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  • Subject Name : Management

Marketing Environment Analysis

Table of Content

Executive Summary

Introduction

Lifecycle Assessment

BCG Matrix

Two-Dimensional Customer Perception Mapping

Pestel Analysis

Porter’s 5 Forces Analysis

Swot Analysis

Conclusion

Executive Summary of The Choice Hotel International Analysis

The main purpose of the report was to conduct a marketing environmental analysis of the Choice Hotel International in terms of its competitors. In the due course of this report the different models were used to analyze the marketing environment of the concerned hotel organization. The report used frameworks like the lifecycle assessment, BCG matrix, Pestel analysis, Porter’s five forces and Swot analysis techniques to come to the final conclusion.

Introduction to The Choice Hotel International Analysis

The Choice Hotel International is known to be one of the biggest as well as a highly accomplished lodging franchise in the world. In the current time, the concerned organization has 7000 franchises under its name that comprises of near about 57,000 rooms in total in over 41 nations and regions across the globe. The Choice Hotel International was established in the year 1939 in the country of the United States and its main objective is to reap highest level of profit from the various investments it is making in the context of any of its franchises (Lee et al., 2018). Moreover, the concerned organization concentrates on creating a powerful connection with the customers, by means of minimizing its cost of operations as well as delivering prospective customers to the hotel.

The main purpose of this report is to conduct a market environment analysis of “The Choice Hotel International” and for this a lifecycle analysis of the concerned hotel organization will also be conducted. Moreover, the report will also take into consideration creating a BCG matrix analysis of the chosen hotel organization against one of its rival organization. Furthermore, a consumer-perception analysis would also be executed in terms of the concerned hotel also paying heed to one the competing hotel organization. Additionally, the report will also take into consideration conducting a Pestle as well Porter’s 5 forces analysis on the part of the selected hotel organization against one of its closest competitors. Finally, a SWOT analysis will be conducted and all the findings generated from the above-mentioned framework will be concluded.

Lifecycle Analysis

A lifecycle analysis process (LCA) is known to be a well-structured and staged perspective. It also comprises of four significant components (Meng et al., 2017). Giving consideration to all the four components, the lifecycle analysis of “The Choice Hotel International” would be conducted. It has been elaborated as under-

  1. Defining objectives and review- The Choice Hotel International is located in many regions across the globe, hence it has a great potential to sell good standard commodities and services to a huge number of customers in a very simple manner. Moreover, the low-cost system of the concerned organization provides commodities and services at a very low price to its customers and making its commodities feasible for the customers (Meng et al., 2017). Furthermore, the change in the climatic condition has even resulted in making certain commodities of the concerned organization worthless for its customers. There is also a chance of the development of both water as well as air-pollution related laws in the context of the hotel industry.

The Choice Hotel International has a huge potential in terms of creating an impact on the environment which in term has been identified by means of finding out the size as well as the place that has been cleared for the purpose of a developing a building. Moreover, the selection of the different techniques of constructions, the origin, quantity as well as the kind of materials along with the use of water, energy are applicable for the construction of the building of the hotel. Other factors includes the lack of proper storage provisions for construction resources, the quantity of waste materials disposed in the process of construction and more kind of damages like erosion of soil that has been caused due to construction processes or the disturbance of the flow of natural water as well as the drainage system of the concerned hotel building.

  1. Inventory Analysis- In this context, it has been determined that the environmental impact of the Choice Hotel International has the potential to emerge from resources like that of water, food, energy and few other types of resources. These resources have been determined to be used in course of executing the functions of the concerned hotel organization. Moreover, it also takes into consideration the environmental impact that has been generated in terms of the concrete and liquid waste-material, the way in which the surface of the hotel is managed and also in terms of the impact that has been created by the guests of that particular hotel franchise. Furthermore, the daily restoration related activities taken place in the hotel along with the substitution of its furniture, devices as well as other provisions can create an influence via the buying preferences and the rising production of the waste materials in terms of the different activities executed by that particular hotel organization. Additionally, in its finishing stage, the environmental influence of the hotel can emerge from discarding of the waste materials for the purpose of renovating it or even demolishing it along with the different tasks involved in terms of these processes (Meng et al., 2017). There are certain hazardous materials that is mostly released by the hotel that is required to be managed in an adequate manner to prevent it from creating a negative impact on the environment.
  2. Impact Assessment- Apart from the social and environmental benefit of minimizing the use of energy on the part of the hotel organization, the Choice Hotel International will also have advantages in terms of its finances as well as in terms of the services the concerned hotel will offer to its customers. Moreover, if the concerned hotel increases the level of environmental awareness among its customers, then it is also possible that these customers will tend to get more selective in the terms of the environmental accreditation of the concerned hotel organization (Meng et al., 2017) . Hence, if the Choice Hotel International tends to embrace certain sustainable approaches, it can also contribute towards improving the image of the commercial activities of the concerned hotel and will also assist in terms of driving more customers to the concerned hotel chain. This is in turn will help the concerned hotel to increase their flow of guest which has been reduced to a considerable extent in the recent time, due to the impact of Covid-19 as well as other environment related concerns.
  3. Interpretation- In this context, it has been determined that the hospitality sector as a whole is working towards transforming its practices due to the shift in the needs and requirements of its customers. In the recent times, the guests of the hotel industry are expecting more of environmental endorsements on the part of the hotel, moreover, the customers are interested in knowing the kind of environment-friendly practices that has been embraced by the hotel along with the initiatives taken by a hotel to reduce the impact of its operations on the environment (Meng et al., 2017) .

