The impact of business environment on the current strategy of IHG is broad and one that calls for consistent attention. This means for IHG to keep up with the current markets its management is consistently engaged in measuring and readjusting its strategies and effectiveness to the market. Using PEST, SWOT and TOWS analysis this paper seeks to bring to light the position of the IHG today and its competitiveness in comparison to its peers in relation to its current strategy.
IHG Pest Analysis
IHG is consistently exposed to the adverse global political and economic risks arising from different financial markets that are inherently affected by inflation, recessions, credit fluctuations that could possibly lower income and revenues. In time of recession there is less business and leisure travel between different countries negatively affecting the room rates and occupancy and thus the general income of the group. In politically affected economies operations may adversely be affected resulting potentially affecting the property value. This in turn may make it more difficult to manage the vast group of hotels resulting in inability to secure franchises, retain, or conclude management agreements.
Bowie, D. & Buttle, F. (2011) asserts that politics are closely connected to economic reactions this can be seen when politicians in different countries decide on regulatory policies preventing the group from selling its investments in some countries. In the past changes in legislation, tax rates have periodically reduced the projected profits.
However most important to IHG is its customers with the companies brand’s reputation its foundation. Thereby failure in the brands sustenance can negatively affect the value of the brand and as a result, the interrelated revenues would equally suffer.
This in-turn means that the group effective control of commodisation is of greater importance than the brand with quality and perception of the consumer in line with the preferences defines the brand itself; failure to which the group consumers loyalty to the group may be lost in turn adversely affecting the profitability of the brand (Bowie, & Buttle, 2011). To prevent such a scenario the group is pushed not only to advance its technology and facilities but also to as much observe the regulations to do with operations this includes security and fire safety.
IHG heavily relies on particular systems and technologies for the day-to-day running of the business especially in areas of high integration to the processes of the business (Bowie, & Buttle, 2011). Failure in the technology would not only affect the systems but also go as far as affecting the business efficiency despite the continuity of the business. As stated earlier the group, forced to keep re investing in new technology not only to be competitive enough for its peers but also equally to be in position for the society. This however is not to say that technology is all the group needs it is...