This essay will be investigating the importance of competitive strategy and strategic management in the hospitality industry. It will discuss the concept of competitive strategy and analyse the strategic management process within the hospitality industry. As well as investigate competitive environment of the hospitality industry and how strategic management can help to achieve a sustainable competitive advantage. “Strategy is the pattern of objectives, purposes, or goals and the major policies and plans for achieving these goals, stated in such a way to define what business the company is in or is to be in and the kind of company it is or is to be” (Kenneth Andrews, 1980).It was identified that competitive strategy is about being different, meaning that different choices regarding a set of activities can deliver a unique mix of value (Porter, M.E., 1996). Another approach is to look for extensions of the strategy, such as offering features or services that rivals would not be able to compete with or could not replace it with something different (Porter, M.E., 1996). In the field of hospitality, innovation can be seen as a key driver of a good business performance and business strategy (Wang, 2014). Companies that focus on corporate citizenship are more likely to have more innovative products, processes, and services. This means if managers implement innovations and see them as an important business strategy, they will be able to allocate resources effectively, maintain high-quality services and provide better solutions to meet the needs of consumers (Wang, 2014). These will lead to greater customer satisfaction and sustainable competitive advantage (Wang, 2014). Some of the major international hotels focusing on sustainability as a core business strategy (Jones et al., 2014). For example, Chief Executive Officer of Hilton Worldwide endorsed the executive summary of the company’s Corporate Responsibility Report by asserting “sustainability is a priority for Hilton Worldwide and a central part of how the company does business” (Hilton Worldwide, 2012, p. 3). As well as, Marriott said, “our sustainability strategy supports business growth and reaches beyond the doors of our hotels to preserve and protect our planet’s natural resources” (Marriott, 2012). Increased interest regarding sustainability creates concern about various major challenges and environment, as well as problems facing societies and economies. Some of the concerns include climate change, population growth, increased levels of pollution and many more. (Jones, Hillier and Comfort, 2016) suggests that in theory, the increase of sustainability is seen as offering a potential solution to these problems. Another strategy that has been implemented throughout the years it is technology, due to intensified competition in tourism and hospitality marketplace. It has been stated that it becomes essential to explore the potential of technologies in the businesses to maximise personalised service and experience along with optimising existing process (Neuhofer, Buhalis, and Ladkin, 2015). Porter, M.E., (1985) has identified that technological change is one of the core drivers of competition. However, not all technological changes can be seen as strategically beneficial, this is due to an unfavourable structure of the company where the use of various high technologies could worsen the profitability of the company (Porter, M.E., 1985). When implementing technology strategy into the firm, the company has to consider competitive advantage that trying to be achieved. Meaning that development of particular technologies in the firm must be most contribute to its strategy (Porter, M.E., 1985). Some of the findings mentioned previously is outdated, however, there are many other sources that prove technological usefulness nowadays in strategic matters. Piccoli (2008) has stated that IT is one of the fundamental components of the strategy. It is representing the uniqueness of how technology is custom-made for the organisation (Piccoli, 2008). On the other hand, some of the IT activities are highly visible which makes it available for inspection by competitors which limits the strength of the IT project barrier (Piccoli, 2008). Wang et al. (2012) suggested that recent development of technologies opened new opportunities for how tourism and hospitality experience can be created. This means with help of technology it allows the use of social media to create interaction and experience between customer and the business (Neuhofer, Buhalis, and Ladkin, 2015). Hospitality industries constantly meeting the challenges due to an unstable and turbulent environment (Ottenbacher, 2007). Hence, to survive in the marketplace hospitality industry constantly need to update and modify their portfolio to meet needs and wants of their target market segment (Ottenbacher, 2007). Meaning that to be able constantly to satisfy customers, hospitality industry needs to consistently face changes. As well as hotels may be forced to develop new services to fill empty hotel rooms during off-peak seasons (Ottenbacher, 2007). On the other hand, when hospitality industry reaches maturity stage, it can face a decline. If decline happened one strategy suggestion is revising and improving the old concept to maintain the level of sales, as well as implementing marketing techniques which include the ability to develop innovations (Ottenbacher, 2007). However, Griffin (1997) has stated that 4 of 10 innovation fail in the marketplace, and even higher in the hospitality industry. This means developing innovation can still be a failure for the industry. However, Ottenbacher (2007) suggests better communication should result in the more effective advertisement, create a brand image, and be consistent with the marketing strategy than competitors. Another challenge regarding strategy that can be identified if hospitality organisation does not consider hiring and recruiting the right service personnel even though staffing considers as an effective strategy to deliver quality service (Ottenbacher, 2007). An example of that would be German hospitality in 2002, they have faced staff problems and was unable to fill 80,00 job openings (Stuttgarter Zeitung, 2002).The strategic management process is can be