This assessment will cover the following questions:
- Identify and evaluate the macro- and micro-environmental influences that affect Intercontinental hotel and groups today.
- Reflect upon theory on how the forces in the macro environment shape performance of Intercontinental hotel and groups.
- Intercontinental hotel and groups isBritish multinational hospitality organisation.Identify and explain strategic tools in the analysis of the internal business environment.
- Communicate central ideas to reshape the business effectively.
Reflective Essay refers to an activity that is associated with appropriate and effective evaluation of certain activities or procedures that are inclusive of experiences or procedures of a company that helps in reflecting upon the current performance of an organisation (Josserand and Kaine, 2016). In this context, the reflective essay below is based on internal environment of Intercontinental Hotels Group (IHG), which is one of the most recognised organisations in hospitality sector of the United Kingdom. The assignment covers description of Value Chain Model, along with a detailed description of the hotel and its business operations. Furthermore, the essay is also inclusive of application of the value chain model and reflection of its usefulness.
Value Chain Model
Value Chain refers to an appropriate combination of several activities that a firm performs in relation to delivery particular products as well as services within the marketplace. Moreover, this aspect is very much necessary in order to appropriately and effectively create value within the company. The reason for this is because it directly reflects upon success of the firm, as higher value enhances the productivity and profitability of the organisation. Moreover, value chain of a firm also helps the company in building a strong and sustainable competitive advantage (Albert and Grzeda, 2015).
In this context, one of the most effective and essential contributions was done by Michael Porter in 1985, where the concept of value chain was firstly introduced. In the Value Chain Model described by Porter, all the systems and their input towards the output (performance objectives) were taken into consideration rather than the departments and functional units of the company. A rather homogeneous display has been provided within this model of activities that are common within businesses, regardless of the sector in which they operate. Moreover, these tasks are further divided amongst primary and supporting activities. In terms of former, activities like inbound logistics, operations, outbound logistics, marketing and sales, as well as service are included. However, the tasks which are directed towards the primary activities are inclusive of procurement, human resource management, technological development as well as infrastructure. A combination of all these activities are adopted and performed by an organisation consistently and effectively which enhances the scope of achieving objectives in an appropriate manner.
One of the biggest strengths of value chain model by Porter is the approach which is followed by its concept. This is because a linkage is established within the systems of the company within one another, which showcases prominent impact upon the cost, as well as the profit. This clarifies the sources within the firm that are generating value for the organisation as well as the resources that are negatively impacted through the current performance of organisations on these grounds. Hence, value chain model is an effective form of analysis which explores the working of an organisation along with factors that could possible help the company in relation to create effective value (De Jong and et. al., 2017).
Intercontinental Hotels Group
Intercontinental Hotels Group or IHG is an international organisation that deals in accommodation, food and beverage operations within the UK's hospitality sector. In addition to this, the firm has an effective presence in almost 100 nations, where it owns several brands that contribute in enhancing the success of the enterprise. Founded in 2003, the firm has made its goodwill and reputation in all over the UK and beyond as an organisation which gives effective food items, accommodation services as well as essentially market its services to the public.
As per the firm's mission and vision, the value within the company is very much created through delivering its hospitality services, which includes the food items they provide, the quality of accommodation, additional services such as internet and lodging facilities and so forth. Moreover, since the firm has a global reach, the firm includes flexible systems that are associated with catering guests from different cultural origins and different social backgrounds. Furthermore, a prominent approach which the company includes within its systems is innovation and differentiation. This could be reflected by the fact that the firm introduced several concepts within the US, such as inclusion of boutiques within their hotels. Such additional inputs made sure that the firm's sales uprise to a substantial and effective level (Waithanji and et. al., 2015).
In addition to this, the company has been a pioneer in marketing its services to its target market and attracting the same through ensuring consistency in its systems. For instance, all the primary activities associated with logistics, marketing and sales as well as services are improvised and modified on a regular basis so that the firm could operates on a fair scale and effective services are provided to the customers appropriately. Moreover, the infrastructure, human resource as well as technological development are very much appropriate to support the primary tasks of the organisation.
It is quite imperative that the internal environment of an organisation is evaluated using value chain model as it covers appropriate systems and operations of the company that is necessary to achieve its objectives, which primarily are the sales and profitability. Hence, in context of Intercontinental Hotels Group, the value chain model appropriately includes the primary as well as supporting activities of the company (Bi, Davison and Smyrnios, 2017).
In this activities, firms tend to build up effective and stronger relationships with the suppliers, as their support is very important for a company like Intercontinental Hotels Group to acquire, store as well as deliver their offerings. In terms of this company, the firm has contractual suppliers all over the UK for its multiple hotels, which are responsible towards delivering beverages, raw vegetables and fruits, as well as laundry services for the company. furthermore, the firm has a house storage, as well as distribution function within the departments of the company, along with systems inclusive of stock requisitions and inventory control.
