Intercontinental Hotel Adelaide - Case Study Example

INTERCONTINENTAL HOTEL ADELAIDE Name Institution Unit Title Unit Name Date of submission Instructor Table of Contents Executive Summary 3 Executive Summary The hospitality industry in Australia is rapidly growing. There is always a probability for a boom in the industry throughout the world. The sector is the largest market segment in the world. InterContinental Hotels is a company under this sector. This report is on an investigation on its internal and external environments. This analysis is very crucial in determining potential and strategic plans for growth. It answers the question “Where is the company?” and applies to analysis of internal organization. Analysis of the business environment is necessary for determination of the relationships between the various business concepts, employees, stakeholders, and other factors. In addition, it helps determine the implication of the environmental factors on performance (Hill et al, 2007). The analysis of internal environment of InterContinental Hotels Adelaide is on organizational structure, product position, management, organization’s strategy, internal risks and control, and other factors. On the other hand, the external environment comprises of customers, markets, and shareholders. Introduction Intercontinental hotel Adelaide is one of the best hotels in Australia offering hospitality services. Its location is along the River Torrens and offers elegant, spacious, and scenic rooms, excellent facilities inside the rooms, and access to restaurants and bar. Its vision is to become one among the greatest leaders in the hospitality industry globally by delivering best services to its guests. The hotel will achieve this through the hotel’s portfolio of desired brands, qualified personnel, and best delivery services. The Intercontinental hotel is committed to responsible steps in everything it does. The hotel has a high-quality agenda with its luxurious hotel features suitable for all kinds of clients including families and organizations (Wood & Brother ton, 2008). It offers great facilities and services and values programs for customer loyalty.This report is discusses findings on an investigation on the internal and external environment of the InterContinental Hotels. It outlays the factors that affect the company’s performance from inside and outside the company. Organization Overview Intercontinental Hotel is uniquely at the Adelaide’s heart along River Torrens. It avails a variety of facilities that include Convention Centre and Restaurants. It consists of elegant, spacious, and scenic rooms, excellent facilities inside the rooms. In addition, the hotel offers excellent and diverse recreational facilities and activities such as sauna, gym, health care fitness, and massage. The five star hotels is aiming at providing high quality services and personalized services including warm welcome to ensure unforgettable client’s experience (Intercontinental Hotels & Resorts, 2013). The operation of the hotel is in three varied ways: franchising, management, and ownership. The hotel is on franchised agreement or by management by board of managers on behalf of its owners. A number of services support the hotels. These include revenue generation techniques and marketing strategies. The hotel owns about 367 hotel rooms with less than 1% of the rooms on lease. The hotel receives over 100 million visitors or customers every year and generates about $20 billion revenues annually (Intercontinental Hotels & Resorts, 2013).Currently, Intercontinental hotel Adelaide is one of the best hotels in Australia offering hospitality services. Its vision is to become one among the greatest leaders in the hospitality industry globally by delivering best services to its guests. The hotel will realize this through its portfolio of desired brands, qualified personnel, and best delivery services. The Intercontinental hotel is committed to responsible steps in everything it does (Paul, 2013). The hotel has a high-quality agenda with its luxurious hotel features suitable for all kinds of clients including families and organizations. It offers great facilities and services and values programs for customer loyalty. Its products reflect the hotel’s promises to the customers and the committed and hardworking personnel that support the livelihood of each product as well as delivering the company’s vision. Intercontinental Hotel Adelaide is committed to operating its business with a lot of responsibility and care. This reflects its priorities and strategies. Its high quality services enable it to build a good relationship with customers and generate revenue to the business. The hotel champions and protects its reputation and public image. It offers a variety of dining services for example Riverside Restaurant serves breakfast and dinner while Atrium lounge serves lunch. It also offers elegant relaxation atmosphere where one can take tea, cocktails, or late night drinks (Intercontinental Hotels & Resorts, 2013). External and Internal Environments Analysis The analysis of the internal and external environment of InterContinental Hotels Adelaide operates on components such as preferred brands, consumer segments, personnel, management, financial situation, and revenues generated. The analysis utilizes the Porter’s five forces model that enables establishment of the average performance of the company. The external environment forces comprises of the bargaining powers of customers, suppliers, markets, and shareholders (Hill et al, 2007). The hospitality industry has various segments depending on the price levels and the