identified as a philosophical approach to business, also means setting of rules that must be followed. The strategical thinking used within the organisations by upper management to apply their thoughts to a process (Clayton, n.d.). The best way to implement the strategy is to make sure everyone in the company understands it (Clayton, n.d.). There are five stages of the process which include goal-setting, analysis, strategy formation, strategy implementation and strategy monitoring (Clayton, n.d.). Locke and Latham (2002) have stated that setting goals improve productivity. As well as it was found that specific and challenging goals result in a higher performance at the firm (Locke and Latham, 1990, pp. 252-261). In any organisation goal setting should be one of the first steps to complete (Shahin and Mahbod, 2007). Primarily benefit of the goal setting it is that it helps to ensure that the organisation complete the job that needs to be done, with the right people and within the resources available (Shahin and Mahbod, 2007). Shahin and Mahbod (2007) identified that goal-setting can be approached by using SMART criteria (Specific, Measurable, Attainable, Realistic and Time-sensitive). It was found that goal-setting at work, increases employees’ performance and service quality in the hospitality industry, however, goals have to be clearly stated and detailed so that employees can understand what has to be done (Crawford and Hubbard, 2008). Although, it is possible that employees with work-related goals have less intention to quit the job and employees will have a higher work satisfaction if have goals to achieve (Crawford and Hubbard, 2008). Meaning that goal setting at the firm not only increases profitability and operation in hospitality but also increases the performance of the employees in the industry which can lead to a sustainable and successful business. The analysis in the hospitality industry or any industry can be considered as a key stage, this is because analysis shapes the next two stages (Clayton, n.d.). The purpose of the analysis is to understand the needs of the business and examine external or internal issues to identify initiative that will help your business grow (Clayton, n.d.). One way of analysing and improving hospitality industry is to analyse service quality as it is a major part of business practice, and it is important to measure and research its effectiveness (Wong Ooi Mei, Dean, and White, 1999). One of the best ways to predict overall service quality is by applying SERVQUAL model (Parasuraman et al., 1988). Meaning that by analysing service quality, manager of hotels can improve service dimensions and refine marketing efforts to meet customer expectations of delivered service (Wong Ooi Mei, Dean and White, 1999). The next two stages are strategy formulation and strategy implementation. Strategy formulation reviews the information given within the company analysis and determines resources the business has to reach their goals and objectives, along with identifying external resources that business is seeking. Therefore, issues have to be prioritised by their importance to the business success (Clayton, n.d.). Strategy implementation is the action stage, where businesses install new structure at the beginning of this stage if the overall strategy does not work within the company (Clayton, n.d.). When strategy implementation is beginning, everyone within the organisation must be clear of their responsibilities and duties (Clayton, n.d.). One of the concerns that hospitality is currently facing is meet consumer expectations with regard to quality of service and respond to the increasing environmental and social awareness of consumers (Jiang and Kim, 2015). However, the response to the growing needs of the consumer, lead to a negative impact of tourism on the natural and social environment such as the expanding construction of hotels and resorts in the degradation of ecosystems and the destruction of coastal and mountainous areas (Prud’homme and Raymond, 2016). This issue can be dealt via strategy formulation and strategy implementation. By investigating the problem, the strategy was adopted a sustainable development (SD) orientation, this strategic orientation could enable the tourism industry to minimise the negative impacts of its activities on natural, cultural and social environments (Eligh et al., 2002). Sustainable development is defined as “a type of development that meets the needs of the present population without compromising the ability of future generations to meet their own needs” (WCED, 1987). However, adopting and implementing SD can be harder for small and medium-sized hotels due to insufficient funds and human resources (Eldemerdash and Mohamed, 2013). As well as, it was noted that implementing SD practices can be difficult due to a lack of knowledge and expertise for any hotel company (Eldemerdash and Mohamed, 2013). The last stage of the strategic management process is evaluation and control. Evaluation and control actions include performance measurements and constant review of internal and external issues making improvements when necessary (Clayton, n.d.). After all the stages have been accomplished, only left to control it and evaluate and if noticed that the strategy is not helping to reach the goal, take corrective actions and if those actions are not successful, strategic management process has to be repeated (Clayton, n.d.). Dzhandzhugazova (2015) has stated that hospitality industry has a highly competitive environment which drives the industry to search for new ways and elements for efficient performance. It was found that one of the core trends in the industry is the development of innovations to increase the performance of the hospitality industry (Dzhandzhugazova et al., 2015). As well as Dzhandzhugazova (2015) has identified innovation is an essential part of the competitiveness of hotel enterprises. There are more researchers about innovation and its effect on the competitive environment and its performance was mentioned in the above text. Pizam, Shapoval, and Ellis (2016) suggested that one of the most important goals in the competitive environment is retaining and satisfying current and past customers and it was suggested that companies