Business and the Business Environment

This document explores the impact of macro and micro factors on business activities and decision-making. It covers topics such as PESTLE analysis, SWOT analysis, and the strengths and weaknesses of Intercontinental Hotels and Resorts. The document also discusses the relationship between organizational functions and the business environment.

BUSINESS AND THE
BUSINESS
ENVIRONMENT

Table of Contents
INTRODUCTION...........................................................................................................................1
LO 1.................................................................................................................................................1
Covered in PPT............................................................................................................................1
LO 2.................................................................................................................................................1
Covered in PPT............................................................................................................................1
LO 3.................................................................................................................................................1
PESTLE Analysis........................................................................................................................1
LO 4.................................................................................................................................................5
SWOT Analysis...........................................................................................................................5
Macro factors which influences the organisation in terms of its strengths and weaknesses.......6
CONCLUSION................................................................................................................................7
REFERENCES................................................................................................................................8

INTRODUCTION
Business environment is considered as the mixture of both macro and micro factors that
impact the working conditions and operation of business activities. In relation with this
organizations need to consider both external and internal factors which impact the business
activities while taking their decisions. Along with this internal factors are under control
meanwhile external factors are beyond the control. Business environment is dynamic uncertain
Complex and relative which impact the performance profitability and growth of company
(Erasmus, Strydom and Rudansky-Kloppers, 2016). In this context this is environment is useful
in analysing the business opportunities tapping useful resources helpful in Planning and
enhancing the overall performance of company. In relation with this Intercontinental hotels and
resorts is considered which a branded British hospitality company is founded in 1946
headquarter in Denham, Buckinghamshire, England, UK. Hotel has around 842, 749 guest rooms
and 5,656 hotels across 100 countries. Moreover, company owned several brands under it
considering Regent hotels, six senses hotels, and hotel indigo, Holiday Inn, EVEN hotels,
staybridge suites and so on. This report is going to cover the various types and purpose and size
scope of various organisations. It also explains the relationship between the organisational
functions and also identify business environment with the help of internal and external factors
and also describe their strengths and weaknesses.
LO 1
Covered in PPT
LO 2
Covered in PPT
LO 3
PESTLE Analysis
It is also termed as the micro environment which is useful in analysing the long-term market
impact on the business conditions and operations of company. It is considered as the best tool to
determine the risk factor which is present in external environment. This Framework serves as the
basic analytical tool for analysing the market decline or growth (Hillary, 2017). It is important to
understand that how the external environment create opportunities and threats for the company
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and this Framework is useful in understanding the influence of political legal economical social
technological and environmental factors for the business environment. These are considered as
the key drivers of change that leads to describe the opportunities and threats in the context of
Intercontinental hotels and resorts and whole Industry that can be overcome by focusing on the
strengths and reducing weaknesses.
Political factors: This factor describes the political stability considering the various policies
that are developed by the government for smooth running and operation of business
organisations. In this context Intercontinental hotels and resorts operates in challenging political
environment and brexit has already negatively influences the political conditions across the UK
regarding the independence and protection of European Union. This factor influences the
profitability and the survival chances of company which is quite diverse. In this context the
political risk varies regarding the sudden changes in the current political conditions towards the
civil unrest. In relation with this possible multinational also include political factors which take
place and influence the other country and also contain business operations in order to engage
within the trade practices (Belas and et. al., 2018). In terms of this the laws and legislations
which are enforced by UK Government dictate the Intercontinental hotels and resorts and not
allowed the company to do unethical practices. In this context some countries prohibit alcohol in
certain conditions that leads to discourage the business operations. Moreover the trade barriers
which protect the intercontinental hotels and group with the potential trade partners would harm
the company by preventing potential Exports. In relation with this the authority is of
Intercontinental hotels and resorts always ensure that prominent rules have been put into the
place to make sure that a line is safe and abide by the prominent rules. Along with this the
respective company depends on the political and Environmental effects in terms of their
feedback and by this they decide that what course of action the need to take for the airline.
