Custom «Strategic Management in the Hospitality Industry» Essay Paper Sample

Strategic Management in the Hospitality Industry

The term hospitality management is interchangeably used to refer to the practice or the study of the discipline in colleges and institutions ( Brotherton and wood, 2008). This paper looks as at the application of the discipline in restaurants, travel agencies, hotels and other institutions in the hospitality industry. The discipline aims at providing good management to the hospitality industry ( Brotherton and wood, 2008). People who expect to get involved in management of institutions in the hospitality industry should consider pursuing the study to acquire the necessary skills. The hospitality industry is very diverse and wide therefore it provides various challenges which may be difficult to meet. The hospitality industry deals with various people from different backgrounds with different needs. Therefore there is need for prior training to ensure that the needs of these clients are met. In this industry there are a large number of service providers who offer similar services to the client who is often in search of the best available services at a fair price. Due to the high competition in the industry facilities which offer the best services receives the largest numbers of target customers. Hospitality management is therefore an important process which ensures that the available resources are put to the best possible use. It is also important to note that organisations that are in the hospitality industry are also business entities that are out to make profits (Chen and Alan, 2007) . Therefore hospitality management involves a wide range of aspects. This paper looks at strategic planning as a single aspect of hospitality management.

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Strategic planning

Most good ideas and strategies fail as a result of poor planning implementation and execution. This often results in loss of resources and capital that had been put in the plan. In some cases this may put the organization or company in a bad financial situation or even worse, out of business. Therefore strategic planning is very important to ensure that strategies do not fail. In the hospitality industry most of the strategies are employed with a goal to give the organisation a competitive advantage (Chen and Alan, 2007). It is therefore important to carefully manage the aspects involved in order to guarantee the success of any intervention.

Importance of planning

One may be tempted to think that progress can be made in the hospitality industry without careful planning. This section briefly looks at the importance of planning

In absence of planning the employees in the organisation fail to know the employers expectation. The employees will therefore continue to work without a clear goal and a common vision ( Brotherton and wood, 2008) . They only work for the sake of raising their income. The duty of planning lies with the manager and cannot be delegated to anyone else in the organization or company. On the other hand employees may develop their plans which may involve setting goals which may be differ from those of the company. The failure to plan may also lead to continued waste of resources. This may not be noticed because the organisations may not have developed important checks and balances to detect such grave situations. In addition to this the customers will always leave dissatisfied because of the poor services offered. Studies have revealed that employees are more comfortable working for organisations that have clearly developed strategies and plans. This is because the organisation is in order and their needs are being met by the organisation. Where there is no planning the employees are most likely to be upset. In addition to this the organisation may receive bad publicity. This is because the customers will often leave dissatisfied. Some may return but the rest may seek other alternatives or even worse they may sell the organisations bad image. This will result in bad reputation which will reduce the number of guest seeking services from the facility. The poorer the planning levels the worse the effects that will be experienced by the organization.

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Levels of planning

Planning at the individual level; the manager should set a personal plan to enable him work faster and in a much easier way (Yu, 1999).

Supervisory planning; Here the manager develops plans for the rest of the workers and ensures that they are working with the organisations goals in their mind (Chen and Alan, 2007) . The employees should be aware of the plans of the organisations so that they can be able to contribute effectively.

Planning should be developed at the higher levels of management within the organisation. At this level fewer people are involved in the process. In addition the rest of the employees can develop their own plans following the guidelines of the management. It is also important to formalize planning to ensure that everybody is aware of the process and their duties in relation to the plan.

Concepts of planning

The term policy here refers to the general methods of dealing with the future. Policies determine the procedure of arriving at decisions within the organisation (Enz, 2005) . Policies also determine the rationale for decision making.

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This follows the guidelines set out by the policies. The plan is a road map towards a particular goal. The plan starts by setting out what is to be accomplished. It also indicates which methods are to be employed in achieving the goals and objectives (Enz, 2005) . It also sets out the time scale.

Formalization refers to the development of rules policies and regulations which keep the company in the scope of achieving its goals. The best way to exercise control especially for international organisations is to decentralize power so that branches are able to perform optimally.

Most hospitality institutions today require their managers to come up with a strategic plan for their operations. This strategic plan is first subjected to an evaluation in order to determine its success before it is implemented (Enz, 2005). Most international or local organisations that have several branches usually develop a framework which is to be used by managers in formulating a strategic plan. This is to ensure that a comprehensive plan that incorporates all the necessities is carried out. Usually the manager is expected to submit his/her formulated strategic plan to the headquarters for evaluation. The formulated plan is evaluated with an aim of checking whether it is feasible (Enz, 2005). The manager may be required to make an oral presentation to defend the plan. The panel that checks the feasibility of the plan usually involves experts in areas such as finance, marketing and human resource. During the presentation of the proposed plan the manager is usually asked various questions regarding the plan. After the presentation the manager may be required to make a few corrections to the plan before it is approved (Yu, 1999). Upon approval the manager then executes the plan and his performance is evaluated by determining his success in implementing the plan. However this is not always the situation especially for the local organisations which may have one manager. Examples here include hotels or travelling agencies. Therefore the strategic plan should be comprehensive to ensure that all the relevant sectors are incorporated.