Hence, it is recommended for the Choice Hotel International to make adequate investments in the direction of making the concerned hotel green. Furthermore, in the current time it would be appropriate for the concerned hotel to move ahead with its creative below level carbon footprint perspective that will also assist in driving the economy of the concerned hotel organization.

BCG Matrix Analysis

The BCG Matrix of the Choice Hotel International will assist the concerned hotel franchise to execute commercial strategies in terms of the business of that particular organization (Rosa et al., 2017) . Moreover, this analysis would be done in comparison with its competitor that is the Marriot International hotel.

Star

  • The fiscal services planned business sector occupies the star position in the BCG Matrix for the Choice Hotel International. The concerned hotel is determined to be functioning in a market that has huge prospects for the hotel in the upcoming time. In this context, the Choice Hotel International has generated huge revenue in terms of the concerned Strategic Business Unit ( SBU) (Rosa et al., 2017) . Moreover, the concerned hotel organization is also recommended to consolidate in a vertical manner by means of obtaining other companies in their network of suppliers. Furthermore, this in turn will help the concerned hotel franchise to generate a higher amount of profit as the associated SBU has the capacity to accomplish the needful.

Cash Cows

  • The SBU that falls in the third position of the BCG matrix, in terms of the Choice International Hotel brand, is the flow of cash of the concerned organization. Moreover, this is known to be an original commodity that occupies a market share of 25% in terms of the associated criteria. The Choice Hotel International has also been determined to occupy a top position in the market as far as its market share is concerned (Rosa et al., 2017) . Furthermore, the concerned organization also has the potential to create an impact on the market, hence it is recommended for them to make adequate investments in its research and development activities, creating a path for the concerned brand to revolutionize at regular interval of time. In this way, the cash cow will convert into star and the total sales of the organization will also increase, which means that customers of the hotel will also increase which has declined in the recent time.

Question Marks

  • The domestic food SBU is known to be a question mark in terms of the BCG matrix of the Choice Hotel International. Moreover, the current inclination of the market depicts that the customers are mostly concentrating on the domestic food products, hence the domestic food market is also demonstrating an increased level of development in the context of the concerned market (Rosa et al., 2017) . However, it has been determined that the Choice Hotel International has occupied a very low share in the market as far as this sector is concerned. Hence, the concerned hotel is recommended to make adequate investment in its research and development activities to create innovative products and convert their SBU into a cash cow as well as generate profit in the upcoming years.

Dogs

  • The plastic bags related SBU has been determined to occupy the dog position in the BCG matrix of the Choice Hotel International. The concerned SBU of the Choice Hotel International is determined to be a failure in terms of the previous five years of the concerned hotel (Rosa et al., 2017) . Moreover, the concerned hotel has also been determined to functioning in market that is degrading to certain major environment related problems, hence it is recommended for them to dispossess this SBU and reduce the losses that is being incurred by the concerned hotel.

Considering, a leading competitor of the Choice Hotel International, The Marriott International Hotel has occupied a huge share of 9% in the hotel industry and has achieved a market capital of $16.97 billion in the year 2006, which is the greatest as far as the hospitality sector is concerned (Fraj et al., 2015) . Furthermore, the development rate of the hotel is also high as 6%, hence, the Marriott International Hotel falls in the number two quadrant that is the star position in the BCG matrix.

Two-Dimensional Consumer Perception Mapping

The consumer perception mapping of the Choice Hotel International would be determined by means of two dimensions that is the accessibility and the trust (Varelas et al., 2017).

