Impact of Micro and Macro Factors on Business

The assignment discusses the influence of micro and macro factors on business, including government interventions, laws, regulations, and policies. It also touches on the importance of human resources, finance, marketing, and their relationships within an organizational context. The report concludes that understanding the positive and negative impacts of these factors is crucial for improving productivity in businesses.

Business And The
Business Environment

Table of Contents
INTRODCTION..............................................................................................................................1
TASK 1............................................................................................................................................1
Covered in PPT............................................................................................................................1
TASK 2............................................................................................................................................1
Covered in PPT............................................................................................................................1
TASK 3............................................................................................................................................1
The context of macro environment..............................................................................................1
TASK 4............................................................................................................................................3
Frameworks for analysis..............................................................................................................3
Internal strengths and weaknesses and their interrelationship with external factors...................5
CONCLUSION................................................................................................................................5
REFERENCES................................................................................................................................7

INTRODCTION
Business refers to an activity in which goods and services are sold to customers in
exchange of money. This act is performed for the purpose of trade and its main objective is to
earn profits. Business environment on the other hand is the combination of internal as well as
external elements that affects the profitability of business. Complexity of the surroundings plays
huge role in business operations. The company which has been selected for the discussion on
subject matter in the report is Savoy hotel. It was established in the year 1869 and is located in
the city of Westminster in central London. Followings report covers topics such as different
types and purpose of organisation, their size scope and range, relationship between the different
organisational functions. Other than these identification of positive and negative impacts of
macro environment and through internal analysis identification of strengths and weaknesses of
businesses and their interrelation with external factors is also discussed (Graham and Kaye,
2015).
TASK 1
Covered in PPT
TASK 2
Covered in PPT
TASK 3
The context of macro environment
Positive and negative impacts of macro environment within the organisational context:
There are different factors which prevails in the business environment that impacts the
profitability of business. The decline in the tourist of Savoy hotel is due to number of external
reasons are affecting the decision making and its operations. PESTEL analysis of Savoy hotel are
as follows:
Political factors: These are the related to the changes made by the government in the
rules and regulation which organisation have to conform to. Changing political situation affects
the position of business negatively as well as positively like laws made by the government
regarding health and tax rates can influence the operations of Savoy hotel. For example
government of UK charging high amount of tax on luxurious hotel has led to an increase the
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price, this has caused the reduction in the tourist of Savoy hotel. This is one of the negative
impact while positive impact of this factor is linked to the safety of customers rules such health
protection laws.
Legal factors: These factors are the associated with the laws made by the government to
protect the rights of people affected the business of Savoy hotel, the organisation had to follow
laws made to cope up with the situation of war or instability in the environment under which it
operates. Laws made against the discrimination of people on the basis of colour, religion
ethnicities etc. It impacted the structure of Savoy, the management made polices to protect the
interest of customers as well as employees working in hotel. The positive impact of this factor is
that organisation who effectively perform their legal obligation are able to attract large number
of customers. On the other hand too many laws will restrict the organisation in maximising
profits.
Economical: These are concerned to the economic condition of particular country
affecting the operations of business. Interest rates, inflation, labour rate, economic growth are
some of the factors that are impacting the hospitality industry in positive and negative manner.
For example Post BREXIT the hotel lost most of its customers. The businesses have to be
performed as per the new standards made in the country. With regards to the positive impacts the
increase in the purchasing power of people will lead to the higher demand of luxurious products
and services in this case higher profits can be achieved. The organisation needed to be updated as
identifying the opportunities and threats at right time is essential for the growth of the business.
Social factors: This is another macro factor that impacts the operation of Savoy as the
organisation has to keep itself updated with the changing trends, taste and preferences of people.
For example with increasing consciousness about health amongst the customers has led to
changes in the food and restaurant businesses. The positive impact of this factor is linked to the
customers achieving the higher level of satisfaction as their needs and requirement are met while
negative factor is in order to estimate the trends the savoy hotel had to spend large sum of money
on research and development sector (Sangari and Razmi, 2015).
Technological factors: These factors are associated with the changing technological
situations, with new advancements in the field of technology such as cyber security has helped
Savoy in securing the privacy of their guests. Positive impacts of using technology in production
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has improved the productivity organisation, but reduction in the employment opportunities and
resistance and ignorance of employees regarding uses are some of its negative impacts.
Environmental factors: Situations like natural calamity changing weather conditions are
part of this factor that affects the business operations. Different climatic conditions can
negatively impacts the hospitality industry, for example in extreme winter Savoy sees decline in
the customers. In order to cope up with the situation organisation has set up means so that
operations will not get halted and emergency situations can be dealt effectively. Positive impacts
