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Discussion on Shangri-La hotels strategic management


Task: For a Tourism and Hospitality organisation of your choice, research and analyse the existing strategy of that business. You have recently been appointed as the CEO of your chosen organisation, apply your critical thinking skills to develop strategic recommendations for the development of the business over the next 12 months. To submit a definitive and complete Report for the organisation chosen, you will need to consider at least the following –

  • A brief history of the organisation and its strategic development
  • The internal and external environments of the organisation
  • The development of strategy at a business, functional and corporate level
  • Competitive advantage and sustainability
  • The impacts of mergers and acquisitions, international strategy and alliances
  • Strategic implementation and the importance of leadership and entrepreneurship
  • Organisational structure, controls and corporate governance

The Report may address other relevant considerations and must include evidence of research to substantiate your conclusions and recommendations. The word count limit is 2,500 words (plus or minus 10%), excluding Appendices, References and Quotations. Times New Roman 12 point font and 1.5 line spacing. APA referencing as per 2018 ICMS Style Guide. Header to contain student names and identifier numbers only. Footer to contain page number only. Plagiarism Declaration attached as first page inside the cover page. Last page of the Originality Report attached as second page inside the cover page.


As noted in the Shangri-La hotels strategic management report, COVID-19 has impacted all the possible industries in the world by pushing the world in a state of Lockdown. However, having said that the good thing is that the major threat from the virus is averted now and government and organizations have started working towards a plan to pull themselves out from the tremors caused by COVID-19, and get back on its feet (Nicola et.,al 2020). One such industry which has been impacted worst is Hospitality and Tourism industry, which brings me to the introduction of the topic for the Shangri-La hotels strategic management. Strategic development and growth is the need of the hour for the hospitality industry and in this report on Shangri-La hotels strategic management we will conduct business environment analysis of Shangri-La-Hotel, Sydney to ascertain and analyze the market in which it is operating. Furthermore, a strategy will be developed at the business, functional and the corporate levels, whilst analyzing its organizational structure, control and corporate governance. Lastly, the report on Shangri-La hotels strategic management will also analyze the implication of leadership and entrepreneurship within Shangri-La-Hotel.

History of Shangri-La-Hotels
Shangri-La-Hotels and Resorts are one of the finest and premium hospitality chains of the world. Founded in the year 1971 with its first ever Hotel in Singapore, the hospitality chain from there has grown by leap and bounds (Karimet.,al 2020). In its exciting journey of over 49 years, the hospitality brand has grown to over 100+ Hotels in over 22 countries and 76 destinations. One of the strong differentiator of Shangri-La-Hotels has been its excellent service quality which is second to none, and its adorable infrastructure of the Hotel Premises coupled with its 5 start services makes stay of the guests, truly memorable. Over 4 years the Hong Kong Based Hospitality chain has thoroughly embarked on the culture of “Hospitality from the Heart” (Karimet.,al 2020).

Internal Environment of Shangri-La-Hotels
Shangri-La-Hotels serves in an industry which is highly competitive in nature, and it will not be wrong to call as a red ocean, wherein every major player is engaged in cut throat competition in terms of price, services and other amenities. It is these toughened rules of the industry, which has pushed Shangri-La-Hotels into its own space of creating differentiation in its services through a plethora of Innovative practices. Shangri-La-Hotels is one of the few hospitality chains which keeps on renovating its infrastructure to demonstrate great physical evidence in front of its customer’s audience. Shangri-La-Hotels is stuffed with luxury facilities for its guest and its amazing hospitality serves like an icing on the cake for the Hong Kong Based Hospitality Brand(Morais, Zhu, Dong & Yang, 2016). Let us conduct a SWOT analysis in the following sections of Shangri-La hotels strategic management to further understand its strength and weakness which are internal in nature, and also assess opportunities and threats which are external to the business.

