Management Fundamentals: Case

study of The Hoxton hotel, London

Table of Contents
1.

Introduction.......................................................................................................... 3

2.

Business Environment analysis............................................................................3

3.

2.1

General external environment analysis : PESTEL analysis.............................4

2.2

Competitive external environment: Porters five force model.........................6

2.2.1

Threat of Entrants....................................................................................6

2.2.2

Bargaining power of Buyers and Suppliers..............................................6

2.2.3

Competitive Rivalry.................................................................................7

2.2.4

Threat of Substitutes...............................................................................7

SMART Objectives................................................................................................. 8
3.1

Specific.......................................................................................................... 8

3.2

Measurable.................................................................................................... 9

3.3

Attainable...................................................................................................... 9

3.4

Realistic....................................................................................................... 10

3.5

Timely.......................................................................................................... 10

4.

Characteristics for effective project management.............................................11

5.

Activities of Hotels main functional areas.........................................................12

6.

Activities of Individual functional areas..............................................................13

7.

Feasibility and Budget report for next three years.............................................14

References................................................................................................................ 17

1. Introduction

Launching a new product across the market involves lot of management, finance, business and
leadership strategies and they should be applied properly for a successful launch. In general role
of the respective management strategies is crucial is analyzing the market conditions,
competitive forces, external and internal conditions, financial status, HR and other key functional
requirements. Main goal of the current research is to analyze the new product launch using the
case study of The Hoxton Hotel, London, where the key aspects like business environmental
analysis, SMART objectives, characteristics of important project management strategies, main
functions like HRM, IT, Marketing, Operations, Layout and a detailed feasibility and budget
report for the next three years (Easingwood, 2010). As per the case study of Hoxton Hotel, it is
one of the leading boutique and independent hotels in UK and they are in a proposal to launch a
new hotel by January 2017 and this report is developed to discuss the key management, finance
and business strategies on behalf of the consulting firm. Ennismore Capital is ready to invest up
to 10 million towards expansion of their hotels in UK and internationally and thus based on the
respective inputs, a strategic product launch plan is developed, discussed and evaluated in the
below sections.

2. Business Environment analysis

Goal of the Hoxton Hotel, London is to launch its new hotel by January 2017 against providing
high end services to its customers in terms of cool and relaxed vibe, best services and cultures
than the existing group of hotels. Thus prior to preparing the required product launch plan, it is
always important to understand the business environment in UK market against launching new
hotels and thus expanding the current business (Buhalis, 2009). There are wide ranges of
operations, functionalities, business areas and other key management aspects to be considered
while analyzing the business environment and entire environmental analysis can be done over
general external and competitive external constraints and they are as discussed below

2.1

General

external

environment

analysis:

PESTEL

analysis

General external environment analysis of Hoxton Hotel London can be done using the typical
PESTEL analysis by considering the key Political, Economic, Social, Technologies,
Environmental and Legal and the required analysis is given in the below table

Political

Economic

Political situations associated over UK and

some part of the Northern Ireland could

macroeconomics in UK might affect the

sustain the overall business value against

overall revenue and rate of interest to the

opening new hotel across these areas.

capital to be invested while launching the

new hotel

Terrorist acts and threat associated could

affect the overall business innovation while

launching the new hotel in UK

Economic growth is one of the positive

factors that will contribute to launch the new
hotel in UK and result good ROI and ROCI

Level of Sanctions those were imposed on

Russia could also affect the new hotel launch

in UK.

National level situations associated with

Variation

of

GBP

value while comparing with the currencies of

other nations might affect the new product

UK might exist EU and this could be a

launch by Hoxton hotels.

potential political barrier in future to launch

and run the new hotel successfully (Liu,
2013)

Inflation and interest rate might also affect

the new hotel launch in UK and some of the
other parts of Northern Ireland (Sandvik,
2012)

Social

Technological
4

All the changes associated with Demographic

issue of UK and other part of world might

socially affect the new hotel launch by 2017.

against advent of technology will favor the

new hotel launch in UK.

All the changes associated with family

patterns and the respective lifestyle might

either positively or negatively affect the

favor the new hotel launch proposal

Frequent shift in the social values will also

change the customer perceptions towards

Functionalities like advance booking online

and on mobile will favor the marketing

hotels.

Internet integration into real life aspects will

improve the interest in hotels and thus also

overall business run of new hotel.

Catering technology related breakthroughs

strategies and overall strategies being adopted

while launching the new hotel (Cowell, 2008)

Enhanced role of Social media will positively

influence the role of marketing strategies
while launching new hotel in UK (Brentani,
2011).

