Analyzing the Impact of Macro Environment on Best Western Premier

This report analyzes the impact of macro environment on Best Western Premier and examines the internal environment and capabilities of the organization using VRIO analysis. It also discusses the different models and theories to understand the strategic direction within the hospitality industry.

Business Strategy
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Table of Contents
INTRODUCTION...........................................................................................................................3
LO1..................................................................................................................................................4
Applying the appropriate frameworks, analyse the impact and influence of macro
environment on The “Best Western Premier”...................................................................….4
LO2..................................................................................................................................................6
Analyse internal environment and capabilities of organization by using VRIO analysis.....6
LO 3.................................................................................................................................................9
Competitive analysis of market sector by applying porter’s five force model......................9
LO 4...............................................................................................................................................11
Summary of SWOT..............................................................................................................11
Critical evaluation of internal environment with porter’s generic.......................................11
Recommendations................................................................................................................13
CONCLUSION..............................................................................................................................14
REFERENCES..............................................................................................................................15
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INTRODUCTION
A business strategy is based on a powerful tool or platform that helps for reaching
enterprise goals, defining the suitable strategies, tactics that needed to take within the
organization (Park and Mithas, 2020). Another way, it can be defined as a business strategy that
refers to the actions, decisions which take place by the hospitality industry.
This report is based on the “Best Western Premier”, identifying the impact and influence
of the macro-environment with the help of pestle analysis. This report will describe the analysis
of the internal environment and capabilities of the organization, evaluating the outcome on
behalf of analysis. Furthermore, it will discuss the different models, concepts, and theories to
assist with understanding, interpretation of strategic direction within a hospitality organization.
Mission: To enhance the overall business visibility and make a strong brand in the global
marketplace.
Vision: To improve current business operational activities.
Objective
 To increase productivity as well as the profitability of the organization in the global
marketplace
 To implement digital technologies for improving speed, the efficiency of business
operational tasks.
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LO1
Applying the appropriate frameworks, analyse the impact and influence of
macro environment on The “Best Western Premier”
Pestle Framework
It is a type of tool or framework that mainly used by enterprise to analyse macro
environment or culture. Pestle analysis refers to the political, economic, sociological,
technological, legal, and environment. This type of framework will provide the insight into
external factors which impact on the Best Western Premier hotels in the global marketplace
(Bondarenko, Efremenko, and Larionov, 2019). This type of hotel provides great and important
services which not only attract tourists but also travellers from one country to another.
Obviously, there are different factors that directly affect the hotel industry.
Political Factor- Political factor plays an important role especially in the context of the
economy of the nation. Best Western Premier is targeting international tourism and then
afterward, it will be focused on the different hotel properties. This hotel provides the best support
for guests and helps to sustain in a competitive world.
Best Western Premier needs to understand the different rules and regulation of country,
which may vary in the province and then afterwards, West premier hotel operates as franchisor.
Manager of Hotel will monitor or track the activities of regulation. Nowadays, COVID-19 has
been rapidly increasingly impact on the business to decrease revenue of hotel. Furthermore,
identifying the political instability within best premier hotel in which impact on the business
policies, and procedures for growth and development (Bondarenko, Efremenko and Larionov,
2019).
Economic Factor- Basically, this factor includes taxation changes, economic growth,
inflation and interest rate, exchange rate. The best way to know about the economic change that
does leave a significant impact on the behaviour of Best Western Premier. All capital states and
country, own a wide number of tourists arriving for purpose of workshops, business dealing, and
another type of sole purpose (Bondarenko, Efremenko and Larionov, 2019). In this way, it is
positively impacting the hotel to give the best option and maintain their service.
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West premier hotel is focused on ever expanding supply in which there is no longer to
manage their franchise due to COVID-19, it has been reduced economy power within hotel
enterprise. Afterwards, best premier hotel revenue and its operating profit will be decreasing due
to decline of market activities.
Social Factor- The social factor is considered the important in Hotel industry because it
will continue to change the demand, want, and preference of the potential client. In UK, many
individual people is focused on the traditional culture and use their native language. Sometimes,
they can give more preference of their traditional food items. That’s why, Best Premier hotel will
serve the dishes, food and beverage on the basis of the demand. Therefore, Hotel can need to be
understand the difference to establish an effective marketing strategies for nation (Bondarenko,
Efremenko, and Larionov, 2019).
Best western Premier is basically exposed to the threat of damage in its reputation. If in
case, it fails to demonstrate with efficient use of practices, promoting awareness among local
communities.