Intercontinental Hotels Adelaide is concerned with three consumer segments that contribute to over 90% hotel revenue. These are midscale, upscale, and luxurious segments. Consequently, to establish a preferable brand, the hotels beliefs in advancing its level of understanding of its guests and demands to ensure the brands survive the rapidly changing customer world. Therefore, the hotels have accomplished customer based segmentation study to understand the reason behind guests booking hotels, which the guests are, and the needs they have. Currently, many customers have rapidly changing needs as to why they stay in the hotels, for example, business trips may turn into family meetings. The hotels are required to meet these changing needs by delivering preferred loyalty brands. The hotels continue to work on the segmentation analysis to develop a better understanding of the guest and help in adopting brand strategies that are effective and appropriate (Woodside & Martin, 2008). The Intercontinental hotels have vibrant, lively, and passionate people who help boost the preferred brands. To deliver its vision and mission, the hotels attract, retain, and encourage the most talented people in the hospitality industry to offer personalized services to guest and breathe life top the hotels brands. The staff operates under a strategy with four pillars. First, the staff members ensure brand hearted culture and they use their talents and dedicated efforts to bring to life the hotels brands. The personnel much easier focus the hotels on establishing and enhancing tools that make delivery of services. In 2012, the hotels launched a framework for ensuring transformed standards of service delivery and brand standards as well as the management of operations (Intercontinental Hotels & Resorts, 2013). Secondly, the strategy focuses on making Intercontinental hotels best place to work in. The hotels will achieve this through equal treatment of individual members of staff and appreciating their accomplishments. The hotels recognize and create room for individual worker to do their best and achieve this through four promises. Throughout Australia, it is a great employer. The third pillar is on availing excellent tools to the hotels’ owners. Through partnership with the human resources department, the hotels have developed a group of award-winning individuals who not only increase employee commitment but also ensure guests satisfaction as well as ensuring efficient services and revenue generation. The final pillar is on establishing a strong team of leadership. In so doing, the hotels have grown its business sustainably. A committed leadership team is necessary for a brand-hearted vision. As a result, the hotels have an established leadership framework that demonstrates clearly, what leadership is in developing a future team of leaders(Lucas, 2008). Additionally, in Intercontinental hotels, ethics, and good practices are on the forefront in business operation. The hotels are committed to running the business with the highest level of integrity and in step with the ethical practices. Its reputation is on confidence and security it offers its stakeholders, and it is a crucial part of InterContinental’s vision to be one of the best hospitality industries in the world (Christmann, 2000). The code of ethics and standards outlay the standards and behaviors of workers describing how they should conduct themselves while serving the world. It is applicable to all managers, committee members, and other employees of the hotels. Hence, it accompanies the company’s core values. All personnel must ensure that they uphold ethical values and behave responsibly in all situations in order to enhance the reputation of the hotels. The principles should lie in the hearts of the people and they should never compromise under any circumstance. All managers, committee members, and employees abide by the code of conduct. The code of conduct sets out their responsibility for failing to ensure proper supervision or report a violation of the codes by a junior worker. Various disciplinary actions that include dismissal, demotion, or firing are applied. The Code of Conduct sets out general standards and does not necessarily address all situations that employees may encounter in the course of delivering their duties. Hence, the employees seek for guidance from managers when appropriate. In addition, the Hotels’ Secretary and Group Internal Auditor are available for confidential advices (Intercontinental Hotels & Resorts, 2013). The entire community of the intercontinental Hotels is responsible for ensuring safe, healthy, and perfect working environment through adherence to local rules and laws as well as internal standards. In addition, the company offers equal employment opportunities to all based on their qualification to the specific jobs without regard to age, gender, race, ethnicity, or nationality (Pizam, 2009). Any discrimination or harassment of an employee is highly prohibited and it is punishable by the company. Additionally, the InterContinental Hotels face stiff competition from international companies. These companies have well established distribution centers, stable financial system, and a strong control system. They also use latest technology in their operations and support services like pricing and costing, management, booking, and checkouts. Therefore, the InterContinental Hotels ensure increased awareness so that management of internal operations may lead to realization of the targeted performance. The company is also interested in protecting the environment as a means of ensuring economic growth and business