of this factor is that favourable environment condition can increase the customer traffic. Savoy
wants to achieve the objectives of reducing the green house by using recycling methods.
TASK 4
Frameworks for analysis
SWOT Analysis is a framework which is used for analysing internal along with external
environment pertaining to any entity. Internal analysis is done for analysing strengths and
weaknesses where as external analysis is done for analysing opportunities and threats. It is used
for formulating effective strategies for meeting competitive challenges for the purpose of
sharpening strengths as well as overcoming weaknesses for lightning opportunities. Such
framework is mostly used in all organisations for aiding towards decision making. This strategic
planning technique is used for specifying projects along with factors which are favourable and
unfavourable for achieving goals of business. This helps in generating meaningful informations
related to various factors (Na, 2016). SWOT analysis of Savoy hotel is as follows:
Strengths Weaknesses
 Brand recognition of savoy hotel is
very high due to presence in various
countries and offering services as per
the customers budgets.
 Such hotel has diverse chain of resorts,
vacation properties and hotels to cater
people during travelling for business or
pleasure purposes.
 Strategies are implemented in such
 Savoy hotel is much dependent on
other proprietors organisations for
building lodging networks in the
market.
 Neglecting sub brands reduces
profitability and leads to lack of
attention on promotional activities.
 Overemphasises on standard services
by stringent procedures and standards
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manner which impresses individuals at
the time of entering in hotel which
builds image in the eye of clients.
 Technical innovations along with
constant gradation in innovative ideas
for retaining existing customers and
attracting new customers which helps
in strengthening foundation of selected
business.
reduces morale of key resources to
perform efficiently.
 Various controversies related to chosen
hotel such as blockage of Wi-Fi,
leaking personal details of clients and
so on leads to negative marketing.
 Savoy hotel is deep rooted to perform
functions according to the past
procedures of family business which
limits the willingness to change as per
new procedures.
Opportunities Threats
 As the clients are now focusing towards
personalised attentions and are willing
to pay more. The hotel should provide
personalized services and could earn
profits for rendering such services.
 A wide scope in hospitality industry is
measured in developing countries.
Growth of hotel in such countries can
helps in attracting travellers to boost
towards brand.
 This hotel can tie with another hotels as
well as airlines hotel chains for
grabbing the opportunity to provide
numerous facilities to people on work
as well as on travelling.
 Various opportunities are available for
sharpening promotional strategies for
offering special for attracting huge
 Free entry of various powerful hotels,
resorts in hospitality industry has
created intense competition and acts as
a big challenge for chosen hotel in
terms of customer base and revenue
growth.
 Increase of compensation creates
problems of reducing employee
engagement and satisfaction leads to
churning of employees which results in
adding costs related to hiring as well as
developing new workforce.
 Recession in international market has
immense effect on Savoy hotel leads to
sale of properties to perform day to day
operations results in decreasing
revenues along with growth.
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exploited market through distinct
communities.
Internal strengths and weaknesses and their interrelationship with external factors
By analysing the strengths, weaknesses, opportunities and threats managers aids to
decision making. It helps in decision making by carefully understanding each elements in
internal as well as external environment. It is a useful technique for brainstorming as well as
strategic planning (Raynus, 2016). Such analysis assist in building on strengths, minimising
weaknesses, opportunities grabbing as well as counteracting threats. It is used for deeper
understanding issues which contributes in the procedures of decision making. Such framework
helps researchers to learn about competitors and accordingly frame alternatives for decision
making. Decisions are taken by applying this analysis at Savoy hotel related to making
operations successful, addressing weaknesses and overcoming them, capitalising on
opportunities as well as detecting threats for achieving growth and profits.
Macro factors includes various factors which influence organisation and businesses.
Some of the key factors includes competitive environment and government intervention.
Description is as follows:
Competitive environment: Situation of competition occurs when numerous business
competes with each another for selling goods, products and services in the wide marketplace.
Competitive environment influences market share, customer preferences and creates situations
which are not easily managed by Savoy hotel.
Government interventions: Government intervention also influence business and
organisations in many ways. It influences by passing laws, changing legislation policies,
promoting economic fairness programmes, regulations as well as permitting, setting interest
rates, spending policies. All these activities influences the working of selected hotel.
CONCLUSION
From the above report it has been concluded that business is a complex activity and
different factors such as micro as well as macro affect the profitability of business. There are
several structures that shapes the organisation. In order to understand the positive and negative
impacts of micro factors SWOT analysis is conducted while PESTEL framework helps in
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understanding the affects of macro factors on the operations of hospitality business. Functions
like HR, Finance, marketing and their relationship within the organisational context are
important to determine to further improve the productivity of organisation.
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REFERENCES
Books and Journals:
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Jarratt, D. and Ceric, A., 2015. The complexity of trust in business collaborations. Australasian
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Kotler, P. and Armstrong, G., 2013. Principles of Marketing. Routledge.
Ledgerwood, G., 2017. Greening the boardroom: Corporate governance and business
sustainability. Routledge.
Lee, S. Y. and Klassen, R. D., 2016. Firms’ response to climate change: The interplay of
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Lloyd-Jones, R. and Lewis, M. J., 2017. Raleigh and the British bicycle industry: an economic
and business history, 1870–1960. Routledge.
Machmud, S. and Sidharta, I., 2016. Entrepreneurial Motivation and Business Performance of
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Review. 25(2).
Na, N., 2016. The United Nations and business: A partnership recovered. Springer.
Raynus, J., 2016. Improving business process performance: Gain agility, create value, and
achieve success. Auerbach Publications.
Sangari, M. S. and Razmi, J., 2015. Business intelligence competence, agile capabilities, and
agile performance in supply chain: An empirical study. The International Journal of
Logistics Management. 26(2). pp.356-380.
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