In this way, it can identify that Social factors will positively impact the hotel to increase
the classes of guests so that customers prefer to select the best one, also it will negatively impact
the hotel where if they are not fulfilling all need or requirement for guest.
Technological Factor- Advancement of modern technology that can be used by Best
Western Premier especially, when it comes to hotel management procedures. This type of hotel
is providing the best quality of services where each and every guest can do their booking through
digital technology. Event guests prefer hotels that are embedded with modern technology. It
became safe and secure so that it would reduce the work efforts and enhance the better result or
outcome. For Example- Hotel provides a card-based key for luxury rooms and online booking
facilities through the website. Modern technology will positively impact the hotel to show
progress and increase growth opportunities. Within Best Western Premier, staff members can
utilise technological aspects and integrated with customer satisfaction levels. But at some point,
it negatively impacts the hotel regarding privacy.
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Legal factor- The legal factor is a positive impact on the growth and development of Best
Western Primer, there have been many changes made which affected the behavior of hotels.
Legal factors include health legislation and safety. However, discrimination law has been
eliminated which identifies possible impacts on legal aspects and effects on the hotel (Chen,
2019). On the other hand, the Current situation and war condition do not affect the Best Western
Premier hotel which may lead to serious changes. It might be possible to determine the external
factors that may leave a negative impact. For Example- Best Western Premier hotel can follow
equal customer safety regulations to provide the best quality of services.
Environmental Factor- This factor is related to the environment or cultural changing,
which is directly impacting the “Best Western Premier”. This hotel will adopt a friendly
environment and select sustainable related products. The environmental factor is affecting the
hotel in the context of heavy rains, floods, and storms. Another way, this factor will help to
reduce troubles, and a team of hotels can handle complex situations or conditions.
Porter’s five force theory -
It has been analysed the framework for analysing company competitive environment. Best
western premier can use as competitive rivals, potential new market entrants, suppliers,
customers and become substitutes which influence luxuries accommodation service of hotel.
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LO2
Analyse internal environment and capabilities of organization by using VRIO
analysis
An organization’s internal environment and its capabilities are composed of elements
within Best Western Premier. It including employees, management, and especially corporate
culture and also defining the current behavior of staff members. There are considered the
important element affects the organization as a whole, others affect the only manager. Best
Western Premier Hotel is mainly used the VRIO framework for identifying the internal
environment as well as the capabilities of the hotel.
VRIO Framework
It is based on the internal analysis tool or platform, used by Best Western premier to categorise
their resources on whether they can hold certain traits outlined in the framework. Basically, it
allows for the Best Western Premier hotel to identify all essential resources and gained a more
competitive advantage.
Valuable
The Best western premier hotel can use VRIO as a framework for purpose of analysis,
identifying the financial resources of the hotel, highly valuable as these help in investing in
external opportunities. Investors and other banks provide better funding for hotels so that they
can purchase raw materials in infrastructure development, food preparation.
Through analysis, its local food products are becoming a valuable resource such as food
ingredients like soap, sauce, and other spice items which are highly differentiating as per
demand. The Best Western Premier hotel can be perceived value for these by customers higher
(Darvishmotevali, Altinay, and Köseoglu, 2020). In this way, it becomes a more valued aspect to
gain more competition by the client because of their differentiation in their products. As per
VRIO analysis, Best Western Premier hotel should become considered as valuable resources
such as financial support through banks and other investors. For Example- Angle investor. It
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allows the hotel to sell their best accommodation services. It helps for generating a greater
revenue which providing the best quality of options.
Rare
The resources related financial of Best Western Premier have found to be rare on the
basis of this analysis. It may possess strong financial resources in UK. For Example- In UK, best
western premier have acquired the financial resources such as budget spreadsheet, equipment’s
etc.
Including resources such as online booking, identifying geographical location of Best
premier Hotel in particular region.
At a certain level, it is very difficult to identify the local food items but other competitors easily
provide in the marketplace (Khmiadashvili, 2019). It means that competitors can use similar
resources for making food items by using traditional ingredients.
On the other hand, VRIO analysis of Best Western Premier and employees are highly
trained or skilled which is not the case with staff members in other hotels. Managers can provide
better compensation and an effective work environment to ensure that these employees do not
leave for others.
Imitable
The financial resources of Best Western Premier are costly to imitate as identified by the
hotel. Through this analysis, the company has a prolonged profit over the years. New entrants
and other competitors would require more similar profits for a long term period of time. Initially,
the patient of the hotel is very difficult to imitate as determined by VRIO analysis. There are
similar resources to be developed and getting more patents for them which become very
expensive processes. For Example- a hotel can use cost-effective resources in the preparation of
different food items in order to attract guest of the company.