prosperity. This commitment is consistent with the company’s mission and the two reinforce each other mutually. The protection of environment is an investment for the future of the company. In addition, the hotels are also concerned with participating with stakeholders to ensure sustainable growth of the business. The InterContinental Hotels hold that it is their interest to establish good relationship with commercial partners such as guests, suppliers, and shareholders. It does this by offering gifts, entertaining guests, offering personalized services, or accepting gifts. This act is consistent with the culture of the local Australian people. However, the company must exercise caution while receiving gifts so that it may avoid gifts that may place it under compulsion or may adversely influence business operation. Anything beyond a token value supposed to reach to top management for confirmation before it has been received. The maintenance and major operation of the hotels depend on exchanges between the hotels and its partners. Dependence on partners is not a problem when the organization has all the required resources to run its businesses. However, when resources become scarce, a problem set in. The unpredictable changes in partners require that an organization keenly monitor the environment to ensure competitive performance. Similarly, the company is committed to a fair, positive, and open competition in the Australian hospitality industry. It competes favorably and honestly by adhering to competition rules and laws. Several manuals lay out the rules, regulations, and laws that require observation during such competitions. The hotels offer zero tolerance to fraud and such case attracts severe punishments when encountered. The Intercontinental Hotels are free to participate in political activities any time. Nevertheless, the individuals are not representing the company in such events. The company does not donate to political parties but only works hand in hand with current government in matters pertaining to daily operation of the business.On the other hand, the company is required to adhere to the Australia’s rules pertaining to disclosure of information relating to prices and brands. The company is responsible for ensuring clear and meaningful financial information and reports to the readers and public. Media involvement is limited to authorized personnel only and announcements, statements, or answers to questions are in the hands of the communication group (Paul, 2013).The hotel has a high-quality agenda with its luxurious hotel features suitable for all kinds of clients including families and organizations. It offers great facilities and services and values programs for customer loyalty. Its products reflect the hotel’s promises to the customers and the committed and hardworking personnel that support the livelihood of each product as well as delivering the company’s vision. Internal Organization Analysis An analysis of the internal organization aims at evaluating factors within an organization that contribute to its performance. Some of the areas dealt with in this analysis include organizational structure, product position, management, organization’s strategy, internal risks and control, and other factors. A Board of directors that act in accordance to rules manages the InterContinental Hotels and regulations set out by the government. The Board manages operations and developments to ensure continued adherence to the standards of operation. It comprises of a Chairman, four executive directors, and six non-executive directors. According to the regulations of the Board, the non-executive Directors are independent and are a strong and reliable source of advice to the hotels. Each Director has varied skills and experience in commercial practice. The Board has the responsibility to ensure strategic direction of the hotels. It ensures performance, development, and control of business operations. In addition, the Board is responsible for coming up with a budget and various proposals for investments. It also manages the overall system of operation including risk and financial management. The Board also puts in place the necessary resources like employees and finances to meet the company’s objectives (Intercontinental Hotels & Resorts, 2013).Another important person is the Company Secretary. The Secretary is responsible for a continuous flow of communication or information between the Committee and Non-Executive Directors. He facilitate he advises from the Directors to the Board on corporate governance of the company. In addition, the company Secretary updates the Board on all matters pertaining to legal, regulation, and development of the company. Yet, the Board has established various Committees to assist in accomplishing its obligations. First, Audit Committee is responsible for reviewing the company’s financial systems, internal controls, and internal management systems. Again, the Audit Committee appoints and defines work for internal and external auditors. Second, the Corporate Responsibility Committee has the responsibility to ensure compliance to the strategy, policies, programmers, and management for the purpose of corporate responsibility across the company. Third, the Nomination Committee under the Chairman of the Board is responsible for determining the composition, size, and structure of the Board. It advises on takeover plans and appropriate decisions to ensure the necessary skills and expertise maintenance in the Board. Finally, the remuneration committee determines on behalf of the Board the remuneration of Directors and committee members. It also decides on the