  1. Accessibility- This accessibility component is high in the context of the Choice Hotel International because it offers products and services at a lower price than its competitor Marriott International Hotel. Moreover, it can be found in several location across the globe making it accessible (Varelas et al., 2017) .
  2. Trust- The customers of the Choice Hotel International are required to be convinced in terms of the environmental-friendly strategies of the concerned organization, in order to be driven towards the hotel.

PESTEL Analysis

  1. Political- Politics-based conditions plays a vital role in terms of identifying the conditions that will create an impact on the permanent profit-generating ability of the Choice Hotel International in a specific market of a specific country (Pan et al., 2019). In this context if huge perks as well as taxes is charged by the government then such companies will be discouraged in terms of enhancing their level of profit. Moreover, the political consistency of the country as well as the significance of the hospitality sector in terms of that particular country will also determine the success of the Choice Hotel International in the future.
  2. Economical- In this context, it has been determined that the Choice Hotel International should take an initiative to make huge investment in terms of the domestic market, which means they would be required to invest on R&D activities and explore innovative attributes that will enable them to drive customers to their organization (Pan et al., 2019).
  3. Social- In this context, it has been determined that the quality of education as well as the level of qualification of the employees of the Choice Hotel International is an efficient target market to drive customers for the organization(Pan et al., 2019).
  4. Technological- In this context, the Choice Hotel International is considered to be very much advanced and it has also introduced segments internally in the organization that will serve the function of creating as well as marketing technology related commodities in the hospitality market (Pan et al., 2019). Moreover, the concerned organization should take an initiative to embrace robots in terms of their operations offering hand-free delivery to drive more customers into their organization in the upcoming years.
  5. Environmental- In this context, the Choice Hotel International has been determined to be experiencing problems with the air and water pollution protocols being implemented on them by the government of the concerned country (Lopes, 2016). Moreover, it is significant for the concerned organization to ensure proper waste management activities and adopt environmentally friendly approach that will give them an opportunity to drive more customers to their organization.
  6. Legal- In this context, the concerned organization has been determined to have proper health and safety law in place that will enable them to ensure the health and wellness of their customers as well as their employees (Lopes, 2016).

Comparing the above with a leading competitor of the Choice Hotel International that is the Hilton Hotels, it has been determined that the latter practices modifying the various provisions it offers to its customers on the basis of the place where their concerned franchise is situated (Lopes, 2016). Hence, it is also recommended for the Choice Hotel International to personalize their offers as per the needs and requirements of their guests so that they will be motivated to visit the hotel again in the upcoming time and thereby the flow of customers in the concerned hotel will also increase.

Porter’s 5 Forces Framework

  1. Threats of new entrants- The new entries in the hotel industry tends to bring with them fresh ideas as well as develop improved ways of the executing the functions of their organization. For instance, there are many new entrants that offers decreased costing strategy, minimized price as well as create new values for the customers of their organization (Andreu et al., 2017). In this context, the Choice Hotel International is recommended to work towards revolutionizing new commodities and services that will not only assist them in driving new customers to their organization but also to persuade the older clients to purchase the commodities and services offered by the concerned hotel.
  2. Bargaining power of the suppliers- In a situation when the bargaining power of the suppliers is high, it has been determined that total profit margin of the concerned organization will suffer due to it (Andreu et al., 2017) . Hence, it is recommended for the Choice Hotel International to develop an effective network of distributors by establish connection with several distributors.
  3. Bargaining power of buyers- In the present time, the customers have emerged to be very challenging and they demand to get the best offers by paying the lowest possible price (Lin, 2016) . This is imposing a huge stress on the Choice Hotel International management, hence the concerned organizational management is recommended to develop a huge channel of customers that will be beneficial in two different ways. Moreover, in this way the negotiating power of the customers will be minimized and it will also give the organization a chance to optimize its sales and manufacturing procedures.
  4. Threat of substitute products and services- The risk of substitution of commodities and services is considered to be high in cases when it provides a better value to the customers that is exclusively different from the already existing offer (Lin, 2016) . In this context, it is highly recommended for the Choice Hotel international to be also driven towards its services and not only just concentrate towards the products offered by their organization.
  5. Rivalry between prevailing rivals- The Choice Hotel International functions in a highly challenging hospitality sector that creates a negative impact on the profit-generating ability of the organization on a long-term basis (Lin, 2016). In this context, it is recommended for the Choice Hotel International to create an exclusive value proposition for its customers taking in the consideration the concept of sustainability.

