Intercontinental Hotel Corporation is a company which has many outlets in the world. The headquarters of this large company is in the United Kingdom. The main operations of this company are done in the city of Denham. This organization has more than 100 branches from various countries across the world (Martin 2009). It has been regarded as one of the best hotel institutions in the world due to the quality services provided by its workers. The stocks of this company are listed in New York and London stock exchange markets. This indicates that this organization has a good reputation in the developed countries.
This organization provides a wide variety of products and services that are distinct in the hotel industry. This group has many lodging facilities that are necessary to accommodate the various tourists visiting the United Kingdom. In other countries, hotels belonging to this organization give first class treatment to the rich people (Martin 2009). The food offered in these hotels is unique and decent. This is the reason why the products offered are slightly expensive than products offered by lower level hotels. The hotel also provides transport services for the tourists who visit a certain country. The transport system also ensures that the tourists are shown to the hotel premises.
All businesses are undertaken in order to achieve certain goals and ambitions. These goals enable a business to achieve success in the long run. However, the achievement of success cannot be possible if certain elements are not met. For instance, each organization must follow certain strategies in order to achieve its ambitions. The various strategies that may be used by an organization can be divided into business level and corporate level (William 2011). The use of this concept helps a company to achieve strategic planning. Strategic planning helps an organization to effectively organize operations in order to achieve its targets.
The business level strategies involve the use of ways that relate to the global business environment to achieve goals and targets of the organization. These strategies focus on satisfying the needs of the customers regardless of their race, religion or historical background. Firstly, it is important for the organization to know its real customers. This must be done through thorough research of the market. After knowing this, it is important for the company to analyze the products that are mostly preferred by the customers. The issues of satisfaction are addressed after acknowledging the products that create impact to both the customers and the organization (John 2012).
The first business level strategy that may be used by the Intercontinental Hotels Group is effective leadership in cost. Costs are inevitable in every institution. Therefore, a company has to incur costs in order to earn profits (Martin 2009). In order to achieve competitive advantage, the company should minimize its overall operation and production costs. One way of achieving this is by controlling the costs incurred in the company. The finance department of this hotel can help in the reduction of unnecessary costs in the company. Another method of practicing cost leadership is by using cost saving methods of production.
Differentiation is another strategy that can be used by this group of hotels. The products offered by this company must have unique features that can be distinct from the products offered by other companies in the hotel industry. In order to promote differentiation, the company must invest in the provision of high quality services. The management of this company must meet from time to time in order to come up with new ideas that lead to innovation of new products. This will enhance the production of creative products that have higher quality. In the promotion of differentiation, the company should ensure that no imitation of products has been done. Imitation may attract legal disputes from the competing companies in the hotel industry (William 2011). This factor should be considered in order to maintain the reputation of the company in terms of quality of services.
The use of cost leadership is more effective for the company to achieve success in the long run. The main reason for this is that reducing costs will increase the profit margin, which will increase the overall profits for the company. The company has already adapted to differentiation, owing to its unique products sold in its various hotels across the globe. Cost leadership will enable the company to have economies of scale in production. The saved costs will be used to cater for the most important operations of the company. Saving costs will also enable the company to have effective methods of financial management.
Corporate level strategies are also important in achieving success in the business world. These strategies deal with ways in which the company can survive in the global business environment without falling (John 2012). Corporate strategies have been categorized according to the formation of a company. Intercontinental Hotel Group is a large company that consists of companies that have merged. This is an indication that the corporation is powerful in terms of market share.
One corporate strategy that can be used by this company is the use of extension (Martin 2009). The company should extend to other forms of businesses across the globe in order to increase its market share. This can be made possible by entering into other businesses that are related to the hotel industry. This company can be involved in the promotion of football clubs. Eventually, the corporation will benefit from the total revenue received by the football club. Extension may also be in the form of introducing new products in the market. Many customers in the market require new products that match the current technological advancement. By introducing new products, the company will have a better reputation than its other competitors.
The other corporate strategy that can be used by this organization is exit. There are certain products offered by the company that do not yield expected returns. These products may affect the overall profits of the company. The company should therefore stop selling them in order to maintain stability in sales. It should sell products that help the company in realizing high profits. Another corporate strategy is enhancement. There are many products offered by the company that require improvement. These items have the potential of stimulating high sales for the company. The company should conduct research and development in order to improve these products. This will make them to look more appealing to the customers (Martin 2009). The general attraction of the products will also increase the willingness of the customers to buy.
Increasing the number of portfolio in the company can be a strategy for this company. Portfolio is a term used to describe an investment made by a company. The company should ensure that it has many investments in order to maximize their returns. Increasing the number of portfolios will help the company to reduce the overall risk in the business world. This strategy is effective for the company to achieve the target of maximizing returns. Diversifying portfolios ensure that if one of the investments fails to yield positive returns, there are other portfolios to cater for the deficit (John 2012).
In every business, there has to be competitors. Competitors are important since it enhances the production of high quality goods. In the hotel industry, there are many hotels that provide high quality service to customers. Various hotels practice various strategies in order to survive in the industry. The major competitor of this group is Accor SA Corporation. This company has more than 3,000 hotels across the world and is situated in France (William 2011). This corporation provides similar products with Intercontinental Hotel Groups. Some of the noticeable differences are in the form of differentiation of products. This has been done by both companies in order to provide unique identity of their products.
The business strategies used by these companies is different. Accor SA has also used cost reduction as a strategy of increasing the profit margin. However, this has not been as effective as in Intercontinental Hotel Group. This is the reason why the latter has a cost leadership over its largest competitor. In the corporate level, Intercontinental Hotel Group has used the strategy of expansion while its competitor has used enhancement (Martin 2009). For this reason, the number of products offered by the International Hotel Group is higher than that of the competitor. Looking at the business and corporate strategies practiced by these companies, it is obvious that Intercontinental Hotel Group has a competitive advantage over its counterpart. Therefore, this company is more likely to achieve success in the long run.
The competitive advantage of Intercontinental Company holds in the fast growing markets. In these markets, expansion yields positive results since the number of customers in the market is increasing. In this category, there is high demand that must be satisfied by increasing the number of products offered by the company. In slow growing markets, there is lower demand. Therefore, it may be irrelevant to increase the number of products offered by the company since there are fewer people willing to buy in the market (William 2011). In these markets, it is only effective to improve the existing products in order to make them more attractive to the existing customers. This will ensure that the current stock of products is purchased by the few customers in the market.
In conclusion, Intercontinental Hotel Group should practice the above strategies in order to survive in the hotel industry. The management of this corporation should ensure that there is effective planning that incorporates business as well as corporate strategies. It should also make sure that the organization conforms to the formulated plans. This should be done through effective implementation. Finally, the management of Intercontinental Hotel Group should practice effective strategic management to ensure that the right strategies are chosen. This will enhance the achievement of success in the long run.
Martin, K. (2009) Intercontinental Hotel Group: Strategic Management. London. Palgrave Macmillan.
William, M. (2011) Strategic Management in the Business Environment. Oxford. Oxford University Press.
John, S. (2012) Strategies for Effective Growth. New York. Mc-Grady.