SWOT Analysis

  • Shangri-La-Hotel, Sydney has one of the finest 5 star ambiences out of all the chain hotels in the world. Its wall - landscaped exteriors provide a sense of relief and calmness, especially to its business travelers, which is its core TG.
  • Being a Hong Kong based brand, the values of the Hong Kong Culture is rooted in its business philosophy. As mentioned in the Shangri-La hotels strategic management, its values such as Humility, showing respect towards others, respect, being courteous, sincerity and many others are seen breathing out of its walls and in its service (Yusof&Jamaludin, 2019).
  • Providing top notch service quality to its customers has been one of its core values and biggest strength.
  • Its “Golden Circle” Loyalty program helps it to earn the loyalty of its business and family travelers and the brilliant loyalty program is seen as one of its biggest strength (Yusof&Jamaludin, 2019).
  • Shangri-La-Hotel’s branding and communication strategy is euphoric, and it drives a feeling of nostalgia and calmness through its social media marketing and other offline promotions.
  • Weakness
  • Shangri-La-Hotel’s aggressive expansion plans, especially in India, China, Mongolia, Qatar, UK and others have restricted its spend on the already built hotels, especially the one in Sydney(Bader, 2017).
  • It was recently in the news of animal cruelty which earned the brand a backlash from its customers.
  • Hotel industry thrives on High cost of operations and same is the case with Shangri-La-Hotel. Especially now when the businesses have been shut down for more than 60+ days, the financial burden on the brand has increased
  • Opportunity
  • The biggest opportunity one can see here is to being open up for its customers once again after the lockdown. Shangri-La-Hotel has this remarkable opportunity to once again build and gain the trust of customers by showcasing and demonstrating the values of Hygiene, Hospitality and intensive care for all of its guests through its marketing and promotions (Cherapanukorn&Focken, 2020).
  • Threats
  • The biggest opportunity is its biggest threat, after the lockdown it is still a task for the Hospitality industry to get up on feet sooner. Hence, it is clear on this Shangri-La hotels strategic management that they have to be prepared for the bad times, as the movement will still be restricted and the spirits and influx of the travelers to Sydney can be expected to be low. At least for a couple of months after the lockdown (Legrand, Sloan & Chen, 2020).

External Environment of Shangri-La-Hotel
PESLTE Analysis

This is also seen as external business analysis and it ascertains the forces which are not within the control of the Hotel, but has an impact on it. These forces help the brand to come up with strategies for the future (Perera, 2017).

Political Factors
Australia’s political climate can be seen as favorable and Shangri-La-Hotel has been a good corporate citizen by paying of its taxes and complying with government regulation. However, with Lockdown still not over and uncertainty over the tourism influx in Australia, the political factor has a much bigger role at play herein Shangri-La hotels strategic management, however only time will tell what the future holds.(Saikimet.,al 2020)

Economic Factors
Shangri-La-Hotel’s major revenue comes from its Asian, European, and UK, Latin America and other tourist and business travelers. It is the core Target audience of the brand, and there has been no movement since last 60+ days. As per the readings provided in the Shangri-La hotels strategic management, it has resulted in losses of jobs in the hotel, and more are to be followed. Lockdown has severely impacted the purchasing power parity of the people and the same is seen in the luxury segment as well. (Saikimet.,al 2020).

Socio-Cultural Factors
More and more people are getting aware of travel and tourism industry of Sydney and it has become major attraction for a large part of the world. Further, thanks to Social media that people are engaged with various activities in Sydney and at the Hotel, which makes them have a dream of visiting Sydney and stay at the Hotel. But, COVID-19, will restrict such free movement in the country, impacting the business (Saikimet.,al 2020).

Technological Factors
As already mentioned in the Shangri-La hotels strategic management, Shangri-La-Hotel plays technology to its advantage. The hotel has also installed Beacon around its Hotels to push targeted content to the guests staying in the hotel, this helps them to make good food and travelling choice while enjoying their stay (Saikimet.,al 2020).

Legal Factors
Shangri-La-Hotel, around the world has a strict policy to abide by all the legal frameworks of the country in which they have been operating, Sydney being no exception (Saikimet.,al 2020).

Environmental Factors
Hospitality industry is seen as one of the top contributors of generating greenhouse gases, and in the recently conducted Paris climate act Australia has pledged to lower down its carbon footprint in the environment, the same directives has been passed to the hotel as well. Shangri-La Hotel is also working in the direction of reducing its carbon footprints significantly (Saikimet.,al 2020).

Competitive Advantages & Sustainability
Shangri-La-Hotel Sydney is one of the few Hotels in the world which has signed and pledged towards local, fair and sustainable sourcing. Most of the raw materials and other tangible elements in the hotel are sourced locally from Australia, this gives the local industry a support and the hotel does not pose any threat to it. Furthermore, it is also building its capability in terms of circular recyclable economy by ensuring that by the year 2025 none of its waste go to the landfills. In order to save energy, it is using devices which consume lesser electricity, which is using LED bulbs instead of big lights. Replacing Thermal energy with solar energy for its Heating plants, and reusing the water used in laundry through water filtration plant for cleaning and other such activities. Besides this Shangri-La-Hotel is also focusing on two of its most talked about CSR programs, which are Sanctuary and Embrace. Hence, it can be easily said in Shangri-La hotels strategic management that Shangri-La-Hotel is most definitely thinking of the long term, especially looking at its sustainable goals for the year ending 2025(Chien, Mao, Nergui& Chang, 2020).