Economical factors: In terms of this the amount of economic activities is extremely
important as it describe the various economic policies such as interest rate inflation foreign
exchange and so on. Along with this, the economic factors that result in impacting the aggregate
demand and the business climate has the potential to influence the profitability of company
which likely to occur loss (Niaki and Nonino, 2017). In this context the economic system of the
UK is monopolistic oligopoly and also similar with the perfect competition economics system by
which its GDP rate is influenced. More about the exchange rate of UK in which Intercontinental
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hotels and group operates impact the profitability of company if company involve themselves in
the international trade. Moreover the stability of countries also significant and unstable that leads
to discourage the international investors and shareholders. Along with this the high level of
unemployment depicts the great supply of job by which people are willing to work at the lower
remuneration that leads to lower the cost of Intercontinental hotels and group. In this context the
demand for hospitality industry is highly related by the high income elasticity and because of this
the economy of world goes and the demand of air transport get improves it is beneficial for
Intercontinental hotels and resorts.
Social factors: This factor describes the requirements demands of customers by considering
their culture values attitudes believes and so on. In this context customer was plays an important
role as they induces company to develop new strategies in order to target other groups and retain
existing customers. It directly reflect the society in which Intercontinental hotels in group operate
and define the encompass culture attitude and values that majorly affect the community. In this
context the influence of social factors is not only important for the operational activities but also
significant for the market viewpoint from the Intercontinental hotels and Groups. In this context
company should have proper understanding regarding the lifestyle of customers their education
level income and preferences which is helpful in designing the product and marketing that leads
to achieve success factor. In this context the class distribution among the population plays a
significant role for the Intercontinental hotels and resorts by which companies unable to promote
the premium product in front of general public considering the lower class that depends on the
niche marketing. Moreover Intercontinental hotels and Groups should fully aware regarding the
health standards reaction of the harassment claims which is significant for the environmental
protection for your all industry. In this context the lifestyle preferences taste and fashion
dynamic and changes according to the requirement of customers that can bring about unity for
the company regarding the interest level for the long haul destination.
Technological factors: These factors include research and development and automation. In
this context the British line is currently undergoing with the digital disruption after many years
of relative stability. It describe the frequent dismantle price structure and competitive landscape
within the industry at the shortest period of time. In this context it is really important to
constantly innovate regarding the increment of possible profitability in order to become the
market leader and also protect them from the exploitation in the upcoming future (Alotaibi and
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Liu, 2017). Along with this it has various ways to develop innovative products to redesign its
policies for the whole industry. By considering this the recent technological development made
by the competitors and drivers of the Intercontinental hotels and Groups by which company to
encounter the new technology in order to achieve popularity within the industry and also monitor
the popularity level.
Legal factors: This factor includes the legal laws and legislations considering the trade
unions for the following industry. By considering this the intellectual property laws and data
protection is obtained by company in order to protect their ideas and patents that is only
profitable for the company and release under the secret information in this context the data is
stolen when Intercontinental hotels and group leads to lose its competitive advantage and in
return get high chances of failure. Moreover the discrimination and health and safety laws are
also selected by company in order to protect themselves and their employees and also offer
healthy and fair working conditions to them (Somers, 2019). Moreover Intercontinental hotels
and Groups treat their employees in fair manner and also provide same opportunities regardless
of their gender age disability religion and sexual orientation.
Environmental factors: This factor leads to cover the ecological impact that becomes
increasingly concerning in the eyes of customers and especially for the airline companies that are
responsible for the use of available resources and care for the environment. In this context each
and every industry has various standards according to the environmental protection policies. In
this context company consider the current weather conditions and estimate its sales for the
leisure activities and vacations of customers in order to manage the transportation for both the
resources and the finished products. In relation with this the delivery dates also effect of the final
product in terms of unexpected monsoon. Moreover the climate conditions and their changes also
render useless products like in some countries the winter has become very mild the cause of
global warming and warm winter clothes has much less seen in the market (Deasy and et. al.,
2016). In this context Intercontinental hotels and resorts develop special program in order to
control the climate changes by overseeing and adopting the carbon dioxide emission and also
concentrate on recycling and using the waste material.