The operations within Intercontinental Hotels Group involves activities like assembling, food production, packaging, testing as well as product delivery. Moreover, another key operational activities within the organisation is related to maintenance and repairing of machineries and equipments. The firm has been appropriately and effectively managing these operations to control its operations through acquisition of equipments that helps the firm in innovate as well as conduct these operations with minimal waste and maximum output.
These activities are inclusive of processing the order, report preparation as well as storage of food. Since the firm has a daily acquisition of food items, the storage facilities of the company is quite effective and temperature controlled to keep the food quite fresh as well as provide best quality food items to customers. As for order processing, the organisation has digitally transformed and automated systems for their websites and mobile applications, which helps the firm in tracking orders and processing them in a prominent and effective manner (Folmer, 2016).
Marketing And Sales
These activities are inclusive of communicating the services of the hotel to its customers in a prominent manner. In relation to Intercontinental Hotels Group, the firm focuses on marketing the differentiated products and services to the customers, which are available at affordable costing as well as high quality. To conduct the same, the firm uses advertising through social media and promotions, sales agents, building effective relationships with prominent channel members and so forth. These allow the firm to market their food items and accommodation services, along with selling the same to their target customers.
This is inclusive of the pre-sale, as well as post-sale services for the customers. In terms of the former, the firm grabs attention of the customer through engaging in communication about the kind of services expected from the company, as well as acquire information about all the queries and requirements of the customers on the basis of which the firm acts upon at the time of sales. Moreover, for post-sales services, the customer relationship management of the firm is directed towards acquiring feedbacks from customers along with providing offers and discounts on prominent locations to ensure their engagement with the company.
In relation to the infrastructure, the firm acts appropriately to manage their financing accounting, legal matters as well as planning activities. For these purposes, technical, financial and human resources are hired by the organisation to develop strategies as to how best the infrastructure of the company be improved and help the firm in gaining competitive edge.
Human Resource Management
This activity is primarily concerned with appropriate and effective management of the employees and workforce of the company. There are several techniques through which Intercontinental Hotels Group ensures this management. For instance, the firm trains their employees on professional grounds,which allows them to deliver the services in an enhanced and competitive manner. Moreover, to retain and engage their clients, the firm improvises its rewarding mechanisms and policies to motivate the workforce (Jordan and Kapoor, 2016).
In hospitality, it is required that the technological development is included within organisations as a key activity to support the operations and systems of the firm. In context with the company, Artificial Intelligence has been used by the firm in relation to track, measure as well as reduce the wastage of food. Usage of technologies like Winnow Vision AI, helped the firm in reduction of 30% of food waste, which is quite effective to support its logistics and operations (Award-winning AI technology helps IHG, 2019).
This reflects with procedures that are included within the purchasing of raw materials, supplies and equipments that are required to produce the food items within the company. Strategic plans and supply chain management is adopted by the firm to successfully procure the resources as per the requirements.
Reflection on Value Chain Model
It is required that appropriate reflection is provided on the above display and analysis of the internal environment of the organisation using value chain model. This would allow development of an effective insight on the usefulness of the model in order to serve the purpose effectively (Kolk, 2016).
Value Chain Model helped me in context of getting an effective insight in elation to appropriately analysing how Intercontinental Hotels Group could gain a competitive advantage. The reason for the same is that it helped me in analysing the current operations of the organisation, which is associated with providing the firm with an effective and competitive advantage.
Furthermore, it also allowed me in evaluating the value that is created by the operations of the company. For example, it is evident from the display below that Intercontinental Hotels Group is quite appropriate in creation of value, as its logistics, operations, services and marketing activities are very much effective in context of providing value which exceeding the cost in an appropriate manner.
In addition to this, Value Chain Model of Intercontinental Hotels Group has also been very much contributing in analysis of internal environment as the supporting activities reflected the aspects that are internally included by the company to ensure procurement and supply chain management of the organisation. In addition to this, while the internal environment of the firm is inclusive of the management of resources and core capabilities, value chain model helped me in realise all the elements of human resource management, along with logistics functions which the firm performs in relation to accomplishing its business performances. Hence, there is a prominent contribution of value chain model in helping me understand the internal environment of the Intercontinental Hotels Group.
Hence, it is concluded from the report above that reflective account helps individuals in analysing experiences and working of companies that helps in enhancing the knowledge of people about organisations and their functioning. Value Chain model is an effective framework that is inclusive of appropriate and effective evaluation of systems within a company and their linkages that helps in allowing the firm in creating value and effectively ensuring accomplishment of business objectives. Lastly, reflection upon this model could help individuals in getting an insight upon the internal environment of an organisation.