company’s strategy, direction, and policies for paying other individuals who influence the company’s operations to accomplish its goals (Intercontinental Hotels & Resorts, 2013). In addition, a management committee also exists. This committee consists of the executive, disclosure, and general purpose committees. The Executive Committee comprises of the Executive Directors. It considers and manages a wide range of strategic and business issues affecting the company. It monitors the performance of the company, is responsible for approving capital, and profits investments as agreed by the Board. It gives the best recommendations on investments. On the other hand, the Disclosure Committee consists of the Company Secretary and senior executives held with the responsibility of ensuring relevance of information submitted in reports is a true representation of the company in all aspects. Finally, the general-purpose committee comprises of one senior executive and one Executive Committee member. It deals with implementation of matters previously agreed upon by the Board. Apart from management, the InterContinental Hotels Adelaide recognizes diversity of its members, guests, and workers. The Board recognizes the importance of diversity to the business and strongly believes in diversity of Board Members. The Board continuously provides an inclusive environment that embraces employees for who they are and their contribution to the company. As a result, experienced and skilled personnel remain within the organization. The InterContinental Hotels Company recognizes the benefits of gender equality and supports women in its operations. It is the company’s aspiration to help more women attain their full potential and representation in the Board (Intercontinental Hotels & Resorts, 2013). The internal controls and risk management covers financial, operations, and compliance controls, principal risks, risks management systems, and materials development (Porter & Van der Linde, 1995). The board is responsible for effective management of business risks and approves risk management policies as well as delegating review of the risk management processes on a daily basis to the Audit Committee. Equally important, a strategy enables a business organization to make wise choices from a wide range of business opportunities options with an aim of achieving set goals and objectives. An organization is supposed to manage the execution of these choices and determine its success from a clear set of measures. The InterContinental Hotels strategy determines a set of plans to achieve balance in the quality of services offered at the hotels and the speed at which the company grows. In addition, the strategy ensures continuous growth of employees. It measures this by the use of performance indicators like growing RevPar, fee margins, and systems size. In addition, the company ensures continued satisfaction of employees and demand for hotel rooms. The InterContinental Hotels beliefs that by integrating environmental factors and social factors into its business strategy is crucial in the long-term profitability of the business and the hospitality industry at large. The industry faces a lot of pressure to incorporate economic factors with environmental and social elements. As a result, the company adopts corporate responsibility into its strategic priorities (Wells, 1998). Corporate responsibility is at the heart of InterContinental’s activities and it implies conducting business in the right way and pursuing long-term goals in ways that result in mutual benefits to the customers, business, stakeholders, and societies. As a result, corporate responsibility is a strategic issue that aligns the business with its vision. The organization utilizes the McKinsey’s 7s models to maintain its leadership and analyze the influence of their styles on their performance. leadership. First, the company has clearly defined and engineered super ordinate goals towards meeting customer needs. Second, the leadership of the company utilizes a well-established strategy targeting the market segment with its goals. InterContinental Hotels have a very good strategy aimed at community involvement and very careful attention to its suppliers, employees, and customers. Third, the leadership structure of the company is a right one. Governed by a board of directors, the leadership is assisted by several committees handling various issues. Fourth, Intercontinental Hotels conducts maintenance of its system from time to time. This ensures minimal breakdown of equipment and facilities during operation hours. The company also measures the performance of the systems and has a committee to deal with recommendation of proactive maintenance system. Fifth, style of maintenance is very crucial in hospitality industry. Sixth, Intercontinental Hotels’ staff is a group of enthusiastic and talented people who have very strong skills and commitment to work. Seventh, the management of Intercontinental Hotels promotes effective set of shared values. However, initiatives that are more effective are necessary to enable every member and employee to appreciate the values. Thus, the 7s analysis is very useful in ensuring proper leadership and approach to business operation in an appropriate manner. As a result, the company designs and promotes safe working environments where team members can perform their duties best. In addition, all team members are valuable contributors to the company regardless of how long they have worked or intend to work for the company. Impacts of the External and Internal Environments on the organization’s Performance The performance of the InterContinental