Introduction The impact of business environment on the current strategy of IHG is broad and one that calls for consistent attention. This means for IHG to keep up with the current markets its management is consistently engaged in measuring and readjusting its strategies and effectiveness to the market. Using PEST, SWOT and TOWS analysis this paper seeks to bring to light the position of the IHG today and its competitiveness in comparison to its peers in relation to its current strategy. IHG Pest Analysis IHG is consistently exposed to the adverse global political and economic risks arising from different financial markets that are inherently affected by inflation, recessions, credit fluctuations that could possibly lower income and revenues. In time of recession there is less business and leisure travel between different countries negatively affecting the room rates and occupancy and thus the general income of the group. In politically affected economies operations may adversely be affected resulting potentially affecting the property value. This in turn may make it more difficult to manage the vast group of hotels resulting in inability to secure franchises, retain, or conclude management agreements. Bowie, D. & Buttle, F. (2011) asserts that politics are closely connected to economic reactions this can be seen when politicians in different countries decide on regulatory policies preventing the group from selling its investments in some countries. In the past changes in legislation, tax rates have periodically reduced the projected profits. However most important to IHG is its customers with the companies brand’s reputation its foundation. Thereby failure in the brands sustenance can negatively affect the value of the bra... ... middle of paper ... ...e, D. & Buttle, F. (2011). Hospitality marketing principles and practice. Amsterdam Boston: Elsevier Butterworth-Heinemann. Enz, C. (2010). Hospitality strategic management concepts and cases. Hoboken, N.J: John Wiley & Sons. Grimm, C., Lee, H. & Smith, K. (2006). Strategy as action competitive dynamics and competitive advantage. New York: Oxford University Press. Hurwitz, J., Bloor, R., Kaufman, M. & Halper, F. (2010). Service Oriented Architecture (SOA) For Dummies. Chichester: John Wiley & Sons, Inc. Rasmussen, M. (2011). International double taxation. Alphen aan den Rijn Frederick, MD: Kluwer Law International Sold and distributed in North, Central and South America by Aspen Publishers. Sturman, M., Corgel, J. & Verma, R. (2011). The Cornell School of Hotel Administration on Hospitality cutting edge thinking and practice. Hoboken, N.J: John Wiley & Son
b) Managers – that they have very little to no control over their property or employees. It seems like many important decisions have been taken away from managers, and they can not react in the best interest for the hotel chain because what’s in the customer’s best interest is usually not the same as the company’s best interest.
The first situation is that of “special events” such as holiday periods, sporting/political events, etc. These events throw more power in the relationship to industry players due to the large customer demand and constrained supply. For example hotels see huge demand around the World Cup sporting event and hotel prices as a result on average spike between 100-300% compared to normal levels and for the last World Cup prices in one city went even further north of around 583% (Mallén, 2013). On the flip side, periods of economic recession have the opposite affect by impacting demand negatively thus forcing hotels to greatly lower prices to spur demand or compete with other industry players. During the last US recession, the average hotel occupancy rate dropped to a record low of 45% at one point from the normal average of 63%. As a result of the greatly declining revenues, such as a 48% drop by Marriott International, industry players laid off over 400,000 employees and greatly scaled back costs and new developments. Also importantly to customers who now saw more power in the relationship drift to their side during this time period, the average daily room price dropped to $98.18 (2009) from the record high of $107.42 pre-recession (2008). Both effects on opposing fulcrums show how important customer demand can affect the industry and the players’ actions
The unique heritage and Burberry’s Britishness are the significant resources that contribute to its success and premium price. Strong brand image as part of intangible assets contributes approximately 25% value to the organization in average (Keen 2003). To avoid discount or oversupply, Burberry needs to continue maintaining its long-term brand image (Berends 2004). Also, Burberry has a variety of product lines and attributes to high worth that makes it more competitive
The Hotel industry has become very important in the past years due to immense traveling and growth of international business. Hotel industry not only plays an important role in the life of people but as well as the economy of the country. Development and advancement in the Hotel industry have rapidly been taking place and especially since the rapid change in technology, it is very important for hotels to be promptly keeping up to date. When the hotel industry is spoken of, there are many famous hotels but one hotel company that has been outstanding in growth and other aspects of business, like in Leadership, Teamwork (Employee turnover), Motivation (Customer retention and satisfaction, Goals and objectives, (changing the way hotel business has worked), and Change within the company; structurally inside and physically outside, adding elements, like entertainment, gaming, and outdoor activities, is the Hilton Hotel Company.
Internet Marketing News and Know-How. Hotel Marketing. 18 Feb. 2011. Web. 19 Apr. 2011. .
Additionally, it measures the speed with which to institute restrictions on non refundable rates, length of stay in the facility and prediction of arrivals. As a management toll, revenue management has enhanced cost control, distribution channels and getting the right marketing mix in the business. In summary, revenue management is critical in the hotel industry for sales of rooms and services as the main products at the right price, time and right
The hotel industry performs within a saturated market, driven by customer loyalty and competitive pricing to stand-out. This competitive nature makes it extremely important to capitalise on strengths while improving on
Hilton Worldwide carries out business through three segments: (1) management and franchise; (2) ownership; and (3) time-share. These business segments enable management to capitalize on strengths like brand recognition and economies of scale. The company focuses primarily on the management and franchise segment which consist of 3,918 hotels with 610,413 rooms. Managing the properties, rather than owning them, allows the company t...
Political Political factors relate to the extent to which the government, or the policies brought about by the government, may impact a business, a particular industry or the
The third vulnerability for The Ritz-Carlton is the economy in general, which is something that it has very little control over. When the economy is down, individuals are less likely to take vacations or splurge on luxuries such as staying at The Ritz-Carlton. Tough economic times will greatly impact luxury spending and even costs for the hotel to
Wu, Z., Roboson, S., & Hollis, B. (2013). The application of hospitality elements in hospitals/practitioner application. Journal of Healthcare Management, 58(1), 47-62. Retrieved from: http://ezproxy.aut.ac.nz/login?url=http://search.proquest.com/docview/1287979397?accountid=8440
Important companies like Shell, DuPont, BP has been reorganised to generate profits from this green market of goods and services. In this sense, it may sound altruistic, "the sustainability", the logic of profitability and competition is what will determine the ability of companies of the future to meet the changing needs of consumers.
Kirk, D., 1995. Hard and soft systems: a common paradigm for operations management. International Journal of Contemporary Hospitality Management, 7(5), pp.13 – 16
The political environment can affect organizations. Political components influence buyer certainty and purchaser and business spending. Stability of political environment is essential for organizations
The frontal office of large hotels mostly uses a computerized system to manage the guest information and pass it to other departments in the hotel. The frontal office is made up of a team of people with each person having various responsibilities in handling the guests. For the small hotels front office, the reception desk may not be computerized and mostly the reception area handles all the guest information and also carries out other tasks such as showing guest to their rooms. In general the small hotels do not have a team of people or at times has very few people in handling the guests. (Bardi, 2006)