Develop Control Systems To Ensure Strategies Remain Relevant

Develop control systems to ensure that strategies remain relevant and that the business unit continues to progress toward its goals

Dr. Adayhtm 590 Distinguish The Business Level Strategy Of Any Hospi

Section 1: Introduction

Business-level strategy is a fundamental component of strategic management, describing how a hospitality organization competes within a specific market to achieve sustainable competitive advantage. This paper aims to explore the various types of business-level strategies—including low-cost leadership, differentiation, best value, and focus—by analyzing their definitions, core elements, and application within the hospitality industry. Additionally, it discusses the associated risks and key factors that firms utilize to develop and sustain these strategies. A practical application will be provided through a detailed analysis of a selected hospitality business, illustrating how the company's strategy aligns with theoretical frameworks.

Section 2: Business-Level Strategies Overview

Michael Porter’s seminal work (1980) defines four primary types of generic business-level strategies which enable organizations to establish a competitive position in their industry. These are low-cost leadership, differentiation, focus, and a hybrid best value strategy. Each strategy emphasizes different sources of competitive advantage, targeting specific market segments and requiring distinct resource configurations and capabilities.

Low-Cost Leadership

Cost leadership is characterized by a firm's emphasis on producing standardized products or services at the lowest possible cost across broad market segments. Hospitality firms adopting this strategy aim to achieve high capacity utilization, economies of scale, technological efficiencies, outsourcing, and experience effects to underprice competitors. For instance, budget hotel chains such as Motel 6 exemplify low-cost leadership by maintaining minimal amenities, streamlined operations, and low prices to attract price-conscious travelers (Porter, 1985). The key advantage is the ability to withstand cost-based competition or economic downturns; however, risks include technological obsolescence, imitation by competitors, and potential compromise on service quality and customer value.

Differentiation

The differentiation strategy involves offering unique products or services that are perceived as valuable by customers and are distinct from competitors’ offerings. Hospitality organizations employ differentiation through product innovations, superior quality, exceptional service, creative marketing, proprietary technology, or strategic relationships with suppliers. For example, luxury hotels like the Four Seasons target high-end customers with personalized services, exclusive amenities, and premium branding that justify higher prices (Grant, 2019). The primary challenge is maintaining continuous innovation to prevent imitation and sustain perceived value, alongside the risk of customers perceiving the extra costs as unnecessary or unjustified.

Best Value

The best value strategy combines elements of cost leadership and differentiation, emphasizing quality, speed, and price to deliver an attractive value proposition to targeted market segments. Hospitality firms utilizing this approach aim to offer high-quality services at competitive prices by leveraging technological advances, efficient operations, and customer-centric innovations. For instance, boutique hotel chains such as Kimpton Hotels focus on providing distinctive experiences with competitive rates, effectively blending affordability and uniqueness (Barney & Hesterly, 2019). The complexity lies in balancing cost control with the delivery of differentiated services, as overemphasis on either component can diminish overall value.

Focus

The focus strategy targets a narrow market niche and involves tailoring products or services to meet the specific needs of that segment better than competitors. Hospitality organizations pursuing focus concentrate on developing specialized expertise, customized offerings, or localized experiences to serve the specific preferences of their chosen market segments. An example is a boutique hotel chain that caters exclusively to eco-conscious travelers seeking sustainable accommodations in urban areas (Hill & Jones, 2018). The primary risks involve the erosion of the niche market as customer preferences shift or as competitors attempt to imitate the specialized offerings.

Application to a Hospitality Business

In applying these strategies to a real-world hospitality business, I analyze the case of Marriott International. Marriott employs a multifaceted approach but primarily aligns with a differentiation strategy within its luxury and full-service hotel segments. Its emphasis on personalized guest experiences, sophisticated amenities, and technological enhancements positions it as a provider of high-value, differentiated services (Chen & Gursoy, 2019). The company's investment in loyalty programs, innovative guest services, and global branding supports this assessment. Marriott's ability to adapt to changing customer preferences while maintaining high service standards exemplifies strategic focus and differentiation in a broad market context.

Conclusion

Understanding the nuances of business-level strategies is critical for hospitality firms aiming to attain sustainable competitive advantage. Each strategy—low-cost leadership, differentiation, best value, and focus—requires unique capabilities, resource allocations, and risk management practices. Effective strategic formulation involves aligning internal competencies with external market conditions and continuously adjusting to competitive dynamics, including threats of imitation and technological disruptions. The practical application of these strategies exemplifies their relevance and importance for strategic success in the highly competitive hospitality industry.

References

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• Chen, J., & Gursoy, D. (2019). Customer satisfaction and loyalty in the hospitality industry: A critical review. International Journal of Contemporary Hospitality Management, 31(4), 1740-1764.
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