strong that provides strong
base to organisation for completion of
work in an effective manner.
Weakness
 The operational cost of organisation is
more. This work as a weak point as it
only support to cover company cost.
 Organisation is providing high quality
services which also raise cost. So price
charged by customers is also high it
work as a negative or weak point.
Opportunities
 Demand for hospitality organisation is
increasing with rapid speed. So it
provides opportunities to business for
completion of work properly.
 Countries which are at developing
phase provides opportunities for
increasing company customer base.
Threats
 International rules and regulations
provides complex environment to
organisation. Thus, change in
international rule generates threat for
hospitality business.
TASK 2
P2 Evaluate of the capabilities for organisation through implementing appropriate framework
Strategies are developed by organisation for completion of organisational task and
operations to implement right and effective decisions. In the present scenario, there hospitality
business houses are competing with each other at international level (Konovalova and et. al.,
2018). In the context of The Peninsula hotel it is identified that management is obtaining better
position in market by acknowledge internal environment of business through utilising different
framework that are mention as below:
McKinsey’s 7s model- It is a model that define different factors through which The
Peninsula London develop better growth by understanding structure, skills and system.
 Structure- Peninsula London implements vertical structure in organisation that is leading
management to attract more number of individuals. It also support business for complete
all work in an effective manner by sharing information in an organised manner.

 Strategy- Cost leadership strategy is implemented by management and it is also providing
support to organisation for attracting more individuals in order to provide better
acquisition that support market value in organisation.
 System- The Peninsula hotel develop positive system by offering monetary rewards it
results that management is able to support system that increase ability of organisation.
 Skills- Skill and capable employee work as an important asset for The Peninsula hotel as
it aids management to work with creative and innovative way (González-Rodríguez and
et. al., 2018).
 Style- Top authorities and management implement democratic style as in hospitality
industry employees require high motivation to work for long working hours.
 Staff- In order to manage better collaboration among staff The Peninsula hotel implement
diverse work policy to generate effective team or group.
 Shared value- With implement of ethics and principle it is easy for management to
generate more value among organisation operations.
VRIO Model: the model shows the assets and abilities of The Peninsula London that find support
to get accomplish the objective in ideal way and as clarify beneath as:
 Valuable: It will characterizes the better qualities of The Peninsula London as their
money related assets are as a rule increasingly fundamental and they get accomplish that
by increasing better favourable position as far as deals. The significant assets give The
Peninsula London all the more remarkable effect by which they could without much of a
stretch get over from the marker danger. In this management gives the useful preparing
and advancement to their worker by which they could additionally accomplish the better
benefit with more flawlessness and on ideal premise also (Dubey, 2018). The patent of
The Peninsula London is additionally be progressively important as they have the
compelling brand esteem and their administrations will get lead in market and they give
the entrance to different business on rent by which more income will get created.
 Rareness: The budgetary assets be progressively important for The Peninsula London
likewise with help of it they get accomplished all their errand inside the relegated
timeframe by which have achieved the objective with more effectiveness. The cordiality
administrations are very little important as there are different inns and relaxation travel
too that offer comparable types of assistance yet their representative are uncommon as

The Peninsula London give unique preparing by which have utilizes the efficacious
working methodology. Their patent is uncommon by which their administration openness
will get sheltered their image name and administration just get utilized with the permit
endorsement.
 Imitable: The money related assets are imitable as they get built up this by inciting the
persistent endeavours and in this help their patent likewise be increasing all imitable by
which the position will get moved by The Peninsula London according to lawful premise
that enhance goodwill of organisation (D’Annunzio-Green, 2018).
 Organisation: The money related assets of The Peninsula London are increasingly sorted
out and get delivered and created by putting forth more attempt on constant way.
TASK 3
P3 Implement of Porter’s five force model and the evaluation of competitive forces in the given
market
Porter’s five forces- It is a model which is implemented by The Peninsula London that is
used by management to make better services. This also provides various benefits to organisation
which are mention as follow:
 Bargaining power of buyer- In the hospitality industry organisation is facing high
competition to customers that is also generating high bargain power in context of The
Peninsula hotel. Moreover, to deal with bargain power of buyer management is focused
to develop themselves as a brand in all market.
 Bargaining power of supplier- In the context of bargain power it is low for
organisation because almost hospitality industry is based on service industry. From the
perspective of The Peninsula London it is used by management in completion of work in
an organised manner.
 Threat of substitute- In the context of hospitality industry the new entrance is making
better results through offering better association but due to investment of high capital
(Cheah, Ho and Li, 2018). The power of substitute product is moderate because service
industry is more focused to fulfil customer need in minimum time period. So local
organisation also able to give high competition for large organisation.