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LO 4
SWOT Analysis
Strengths: Intercontinental hotels and Resorts share large number of outlets in across the
world and also support the strong distribution of network that make sure the availability of
production services to the large number of customers on the stipulated period of time. Moreover
the hotel has low cost structure which is useful in producing the products at low cost and sell
they met the low prices that are affordable for the customers. The company has strong
relationship with its suppliers by which they not only offer products but also put emphasis on
advertising the products and services of company (Saleem, 2017). Intercontinental hotel has been
prominently able to generate positive return towards its capital expenditure that and curd on the
various project in the past. Away with this hotel also and best extensively in the training of
employees that results in employing the large number of skilled and motivated employees and
has diverse workforce in the many areas of company by considering the diverse ideas and
methodologies of doing things.
Weaknesses: Intercontinental hotels and Groups invest more time and money towards the
research and development of the country and invest less money towards the employees that can
become weakness for the productivity and result in terms of innovative products. In relation with
this the current ratio describe the ability of company to meet its short term financial obligations
and legislation that slow down the average of industry by which company face many problems in
coming future (Holotiuk and Beimborn, 2017). Moreover there is a lack of proper financial
planning at the Intercontinental hotels in groups concerning its cash flow that leads the certain
circumstances which is not enough for the cash world required for the relevant and unplanned
borrowings. Moreover the hotel concentrate probably on the local workers and low amount of
workers towards the racial backgrounds full stop as the lack of diversification makes Complex
for employees in order to adjust the workplace that leads to the laws of talent.
Opportunities: In this context there has been the huge increment in the number of internet users
all over the world which becomes an opportunity for the company to expand its online presents
using the internet to interact with their customers (Virglerova, Dobes and Vojtovic, 2016). In this
context the increment in the number of social media users has rapidly increasing by considering
the three probable social media platforms such as Facebook, Twitter and Instagram which
describe the great number of opportunities to increase the probable customer base. In terms of
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this technology helps the company to collect data regarding their customers and improving the
marketing efforts.
Threats: In this context the new technological development leads to develop computers
within the industry that can become threat for the Intercontinental hotels and groups in terms of
customer attachments and new technology can also lost the competitors that leads to decrease the
market share of Intercontinental hotels and Groups. Moreover the uncertain political conditions
through the barriers that leads to hinder the performance in terms of enhancing its business and
unnecessary cost (Lee, 2017). Moreover, the digital disruption continues to become the high risk
for the Intercontinental hotels and resorts and also explain the technological development in
order to reduce the impact of digital disruption in upcoming future.
Macro factors which influences the organisation in terms of its strengths and weaknesses
Political: In this context the uncertain political conditions and arrival of new entrants
becomes the weakness for the hospitality industry which influences the frame of mind of
customers concerning appropriately opting the hotel for them (Eling and Schaper, 2017). In
relation with this it also impacts the profitability and productivity of company by considering the
income of customers and economic recession leads to impact the booking and cancellation of
hotels because of various demographic and climate factors.
Economical: In this context the recession because of the brexit impact the income level of
people by which the does not spend much amount on their vacations and leisure activities that
leads to impact the airline industry across the world (Triaa, Gzara and Verjus, 2016). For this the
funds in the form of licence fees for the airline industry has been reduced by the government in
order to operate their cost that implies on the airline industry which cannot be able to operate
effectively in low points when the operating cost is high.
Social: In this context Intercontinental hotels and resorts and hospitality industry always
development strategies by analysing the demands and preferences of customers as it is the best
way to attract customers towards the company and also helps in targeting various groups. In
relation with this the prominent services which are provided by the company impact the image
and their services become the factor that need to retain their customers for longer period of time
(Calabrese and et. al., 2018). In this context the company need to analyse the requirements and
the size of probable market by considering the development within the travelling industry and
need to cope up with it for their betterment.
