1. Why did Holiday Inn s business model and strategies changed over time? 2. How has competition changed the strategies behind the InterContinental Hotels Group s business model over? 3. In what ways is it using non price strategies to improve its competitive advantage? Holiday Inn founded the market for average-price, average-quality motel rooms. But in the 1970s the chain ran into trouble because it failed to see that the market was fragmenting, creating the need for different kinds of products, ranging from luxurious resort features to basic, no-frills accommodation. Holiday Inn was left stuck in the middle, with its undifferentiated product and average costs. In a counterattack, the company fought back by differentiating to offer a range of products, from the inexpensive Hampton Inns chain to the luxury Crowne Plazas. These moves were successful and led to a temporary advantage, but by the late 1990s, Holiday Inn was again in decline. Continuing endeavors to position hotel brands and chains to maximize customer demand led to the purchase of Holiday Inn and incorporation into the InterContinental Hotels Group chain. InterContinental Hotels, with Holiday Inn in their plans, seeks to have a room to meet the need of every segment of the lodging market anywhere in the world.