Environmental

Legal

Changes related to Weather conditions might

Rules and regulations associated with the

affect the new hotel launch in some specific

hotel and catering industry might change in

location in UK

very near future

Environmental pollution issues associated

Rules

and

regulation

associated

with

with hotel industry might badly affect the

Consumer protection in UK might also affect

overall brand image while launching the new

the new hotel launch

hotels in UK.

Rule

and

regulations

associated

with

Catering business might also affected with

immigration might affect the new hotel

the issues related to seasonality

launch in UK and could potentially damage

Effects related to natural disasters might

hinder the proposal of new hotel launch

the brand reputation from international

tourists and visitors respectively (Nigel,

(McDonald, 2011)

2.2

2010).

Competitive external environment: Porters five force

model

Competitive external environment analysis plays an important role in estimating the respective
forces while launching a new product in the market. With proper analysis of the current and
future competitive forces across the market, launching the product can be done successfully
while analyzing the constraints and the respective risks as well. When the case with current
Hoxton hotel is consider, its major business area is hospitality and management and thus below
Porters Five Competitive forces analysis will help in understanding the market situation prior to
launch the new hotel in 2017 and the required discussion is as given below

2.2.1 Threat of Entrants

Threat of new entrants is very high across the hotel industry with the level of enhanced business
opportunities in this context. With the impact of globalization, lot of business opportunities were
enhanced globally that too in specific with hotel industry, as the role of hospitality and tourism
has increased against the global business trends in the market. Customers will be affected a lot in
this context, where the new market entrants with strategic business plan and respective marketing
strategies could attract them. Thus analyzing the possibilities of new hotel launch from the
existing hotels like Forte Posthouse, Hyatt, Swallow and Hilton plays an important role prior to
launch the new hotel in very near future. Impact of new entrants could also affect the role of
lenders, competitor shareholders, Chairmen of Competitors and Board of Directors accordingly
(Matheson, 2009).

2.2.2 Bargaining power of Buyers and Suppliers

Supplier and Buyer bargaining power are high across the hotel industry due to the number of
options available in this context. Bargaining power of suppliers is high in this context, as there
are many hotels in UK and thus to meet the market demand it is always required to agree with
the supplier demands as well. Bargaining power of community is also high in this context, as
they might be involved over multiple services across the hospitality and tourism management
and thus analyzing the bargaining power to launch the hotels in UK plays a crucial role to
investment the required level of capitals. Role of Government and Customers is also crucial
while estimating the respective bargaining power, the regular changes in the tax rules and
benefits provided to the hotel industry might lead to opening of more and more hotels and thus
improve the overall tourism in UK. With the increased hotels in UK, bargaining power of both
the customers and suppliers will be increasing as well (Pitt, 2011).

2.2.3 Competitive Rivalry

Competitive rivalry is very high in the hotel industry and as with the enhanced demand towards
the catering industry. There are almost thousands of hotels in UK which are proved to be
excellent service providers both in terms of catering, hospitality and thus able to attract both the
domestic, international and tourist customers. With the level of feasible tax laws, rules and
regulations, hospitality and tourism industry is wide grown in UK since a decade and thus more
and more are hotels are being added to the market. Thus the overall rivalry among the key
competitors is increasing a lot in this context and when the case with Hoxton hotel is considered,
there are many core competitors in UK market and the key among them include Forte Posthouse,
Hyatt, Swallow and Hilton, where the level of competitive rivalry is increasing against the
successful marketing and business strategies adopted by the respective hotels.

2.2.4 Threat of Substitutes

Threat of substitutes is also very high when the case with hotel and catering industry of UK is
considered. As mentioned, there are many hotels those are serving the local and international
customers with wide range of options and thus customers have lot of opportunities and
alternatives to choose in this context. Thus to attract more customers, Hoxton should always plan
new business and marketing strategies prior to launch their new hotel, where choosing the
desired market place with the strategic marketing mix plays an important role in successful
launch of new hotel (Keskin, 2009).

3. SMART Objectives

Analysis of SMART goals and objectives plays an important role in analyzing the overall
business operations being implemented currently and to plan the strategic future market
positioning as well. SMART represents the Specific, Measurable, Attainable, Realistic and
Timely goals and these principles will act as guide to launch a new product in the very near
future and the respective analysis is done for the Hoxton hotel launch and the required discussion
is as given below

3.1

Specific

Specific goals in launching the new hotel across the UK market include the following

Acquiring the required land and associated properties to start construction of hotel

building
To cut down the existing cost of maintaining the hotel and thus understanding the future
cost and benefit analysis to launch the new hotel across the competitive market
conditions in UK

To recruit new staff related to hospitality and catering technology, where the top

management can hire them from few reputed universities and colleges surrounding UK
Categorizing the financial and business strategies accordingly to meet the capital
structure and corporate financial strategies while launching the new hotel across the
internal and external environmental constraints (Craig, 2010).

