__________________________________________________________________________

Tourism Planning and development

(CAC 6006)
Tutor: Prof. Athina Vasilaki

Date of Submission: 03.03.2022

Name of the Student: Ali Abdel Kodouss

3rd year
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Table of Contents

INTRO: 3

COMPETITIVE ADVANTAGE 3

MACRO ENVIRONMENTAL FACTORS 4

PORTER’S FIVE FORCES OF COMPETITION: HOSPITALITY EXAMPLE 5

CORPORATE STRATEGY 6

ACQUISITION AND RESTRUCTURING STRATEGIES 7

ATTRACTING GUESTS ONLINE: 8

CONCLUSION: 9
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Introduction:

Strategic management plays a major part in all kinds of companies. It is known that the
functional areas of management in a company include production/operations, marketing, finance,
and human resources. Strategic management is nothing more than planning for both expected
and unexpected circumstances in order to achieve a long-term competitive advantage by
formulating and executing appropriate strategies. It has to do with making decisions concerning
an organization's future direction. It aids us in determining the future in which a company is
heading. To make the best judgments, each manager must completely understand and analyze the
overall and competitive organizational environment.

Competitive advantage

Is a Factor that enables a corporation to produce a product or service better or and affordable
than its competitors. These elements enable hotels/restaurants to earn more sales or higher profits
than their competitors. There are various elements that contribute to competitive advantages,
including pricing, restructuring, branding, product quality, distribution channels, copyrighted
material, and customer service (Twin, 2022).

The Major internal and external factors affecting the implementation of strategies
in the hospitality and tourism industry

It is difficult to develop a company’s strategy. When putting together a strategy, there are several
factors to consider, such as the environment, the organization's internal culture, competitors, and
desired goals. Henry Mintzberg classified his strategy into three types: planned, achieved, and
spontaneous. The plan that an organization's top management anticipates is referred to as
planned. It includes all forms of negotiation and bargaining that include a large number of people
within the company. An achieved strategy is one that is implemented as part of senior
management's desired strategy. Spontaneous strategy is created by interpreting planned strategy
and adapting it to the ever-changing environment.
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The entire organization is involved in strategy development. If they work for a franchise, top
management will give them instructions and directions, and local firms will pass their
experience to corporate headquarters. It is necessary to have achieved some environmental
stability before creating a plan. As a result, the strategy will become more complete, and the
results will be more beneficial.

An organization's management greatly depends on the strategy. It accomplishes a number of

goals, the three most important of which are decision assistance, target achievement, and
coordination support. It aids in the conversion of internal corporate choices into decision support
guidelines, hence improving the quality of the product.

The examination of the company's external environment is thought to be far more complex than
the internal environment analysis. it incorporates all external elements that might have an impact
on the organization's (hotel/restaurant) operations. The external environment may be split into
macro-environmental analysis and microenvironmental analysis,  Macro-level analysis is
concerned with the firm's external environment, as well as global challenges that influence not
only this organization but the whole hospitality industry. The micro-level, on the other hand,
look at the organization's own elements that affect its operations, consumers, and competitors.

MACRO ENVIRONMENTAL FACTORS

Technological:
Transportation and distribution.

Environmental:
Pollution
Energy consumption
Waste disposal

Political:
Legislation, regulation
Economic policy
Government-owned businesses
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Economical:
fiscal policy
monetary policy

Socio-demographic:
Social culture
Demography
Social structure

 Micro-Environmental aspects incorporate all internal elements that might have an impact on the
organization's operations.  Depending on the size of the company, it may have some impact.
Customers (guests), competitors, and suppliers are the most common components of this context.
It is a group of businesses with highly similar services, according to Michael Porter. To develop
a solid strategy, the company must be able to understand its competitive environment. This will
allow it to learn more about its consumers, uncover new markets, detect potential risks from
recognized competitors while also discovering new ones, and get a better understanding of its
resource markets.

In 1980, Michael Porter created a framework for analyzing competitiveness and attractiveness
within an industry (Porter's Five Forces - The Framework Explained: Analyzing Competitiveness Using Michael
Porter's Strategic Model, 2022). Porter's five forces of competitiveness. Porter explained that there are
five forces that regulate competitiveness within an industry. The five factors are attraction or
competition among enterprises within an industry, supplier power, buyer power, threat of new
entrants, and danger of replacements.

PORTER’S FIVE FORCES OF COMPETITION: HOSPITALITY EXAMPLE

THREAT OF NEW ENTRANTS

This force is based on the ability of the new firm to enter the market. New entrants to the hotel
industry have a number of challenges, and developing it in a competitive area will make it
difficult to gain a competitive edge. It is, nevertheless, a regular occurrence. either New
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companies can still join the market and represent a danger to established competitors, especially
whether they have a competitive edge in terms of the competitor's differentiation.

