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Strategic Analysis

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TABLE OF CONTENTS

OVERVIEW OF STRATEGIC ANALYSIS..................................................................................... 1

BACKGROUND OF INTERCONTINENTAL HOTEL GROUP, UK............................................ 3

BACKGROUND OF MARRIOTT, UK........................................................................................... 3

COMPARING AND CONTRASTING STRATEGIC CHOICES.................................................... 4

Ansoff matrix...................................................................................................................... 5

Decisions taken by firm which results into failure..................................................... 8

Blue Ocean strategy.......................................................................................................... 9

Porter Generic Strategy................................................................................................. 10

Branding............................................................................................................................. 11

Product and market decisions.......................................................................................12

Strategic choices support firms in meeting vision, objectives and mission........13

Decision made by business that affects products, markets and structure......... 14

CONCLUSION............................................................................................................................. 15

REFERENCES............................................................................................................................... 16

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OVERVIEW OF STRATEGIC ANALYSIS
Strategic analysis can be defined as a process of carrying out research on the

business environment in which firm operates. Such type of analysis helps business to

formulate strategy so that organizational goals can be attained in an effective manner

(Hensmans, Johnson and Yip, 2013). However, it is essential for entrepreneur to understand

business environment in which they are operating and develop interaction with its

environment so that efficiency and effectiveness of business can be enhanced in order to

achieve desired goals. In the present portfolio analysis, two organizations have been

chosen that are operating in the same industry. Intercontinental Hotel Group and Marriott

hotel have been undertaken which are prominent hotels of UK and recently through

carrying out research, it has been assessed that Marriott is facing issues in losing market

share because of implementing ineffective strategies (Hill, Jones and Schilling, 2014).

Hence, IHG implements effectual strategies that help them to develop their brand

image in the market and make good product and service decisions in order to attract

consumers towards the firm. Also, different strategic tools have been undertaken such as

Ansoffs matrix, Porter generic strategies etc. All such strategic tools helps in identifying

the key strategic issues faced by companies in international market and also affects the

development of overall industry (Kim and Mauborgne, 2013). However, comparing and

contrasting the strategic choices made by firm in order to attain desired results. Also, it can

be stated that strategic choices assist companies in meeting their vision, mission and

objectives.

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BACKGROUND OF INTERCONTINENTAL HOTEL GROUP, UK
Intercontinental Hotels Group Plc is a British multinational chain of hotels and it

owns 4800 hotels across 100 countries. Its headquartered is situated in Denham, UK.

Business possesses around 710000 rooms and thus, includes varied hotel brands operating

under it such as Crowne Plaza, Holiday Inn and Hotel Indigo etc. Company operates in

worldwide market and thus later it joined forces in the privatization of Army Lodging

program in order to render best quality services and experiences to soldiers as well as their

families. Such type of program provides effective hospitality services to US Army (Elbanna,

2010). Therefore, it is essential for hotel to maintain its service and product quality along

with overcoming issues in order to gain consumer satisfaction. For this, effective strategic

choices have been made by firm such as Ansoffs matrix and Porters Generic Strategies in

order to identify the reason of firm's success.

BACKGROUND OF MARRIOTT, UK
Marriott International, UK is an American diversified hospitality company that helps

in managing and franchising a broad portfolio of hotels that involves varied facilities such

as lodging etc. Company owns more than 4087 hotels across 80 countries and it possesses

more than 697000 rooms. However, due to tough competition in the marketplace, business

faces issues such as decreasing market share and thus, it is essential for firm to enhance its

product and service quality in order to attain desired results (Ghezzi, 2013). Management of

firm implements different strategic choices such as Ansoffs and Porter Generic strategies

so that problems faced by firm could be identified and thus, it includes effective strategies

to overcome those issues and perform better than its rivals.

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COMPARING AND CONTRASTING STRATEGIC CHOICES

Ansoffs matrix

BASIS Meaning IHG Marriott

Market It helps business to Thus, here marketers of firm While, Marriott always

penetration grow by using attract new customers by tries to attract existing

existing offerings in providing them additional customers and providing

the current market schemes and benefits so that them different offerings

(Haley, 2006). competitive edge can be to satisfy their needs.

attained. Business sells existing Also, they develop

products to current as well as different products and

new customers in order to services within the

enhance brand image in the existing market to

market (Lpez, 2005). attract high class people

(Griffin and Pustay,

2005).

Product It focuses on It helps IHG in enhancing On the other hand,

development delivering new or product range and providing management of Marriott

modified products or unique services to consumers so does not aim on adopting

services within the that market share of the product development

existing market (Hill company can be enhanced. For strategic option as it

and Jain, 2007). instance: firm provides high provides similar products

class services or customized and services to every

services as per the guests consumers (Johnson,

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requirements so that brand Lenartowicz and Apud,

image can be developed 2006).

(Ghemawat, 2003).

