HOSPITALITY

STRATEGIC
MANAGEMEN
T
American Hotel Academy
2021
Course agenda
1st SESSION: 5st SESSION:
Concepts Competitive environment
Terms & definitions Porter”s forces

2nd SESSION: 6nd SESSION:

Introduction to strategic management Strategies
Vision
Mission 7rd SESSION:
Objectives

8th SESSION:
3rd SESSION:
Recap and examination/project
Internal resources
External environment

4th SESSION:
Mid term recap and examination

2
 INTERNAL &
EXTERNAL
ENVIRONMENT
 THE INTERNAL
ENVIRONMENT
The internal environment of the company gathers all the elements the company
has an Influence on and that can control. That means it has the resources, the
competences and the abilities to do that.

RESOURCES
Resources = tools
COMPETENCES

Competences = know how

ABILITIES

Abilities = power

STRATEGY

4
 Resources
Physical resources Human resources
•Position •Recruit

•Bildings •Select
Financial resources General resources
•Equipments •Train
•Capital •Patents
•Materials •Motivate
•Loans •Author rights

•Credits •Reputation

•Investments •Brand

5
Assesment of the comptetitive
advantage
Depending on the characteristics of the resources when compaired with the
competition:
•Competitive advantage with more resources
•Shared competitivness with common resources
•Competititve disadvantage with less resources

6
 VRIO Framework / analysis
Valuable: A resource is deemed as valuable if it adds
value to the company – either allowing it to take
advantage of opportunities or mitigate the threats.
Rarity: A resource is judged on the rarity, which is
often the easiest and least subjective part of VRIO. It
can come down to simply if this resource is easily
acquired by competitors, by yourself, or if it’s easy to
replace completely.
Inimitable: If a resource can be imitated comes down
to the how easily an organization can substitute or
copy out a resource (easy to copy a particular feature
in a product, or a particular marketing approach, but
difficult to copy a brand or historic database of
customer trends.
Organized: This area is around organizing the
company to maximize the potential from the resource –
is it generating the most it possibly can do for the
business? 7
8
 VRIO Framework / analysis
ADVANTAGES
• It’s simple and effective as a resource review
• When done well it can elevate a companies
competitive positioning
• It’s comprehensive while not being
complicated
• It’s very focused on internal analysis
DISADVANTAGES
• It can be time consuming
• It relies on a lot of subjective judgment
• It’s focused solely on internal analysis so
needs other frameworks

9
 The VALUE CHAIN analysis
Originated in the 1980s by Michael Porter, value chain analysis is the conceptual
notion of value-added in the form of a value chain. He suggested that an organisation is
split into 'primary activities' and 'support activities'. The figure below divides activities
into primary and support activities as suggested by Porter's Value Chain Analysis
model:

10
 The VALUE CHAIN
Primary Activities: are directly concerned with creating and delivering a product. They can be
grouped into five main areas: inbound logistics, operations, outbound logistics, marketing and
sales, and service. Each of these primary activities is linked to support activities which help to
improve their effectiveness or efficiency; and According to Porter (1985), the primary activities are:

Inbound logistics: refers to goods being obtained from the

organisation's suppliers and to be used for producing the end
product.
Operations: raw materials and goods are manufactured into the
final product. Value is added to the product at this stage as it
moves through the production line.
Outbound logistics: once the products have been
manufactured they are ready to be distributed to distribution
centers, wholesalers, retailers or customers. Distribution of
finished goods is known as outbound logistics.
Marketing and Sales: marketing must make sure that the
product is targeted towards the correct customer group. The
marketing mix is used to establish an effective strategy, any
competitive advantage is clearly communicated to the target
group through the promotional mix.
Services: after the product/service has been sold what support
services does the organisation offer customers? This may come
in the form of after sales training, guarantees and warranties. 11
 The VALUE CHAIN
Support Activities assist the primary activities in helping the organisation achieve its competitive
advantage. There are four main areas of support activities: procurement, technology
development (including R&D), human resource management, and infrastructure (systems for
planning, finance, quality, information management etc.). They include:
Firm infrastructure: every organisations needs to ensure that their finances,
legal structure and management structure work efficiently and helps drive the
organisation forward. Inefficient infrastructures waste resources, could affect the
firm's reputation and even leave it open to fines and sanctions.
Human resource management: the organisation will have to recruit, train and
develop the correct people for the organisation to be successful. Staff will have to
be motivated and paid the 'market rate' if they are to stay with the organisation
and add value. Within the service sector such as the airline industry, employees
are the competitive advantage as customers are purchasing a service, which is
provided by employees; there isn't a product for the customer to take away with
them.
Technology development: the use of technology to obtain a competitive
advantage is very important in today's technological driven environment.
Technology can be used in many ways including production to reduce cost thus
add value, research and development to develop new products and the internet so
customers have 24/7 access to the firm.
Procurement: this department must source raw materials for the business and
obtain the best price for doing so. The challenge for procurement is to obtain the
best possible quality available (on the market) for their budget. 12
 THE EXTERNAL
ENVIRONMENT
The external environment of the company gathers all the elements outside the
organisation that has effects on its behaviour or performance.

MAIN AXES

The analysis of the The analysis of the

general external competitive
environment environment

Long term Variable Direct Short term

trend impact relations trend

13
PEST analysis

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 PEST analysis - benefits
A company may have all the information it requires about the quality of
its infrastructure, the extent of funds, and the employee talent
available to it, but it may not be fully aware of the external
environment in which it is to operate or launch a new project. It can
even predict future prospects of a project or product by studying the
PEST factors.

• Provides an understanding of the wider business environment.

• Encourages the development of strategic thinking.

• Straightforward and only costs time to do.

• May raise awareness of threats to a project.

• Can help an organisation to anticipate future difficulties and take

action to avoid or minimise their effect.

• Can help an organisation to identify and exploit opportunities. 15

 The analysis
of the COMPETITIVE environment
A competitive environment is the dynamic external system in which a business
competes and functions. The more sellers of a similar product or service, the more
competitive the environment in which you compete.

Direct competitors are businesses that are selling the same type of product.

Indirect competitors are businesses that still compete even though they sell a
different service or product. The products or services offered by indirect competitors
tend to be those that can be substituted for one another.
Transport

Lodging
Hospitality
F&B
industry
Leisure

Events
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