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The strategic planning process

The process commonly used in the formulation of a strategic plan was adopted in the 1970s but has evolved to accommodate the requirements of the contemporary world. The formulation of the strategic plan outlined here is designed for the single business entities. The purpose of the strategic management is to enable the organisation achieve its goals. Therefore it should be drafted with the objective of enabling the company achieve these goals. The strategic plan in addition offers guidance and direction to the employees. The goals set in this plan should be measurable and achievable. The modern strategic plan enables the evaluation of various departments in the organisation. Goals which are not measurable and achievable are difficult to evaluate their success.

a) Mission of the strategic plan

This is the first step in formulating the strategic plan. The mission statement is a general statement that refers to the organisations future ambitions and purpose. The organisation's goals usually reflect the message captured within the mission statement (Enz, 2005). Goals here could touch on financial growth, providing quality services or developing customer retention or attraction. Effective measures should be established in order to gauge the success these goals.

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b) Situational analysis

The situational analysis is vital because it provides background information that is needed in developing the strategy. This analysis is a scan on the company's exterior environment, its interior environment and the organisational context. Several techniques are employed in this process. The process begins by establishing the organisations internal environment which includes evaluation of the effectiveness of the human resource. The external environment is evaluated through establishing existing relationship between the organisation and the customer, the organisation and its suppliers, the organisation and stakeholders, organisation and competitors, organisation and the shareholders as well as its relationship with stakeholders.

Analysis of the external environment is carried out through macro and micro analysis. This is usually done by analysing the political, economic, social and technological factors also known as the pest analysis. The internal factors of the firm are evaluated using tools such as SWOT analysis, BCG matrix and McKenzie's 7S. Usually situational analysis generates a lot of information which may not be relevant for the formulation of the strategic plan. The SWOT analysis enables one to categorize internal factors as strength and weaknesses and the external factors as opportunities and threats making the information become more manageable. The situational analysis is vital because it provides necessary information that will be used in making the final strategic plan.

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c) Strategy formulation

The information generated from the situational analysis is used to formulate the strategy. Strategy formulation is then carried out in three levels which are, operational, competitive and corporate.

The operational strategies are usually related to the various departments within the company. These could include; human resource, marketing, finance, and production (Chen and Alan, 2007) . The strategy here is formulated in such a way there is improved output and efficiency. The competitive strategies relate to establishing a competitive advantage over other hospitality institutions in provision of services to the customer. This process involves identification of the organisations strengths and weaknesses in the market which give other companies a competitive advantage and the subsequent evaluation of the weaknesses of other organisations. The company then develops a strategy to win the competitive advantage usually by improving its services or by capitalising on the weaknesses of other companies. The company's Organisations develop different strategies which depend on the situational analysis. Sometimes the strategies may lead to provision of different services from those offered in the market.

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d) Implementation

Strategy implementation refers to the act of putting the strategy into action. This is done through the use of prior set steps and procedures to carry out the strategy. The strategy itself should be broken down into policies that will be understood at the company level. This way, issues that had been overlooked or were not visible at the managerial level can be incorporated (Powers and Clayton, 2009. Policies developed should touch on the following functional areas; information systems, research and development, procurement, human resource, production and marketing.

The implementation procedure should start by addressing the most serious issues. This means that the most serious issues that were noted during the situational analysis should first be implemented. Once these issues have been addressed the company can then move on to other less serious issues. This step may also require the mobilisation of the resources to follow the stipulated plan. For example if the company realises there is a need for employee training, the required resources, cost, content that will be taught, time and duration of the training should be determined.

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e) Evaluating the strategy

This is the process of establishing whether the strategy is working or not. Evaluating the strategy enables the manager note the improvements that need to be made to ensure that the strategy remains relevant. This step also involves determining how different changes can be incorporated into the original plan. This process also evaluates if the targeted outcomes have been met. If the set deadlines have not been met it means that the strategy is not operational or the project progress is not in line with the actual goals. This means that the strategy should be reformulated. The management and employees are allowed to evaluate whether the strategy has been effective or not. The strategy evaluation includes the use of challenging metrics and timetables. If the metrics and tables are achievable then the strategy is bound to fail (Chen and Alan, 2007). Strategy evaluation is a very important process and should be a continuous process. To ensure that the monitoring and evaluation process is functional the company should set up control systems. The standards of performance should also be incorporated into the control system to ensure that success is well determined.











The strategic planning process outlined above has its limitations. First this process is only suited for stable environments. This means that this process may not be applicable in unstable environments. Secondly the process assumes a top down approach whereby the management develops a plan which is followed by byte rest of the organisation members. This may be unsuitable in competitive environments where the playground is rapidly changing. In these environments the most important changes could come from any member of the organisations (Yu, 1999) . Strategic planning is advantageous because making adjustments to the strategies is relatively easy because changes can be effected at any level of the plan.

Drawbacks in strategic planning and rapid changes in the competitive environment, organisations are moving away from strategic management to the more effective scenario planning. Scenario planning is an effective tool that can be used in environments that experience rapid and turbulent changes. This tool has its origin from the military. In turbulent environments it is likely that important opportunities and threats may pass unnoticed some of these could have grave effects that could put the firm's survival on the line (Powers and Clayton, 2009. Scenario planning incorporates all the possible environmental changes so that the firm is prepared to take on any particular issue

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The adoption of scenario or strategic planning tools will not only ensure that the organisation puts its resources to the best use but also will give it a competitive advantage in the market. The benefits of using either of these tools can be effectively evaluated using control systems within the organisation. Hospitality management involves myriad aspects which should be synchronized to ensure that the best results are achieved.

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