Each individual student will write a 1,500 word report
on one critical strategic management issue for an
organisation of their choice in the Tourism and
Students are encouraged to engage with a Tourism
and Hospitality business identified in the course or
draw upon their own industry experience to uncover a
key strategic management issue for a business in the
Tourism and Hospitality industry.
Some key areas of strategic management in the
Tourism and Hospitality industry that may be of interest
could include the following; competition, resources,
competitive advantage, business level strategy,
corporate level strategy, organisation structure and
controls, globalisation, entrepreneurship, leadership
This assessment seeks to develop the critical thinking
skills and abilities of students through the identification
Page 2 of 2
of a relevant strategic management problem for a
Tourism and Hospitality business and the development
of a viable strategic solution for that problem.
Individual students are to submit their written report of
no more than 1,500 words to the Turnitin drop box on
Moodle by 23:59 on Sunday of Week
This Assessment is individual and contributes 30% to
the final mark for the course.
The word count limit is 1,500 words (plus or minus
10%), excluding Appendices, References and
Times New Roman 12 point font and 1.5 line spacing.
APA referencing as per 2018 ICMS Style Guide.
Header to contain student names and identifier
Footer to contain page number only. Plagiarism
Declaration attached as first page inside the cover
Last page of the Originality Report attached as second
page inside the cover page.
Refer to and comply with, all the relevant requirements
for a Business Report as listed in the ICMS Style
Guide and note particularly the penalties that apply to
non-compliance with the word count limit and late
Free essay assignment
Strategic Management in Tourism and Hospitality
Strategic Management in Tourism and Hospitality
Topic: Gaining competitive advantage in the tourism and hospitality industry: A case study of Four Seasons Hotel Sydney
Table of Contents
Executive Summary 2
The Concept of Competitive Advantage 3
Four Seasons Hotels and Resorts 3
Strategic Analysis 4
Porter’s Five Forces Model 4
PESTLE Analysis 5
Four Seasons Hotel in Australia is part of a chain of hotels that operate over 100 hotels across the world. A strategic analysis of the hotel shows that it has sustained considerable success over the years. However, it needs to take radical measures to facilitate the competitiveness of the operations. The report provides a clear description of the strategic management of the company and the various actions it can take to improve their performance. The analysis involves the strategic analysis, Porter’s Fice Forces Model, and the PESTLE analysis framework to determine the internal and external conditions of the company. The findings of the company show that the company is in a stable position and it can perform better in the years to come. However, the recommendations indicate that the company should improve its waste management policies, decision-making, and investment in marketing.
Keywords: Strategic management, PESTLE analysis, Porter’s Five Forces Model.
Hotels are striving to gain a competitive advantage in the tourism and hotel industry using a variety of strategies. The four strategies they apply include cost-leadership strategies, differentiation strategies, and focus strategies. Hotel and tourism in Australia are also using similar strategies to expand market share, satisfy clients, and increase their profitability (Meyer et al., 2017). The purpose of gaining a higher competitive advantage is to increase brand loyalty and attract more customers. Hotel industry in cities such as Syndey focus on local and international clients thus they have to apply diverse means to attract clients.
The following report will provide a succinct description of the strategies that companies are utilizing to gain a high competitive advantage. It will provide a list of findings and recommendations that the Four Seasons Hotel can apply to gain and maintain their competitive advantage.
The Concept of Competitive Advantage
The concept of competitive advantage describes the conditions that allow an organization to produce products or services of equal value at a lower price in a more desirable fashion. The condition allows an organization to generate more profits and compete against other companies (Phadermrod et al., 2019). Organizations that are aspiring to generate high competitive advantage should also plan on how to maintain their competitiveness in the market. An organization such as the Four Seasons Hotel must decide the sources of their competitiveness.
Four Seasons Hotels and Resorts
Four Seasons Hotels and Resorts is a luxury hospitality company that operates over 100 hotels across the world. The hotel which started in 2006 is majorly owned by Bill Gates as well as Prince Al-Waleed bin Talal. The hotel is well-known for the provision of international meals including traditional meals in Australia (Arif & Hossin, 2016). Clients can also enjoy their comfort internal-level accommodation facilities. Four Seasons Hotel in Australia flourishes in the market due to several reasons. One of them is cost leadership. The reason is that they provide top-notch hotel services such as meals, drinks, and accommodation at a competitive rate (Pan et al., 2019). The company has remained competitive for over a decade due to its ability to change with the market dynamics. For example, the client responds effectively to changes in seasons that prompt people to demand specific packages.
Four Seasons Hotel in Australia is popular due to its ability to customize its products and services to its diverse clients. They offer customized meals and drinks from over 200 menu selection items. International clients can enjoy a cool stay at the heart of Sydney when they choose Four Seasons Hotels (Varelas & Georgopoulos, 2017). The management also understands that employees also have an impact on their competition. They provide friendly working schedules, high salaries, and always hunt for the best talents in Australia (Varelas & Georgopoulos, 2017). The organizational culture also promotes a friendly approach to all customers, thus boosting customer loyalty. The hotel also enjoys a high rate of returning clients.
The strategic analysis involves the process of researching an environment where an organization operates and determining a strategic plan. Strategic analysis is a process of identifying the strengths, weaknesses, opportunities, and threats (SWOT). The analysis of the Four Seasons Hotel is important since it helps the organization to determine how to respond to the market changes (Varelas & Georgopoulos, 2017). One of the strengths of the company is that it has an international appeal. Therefore, it has a command in the market for both local and international clients. The company also is a chain of other hotels and thus they can share notes on how to apply various strategies in the market (Nurlansa & Jati, 2016). However, the weaknesses of the hotel are that it has poor waste management practices and thus it can be criticized by the public. The company has also not invested in research and development, a mistake which can weaken the organization.
