The Strategies of Intercontinental Hotel Group - Case Study Example

The strategy adopted by the company was that involving a large scale of operation. This type of operation was facilitated by the ownership of various brands of hotels operated by the Intercontinental Hotel Group. For instance, the Lido holiday inn. The multi-brand ownership strategy made it feasible for the company to operate on a large scale. To be specific, a holiday inn hotel had 1000 standard rooms and 355 apartments. The IHG owned 26-holiday inn hotels, not to mention other brands. This ownership strategy was unique by then and was a source of competitive advantage to IHG. Second, the geographic locations of the hotels managed by the company were unique and complemented the purposes for which they were put up. That is, for holiday getaways. The unique geographical location, which could not be imitated by any other company, provided a sustainable competitive advantage for the company.

Third, the company actively segmented its target market. Every target market had a suitable brand of hotel. This strategy ensured that the client’s needs were met. Fourth, the company was the first to establish a Chinese website for local customers to improve communication with a wider variety of customers who speak different languages such as English and Chinese. The website also provided a platform for reservations. This strategy was cost-effective and efficient. Therefore, was a source of competitive advantage.

Positioning strategies of IHG

The positioning strategy of the company involves making plans that make a company stand out among other rival firms. The Intercontinental Hotel Group has implemented the following strategies: first, the company has segmented its target market and provides hospitality services to match the market need. For instance, at the onset, the company entered the China market with a unique service delivery strategy, including setting up the first website in Chinese. The strategy facilitated the high market growth rate experienced. The open-door policy in China in the year 1978 resulted in a rise in demand for international inbound tourists. On the other hand, the increase in personal income and the rise in the middle class gave rise to domestic tourism, which never existed before the 1980s. Higher growth in both inbound and domestic tourism was induced by the government after realizing the significant contribution of that sector to the national economic growth.

Article on the strategy of the hospitality industry in China
The hospitality industry in China has shown a steady growth rate and according to analysts, a further increase in the growth rate for the next 10 years is anticipated. The anticipated increase will be caused by a continued increase in demand for meeting rooms, and conference and exhibition centers. A large number of new tourism projects are in the pipeline and the rapid increase in high-tech and industrial parks is behind the expected increase in travel accommodations. The strategies to utilize the opportunities, as implemented by Marriot, Starwood, InterContinental, and Accor, involve a combined pipeline of about 400 new hotels (China’s Hospitality Industry – Rooms for Growth 1-8). Read More