POWER OF SUPPLIERS

This element does not generally pose a serious threat to the hotel industry when compared to
consumer bargaining power, but it can nevertheless impose pressure on the company. The more
supplier power the industry has, the more enticing it gets, and therefore the profit potential
grows. The fewer a firm's suppliers are, however, the greater power the supplier has had over the
company. This might affect input costs and put pressure on firms that depend on their products
and services. This puts managers in a tough situation, but in order to stay competitive, they need
to develop a strategy to engage with suppliers that can help them save money.

THREAT OF SUBSTITUTES

Are threats to the hotel industry used to be few and far between, but as technology has advanced,
technological innovation has proved to be a major problem for hotel managers. Alternatives such
as Airbnb, first debuted in 2008, temporary lodging, guest homes or rentals, and a variety of
others could have an impact on the hotel room demand.

POWER OF BUYERS

This is the ability of customers to compel price reductions.  when tour organizations acquire or
reserve a large number of hotel rooms. Hotels are expected to cut costs as their customers have
more negotiating power. This will be challenging for a supplier with a lot of negotiating strength
to raise rates, and that they might even lose money. Suppliers, on the other side, can increase
their rates to increase profits if their negotiating position is inadequate. Customer negotiating
power is more vulnerable in a hotel that provides a service to group trips or has a large number
of guests. Individual or walk-in customers, from the other hand, have little if any negotiation
leverage due to a lack of a substantial margin.
INDUSTRY RIVALRY
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The hotel industry is known for its strong competitiveness. A variety of variables influence the
hotel industry's competitiveness. If there are a huge number of competitor hotels in the area, all
offering similar products and services, the company's competitive power may be harmed. When
a new firm comes on the market, it brings with it a lot more competition and a greater need to
specialize.

Hotels that wish to attract new clients must contend with a busy market and severe competition.
While all the other hotels market their offerings, online travel agencies (OTAs) advertise low
pricing, and sharing-economy competitors like Airbnb emphasize unique rooms. It's challenging
enough to get a potential guest to recognize one’s resort or hotel without worrying about them
booking a reservation. Both, though, may appear to be considerable obstacles. Hotels are
frequently enticed to follow the lead of travel agents and compete on pricing and discount offers.
While this may improve reservations in the near term, it fails to adequately generate long-term
loyal clients. Instead, businesses can consider the following five effective marketing methods.

CORPORATE STRATEGY
The type of strategy businesses should aim for is corporate-level strategy because it is the best
one yet. It is the primary goal of one's company. Consider corporate strategy to be the goal
toward which your company is heading. That destination has an impact on all your business's
strategies and choices. So, if your company has reached market dominance and must diversify
to stay afloat, the corporate level plan would be to expand into other areas. From now on, it
becomes the controlling hand for all of what the company does.

INTERNATIONAL STRATEGY
The international strategy adds value by transferring key capabilities and resources from the
home market to markets in other countries. When pursuing an international strategy, an
organization's resources and competencies are managed in a decentralized way outside of the
core to companies. Local networks and capabilities are utilized in terms of offers and marketing,
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but there is a minimal adaption to local markets. International strategy is useful in markets
where, while the local response is required, it is not critical. A multi-domestic approach, on the
other hand, aims for maximum local response. Local costumer's interests are considered while
designing and developing products and services.

DIVERSIFICATION STRATEGY

 Is a marketing technique that entails creating or acquiring different products in order to expand
the share of the market or penetrate new markets. It allows a company to expand by growing
market share in an existing sector or by entering a new market. Diversification implies both
market risk and innovation. (What is Diversification Strategy? (Definition and Examples), 2022)

DIVERSIFICATION RISKS

Diversification, unlike market growth, is seen as a high-risk strategy, not only because of the
risks involved in developing new products but also because of the firm's lack of expertise in the
growing market. Diversification puts a company in a position of great uncertainty.
Diversification sometimes involves a significant growth in human and financial resources, which
can negatively affect resource allocation in core businesses. Therefore, it is recommended that a
company diversify only when its product lineup or industry no longer offers growth
opportunities. (What is Diversification Strategy? (Definition and Examples), 2022)

ACQUISITION AND RESTRUCTURING STRATEGIES

 restructuring can be done for a variety of reasons, but they all stem from a desire to maximize
the use of present assets while also opening new opportunities (Group, 2022). Businesses may
choose to reform their budget and/or their organization for the following reasons:
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Profit improvement: If a company's assets aren't being used effectively to increase revenue,
restructuring may be done to place it on a more secure financial footing. The route the
corporation takes in its restructuring will be determined by the business plan that successfully
leverages current resources.

 A merger occurs when a firm is purchased and absorbed by another business organization, or

when an existing company merges with another to establish a large new corporation. While this
is a popular tactic utilized by firms in financial hardship, it should be highlighted that M&A
(mergers and acquisitions) deals are frequently the consequence of the potential for business
benefits that may be created by integrating the two businesses, rather than by financial despair.

