Environmental audit of IHG
Executive Summary
The purpose of this brief is to evaluate the strategic position of Intercontinental hotels group (IHG) PLC and to make recommendations to the Board of Directors. This brief highlights the environmental audit of IHG. Key drivers of IHG are huge number of hotels, largest in terms of number of rooms and members in Loyalty Rewards club scheme all over the world. The external environmental analysis is done using PESTEL analysis followed by Porters Five forces and Industry Life Cycle. The key drivers affecting IHG are determined by PESTEL. The internal environmental analysis is done using Resources and capabilities, VRIN and Value chain analysis. Annual reports are used to measure current strategic position of IHG. SWOT analysis is used to summarise the environmental analysis of IHG followed by Critical analysis to determine IHG’s current strategic position. Conclusions have been drawn at the end with some recommendations of setting up more hotels in emerging markets like India and China and other things which benefits the organisation in the current economic climate.
Contents Page 1.0 INTRODUCTION_______________________________________________________03 2.0 AN ANALYSIS OF THE EXTERNAL ENVIRONMENT_________________________04
2.1 PESTEL ANALYSIS ______________________________________________04
2.2 PORTER’S FIVE FORCES ANALYSIS _______________________________06
2.3 INDUSTRY LIFE CYCLE ANALYSIS_________________________________08
3.0 AN ANALYSIS OF THE INTERNAL ENVIRONMENT__________________________09
3.1 RESOURCES AND CAPABILITIES___________________________________09
3.2 VRIN ANALYSIS__________________________________________________10
3.3 VALUE CHAIN ANALYSIS__________________________________________11
4.0 CRITICAL ANALYSIS OF COMPANY’S CURRENT STRATEGIC POSITION_______12
5.0 CONCLUSION AND RECOMMENDATION___________________________________14
The purpose of this brief is to evaluate the strategic position of Intercontinental hotels group (IHG) PLC and to make recommendations to the Board of Directors. This brief highlights the environmental audit of IHG. Key drivers of IHG are huge number of hotels, largest in terms of number of rooms and members in Loyalty Rewards club scheme all over the world. The external environmental analysis is done using PESTEL analysis followed by Porters Five forces and Industry Life Cycle. The key drivers affecting IHG are determined by PESTEL. The internal environmental analysis is done using Resources and capabilities, VRIN and Value chain analysis. Annual reports are used to measure current strategic position of IHG. SWOT analysis is used to summarise the environmental analysis of IHG followed by Critical analysis to determine IHG’s current strategic position. Conclusions have been drawn at the end with some recommendations of setting up more hotels in emerging markets like India and China and other things which benefits the organisation in the current economic climate.
Contents Page 1.0 INTRODUCTION_______________________________________________________03 2.0 AN ANALYSIS OF THE EXTERNAL ENVIRONMENT_________________________04
2.1 PESTEL ANALYSIS ______________________________________________04
2.2 PORTER’S FIVE FORCES ANALYSIS _______________________________06
2.3 INDUSTRY LIFE CYCLE ANALYSIS_________________________________08
3.0 AN ANALYSIS OF THE INTERNAL ENVIRONMENT__________________________09
3.1 RESOURCES AND CAPABILITIES___________________________________09
3.2 VRIN ANALYSIS__________________________________________________10
3.3 VALUE CHAIN ANALYSIS__________________________________________11
4.0 CRITICAL ANALYSIS OF COMPANY’S CURRENT STRATEGIC POSITION_______12
5.0 CONCLUSION AND RECOMMENDATION___________________________________14
References: 1. Barney, J. (2011) 'Firm Resources and Sustained Competitive Advantage ' Journal of Management 17 (1), 99 -120. 2. Datamonitor (2011). 'Global Hotels & Motels Industry Profile ' 2011, Hotels & Motels Industry Profile: Global, pp. 1-40, Business Source Complete, EBSCOhost, viewed 16 November 2013 3 4. Evans, N. & Campbell, D. & Stonehouse, G. (2003). Strategic management for 5 6. InterContinental Hotels Group PLC (2012): Investors - Overview of IHG. [Online] Available at: http://www.ihgplc.com/index.asp [Accessed: 16 Nov 2013]. 7. Jones, P (2009). 'A ‘sound strategy’ for Intercontinental Hotels ', Tourism & Hospitality Research, 9, 3, pp. 271-276, Hospitality & Tourism Index, EBSCOhost, [Accessed 14 November 2013] 8 9. Porter (2008), The Five Competitive Forces That Shape Strategy, http://hbr.org/2008/01/the-five-competitive-forces-that-shape-strategy/ar/4 (Accessed 17 Nov 2013) 10