Impact of M&A, International Strategy and Alliances
Merger & Acquisition has been one of the growth strategies for the Hong Kong Based brand, its new ties with the Taj group has strengthened its position in the Asian market. Hence, as mentioned in the Shangri-La hotels strategic managementit sees merger and acquisition as the major aggressive strategy to expand its business activity. Shangri-La-Hotel which is present in over 22 countries has a sizable alliance all across the world, in terms of supply chain and other raw material categories. The international strategy of Shangri-La-Hotel has always been to operate as a local player, build strong ties with the local community (like it did in Sydney), not becoming a threat to the domestic industries but enabling them to do more business (Chien, Mao, Nergui& Chang, 2020).

Organizational structure and development of strategy at the business, functional and corporate level

organizational structure and development

All the business decisions for Shangri- La-Hotel are taken at the headquarters in Hong Kong. These decisionsmade in the Shangri-La hotels strategic management are mostly related to its Merger and Acquisition strategy, rolling out new sales target for all the Hotel brands, appointing of CEO and other important business function. Business strategy is the core of the strategy from there it is directed to corporate and functional level strategy (Ng &Tavitiyaman, 2020).

The corporate level strategy is made on the guidelines or specific instructions passed by the headquarters to wherever the local headquarters of the Hotel chain are. The management team at corporate levels makes the target for the hotels locally and helps in various activities like Procurement, Recruitment, Allocating budgets and others at the divisional level.

The functional strategies are made at the Hotel level by the individual middle level managers who take the decision and send it to the corporate board for the approval. All the middle and lower level decisions are taken at the functional level.

Controls & Corporate Governance
Already mentioned in the earlier section of Shangri-La hotels strategic management that Shangri-La-Hotel is a Hong Kong based brand which has a deep root of its values which are of respect, trust, transparency, integrity and sincerity. The brand examined in the segments of Shangri-La hotels strategic managementshows and follows the same values at all the level, especially the board which is responsible for creating the strategies at the business level. All the corporate governance and controls happen at the business level with its board of directors appointing a team to keep a close check on the attainment of the goals and the adherence to the guidelines. There is an internal review meeting every quarter where CEO from all across the globe gather together to show the result, the progress and the next set of action and the pipeline in place(Hu, Li, Liu &Teichart, 2020).

business strategy Current Business Strategy
The current of Shangri-La-Hotel, Sydney is based on Market Penetration and Product development. The implication herein Shangri-La hotels strategic management is that it wants to further penetrate the tourism and hospitality industry leveraging its services, brand name and the legacy of 40+ years. It wants to become the emblem of services in the Hospitality industry, and in order to achieve the feet its employees have committed 100+ hours devoted to training every single quarter, where they learn the new ways of accentuating the experience of customers at the hotel (Hu, Li, Liu &Teichart, 2020).

Another business strategy defined in the Shangri-La hotels strategic management is based on Innovation and differentiation such as new loyalty program are being launched, with new collection of toiletries and other amenities being created, which is seen as its product development strategy in the Sydney market.

Strategic Implementation and importance of Leadership& Entrepreneurship
Bang Chee Lim is the group CEO for the Hotel and he is seen as one of the finest transformational leaders. Being a transformational leader the man has the ability to transpire the vision of the Headquarters to the corporate level, from where it goes to each and every employee of the organization. Bang Chee Lim thinks very high of the Hospitality services provided by each of its branch hotel and urges all the employees to keep working towards the attainment of the goals. Entrepreneurship and empowerment is seen in Shangri-La Hotel in the form of mini projects which comes from the headquarters on the lines of identifying sustainable lines of food production, and how to value add in its services to keep its competitive edge in the market(Wong & Kim, 2020)..

The strategies outlined in the Shangri-La hotels strategic management are presented keeping in mind COVID-19, lockdown and the implication it will have on the industry.

