The hotel comprises of 296 rooms, is a 4.5 star hotel. Crowne Plaza is a part of InterContinental Hotels Group which is therefore one of the leading hotel chains in the world. At the moment Crowne Plaza itself has got more than 400 hotels in more than 65 countries. Crowne Plaza Canberra offers facilities such as an onsite fitness and wellness centre, self-parking, valet-parking, in-room dining, hotel bar that is used for light refreshments, a restaurant where buffet breakfast, lunch and ala-carte dinner is served 7 days a week, 24 hours business centre, complimentary internet.
Market/ Segmentation – Business/ Corporate Travellers, Free Independent Travellers, Government Delegates, Leisure Travellers, International Visitors, Students, Young Adults:
On the basis of the above diagram (Australian Bureau of Statistics) in the last few years it can be seen that Australia has attracted many tourists. In terms of education Australia offers excellent education standards for all the students around the world. Example of such Australian Universities are Australian National University, University of Canberra, etc. Australia has also seen a rapid increase in business travellers/ government delegates. A rapid increase in terms of foreign investors seeking for quality assets and similarly on the other hand Chinese investors are therefore looking for long term generational wealth income. On an average the general demographic that are seen being fascinated by the hotel industry are usually within the age group of mid 20’s to mid-50 which includes couples, young adults, corporate clients, families and solo travellers.
Analysing the business environment the organisation operates in:
The situation analysis which is a process of assessing the current situation facing the organisation, arriving at a set of assumptions about future, identifying key strategic issues which are likely to confront the organisation. (Reed, Peter, 2014, p. 65). It therefore commences with a review of the external environment in which there are forces that can be described as being remote or macro-environment which comprises of economic, socio-cultural, climate change, and technology such as
Political Economic Social Technological Environment
International Relations, Legislation, Political unrest Inflation, Exchange rates, Fiscal Policy Staff is bilingual (different languages) Hotel needs to be up to date with latest technological changes such as wireless internet, HDTV’S etc. Environmental friendly sustainability programs, waste consumption, recycling etc.
Emerging Markets, Having the benefits of a significant increase in the tourism/ hospitality industry in Australia.
Employee retention is a threat from brands such as Marriott, Hyatt, Hilton, change in consumer demands could hurt Crowne Plaza and can have negative impact on brand, similar services provided by other hotels
On the other hand forces that are described as near which comprises of suppliers, clients, staff, market demand and supply. (Reed, Peter, 2014, p. 65).
Location, Loyalty Program (IHG Rewards Club), trained and efficient staff, no. of rooms – 296 Overpriced room rates similar to the rooms in other hotels, Poor Interior Designing of the hotel
Crowne Plaza works with suppliers that at all times meet the hotel requirements and therefore it increases the value of the products and services delivered to the guests.
Porter argues that competitive intensity in an industry and hence industry profitability depends on collective effect of five forces. (Reed, Peter, 2014. p. 74). The Five Forces model is a simple but influential tool for the identification where power lies in a certain business situation by using the outside-in perspective (Johnson, Scholes & Whittington, 2008).
Therefore, Porter’s five-force model: forces driving industry competition (Reed, Peter, 2014, p. 73) is useful as it increases the productivity of Crowne Plaza as this industry is all about being profit oriented, helps in determining competition, eventually generates higher earnings for their investors, sets up a foundation for a more detailed research. Hotel Industry is all about competitions and such a model has been designed on the basis of competition. The Porter’s five-force model increases the chances of better co-operation (Downes, 1997). A further benefit according to Grundy (2006) for hotels is that the managers set a higher focus on the external environment in comparison to the traditional ‘SWOT’ analysis. The goal of the Five Forces framework is not only to assess industry profitability and attractiveness but also to comprehend the “underpinnings of competition and the root causes of profitability” (Porter, 2008, p. 29)
Potential Entrants – There are many hotel giants that are already exists such as Marriott, Hyatt, Accor, etc. If a new hotel chain plans to enter such highly competitive market then they have to go through a lot as this industry is all about being up to date with technology. If a new hotel chain can adopt to technology in a unique way to sell its products or services, customers might be impressed with it and might switch. Crowne Plaza handles the threat of new entrants by constantly innovating new products and services for their guests.
1) Power of Buyers – Guests hold the advantage as hotels can’t make money, profits until and unless their facilities are used. If the guests of Crowne Plaza don’t like their services/ products it will be very easy for them to switch brand resulting in losses for the organisation. It is tackled by creating the world’s largest loyalty program IHG rewards club where a guest is valued, acknowledged and recognised.
2) Power of Suppliers – Crowne Plaza has different suppliers across the world. Suppliers hold an upper hand in terms of costs being offered to a particular hotel. Competition among hotels such as Marriott and Hilton will influence the suppliers to increase their rates on the products as well as services that are being supplied. This will damage a hotel’s reputation if something goes wrong. Crowne Plaza has therefore build effective supply chains with a variety of suppliers.
3) Competitive Rivalry – Rivalry can be classified as competition between the hotels in order to increase market share. An example can be seen where Accor Hotels have merged with Mantra Hotel Group to obtain competitive advantage. Therefore, Crowne Plaza an InterContinental Hotel Group Brand offer excellent services to all its guests and is therefore competitive.
4) Threat of Substitutes – Substitutes are classified as where a particular product/ service meets the wants of the guest’s in different ways. Crowne Plaza tackles the threat of substitutes by being a service oriented brand instead of a product-oriented. Crowne Plaza as a brand goes one step ahead in understanding the needs/ wants of their guests.
The model which is cannot be useful for such an organisation is The Ansoff Matrix. The reason I have chosen Ansoff Matrix is it is a model that is only based on theories and doesn’t include practicality. It doesn’t even include the movements of external competitors. The Ansoff Matrix model is considered to be very basic as it does not include all the attributes that can influence a market, is unrealistic within this market. It doesn’t explore other marketing options that can be available for an organisation.