Industry – Hotel, Crowne Plaza Canberra
Target 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 tourists the numbers have gone up especially tourists coming from China, New-Zealand, Singapore, United Kingdom and United States of America. Moving on to students when it comes to education Australia is considered the best country which has excellent education standards for all the students around the world. The government have also made the visa application forms much easier and based on that they attract a large number of students coming for further education to Australia. Example of such Australian Universities are Australian National University, University of Canberra, University of Melbourne, and RMIT University. Australia has also seen a rapid increase in business travellers/ government delegates. Australia have seen 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
Danger and effect of Terrorism,
International Relations, Legislation, Economic Policy, Political unrest Inflation and exchange rates, Fiscal Policy Different Languages spoken by employees in this industry is considered very important as well as beneficial Hotel needs to be up to date with latest technological changes such as wireless internet, HDTV’S etc. Hotels adopting to environmental friendly sustainable programs, focusing on reducing energy, water consumption, waste management etc.
Emerging market expansion worldwide, Employee retention is a threat from big brands such as Marriott, Hyatt, Hilton
Having the benefits of a significant increase in the tourism/ hospitality industry in Australia.
change in the consumer demands could hurt Crowne Plaza and can also have a negative impact on the brand, similar services provided by other hotels, highly competitive hotel industry that.
And 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
IHG as a brand similar to Accor Hotels provides opportunities to the local communities to enhance their knowledge in the hotel industry. Crowne Plaza is known for working 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. With the mission of providing unique and enjoyable experiences for the guests and staff members at all times.
Porter’s five-force model: forces driving industry competition (Reed, Peter, 2014, p. 73). Porter argues that competitive intensity in an industry and hence industry profitability depends on collective effect of five forces. (Reed, Peter, 2014. p. 74)
1) Potential Entrants (Threat of new entrants) – In the hotel industry there are considered to be big hotel giants that are already in the market such as Marriott, Hilton, Hyatt, Accor, IHG etc. Therefore 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 entrant can adopt to technology in a unique way to sell its products or services, customers might be impressed with it and might switch in this case so there is always a threat to big chains from new entrants. It can be seen that Crowne Plaza is tackling the threat of new entrants by constantly innovating new products and services
2) Power of Buyers – Consumers (guests) actually known as buyers hold the advantages as hotels cannot make money, profits until and unless their facilities (products and services) are used. There are considered to be millions of people that use the products/ services of Crowne Plaza Hotels and therefore if they don’t like the services/ product it will be very easy for them to switch brands resulting in losses, collapse for the organisation. In order to avoid it hotels need to be very careful in terms of their guest’s preferences, what they dislike. Preferences can be in terms of rooms, food and beverage, other services provided by the hotel. This is tackled by the launch of the world’s largest loyalty program IHG rewards club
3) Power of Suppliers – Crowne Plaza has different suppliers across the world. Suppliers hold an upper hand in terms of costs and prices being offered to a particular hotel. For example rivalry 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 can therefore damage a hotel’s reputation if something goes wrong. Crowne Plaza has therefore build effective supply chains with a variety of suppliers.
4) Competitive Rivalry – Rivalry can be classified as competition between the hotels in order to increase market share. In order to retain customers (guest’s) hotel offers different types of loyalty and membership programs to have an edge over their competitors. Hotels are seen these days doing mergers with other brands to obtain competitive advantage. 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 its guests including business, corporate, leisure, families etc and is itself competitive.
5) Threat of Substitutes – An example can be seen where the hotel guests of Crowne Plaza pay quite a big amount for parking their cars in the hotel car-parking and when having breakfast, dinner in the hotel’s restaurant. This can be affected as if the travellers prefers to park somewhere else where it is free or where it is not expensive could be on the street. Similarly dining outside the hotel for dinner or breakfast instead of within the hotel to avoid expensive charges. There are many substitute products out in the market which can have a negative impact on the hotel’s performance.