Market It assists business to IHG launches new program of Here, Marriott does not

development expand its products providing quality products and aim to focus on new

into new market services to US Army officials as market or expand its

(Kehoe and Perri, well as their families. Such product line. If, it

2002). scheme of firm states that attracts existing

business develops its market by consumer group and

expanding its product range in tries to retain them for

the new market (Kennerley and long term in business

Neely, 2003). (Leung and et. al., 2005).

Diversification By adopting It is a risk strategy therefore, On the other hand,

diversification, business does not adopt it and Marriott International

business tries to grow thus, focuses mainly on adopts such strategy and

its market share by providing hospitality services to provides transportation

offering new the consumers (Morrison, 2002). facilities to the guests. It

products into the new involves different

market (Klapper, related and unrelated

Laeven and Rajan, diversification so that

2004). offering new product

line helps in attracting

new customers (Wild,

Wild and Han, 2014).

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It can be evaluated from the above analysis that implementing Ansoff matrix helps

in analyzing the strategic choices made by business in order to achieve competitive edge

over its rivals. For instance: Marriott management fails in making crucial decisions

regarding market development and only focuses upon the current market or existing

customers. Thus, such strategic option results into the failure of business and leads to

decline in market share. On the other hand, IHG hotel undertakes market development

tactic and provides best quality services to its new segment of clients i.e. US Army officials

and their families which helps in increasing the market share of firm and impacts upon the

profitability of business in the market (Mama and Kruger, 2012).

Furthermore, hospitality firms are required to employ effective quality products and

services so that best decisions can be made in regard to service delivery and consumer

satisfaction. For instance, Marriott faces issues in enhancing consumer base and

profitability because still it focuses upon the existing product range and client base i.e. high

class people. The marketing team of business develops different strategies in order to

attract and retain existing customers but does not focus upon new clients to increase the

market share. Thus, it faces issues and such decision impacts upon the company's

performance in market. Hence, it is significant for business to undertake best strategies so

that it does not influence the business activities and expand its operations in worldwide

market (Kourdi, 2010).

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Decisions taken by firm which results into failure

Thus, it has been assessed that the decision taken by Marriott International to not

expand its market segments and focus upon existing customers proves to be a failure in

terms of gaining market share. While, Intercontinental Hotel Group focuses upon the

decision to extend its market segment by providing additional services to army officers and

their families that results into enhancing the market share and profitability. It also assists

business to increase the brand image of firm in market and give tough competition to rivals

and achieve successful outcomes. Therefore, it can be assessed that business is required to

focus upon strategic planning and make appropriate decisions in regard to support the

companies and develop their mission, vision and objectives so that set goals can be

achieved (Stonehouse and Houston, 2013). In addition to this, if firms are not able to make

effective decisions regarding expanding the market segment or developing the product

line affects the economy of country as well as profitability of company. Therefore, it is

suitable for hospitality firm to undertake effectual decisions in regard to enhance the

consumer base and offer them best quality products and services in regard to achieve

satisfaction (Nickols, 2012).

Blue Ocean strategy

Furthermore, it can be assessed that after considering the decisions taken by

businesses such as IHG undertakes decision to expand the market share led them into Blue

Ocean because for this they do not have to fight with the rivals to overcome the market.

Here, they achieve success with the help of their effective strategy implementation and

thus goals can be attained. However, such strategic moves helps firm to create a leap in

value for company, its customers and employees while unlocking new demand and also

making the competition irrelevant (Kim and Mauborgne, 2013). While, it is essential for

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Marriott to undertake red ocean strategy and thus try to outperform their competitors in

order to grab a greater share of existing demand. However, as the market space gets

crowded, prospects for profits and growth reduces. For instance, implementing varied

strategies makes the companies to raise cut throat competition and turns the ocean bloody

red. Thus, as per Ansoff matrix, IHG is doing much better than the Marriott hotel and

expands its market share by focusing upon the needs and wants of target consumers

(Ghezzi, 2013).

Porter Generic Strategy

By adopting such strategy, it stated that the proposed strategy helps in developing

a framework in order to contrast between differentiation and cost leadership. However, it

is also considered as a much more market focused tool as it proposed business strategies in

order to perceive value by consumers and price to customer rather than cost to firm. There

are four strategies of Porter Generic Strategies such as differentiation, cost leadership,

focuses cost leadership and focus differentiation (Interbrand, 2014). However,

differentiation strategy states that uniqueness available in the products and services that

helps in providing value to consumers and allows business to charge premium prices. For

instance, IHG is a luxurious hotel and targets upper middle class travelers and thus it

undertakes differentiation strategy. Business also charges premium prices for its products

and services delivered to consumers. On the other hand, Marriott undertakes the cost

leadership strategy and thus sells its products at the average industry prices in order to

attract more number of business travelers and earn higher profits margins as compared to

rivals. Such strategy helps them to enhance market share and attain competitive advantage

so that desired goals can be achieved (Lpez, 2005).

