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Intercontinental hotel group has its headquarters in UK. It evenly spread all over across the globe and it is referred to as the world largest hotel group. Its capacity is however determined by the number of hotel rooms that are already established. IHG is charged with various responsibilities that include leasing, owning, franchising through various subsidiaries. They have undertaken this in over 100 countries across the globe.
IHG is also known to hold a portfolio of highly recognized brands of hotel which range from intercontinental hotels and resorts, crown plaza hotels and resorts, holiday inn hotel and resorts as well as hotel indigo. These various franchises have enabled businesses of IHG to grow in areas such as tourism industry, hospitality, and events (Fisher, 1997).
On its supply chain, IHG has managed efficiently and cost effectively their purchasing and distribution of all goods and services. They have also provided flexible solutions to supply problems that may help sustain future requirements. IHG has also staged rapid implementation on its supply management issues to bring forth business sustainability and overall benefits. They have also participated in streamlining of the processes that are involved with the distribution and purchase of materials and services in order to improve business efficiencies and buying power of the customers in order to increase volume of benefits and reduce the operation cost (Lee, 2002).
Impact of supply chain
The main objective of supply chain efficient management is to ensure that there is a constant provision of high quality, efficient, and information in the supplying industry. These strategies are supposed to enable suppliers to provide timely and uninterrupted flow of goods and services to customers or clients. However, supply chain is sometimes faced by challenges that business analysts have referred as a contingent of distortions that is experienced in the business chain. These impediments are caused by various policies in supply chain established by state governments or international business communities. Other issues include methods of promotions, sales, manufacturing, customers, suppliers, systems and processes involved in the supply (Johnson, 2000)
Interruption in the supply affects demand of goods and services of the customer. Various oscillations that are experienced in supply chain springs back results into a costly disturbance to the supplier of goods and services. Because of this, there is negative effect on the business performance, quality problems and subsequent high costs of raw materials. Business analysts propose that solution to this kind of problem could only be found through provision of easy and intuitive methods in the ordering and supply of goods to the hotel groups. This should be done for the wholly owned properties and franchises of intercontinental hotel group. There should also be a significant decrease on the various costs for franchise and orders that are placed by IHG in order to reduce error rates that might occur within the company (Belington, 1992).
Intercontinental hotel group has experienced impacts of supply chain issues. The effects have been attributed mainly due to policies that regulate supply of goods and services especially items that are used in the hotels. The other specific impacts have also been witnessed in areas such as manufacturing. This has resulted sometimes into a low quality goods and delay in supply of ordered goods. There has also been a net effect on the promotions and sales of their brands (Anderson, 2002). The group has lacked marketing strategy to curb the rising competition between the investment companies. Due to shorter life cycles of certain products and different varieties, the group has consequently experienced high cost and complexity of supply chain.
Solutions to problems experienced by IHG have partially been solved through introduction of e-business system in the franchises. They have quickly provided sustainable method for delivering recipes to the hotels. Other strategies have been to decrease transaction cost by automating orders of goods and services to the hotel. Through outsourcing and furtherance globalization and business fragmentation may be an imperative measure to the group. This will enhance in tackling the challenges experienced in the supply chain. Advancement in information technology within the group company will help to tap necessary information for the success of the company. This is cited as relevant way of ensuring coordination and decision making within the company (Anderson, 2002).
Intercontinental hotel group operates on three main industries. These include hospitality, tourism and events industries. Any impact of supply chain to IHG is known to have direct impact on the three industries especially in terms of provision of goods and services (Johnson, 2000).
The industry forms the central business area of IHG. It handles customers’ issues in diverse perspectives ranging from those of accommodation, supply of necessary goods and services (in general sense, tourism). The tourism industry within IHG has moved swiftly increase the number of beds in order to accommodate tourists that are increasing in number day by day. They have also emphasized on the increase of supply of consumable goods in order to meet the demands of tourists and/or clients. The company looks at adopting responsible tourism with expounding on the company’s goals and objectives in order to accommodate the customers demand.
Tourism sector within the hotel has been subjected to significant change through introduction of e-business. This has improved links to information regarding the company that can now be accessed online. Tourists are able to book for services and accommodation facilities before reaching destination. Electronic tourism has been one of the changes considered beneficial to the hotel. E-tourism has been increasingly informative; there is transparency, convenience, and easy solutions to the problems. Online access to information has also enabled the provision of guides to the customers (Fisher, 1997).
Intercontinental hotel group deals with various events within their businesses. These events range from conferences, meetings and seminars. The main problem that has been experienced as a result of this includes shortages of facilities. This has been due to the increasing number of tourists and clients that stream to the hotel facilities. The possible solution to this problem include expanding on infrastructural facilities and outsourcing that may involves renting of properties from other companies in order to accommodate the increasing number of clients (Kotler, 1997).
Conclusions and Recommendations
Supply chain remains to be the most important event in any business activity. Intercontinental hotel group should therefore devise ways to curb challenges that involves policies, sales and promotions, manufacturing and marketing, supply and the systems involved in the supply chain. They should also embrace electronic tourism in the business sector in order to make information of hotel easily available to the clients and customers. Expansion on the various facilities should also be ensured in order to accommodate the growing number of customers. Through the implementation of these recommendations, the hotel would be able to sustain its business efficiently and cost effectively. They would also be able to manage purchasing and distribution of all goods and services required to run the operations at the hotels.