SPECIALIZATION HOTEL STRATEGY

Since there are so many options for hotel location, size, brand, and operator, hotel owners can
specialize in one or more of these areas, types, brands, or operators, or diversify their assets
within the lodging business. Diversifying regionally and across property types is the most
popular diversification strategy in the real estate industry, including the hotel business, according
to new research. According to a poll of real estate investors, approximately 91 percent of those
who make systematic attempts to diversify their portfolios alter the geographic locations of
assets (Porter's Generic Strategies, 2022).Geographic diversification, on the other hand, has been
demonstrated in previous research on other forms of property development to diminish the value
of publicly held hotel owner firms. (Porter's Generic Strategies, 2022)

ATTRACTING GUESTS ONLINE:

Events On Social Platforms:

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To keep their target audience interested, hotels frequently provide discounts or special
promotions. Most of these are marketed via social media, and they're also often promoted using
pop-up advertisements on the hotel's website. Offers or discounts, on the other hand, aren't the
only ways to keep your audience interested. The engagement of consumers with the hotel brand
is among the most exciting internet marketing tactics. Users like sharing their vacation
memories, including photos and videos, as well as participating in special activities on their
favorite hotel's social media platforms. These events may be contests in which followers are
invited to join, but instead of simply awarding them with discounted stays or special offers, you
may provide them with special gifts or experiences while they are there. For example,
establish raffles in which the winner is given the opportunity to participate in hotel festivities
during seasons, such as Christmas. Another method is to start unique promotions is to invite
customers to test out new hotel experiences. Some facilities, for example, provide activities for
such visitors, such as excursions, cultural trips, and so on. Rather than pursuing techniques that
result in more losses than gains, it is more useful to communicate with your visitors and reveal
the many benefits of staying at your hotel at any time of year.

OFFER VALUE OF CONTENT TO THE GUESTS

Any internet marketing plan must have content. It both draws new prospective visitors and keeps
current ones intrigued. However, what kind of material may be generated to entice customers?

We frequently observe how, in order to attract consumers, we opt to tell the audience about
recreational opportunities in the area where the hotel is located. That is, what activities travelers
may enjoy in the location at any time of year to assist the destination attracting visitors all year.
Since many costumers chose the location based on its popular tourist spots, these key points
might be landmarks, cultural activities, gourmet offers, or even local celebrations that are
unfamiliar to the target audience. 

ATTRACTING GUESTS OFFLINE

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Traditional marketing continues to play a vital part in today's culture, but because people have
been accustomed to brochures and standard signage, it's critical to work with a business that
could help you design a recognizable and unique hotel advertising strategy.  Strong pictures and
brief yet memorable phrases are remembered. Many businesses, such as 1-800-mattress, still
have phone numbers that people can remember easily. If you just do this with your hotel's name
or a variation of it, clients will remember you so that the next they visit, they have a place to
stay.

Always be sure that your structure is recognized from the outside. Landscaping and care are just
as important as door plates, outside metal signs, and fence signs. Whether in person or through
Google Earth, your hotel's outside design is the first thing customers see, making it an offline
marketing asset by itself (How to attract guests to your hotel when bookings drop?, 2022).

HOTEL SALES STRATEGY

This plan may necessitate a change in your typical sales and marketing strategy. The goal is to
sell corporate groups accommodations and meeting spaces; it's critical that you can provide a
good price on both. Landing these sorts of sales requires creativity, but it may pay off
handsomely in terms of recurring business. Connecting directly with planners is the most cost-
effective approach to acquiring group reservations. Hotel strategy managers may access
floorplans, photographs, and unique differentiators by listing the property in venue markets. It's
also crucial to divide the target audience so that you can make attractive offers to the appropriate
kinds of people who are interested in your property (Hotel sales strategies to dramatically increase
occupancy [2022 update], 2022).

REWARD SALES STRATEGY

Most tourists today, especially the influential millennial age, cherish the ability to earn incentives
from the firms with whom they do business. Hotel rewards systems, for instance, have had a
huge success. The management or operator should create a system that pays customers for
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visiting regularly, buying upgrades, and introducing family and friends as part of a guest
reward sales plan. Recurrent reservations, which are highly profitable for hoteliers, are
frequently generated using a rewards sales approach.

Conclusion:

If a company's profitability is primarily determined by the attractiveness of the industry it

operates, the firm's position within that sector is a significant secondary determinant. Porter's
Five Forces is a simple but efficient method for identifying the main competitive forces or
attraction in a firm or region. A company's strengths, according to Michael Porter, fall into two
sections: cost advantage or diversity. Finally, branding is crucial to marketing. For hotels, this
means having a simple name that is easily remembered and a welcoming ambiance from
the customers to walk through the door. A connection with a branding and marketing firm that
could see one's hotel through someone's eyes and help you create a public image that people will
love.

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