Hotels is under the influence of the internal and external environmental factors. For instance, an upswing or downswing on the economic situation will immediately affect performance. Recently, Australian hospitality industry has undergone changes in its external environs mostly because of the highly flexible environmental condition and the increasing uncertainties in the economy of the country. The hotels seem to have features that suit it into segmented market well. From the Porter’s forces analysis, it is clear that InterContinental Hotels Adelaide more or less cope with the threat from various competitors in the hospitality sector, and the customers are its most important stakeholders with power to determine the services they want among many substitutes (Porter & Van der Linde, 1995). This influence the company to prioritize occupying a favorable position in the market and launch aggressive competition. The company uses these forces in order to establish its market position and competitive advantage. In the meantime, other hotels and tourism firms do not offer stiff competition to InterContinental Hotels since it has been conducting the hotl business for many years. The experience makes the company mature, technologically advanced, good hotel operation and management and has a good reputation. Additionally, organizational performance of the InterContinental Hotels based on Baldridge criteria focuses on seven categories that have resulted in excellence. These are leadership, strategic management, focus on customers and market segment, knowledge of management, staff, operation management, and results of its various activities. The hotels used this approach to achieve excellence in its hospitality operations (Kaplan & Norton, 2000). The customer service is a result of outstanding performance of team members and personalized service as well as adequate knowledge about the products (Christmann, 2000). The company’s nurtures good relationship with customers through customer service beliefs such as the livelihood of the business depends on customers, customers are the primary source of motivation in company’s work, they bring their needs, and desires to be meet by the company but not to content or argue with them. Given the appropriate choice of business strategy and effective management of the company, the performance of the Hotels is better and efficient. The company has well determined performance indicators to measure its success in achieving its strategy (Lucas, 2003). They apply around the elements of the strategy for example where the business operates, which involve customer segments, market segments, and business models. Second, it concerns how the business wins by focusing on its priorities of brands, skilled people, and personalized services delivery. In particular, performance measurement is through revenue based margins, RevPAR, employee involvement, and standards of business operation. These performance indicators measure how the company is progressing towards delivering hotels mission and vision of becoming leading service provider in the hospitality industry. For instance, skilled and highly experienced people create wonderful customer experience since they are going to receive service from people who enjoy what they are doing. Consequently, the company is able to generate revenue at a quick pace and grow in size. The fast growth rate positively affects the Intercontinental Hotels and will have a long-term effect on the company’s performance. This is the effect of positive involvement in community activities through creation of solutions, which lead to sustainable environment. It is in a manner that portrays the shared values of the InterContinental Hotels, shareholders, guests, and surrounding communities. The appropriate business model speeds up profitability of the business in the market segment (Kaplan & Norton, 2000). The country’s economic changes affect performance. The globalization process exerts pressure on the hotels to expand its operations into new markets because of the rapidly growing opportunities in foreign markets. The government incentives, financial support centers, and the industry at large influence the growth. The InterContinental has many options to choose from including management contracts, joint enterprises, franchising. The overall management of the organization affects the performance through appropriate strategies (Woodside & Martin, 2008). Conclusion The InterContinental Hotels Company reflects the hopes and intentions of many people including stakeholders, customers, partners, and neighboring communities. It portrays how things are and will be in the hospitality industry. In fact, the company is capable of achieving excellence and outstanding performance through creation of better opportunities, company, and environment. The company takes the challenge to bring it to reality its mission for a better future. It focuses on teamwork, excellence as a value, and a customer-oriented mission. It focuses on customer’s needs satisfaction rather than on the products to sell or services. References: Christmann, P. (2000). Effects of best practices of environmental management on cost advantage: the role of complementary assets. The Academy of Management Journal, 43(4), 663-680. Hill, C., Jones, G., Galvin, P., & Haidar, A. (2007). Framework for Internal Analysis. Oxford University Press. InterContinental Hotels & Resorts (2013).Luxury Adelaide Hotel on River Torrens.Retrieved fromhttp://www.ihg.com/intercontinental/hotels/gb/en/adelaide/adlha/hoteldetail/. Kaplan S. & Norton D. (2000). 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