"TABLE OF CONTENTSPart 1 ...................................................................................................................................................................... 2Overview of the hotel ......................................................................................................................................... 2Business Level Generic Strategy ......................................................................................................................... 2Part 2 ...................................................................................................................................................................... 3Direction of Strategic Development ................................................................................................................... 3SWOT Analysis .................................................................................................................................................... 3Part 3 Evaluating Strategic Factors ......................................................................................................................... 5Pestel .................................................................................................................................................................. 5SFA framework ................................................................................................................................................... 7Suitability ............................................................................................................................................................ 7Feasibility ............................................................................................................................................................ 8Acceptability ....................................................................................................................................................... 9Part 4 Implementation ........................................................................................................................................... 9 PART 1 OVERVIEW OF THE HOTEL Macdonald Hotel and Resort is a luxury chain hotel in the United Kingdom base in Bathgate, it is alsoUK’s eight-biggest hotel group in the industry (The Scotsman, 2003) counting of fifty-five hotels inUnited Kingdom and expanding to Portugal and Spain. Macdonald hotels is one a few privately ownluxurious hotels and resorts. The hotel is financially doing better every year. The Macdonald’s hotelhas a good reputation in terms of their service quality; the brand is also famous for their restaurantsthat have over 40 AA rosettes and spas as well as business conferences available at their hotels andresorts. (macdonaldhotels.co.uk) 2016 (year) £000 2015(year)£000Turnover 163,434 155,720Gross profit22,104 19,749Ground operating profit 17,419 16,630Total operating profit 17,668 16,907Profit before interest 74,884 17,370Profit for the financial year 55,493 6,082Profit and loss account for Macdonald Hotel in year 2016 and 2015. (Macdonald Hotels Limited,2016)A significant change of the hotel finances is they were at debt with Lloyds bank at £500m, in 2007they had to sell 24 hotels for £400m and until 2016 their debt lowered to a price of £196m.BUSINESS LEVEL GENERIC STRATEGYMacdonald hotel key area of strategic development includes finding new market for their business andfocuses on quality, value and development. Putting the business in Porter’s generic strategy, it is inthe category for focus differentiation.Macdonald hotel and resort fits in focus differentiation because it targets a narrow market (PorterGoold and Luchs, 1996). Luxury hotels like Macdonald focuses on high price because of the high- perceived value. These hotels offer top class service in a high price but there are always customersthat value these type of services. All of MacDonald’s hotels are graded 4 stars in United Kingdom anda 5 star for Macdonald Monchique Resort and Spa in PortugalMacdonald’s hotel offers different type of rooms that targets different types of travellers and theirpreferences of accommodation. The difference between other chain hotels in United Kingdom is thatmost hotels don’t offer cabin style resorts but Macdonald does. With different locations set in thecountry, they could offer different style of accommodation like chalets, lodges and cabins located nextto the lake or some with private pools in the apartments (macdonaldshotels.co.uk). Therefore, theywould be able to target customers who are looking for something different with higher price whichfalls in differentiate focus in both models. PART 2DIRECTION OF STRATEGIC DEVELOPMENT In order to be able to find suitable directions for the hotel’s future strategic development, a SWOTanalysis will be conducted. SWOT ANALYSISStrengths Weakness? Well-establishes United Kingdom brand ? Doesn’t have hotels in major cities or citiescentres. (Macdonaldhotel.co.uk)? Located in different places around thecountry ? High price (£237 per night) for apartments(Macdonaldhotel.co.uk)? Improvement in sales and marketing overpass few years (Macdonald Hotels Limited, ? In debt over £100m 2016)? Upgrades on information technology tobenefit from investment and centralreservation (Macdonald Hotels Limited,2016)? Private own company Opportunities Threats ? Spas, business facilities and weddings are ? Economic situation impacted on consumeravailablespending. (Macdonald Hotels Limited,? Good reputation over the restaurants inside 2016)in hotels ? Debtors with customers ? Quality, value and development are taught ? Political risk to Brexit and EU referendumto the employees to progress with the affects on buying land outside of Unitedbusiness (Macdonald Hotels Limited, 2016) Kingdom ? Part of the “Room 20” Energy Committee ? Customers could choose international brandto reduce carbon emission (Macdonald over own UK brandHotels Limited, 2016) ? Low bargaining power for suppliers Ans off Matrix Combination with the SWOT analysis and Ansoff Matrix, a clear strategic development are proposedand how to apply. Ansoff matrix helps to analysis any risk, generate ideas and determine product andmarket growth strategy. Existing Service New ServiceNew Market Market Development Diversification? Expand out to the Asian ? Open hotels in citymarket. Beach side centre like London,resorts in Thailand or Birmingham, Brightonother South-east Asia and Liverpool. with a touch of EnglishAs the hotel does not haveservice. hotels in the city center,Going Internationalisation opening a few in the major(Evans, 2015) cities will be able to attractmore tourist who do not want toThe company should taketravel to the countryside toadvantages of the number ofexperience their services andEuropean guests travelling outhotelsof UK and EU and looking for afamiliar services that they areuse to.Existing MarketMarket PenetrationProduct Development ? Letting catering service ? Introduce spa andoffsite wedding packages toabout-to-be newlyAs the hotel has a goodweds. reputationin their food andbeverage services, over 40 AA As the venue have bothRosettes award. Letting the facilities available for customercatering service offsite will and newly weds are usuallyattract people hiring them for tired after the day of theparties or weddings, therefore ceremony, the hotel could offerearning more.couple massages and in lawmassages in the weddingpackage. This does not onlybenefits the couples but also upthe sales of spa programmeswhich are not as good as othersales in the companyPART 3 EVALUATING STRATEGIC FACTORSPESTELTo evaluate what strategic factors affects the hotel a pestel analysis is done to understand andselecting directions for the hotel to go. A pestel analysis includes political, economical, social,technological, environmental and legalPolitical As mentioned in their annual report, politicalfactors are one of the major drawbacks. Brexitand EU referendum are both that affects the hotelhighly as it would potential affect the fiscal,monetary and legal landscape in UK as well as the currency exchange rate.Economical With the affects of political situation, thecurrency rate and consumer spending levels withmove according to the situation. The position ofMacdonald hotels in the economy is not verygood even though they have a profit of£55,493m, the company is still in debt sand willneed to sell lands to ease the debts.Social There are many competitions in the socialsectors, even though people are now morewillingly to spend money on luxury goods andhotels but there are more people who are turningto other ways like booking Airbnb instead ofhotels. Technological Technological factors are now getting strongercompare to previous years, hotel needs toupgrade their technology in order to centralisetheir booking quicker, but for Macdonald Hotelthey were able to upgrade their systems up front.EnvironmentalThe hotel have to consider environmental factorsas most of their buildings are in country sides butthey have counterbalance the situation withenvironmental schemes like “Room 20”Environmental policy and cut the carbonemission by 20% by 2020.Legal In regards to legal aspects, apart from those thatwere mentioned in the political factors that wouldalso affect the legal side, the only problem thatthe hotel will need to face would be employeeswages and tax. But the employees would not be amajor problem for the brand as they were votedone of the best companies to work for in UKhotel sector. (BBE, 2016)To rank which strategic factor is best for the company, there would be graded whether which one ismore favourable and rank which is the best option. This ranking system is adapted from JohnsonScholes and Whittington (2005) Political Economical SocialTechnologicalEnvironmentalLegal RankMarket ? ? ? ? ? ? 4 "