3.2

Measurable

Measurable goals in launching the new hotel across the UK market include the following

To increase the current sales by 40% prior to launch the new hotel and thus improve the

capital while investing on it

To gather 60 to 70% investment from the existing services, investors, shareholder and

stakeholders
To invest 2 million to complete the proper design, layout and key infrastructure plan

prior to launch the new hotel over the competitive market of UK

To maintain ample space and ambiance by imposing the advance hospitality and catering
techniques while launching the new product and thus investing 20% of the total

investment
To analyze the market conditions of UK hospitality and tourism industry by imposing key
marketing and business strategies by 2015 and thus do possible changes in the product
design (Edgett,2010)

3.3

Attainable

Following are the key attainable objectives and goals considered while launching the new hotel

To train and develop the existing staff and thus involve them in developing the strategic

marketing and business plans

To analyze the capability of the new product launch by building a sample prototype and

capital investment, return on investment and other key budgeting analysis

To increase the existing catering, hospitality and tourism management technique within 6
to 14 month by focusing more on the SWOT, PESTEL and ANSOFF analysis
9

To prepare a detailed business, management, administrative and financial risk assessment

and respective mitigation plan by end of 2015

To determine the key barriers of marketing and design of the new hotel against the
competitive hospitality market of UK by mid of 2015 (Gray, 2012)

3.4

Realistic

Following are the key realistic goals and objectives considered while launching the new hotel

To promote the new hotel launch by keeping the primary focus on mass communication,
print media and social media by investing 10% of the capital and get a clear picture of

product promotion by end of 2015

To prepare the budget with respective to hotel rooms like corporate single, corporate
double, corporate double deluxe and corporate suite against considering the price
variations planned based on the competitive forces in UK hotel industry by starting of

2016
To increase the overall existing customers based and corporate relations by 30% within 6

months and thus promoting the proposal of new hotel launch (Quelch, 2008)
To motivate the existing staff towards their contribution in strategic decision making and
further training and development activities by engaging an appreciation of their current
pay by 8% within coming 8 to 12 months

3.5

Timely

Following are the key timely goals and objectives considered while launching the new hotel

To prepare the high level design, layout and other key business and administrative

functionalities against launching the new hotel by February 2016

To implement the business and marketing strategies planned prior to the new hotel launch

by September 2015
To recruit all the required catering, business administration, hotel and hospitality
management staff, which include both the fresher and experienced and involved them
over key training and development activities by June 2016

10

To launch the new hotel by considering all the risks, mitigations, internal and external
constraints by March 2017 (Parkinson, 2012)

4. Characteristics for effective project management

Effective project management plays the main role while launching a new product into the market
and it involves analysis lot of issues related to business, market and finance as well. Based on the
case study of Hoxton hotel in UK, following important characteristics of project manager are
identified and they are as listed below

Proper and strategic analysis of economic facility, construction and development process,
investment potential against the key attributes like attracting the investors, shareholders,

stakeholders and all economic sectors in this context

Building well-articulated aims, objectives, goals and screened aspects associated with

launching the new hotel

Development of ample life cycle methods which will include all the possible starting and

ending points of the project i.e. launch of new product in this context
Planning and implementation of non-repetitive and endeavor one time program to avoid
rework on the key marketing and business strategies, where project manager could follow

Six-Sigma models in this context

Analyzing all the required organizational lines while preparing the marketing plan and

new product launch while evaluating the required marketing mix

In some cases, special team or organizations should be initiated by the project manager to
analyze the pre-business and marketing strategies against launching the new hotel across

the UK market
Analysis of the key project tasks, milestones, WBS, project plan and deliverables while

launching the new hotel and the respective proposal in the market (Novelli, 2014)
Planning the efficient organization task which will include allocation of resources,
leadership strategies, tasks relationships and the corresponding final project schedules

11

Analyzing the budgetary constraints and the respective changes those might affect the

proposal of new hotel launch in UK

Building the required communication plan with the stakeholders, employees,

shareholders and key business partners while launching the new hotel in UK market
Dividing the entire project of launching the new hotel in UK into various phases like

conception phase, planning phase, execution phase and termination phase

Assessment of subjective objectives against the current and future project goals and status

while launching the new hotel in UK market

Training and development activities to the newly recruited catering and hospitality staff,
such that they can server the local, international and tourist customers in an effective

manner
Planning and implementation of key functionalities of the hotel management like IT, HR,
Finance, Warehouse and sales and automating the respective issues with the level of

technology involvement.
Development of proper and feasible financial strategies by calculating the key financial

ratios for the next years against planning the new hotel launch across UK market
Development of enhanced business and marketing strategies to meet the core competitive
forces and internal and external business environmental constraints, such that launching

the new hotel across the market will be successful.

