STRATEGIC MANAGEMENT

Strategic Analysis: Hospitality Industry

By Jeffrey Harrison. Published in Restaurant Administration. (August 2011)

Introduction

Increasing global competition and rapid changes in the structure of industries and economies have contributed towards the rapid development and improvement of strategic planning tools and methods that managers and executives find useful. The ever improving tools and techniques in the area of strategic planning and analysis have greatly contributed towards the growing popularity of strategic planning. Organizations that employ strategic planning and analysis tools tend to perform better than those that do not use them. For instance, a study on the hotel industry in United Kingdom concluded that business performance of hotels that performing better is associated positively with the formality, participation, sophistication, and thoroughness in strategic planning processes. The process of strategic analysis refers to the systematic examination and investigation of organization and its environment. Strategic analysis is a base of strategic management process. This article focuses on strategic management and its research components. At the heart of the model presented in this article, internal analysis and examination of human, learning, knowledge, financial, physical, and other general organizational resources that help managers in determining an organization's realized resources or potential of competitive gain and analysis. Moreover, it is important to completely review of what is referred to as the operating environment or the task environment, as it includes stakeholders such as suppliers and customers with whom the organization repeatedly deals. The wide ranging and broad environment makes up the context and environment in which organization and its industry operate. Head note of this article is, hospitality executives and managers must analyze both internal resources and external factors for developing an effective strategic plan.

Literature Review

In a recent international survey of organizations from a range of industries, 80 percent of those organizations reported that they conduct strategic planning. In addition, executives and managers reported higher satisfaction level with strategic analysis than with most of the other tools in management. Jack in the box is a firm that announced its plans to open more than 100 restaurants in combination with convenience stores. All the stores will host full size restaurant along with gasoline filling services. Store will also sell other items such as milk and bread which are typically available in convenience stores. What made Jack in the Box to arrive at such decision? As per Bob Nugent, company's CEO, a thorough analysis of the market of convenience stores indicates to them that there was sufficient opportunity, mainly due to the fact that no single company dominates this market. 7 Eleven Inc. is the leading player in the industry of convenience store that actually controls slightly above 4% of the market. Weigh this against the industry of fast food where McDonald's is a major player (controls over 43% of the market) and market share of the Jack in the box was 4.6 percent only. Research indicated that the customer of a convenience store twice as likely to consume fast food as the customer of non convenience ...