focusing on consumers’ needs and wants can achieve this goal. Competitive landscape of the hospitality industry is essential in defining the profitability and survival of firms (Singal, 2015), it is also can be seen as one of the important factors of the competitive environment. Strong competition in hospitality and tourism industry primarily affects strategic decision-making which includes innovation, growth, investment and etc. (Singal, 2015). To deal with high competition level, Porter (1980) has suggested Porter’s Five Forces model that provides a framework for analysing industry profitability and defines the competitive environment of the industry. Singal, 2015 has stated that hospitality and tourism industry is facing higher competitive environment than other industries, this is due to a low barrier to entry and ability to put unskilled labour and food supply. Another threat to the highly competitive environment in the hospitality businesses is high exit barriers. Meaning that when exit barriers are high, it is most possible to lose all the investment when withdrawing from the business. Therefore, there is a possibility to remain in the business even with low profitability or non-existent (Singal, 2015). On the other hand, hospitality industry facing higher capital intensity due to geographical mass and importance of location, most hotels are affected (Singal, 2015). This means that due to high levels of intensity and inflexibility of fixed assets can have a material effect on management of hospitality and tourism companies (Singal, 2015). The overall competitive environment is very high in the hospitality industry, which means working harder and planning good strategies is highly efficient for the industry.There is a significant increase in revenue growth and new development in the hospitality industry (Tracey et al., 2014), it was also noticed in major companies such as Marriott, Four Seasons, and Starbucks. These companies had strong sales performance since 2010, as well as store growth and property development has been positive and steep. The reason for the growth was implementing effective human resource system, practices, and policies that were designed to create an increased level of employee engagement and performance. Companies that focused on learning and development, particularly for new staff was found “most-admired” (Hinkin and Tracey, 2010). Tracey et al. (2014) have identified that for sustaining high-quality service and efficiency in the hospitality industry, new employee program establishment is essential, a program that addresses not only job-specific requirements but also covers strategic knowledge (e.g., firm’s core value). This means that better training for the employees can increase performance for the overall industry. For example, Four Seasons was sending handbook for the new employees to review and learn the key policies and standards prior to their first day of employment (Tracey et al., 2014), which helped employees to follow-up during the formal orientation process. As well as, simulation and demonstration were included in an active program, to ease skill-based learning objectives and behavior (Noe, 2013). Companies such as Marriot, Starbuck and Four Seasons used this active program to help employees within their job roles (Tracey et al., 2014). Due to the pre-training program, that helped new employees to learn quickly their responsibilities, roles, and skills it helped to accomplish service quality, customer satisfaction and financial targets. A good example of employment training in the hospitality organisation was developed in Marriott Hotel. Marriott offers employment skills training and vocational opportunities through a variety of charitable partners including The Prince’s Trust Fairbridge program in the United Kingdom (Marriott, n.d.). The company is consistently recognised as a top employer and has one of the most diverse and inclusive workforces. Current efforts include cross-cultural workshops, the Women’s Leadership Development Initiative, and training for executive-level women for participation on corporate boards (Marriott, n.d.).As mentioned previously one of the ways how strategic management contributes to achieving a sustainable competitive advantage in the hospitality is innovation. This is because innovation shows the uniqueness of the firm, unique advantage remains the key components of a successful strategy (Phillips et al., 2015). An example, would be Marriott, was the first to offer Apple pay and mobile check-ins across their product portfolio. As well as, they have introduced keyless entry. One of the top innovations of Marriott regarding technology it is virtual travel experience, allowing potential guest to see, hear and feel the experience of global destinations (Johnston J., 2015). As well as, Marriott’s marketing strategy includes environmental strategies to protect the planet. This is done by being in partnership with green hotels program, green supply chain as well as donating to supportive foundations (Marriott, n.d.). Also, Marriott takes responsibility for the society by assisting in sheltering and food, providing jobs via education and training and address health of future generation (Marriott, n.d.). This affects the way business is seen as a corporate image is improved making customers choose Marriott instead of competition. To conclude, strategic management is very important part of the hospitality industry. Strategic management is focusing on uniqueness and innovations of the company to make it look better than others. As well as, strategic management include investigating and analysing of external and internal advantages and issues, helps identify problems that need to be solved and focus on benefits of the company to increase its performance and sustainability. As mentioned previously increased interest regarding sustainability creates concern about various major challenges and environment, as well as problems facing societies and economies. It was found that hospitality has the highest level of competition, that’s why strategic management has to be used more efficiently to increase competitive advantage. Many of the companies that using right strategies and understand the strategic management process can become successful.