  • With Australia not reporting spike in cases, and its neighbour NZ which has already gotten done with COVID-19, it is a good time for Shangri-La Hotel to begin its marketing activities One of the first few things the brand should start with is, assuring its TG of the safety and hygiene measures they take at the hotel. This will help to gain the trust of customers.
  • Start a series of contest on social media about the trivia and facts of Sydney, its major attraction and tourist centres, this will help to build a nostalgia and a craving in its TG to explore Sydney and relive the memories (Baek, Choe& Ok, 2020).
  • Use Influencer marketing strategy to tap into its Young traveller audience, and likewise for its business audience.
  • Start its own blog, wherein they can guide people on how to travel safe, what are the precautions to be taken and others so as to identify itself as an industry leader post lockdown(Baek, Choe& Ok, 2020)
  • Prepare and train its staff for different kind of customers query and other new service hygiene measures which have to be now taken.
  • If it does not hits the business financially, Shangri-La-Hotel can slash its prices in the market for a couple of months to welcome the tourist who are taking little risk in traveling abroad and give them some form of business and other discount for taking the strong step in the right direction(Baek, Choe& Ok, 2020).

These are some of the recommendations based on the case scenario of Shangri-La hotels strategic managementwhich will ensure that the hotel in Sydney is able to progress despite the aftermath of Covid-19.

As illustrated in the above context of Shangri-La hotels strategic management, being one of the finest hotel chains in the world, Shangri-La-Hotel still finds itself at the mercy of COVID-19. With severe restriction on movement of goods and passengers it has hurt the business significantly and also forced the brand to get rid of few jobs. However, with the major threat from the virus being averted, Shangri-La-Hotel Sydney has to warm up the market with its excellent hospitality, breath-taking interiors, charm with its Loyalty card and assure them with its hygiene and safety measures and things will be back on the track. Until then, Stay Safe and Stay Informed.

Baek, J., Choe, Y., & Ok, C. M. (2020). Determinants of hotel guests’ service experiences: an examination of differences between lifestyle and traditional hotels. Journal of Hospitality Marketing & Management, 29(1), 88-105.

Bader, E. E. (2017). Sustainable hotel business practices. Shangri-La hotels strategic managementJournal of Retail & Leisure Property, 5(1), 70-77.

Baek, J., Choe, Y., & Ok, C. M. (2020). Determinants of hotel guests’ service experiences: an examination of differences between lifestyle and traditional hotels. Journal of Hospitality Marketing & Management, 29(1), 88-105.

Baek, J., Choe, Y., & Ok, C. M. (2020). Determinants of hotel guests’ service experiences: an examination of differences between lifestyle and traditional hotels. Journal of Hospitality Marketing & Management, 29(1), 88-105.

Cherapanukorn, V., &Focken, K. (2020). Corporate social responsibility (CSR) and sustainability in Asian luxury hotels: Policies, practices and standards. Asian Social Science, 10(8), 198.

Chien, G. C., Mao, I., Nergui, E., & Chang, W. (2020). The effect of work motivation on employee performance: Empirical evidence from 5-star hotels in Australia. Journal of Human Resources in Hospitality & Tourism, 1-23.

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Karim, W., Haque, A., Anis, Z., &Ulfy, M. A. (2020). The movement control order (mco) for covid-19 crisis and its impact on tourism and hospitality sector in Australia. International Tourism and HopitalityYournal, 3(2), 1-07.

Legrand, W., Sloan, P., & Chen, J. S. (2020). Sustainability in the hospitality industry: Principles of sustainable operations. Shangri-La hotels strategic managementRoutledge.

Morais, D. B., Zhu, C., Dong, E., & Yang, G. (2016). Promoting sustainability through increased community involvement: the Shangri-La Ecotourism Demonstration Project. Tourism Review International, 10(3), 131-140.

Ng, A. W., &Tavitiyaman, P. (2020).Corporate Social Responsibility and Sustainability Initiatives of Multinational Hotel Corporations.In International Business, Trade and Institutional Sustainability (pp. 3-15).Springer, Cham.

Nicola, M., Alsafi, Z., Sohrabi, C., Kerwan, A., Al-Jabir, A., Iosifidis, C., ...& Agha, R. (2020). The socio-economic implications of the Coronavirus and COVID-19 pandemic: A Review. International Journal of Surgery.

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Saikim, F. H., Peters, R. F., Simon, N., Angki, T. A., &Bagul, A. H. B. P. (2020).Rural Tourism Destination Strategy through SWOT Analysis in Kg. Kolosunan, Penampang, Sabah. Journal of Contemporary Issues and Thought, 10(1), 36-45.

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