Clear budget and capital analysis against the design, layout and other key hospitality
management issues prior to the launch of new hotel across the UK market (Kalafatis,
2009).

5. Activities of Hotels main functional areas

In general there will be many functional areas across the hotel management and they should be
well analyzed prior to launch the new hotel. When the case with Hoxton hotel, London is
considered, ample importance is given to the key functional areas like Information Technology,
Human Resources, Design, Layout, Marketing and Operations and the level of activities
involved in this context are as discussed below

12

Design of the hotel layout will be done with the involvement of key subject matter

experts, where the prototype of the building architecture will be developed first
Layout of the new hotel proposed in UK will be done based on the geographical and
demographical constraints and will be developed by considering the existing design and
architecture of Hoxton and the required developments and enhancements will be made in

this context
Lake and Garden view will be considered while designing the layout and design for the

proposed new hotel launch in UK

Hotel infrastructure analysis will also be done as a part of the functional areas related to
design and layout, where the current assets and ;liabilities will be done based on the
capital structure of Hoxton hotel since 2009 to 2014 and thus future recommendations

will be made in this context (Paul, 2011)

Operational level issues against the respective functional areas which include the core
competences, unique resources, threshold resources and threshold competencies will be
considered to understand and meet the stakeholders, shareholders and customers demands

6. Activities of Individual functional areas

Following are the key activities identified against the imposing required level of individual
efforts across the respective functional areas

Logistics operations like inbound logistics, outbound logistics, services, value chain,
supply chain and procurement will be allocated to the operations managers who will be

involved in preparing the new product launch issues right from the beginning
System procedure and boundaries against supply chain and logistics will be defined by
the marketing and sales department and functional areas as well and thus the accurate

estimated while launching the new hotel will be driven in this context
Usage range of services and products, point of sales, warranty provisions will be
considered as a part of both design/layout and operations management, such that
successful marketing and implementation plan of new hotel launch can be developed

13

Marketing and Sales functional area and the respective staff will also be involved across
the key activities like hotel promotion over print and social media using the advent of

technology to the maximum possible extent (Jones, 2012)

Proper recruitment, training and development of the newly recruited staff will be done by
the Human Resources functional areas, where the required training will be given by the

industry experts prior to launch of the proposed new hotel

Other services provides will considered under the Information technology business area
and key among them include Software providers, Training providers, Software designers,

Retailers, System consultants, Internet Service providers and computer manufactures

Required software against billing, hotel room booking, job and room scheduling, clientserver maintenance are also considered as the part of key activities and responsibilities of

IT functional area
Appraisal management, decision making and marketing plan development activities will

be done by the top level manager of Human resource functional area.

Implementing any of the popular ERP and CRM solutions like SAP Fico and DP (Hope,
2013)

7. Feasibility and Budget report for next three years

Analyzing a feasible budget report for the future and upcoming years plays the crucial role in
launching a new product across the competitive market and that too in specific with hospitality
and tourism industry. When the current case with Hoxton hotel, London is considered, their plan
of launching the new hotel has many risk associated at the business, market and financial
constraints and by considering all the respective aspects, following budget report is developed
for the next three years and is as given in the below table

Initial

Year1

External
costs
Design

and 250000
14

Year2

Year3

development
of layout
System

10000

10000

10000

maintenance
System

5000

5000

5000

4500

4500

4500

2000

2000

2000

25000

25000

25000

80000

80000

80000

65000

65000

65000

licensing fees
Startup

6500

marketing
package
Support from
internet
marketing
and

hotel

promotion
Location

12000

photography
and analysis
Other sources
advertising
fee
Internal
costs: Labor
IT Staff time
Recruitment

80000
30000

of fresh and
experienced
team
Marketing
manager and
team
IT Technical
and
Management
support
15

Internal
costs:
Expenses
Hardware and 120000
Other

key

equipment
Software
Staff training

30000
10000

2000

2000

2000

538500

193500

193500

193500

844800

2534400

160000

320000

1004800

2854400

Subtotal
costs
Benefits
Increase

in

revenues
Reduction in 0
staff training
to handle the
reservations
Subtotal

benefits
Net
ROI

3859200
245%

Thus from the above feasible budget analysis it is clear that all the figures are considered GBP
and most of the values considered are arbitrary in this context while launching the new hotel in
UK.

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