The opportunities of the company are that the number of local and international clients is rising, with a large percent preferring the emerging products. The company is also utilizing social media as a new way of marketing to the millennial generation which is forming a significant percentage of their customers (Nurlansa & Jati, 2016). On the other hand, the company is faced with various threats which include strict regulatory frameworks from the government. The regulations may restrict operations or lead to high fines or taxes (Suryaningsih et al., 2018). Another threat is a shortage of skilled labor in the market. Inflation and changing dynamics in the economy are also factors that threaten the company.
Porter’s Five Forces Model
The model was coined by Michael. E. Porter in 1979 indicating that companies are faced by various forces that influence their operations. The forces include a threat of new entrants, bargaining power of buyers, bargaining power of suppliers, the threat of substitutes, and rivalry among existing companies (Suryaningsih et al., 2018). The company faces minimal threat since the scope and level it has achieved can hardly be attained by an organization within a short time. The company can also use a cost advantage to knock off new entrants. The suppliers have little room for control since the company is giant in the market (Suryaningsih et al., 2018). Buyers also rarely affect the prices of products and services since the hotel is a chain of facilities providing services across the world. Additionally, the company does not face the threat of new substitutes since they have attained a level of perfection that others struggle to achieve (Varelas & Georgopoulos, 2017). However, the company has rivalry from a few firms which are in the same level of quality and perfection.
Pestle Analysis is a framework proposed by Francis Aguilar to propose the strategies external analysis of an organization. The various factors include political, environmental, social, technological, legal, and environment. Currently, the company enjoys a favorable political environment since the country is peaceful (Pan et al., 2019). However, politicians can throw the country into disarray if they commit crimes or engage in the rivalry. The company enjoys the robustness of the country’s GDP and low-interest rates. The social factors favor the company since more millennials are becoming customers. The age distribution also favors the hotel. The hotel is also taking advantage of technology to make various improvements. Rival companies are, however, also embracing various technological systems (Pan et al., 2019). The company has not fallen into any legal issue and all arising matters are solved locally. On the other hand, environmental factors such as the fire in Australia affected the performance of various businesses.
The findings indicate that the company can enjoy a great future ahead if it continues to invest in various areas such as technology. Technological developments provide a great opportunity for the company to gain a high market share. For example, marketing products on social media is a determinant of whether millennial will buy from the company or not. Utilizing technology in the company will also reduce the cost of operation (Pan et al., 2019). For example, utilizing technology to reach out to recurrent customers or analyze customer data will enhance data-driven decisions. It can also utilize technology to carry out research and development by collecting massive data from clients and analyzing it. Therefore, based on the available data, the company stands a chance to continue dominating the marketing satisfying their customers.
Strategic management of the tourism and hospitality industry shows that the Four Seasons Hotel in Australia has a better chance of improving their competitiveness in the future. According to Pestle and porter’s five forces model, the company can perform better in the future. One of the areas it should focus on is improving their use of technology to attract the millennial generation. The findings also suggest that Four Seasons Hotel enjoys a favorable environment including economically, politically, technology, and environmentally.
Four Seasons Hotel can improve its research and development to avoid any weaknesses in the future. The company should collect massive data through technological developments to enhance data-driven decisions. It is also important for the company to improve its practices and align them with global environmental policies. One of the policies they should change is how to manage their waste. Accusations from the public can lead to a negative reputation which can harm the popularity of the organization. Another recommendation is that the company should improve its decision-making ability to prevent delays. In the past, the company has witnessed delays that affect the introduction of new products.
Four Seasons Hotel should also invest in marketing and promotion of products using a variety of channels. Previously, they have not invested sufficient resources leading to an inability to expand the market base. The company is also currently facing a high employee turnover which is a risk to the management of the company. The company should find the reasons why employees are quitting and provide necessary solutions. Various recommendations are necessary to boost the performance of the company. The management should take firm action to ensure they deploy the necessary resources and make appropriate decisions to facilitate competitiveness.
Arif, T. M. H., & Hossin, M. Z. (2016). A comparative analysis of internal and external environments between Hotel Hyatt, UK, and Hotel The Cox Today, Cox’s Bazar, Bangladesh. IOSR Journal of Humanities and Social Science, 21(6), 13-22.
Meyer, G. D., Neck, H. M., & Meeks, M. D. (2017). The entrepreneurship‐strategic management interface. Strategic entrepreneurship: Creating a new mindset, 17-44.
Nurlansa, O., & Jati, H. (2016). Analysis of porter’s five forces model on Airbnb. Elinvo (Electronics, Informatics, and Vocational Education), 1(2), 84-96.
Pan, W., Chen, L., & Zhan, W. (2019). PESTEL analysis of construction productivity enhancement strategies: A case study of three economies. Journal of Management in Engineering, 35(1), 05018013.
Phadermrod, B., Crowder, R. M., & Wills, G. B. (2019). Importance-performance analysis based SWOT analysis. International Journal of Information Management, 44, 194-203.
Suryaningsih, N. P., Sutama, I. K., & Swabawa, A. P. (2018). Factors to Increase Sales Wedding Package Selling At Four Seasons Resort Bali At Jimbaran Bay. Journal of Applied Sciences in Travel and Hospitality, 1(3), 237.
Varelas, S., & Georgopoulos, N. (2017). Porter’s competitive forces in the modern globalized hospitality sector–the case of a Greek tourism destination. J Tour Res, 18, 121-131.