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Technological: In this context the digital revolution influence the company in terms of
internet and up gradation of Technologies which they use in their booking and other operational
activities such as customer service and so on. In relation with this company also used cyber
security and data protection software in order to protect the details of their employees that lead to
reduce the misuse of companies’ data which can become strength for company in order to retain
their employees (Foss and Saebi, 2018). As employees think that the details are in the safe hands
which does not get leak and this can became the prominent factor that can retain them for longer
period of time.
Legal: By considering this factor it becomes the weakness for the company as in many years
company face lot of strike actions and trade union causes by which they face lot of loss. In this
context company face huge loss because of its cancellation of bookings which become quite
tough for Intercontinental hotels and resorts to operate its functions during the workout in which
they were cancelled and their employees but not allowed to work (Clarke, Li and Xu, 2016). In
relation with this company also face the impact of trade unions that leads to develop strikes
lockouts for the company and also face legal actions that is not good for its operational activities
within the dynamic business environment.
Environmental: In terms of this the uncertain climate conditions in various countries leads
to impact the leisure activities and vacations of many people that influences the profitability and
reputation of company. As the less percentage and arrival of customers and guest leads to to
impact the sales and decreases the profitability of hotel.
CONCLUSION
By considering the preceding information it is analysed that environment is the sum up of
both internal and external factors which impact the overall performance of company.
Furthermore swot and pestle analysis is conducted in order to analyse the environmental
condition and situation for the expansion of company to take entry in the dynamic business
environment and other area that impact the overall business conditions. In this context the
internal external strength and weaknesses are also determined which impact the organisation and
business as well.
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REFERENCES
Books and Journals
Alotaibi, Y. and Liu, F., 2017. Survey of business process management: challenges and
solutions. Enterprise Information Systems. 11(8). pp.1119-1153.
Batocchio, A., Ghezzi, A. and Rangone, A., 2016. A method for evaluating business models
implementation process. Business Process Management Journal.
Belas, J and et. al., 2018. Relationship of gender to the position of Slovak University students on
the socio-economic determinants of the business environment and the development of
entrepreneurship. Entrepreneurship and Sustainability Issues.
Clarke, G., Li, Y. and Xu, L.C., 2016. Business environment, economic agglomeration and job
creation around the world. Applied Economics. 48(33). pp.3088-3103.
Corradini, F., Polzonetti, A. and Riganelli, O., 2018. Business rules in e-government
applications. arXiv preprint arXiv:1802.08484.
Eling, M. and Schaper, P., 2017. Under pressure: how the business environment affects
productivity and efficiency of European life insurance companies. European Journal of
Operational Research. 258(3). pp.1082-1094.
Erasmus, B., Strydom, J.W. and Rudansky-Kloppers, S. eds., 2016. Introduction to business
management. Oxford University Press Southern Africa.
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Hillary, R. ed., 2017. Small and medium-sized enterprises and the environment: business
imperatives. Routledge.
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Koišová, E and et. al., 2017. SMEs financing as an important factor of business environment in
Slovak Republic regions. Montenegrin Journal of Economics.
Lee, I. ed., 2017. The Internet of Things in the Modern Business Environment. IGI Global.
Mawejje, J. and Okumu, I.M., 2016. Tax evasion and the business environment in Uganda. South
African Journal of Economics. 84(3). pp.440-460.
Niaki, M.K. and Nonino, F., 2017. Impact of additive manufacturing on business
competitiveness: A multiple case study. Journal of Manufacturing Technology
Management.
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Research Challenges in Information Science (RCIS) (pp. 21-32). IEEE.
Saleem, M.A., 2017. The impact of socio-economic factors on small business
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Somers, F., 2019. European Business Environment: Doing Business in Europe. Routledge.
Triaa, W., Gzara, L. and Verjus, H., 2016, August. Organizational agility key factors for
dynamic business process management. In 2016 IEEE 18th Conference on Business
Informatics (CBI) (Vol. 1, pp. 64-73). IEEE.
Virglerova, Z., Dobes, K. and Vojtovic, S., 2016. The perception of the state's influence on its
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