In this context, the competition of the Choice Hotel International with the Marriott International can be considered, wherein the Marriott International is considered to be top participant of the hospitality sector across the world and is depicting constant indication of development and prosperity in the hospitality sector.

SWOT Analysis

Strengths

  • The Choice Hotel International is known to have its franchises all over the world, hence it has huge channel of customers (Dabestani et al. 2016).
  • The low pricing system of the concerned hotel offers commodities and services at a lower price to its customers.

Weaknesses

  • The Choice Hotel International may fail in cost management with reference to stainable initiatives like the reduction of the use of plastic bags is concerned

Opportunity

  • The Choice Hotel International has an opportunity to make use of robotic services that will initiative hand-free provisions to the customers of their organization.

Threat

  • The Choice Hotel International is prone to a major threat from one of its leading competitors that is the Marriott International Hotel, which is continuously prospering in terms of the hospitality industry (Martinez, 2017).

Conclusion on The Choice Hotel International Analysis

Through this report it has been determined that the Choice Hotel International should work towards developing a higher number of innovative ideas in terms of their products and services, which will help them constantly prosper in the long run of their business like their top competitor the Marriot International Hotel. Furthermore, it is recommended for the concerned organization to embrace a higher number of environment-friendly initiatives to drive a higher number of customers into their organization. Additionally, they should take proper initiatives to make use of robots in their organization to offer contactless delivery system to their customers.

References for The Choice Hotel International Analysis

Andreu, R., Claver, E., & Quer, D. (2017). Foreign market entry mode choice of hotel companies: Determining factors. International Journal of Hospitality Management62, 111-119. Retrieved from https://www.sciencedirect.com/science/article/abs/pii/S027843191630562X

Dabestani, R., Shahin, A., Saljoughian, M., & Shirouyehzad, H. (2016). Importance-performance analysis of service quality dimensions for the customer groups segmented by DEA. International Journal of Quality & Reliability Management. Retrieved from https://www.emerald.com/insight/content/doi/10.1108/IJQRM-02-2014-0022/full/html

Fraj, E., Matute, J., & Melero, I. (2015). Environmental strategies and organizational competitiveness in the hotel industry: The role of learning and innovation as determinants of environmental success. Tourism Management46, 30-42. Retrieved from https://www.sciencedirect.com/science/article/abs/pii/S0261517714001034

Lee, W. S., Lee, J. K., & Moon, J. (2018). Study on the preference for capsule hotel attributes using a choice experiment. Tourism Economics24(4), 492-499. Retrieved from https://journals.sagepub.com/doi/abs/10.1177/1354816618765345

Lopes, M. (2016). The hospitality industry (Doctoral dissertation). Retrieved from https://run.unl.pt/handle/10362/17234

Lin, X. (2016). Strategy analysis of a boutique and lifestyle hotel: a SWOT analysis (Doctoral dissertation, California State Polytechnic University, Pomona). Retrieved from http://broncoscholar.library.cpp.edu/handle/10211.3/174609

Martinez, B. (2017). A SWOT analysis on Millennials in the workplace: Increasing manager success with Millennial employees in the hotel industry (Doctoral dissertation, California State Polytechnic University, Pomona). Retrieved from http://broncoscholar.library.cpp.edu/handle/10211.3/185243

Meng, L., & Sager, J. (2017). Energy consumption and energy-related CO2 emissions from China’s petrochemical industry based on an environmental input-output life cycle assessment. Energies10(10), 1585. Retrieved from https://www.mdpi.com/1996-1073/10/10/1585

Pan, W., Chen, L., & Zhan, W. (2019). PESTEL analysis of construction productivity enhancement strategies: A case study of three economies. Journal of Management in Engineering35(1), 05018013. Retrieved from https://ascelibrary.org/doi/abs/10.1061/(ASCE)ME.1943-5479.0000662

Rosa, F. S. D., & Silva, L. C. (2017). Environmental sustainability in hotels, theoretical and methodological contribution. Revista Brasileira de Pesquisa em Turismo11(1), 39-60. Retrieved from https://www.scielo.br/scielo.php?pid=S1982-61252017000100039&script=sci_arttext

Varelas, S., & Georgopoulos, N. (2017). Competition as a critical factor of the strategic planning of hotel businesses. J Hotel Bus Manag6(167), 17. Retrieved from http://smqnet.com/journals/smq/Vol_5_No_2_1_June_2017/3.pdf

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