Analysis Of The External And Internal Environment Of Hyatt Hotels: Issues And Insights

Overview of Hyatt Hotels

Hyatt hotels are one of the most developing hotels in the current market. It is planning to grow even more to have a better competitive advantage in the market. In this report, the external and internal environment of the business is going to be analysed for better understanding of the issues that the organization might face in this venture. To conduct the analysis 7s, SWOT, STEEP tool will be used. In the end, a conclusion will be provided to have proper data analysis about the services.

McKinsey’s 7s framework

Strategy

The hotel is one of the eminent ones and the pricing strategy it uses is premium. The most of the cases it is seen that the management targets the higher economic class people from the society. It is offering best cuisines to the people who are seeking for services in their domain. The festive offers are also included in their plan and it is one of the most necessary things, which one company should possess to have better marketing advantage (Dominici and Guzzo, 2010).

Structure

The hotel is focusing on the centralised system of having control over the employees and in this regard, they have divided the entire workforce in different segments like, workflow, human resources, customer segments, management and other external bodies. The communication process is updated and they have proper connection with the internal and the external stakeholders (Chand, 2010).

 

Fig 1: 7S model

(Source: Dudovskiy, 2018)

Systems

The entire system of the hotel is balanced and it has a proper communication between every segments of the business. According to the calculations, it is seen that the hotel has gained profit of around $4 billion and the stakeholders have gained $207 million from this (Brady et al., 2015). The HR management team is highly efficient in performing the allotted tasks. The decisions taken by them are always for betterment of the entire hotel group and the stakeholders as well.

Shared values

The aim of the company is to provide the best service to the customers and to meet the need they are fostering a common culture in every part of the organization. The hotel is sharing common values among the employees to provide proper services. The company ventures are always for betterment of the organizational performance and in this perspective, they have mainly focused on the technical sides and innovation (Buil, Martínez, and Matute., 2016).

Pricing Strategy and Marketing Advantage

Style

The leadership style of the organization is efficient in mitigating the issues that have been witnessed in the past years. The current scenario of the leadership skills is just the same and it is seen that the employees properly communicate with the management to help then in taking decisions (Tajeddini, 2010). With this process, the hotel is expanding in the outer part of the country with a proper brand recognition and unequivocal balance sheet.

Staffs

The hotel has around 95000 associates and the employee number is 45000, which is a huge number in order to determine the class of a hotel. Apart from that, the 55000 associates have third party ownership with the hotel management and administration (Brady et al., 2015).

Skills

The people who are working in the organisation are efficient in delivering the services that are needed by the customers. Sustainability of the skills is monitored and efficient training programs from the management’s side manage the entire business properly (Shaw, Bailey, and Williams, 2011). The hotel also provides better services to the external shareholders who are one of the main units of the hotel.

STEEP analysis

Social

The education level of the region is one of the most important parts that are hindering the growth of the hotel. The high class and power barrier in the society is stopping the hotel from being a successful structure in different parts(Brady et al., 2015). Apart from this, the hotel patronises the entrepreneur spirit and with its contribution, the hotel is trying to contribute in the surrounding society. 

Technology

The technical side of the organization is developing day by day. The diffusion rate is also high for the value chain and it is being impacted in a negative manner. The technical development needs proper financial support and to maintain the service standards the management has to analyse the situation for technical modification in a lower rate.

Economics

The economic factors that are hindering the growth of the hotel are present in an enormous amount. It is seen that Australian inflation rate has affected the growth of the industry and the hotel as well. The labour cost and technical cost is rising with every passing day (Alberti, 2016). Apart from this the unemployment rate is also going high (3%), which is diminishing the development of the hotel.

Politics

The Australian political ambience is not that suitable for the lodging industry and the bureaucracy is stopping the growth of the hotel. The wage regulation issues are safety regulations are one of the most important factors to be considered in the hotel industry. The Hyatt hotel adhered all of them to provide profound services to the customers.

Centralised System of Control

Environment

The weathers conditions of Australia are one of the most important factors to be considered. The wage management needs to be considered as one of the most important facts in this segment. There are other sections where the hotel needs to focus, and one of them is using the renewable energy (Ge, Chen, and Chen, 2018).

Strengths – Proper growth in franchise. – Good property ownership. – Proper network and market shareholdings.	Threats – The currency rate fluctuation. – The presence of huge competition in B2B and B2C segment.
Weakness – The incremental profit is not shared. – The capital management has some issues.	Opportunities – The opportunity to operate in regional basis. – The vacations owner properties can be sold.

The above table denotes that the hotel has some issues but opportunities as well. There are many possible segments where the hotel can make a good profit, but for that, they have to minimise the threats and the weaknesses. They need to optimise their strength and provide more focus on the opportunities, which it has in the market. The B2B and B2C market is important segment and in these grounds, the company needs to focus more. Apart from that, the customers can be attracted with the proper brand endorsing strategies.

Conclusion

According to the microanalysis, the shared value and development strategies are lagging and it is necessary for the hotel to have focus on that part. In accordance with the MACRO analysis the entire political context and the economy of Australia is becoming a barrier for the hotel. In accordance with the SWOT analysis, the company can use the strength and opportunities of the hotel to get more productivity from different segments of the hotel. 

References

Alberti, G. 2016. Moving beyond the dichotomy of workplace and community unionism: The challenges of organising migrant workers in London’s hotels. Economic and Industrial Democracy, 37(1), 73-94.

Brady, S. R., Young, J. A., and McLeod, D. A. 2015. Utilizing digital advocacy in community organizing: Lessons learned from organizing in virtual spaces to promote worker rights and economic justice. Journal of Community Practice, 23(2), pp.255-273.

Buil, I., Martínez, E., and Matute, J. 2016. From internal brand management to organizational citizenship behaviours: Evidence from frontline employees in the hotel industry. Tourism Management, 57, pp.256-271.

Chand, M., 2010. The impact of HRM practices on service quality, customer satisfaction and performance in the Indian hotel industry. The International Journal of Human Resource Management, 21(4), pp.551-566.

Dominici, G. and Guzzo, R., 2010. Customer satisfaction in the hotel industry: A case study from Sicily.

Dudovskiy, J. 2018. Amazon McKinsey 7S Model – Research-Methodology. [online] Research-Methodology. Available at: https://research-methodology.net/amazon-mckinsey-7s-model-2/ [Accessed 8 Sep. 2018].

Ge, H., Chen, S., and Chen, Y. 2018. International alliance of green hotels to reach sustainable competitive advantages. Sustainability, 10(2), 573.

Shaw, G., Bailey, A. and Williams, A., 2011. Aspects of service-dominant logic and its implications for tourism management: Examples from the hotel industry. Tourism Management, 32(2), pp.207-214.

Tajeddini, K., 2010. Effect of customer orientation and entrepreneurial orientation on innovativeness: Evidence from the hotel industry in Switzerland. Tourism management, 31(2), pp.221-231