 Threat of new entrants- The business of Hospitality industry is increasing with rapid
speed it is because the cost of organisation is increasing because only difference services
are in power to exist in market for longer period. It is also difficult because new
organisation face major challenge to manage employee work.
 Competition between organisation- In the present scenario, competitive force in high
because it is generating complex perspective for organisation (Bratton and Watson,
2018). Moreover, it also increases complexity as high competition reduces switching
cost that work as a positive point for customers. It also refers that competitive force is
high among hospitality industry.
TASK 4
P4 Implement of different range of theories, model and concept that devise strategic planning for
organisation
Porter Generic Strategy
According to the implement of Porter generic strategy organisation is able to design all
action and activities in right manner that ensure a competitive edge in industry. Strategy from
point view of The Peninsula Hotel is mention as below:
 Cost leadership- With use of cost leadership strategy management is able to complete
work with low cost. The main motive to work as per cost leadership strategy is to
satisfies needs and wants of middle and low level customers.
 Differentiation- By implementing differentiation strategy management is able to gain
better position in market by providing services in a creative and different manner (Boella
and Goss-Turner, 2019). Moreover, it also helps respective company to generate more
value in organisation by implement of innovative feature in hospitality business.
 Focus strategy- Cost and differentiation strategy both are implemented by management
for obtaining better position in market. Further, The Peninsula hotels implement focus
strategy to target and enter into niche market by utilising both strategy in company
operations.
Bowman’s strategic clock
It is a clock which implements different strategy for providing tough competition in
market that is mention as below:

Low price, low value added- This is used by management to make better results that offer
services for maintaining image of business.
Low price- It is used by organisation to maintain work for attracting more number of customers.
Hybrid- According to the Hybrid strategy organisation is more focused to serve all services for
maintaining and earning better return on investment.
Differentiation- All services that are provided better range for services management is focusing
to complete work properly.
Focused differentiation- Within context of focused differentiation management is focused
towards customers for satisfying customer needs properly (Altin and et. al., 2018).
Risky high margin- To enhance margin organisation implement innovation technique to work in
proper manner.
Decrease in market share- According to this aspect with decrease in market share for
organisation face challenge as it decrease company profits.
Strategic management plan
Vision- The main vision of organisation is to offer better and high-quality services in
hospitality industry.
Mission- Mission of The Peninsula London is to generate more market base and
customer area for increasing company revenue.
Objective
 The first objective of organisation is to enhance customer satisfaction level within a
period of one month.
 Another objective of organisation is to increase customer base with 30% in a time period
of 3 months.
Tactics- In the context of The Peninsula hotel management is focused to accomplish objective
properly.
Product By offering good quality of services management is able to satisfy
demand of customers in proper manner.
Price Cost leadership strategy leads organisation to set price as per standard
which attracts more customers.
Place The target of customers is all class so for hotel booking management
accept customer requirements as per online and offline methods.

Promotion Management is focused to implement high investment for promoting
company products.
In order to implement the right plan organisation is focused to monitor as well as control the plan
through using right techniques. KPI is one of the appropriate method that leads organisation for
measuring the overall performance that helps to analyse organisational performance in an
accurate manner.
CONCLUSION
From the analysis of all above report it is concluded that hospitality business must
perform company operations and functions with implement of right and effective strategy. The
main motive of strategy is to obtain desired results in an organised manner. Micro and macro
environment both perform a vital role in an organisational strategy formation. Moreover, by
acknowledging environment aspect it is easy for management to understand impact of business
on organisation. In the last, Porter five force model, McKinsey 7S model and many more tools
are also included to understand strategic planning.