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The proposed strategy for IHG helps them to gain core competencies and provide

best advantage of firm as well as consumers. Also, business efficiently creates additional

sustainable competitive advantage that helps them to achieve desired goals. Moreover, it is

significant for business to develop strategic analysis so that best results in the form of high

market share and profits can be achieved. However, it helps IHG and Marriott to expand its

business operations and provide best products and services to consumers (Hill and Jain,

2007). IHG adopts differentiation strategy and thus provide unique quality products and

services to customers that attract them to consume the same and enhance the sales and

profitability of firm in market. While, Marriott adopts cost leadership strategy that assists

them to stand out of crowd and provide best suitable prices in regard to retain consumers

for long term and achieve desired goals. Hence, it is crucial for hospitality firms to adopt

unique strategy so that desired outcomes can be attained.

Branding

However, it is essential for businesses to pay proper attention on its branding which

can be done through adopting effectual marketing strategies such as online promotion, e-

mail marketing, and mouth publicity. For instance, IHG adopts online marketing and

provides advancements on different social media sites to attract high class consumers who

regularly travel. However, such strategy is effective in order to enhance customer base and

sales in market. On the other hand, Marriott adopts effective marketing tactic such as

mouth publicity as well e-mail or message marketing in which it sends messages to prospect

clients and provide them detailed regarding the booking offers and available discounts

(Ghemawat, 2003). Thus, undertaking such type of marketing strategy helps firm to achieve

desired outcomes.

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Product and market decisions

Furthermore, it is another crucial strategy that helps business to take effectual

product and market decisions in regard to enhance sales and profitability. However, it is

essential for business to analyze the target segment and then undertake effective product

and market decisions so that best results can be attained. Fr instance, IHG adopts decision

regarding targeting army officials and their families and provides them best quality

products and services in order to satisfy their needs. Therefore, it is essential for firm to

obtain crucial decision regarding developing the product line and market related decisions

so that set goals can be achieved (Johnson, Lenartowicz and Apud, 2006). On the other

hand, Marriott International focuses upon existing market base i.e. upper middle class

consumers so that product and market related decisions can be made effectively and

efficiently.

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Strategic choices support firms in meeting vision, objectives and mission

However, adopting best strategic choices helps in supporting the firm in order to

meet their vision, mission and objectives. Thus, it is essential for hospitality organization to

choose best strategic choices that is suitable in order to imply the same and achieve

competitive advantage over rivals. Developing strategic decisions helps firm to meet the

vision, mission and objectives. For instance, IHG mission is to provide best quality services

to its guests and it can be attained through implementing strategic decisions such as Porter

Generic and Ansoffs matrix to attain results (Kennerley and Neely, 2003). Thus,

implications of identified choices help in achieving competitive advantage within firm and

enhance their market share and profits. Moreover, implementing effective market

strategies helps business to overcome strategic issues faced by industries at global level

and thus develop the market in order to achieve desired results.

Decision made by business that affects products, markets and structure

Here, it can be assessed that the decisions made by firm highly affects the products,

market and structure of enterprise. Therefore, it is essential for organization to make

crucial decision and develop best products, services and market to achieve results. For

instance, if firm focuses on such factors it helps them to enhance the competitive

advantage. While, if they are not able to undertake such options it disrupts the competitive

edge gained by firm and rivals become the options for customers. It is essential for IHG

develops its market segment for Army officials and their families thus, they need to focus

upon that they should not leave the existing consumers and affects the operations of firm

in market (Griffin and Pustay, 2005).

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CONCLUSION
It can be concluded from the study that strategic analysis helps firm to carry out

effective research and thus analyze the business environment in which the firm operates.

Further, it led firm to formulate business strategy so that best decisions can be made in

order to achieve organizational goals. Further, comparing two hospitality firms such as IHG

and Marriott International assists that former adopts market development and product

development strategy in order to enhance the consumer base and achieve high profits.

While, Marriott focuses upon existing products as well as target consumers so that they

lack in gaining competitive advantage over rivals.

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REFERENCES
Books and Journals

Elbanna, S., 2010. Strategic planning in the United Arab Emirates. International Journal
of Commerce and Management. 20(1). pp.2640.

Ghemawat, P., 2003. Semiglobalization and international business strategy. Journal of


International Business Studies. 34(2). pp.138-152.

Ghezzi, A., 2013. Revisiting business strategy under discontinuity. Management Decision.
51(7). pp.13261358.

Griffin, R. W. and Pustay, M. W., 2005. International business: A managerial perspective.


Pearson Prentice Hall.

Haley, T. G., 2006. The logic of Chinese business strategy: East versus West: part II.
Journal of Business Strategy. 27(2). pp.4353.

Hensmans, M., Johnson, G. and Yip, G., 2013. Strategic Transformation: Changing While
Winning. Palgrave Macmillan Publication.

Hill, C. W. and Jain, A. K., 2007. International business: Competing in the global
marketplace. NY: McGraw-Hill/Irwin.

Hill, C., Jones, G. and Schilling, M., 2014. Strategic Management: Theory: An Integrated
Approach. Cengage Learning.

Online

Interbrand, 2014. [Online]. Available through: <


http://bestglobalbrands.com/2014/ranking/#?listFormat=ls>.

Nickols, F., 2012. Strategy. [Online]. Available through :


<http://www.nickols.us/strategy_definitions.pdf>.

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