Organisation
In Best Western Premier, managers are organised to capture the value and importance of
VRIO analysis. Different resources are used strategically to invest in the right places, making use
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of combatting threats and gained more opportunities in the context of growth and development
(Njoroge, Anderson and Mbura, 2019).
Best Western Premier Hotels have been established in a distribution network with other
enterprises. It must ensure that the product or service meets the expectation level of a potential
client.
Resource-based view strategy
This type of strategy is based on the managerial framework used to identify the strategic resource
as a firm that can exploit to achieve sustainable competitive advantage.
 Physical: In Best Western Premier hotel, managers can use different physical resources
such as facilities, infrastructure, materials, and equipment that are utilized by hotels.
 Financial: financial resources are obtained by Best Western Premier hotels to collect
funds from different investors (Xia and et.al., 2020). In order to maintain and control
different investment-related activities. Generally, it involves capital markets, owner
equity, and stock.
 Human: In Best Western Premier hotel, HR has performed different activities to hire or
recruit a skilled or talented candidate, they have an ability to handle entire business
operations. It helps for identifying the suitable need or requirement for guests within the
hotel.
 Intangible: this type of resource is based on the intellectual property and recognition of
the brand so that they can consider patents, copyrights, and the trade market. Intangible
assets exit in the opposition to tangible assets such as a land, vehicle, and inventory
items.
Resource categories Analyses of Best premier Hotel
Physical resources Operating business within 20 different
countries.
Wide range of luxuries properties
Operational resources Online reservation system.
Providing rewards of their potential guest
Financial resources Managing the stable cash flow system
Handle strong balance sheet
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Intangible resources Strong brand name in global market
Maintain loyalty or trust
Human resources 1,50,000 employees works within hotel
Providing efficient training and development
session
Operational resources-
 Best western has a global reservations system and consider as average been booking $1
million. It has an ability to upgrade their website represents its capability to make their
resources unique. It has agreed that this core competence can never be permanents.
 Best western premier can use intangible resources such as reputation, staff skill, and
credibility. In this way, Hotel has maintained its strong position for long term brand in
which been going since 1946. In most of times, it is mainly focused on the marketing
while promote their business in global marketplace. in order to gain advantage and
generate new consumers.
 Best western premier consider core competence in which identifying long term standard
reputation on the basis of quality and service.
SWOT Analysis
Strength
 Associated “Best western Premier” Hotel in over 80 countries, consider as largest hotel
chain in the global world.
 The strength is the quality of product and service which always attracting more potential
consumers.
 Implementing innovation in business process to influence or inspire client. In order to
gain more competitive advantage in global marketplace.
 Hotel is located in good areas across the world.
 “Best Western Premier” has been successfully increased sales and inspire more
consumers.
 “Best Western Premier” has been gained the high profit margin in term of luxuries
accommodation, Spa & lifestyle, All-inclusive resort and etc.
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Weakness
 “Best Western Premier” does not interfere with the management of team members. in this
way, it is very difficult to manage or control the quality of service.
 Best western premier hotel can have a lack of Competition level within international
hotel chains, it is becoming as limited in the context of market share and their growth.
Threat
 Best western premier is changing market situation or condition which
automatically down economy.
 High end hotels charge thousands of US dollars when problem is that rate of hotel is not
within reach its average household in today’s world.
Opportunities
 Best western premier will increase the online presence through digitalization
technique
 High competitive level
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LO 3
Competitive analysis of market sector by applying Porter’s five force model
In regards to Best Western hotels and resorts, it is found that it offers a global network of
hotels in around 100 countries. It has an attractive and unique boutique and extended stay which
attract guests to the hotel and increase experience. Hospitality is one of the main sectors which
contribute to increasing revenue and improving the economy of the country. It is found that
competition is fierce in this sector as there are several hotels that provide the same features of
services. Now one of the main aims of Best Western hotel and its main brand Best Western
Premium is to become the market leader and expanding business. For becoming successful in
business expansion and becoming the market leader, it requires identifying the market conditions
and all factors that can increase competition in the market (Ulubeyli, 2017). With the help of
Porter’s five forces analysis model, it can evaluate the intensity of competition such as:
Power of buyers: There is a moderate intensity of this power. Reason behind this is
because customers in this sector have a variety of options because other rivals of this hotel such
as Hilton and Marriott also are well-known and provide better services. So, due to having a lot of
options, customers in this sector can bargain for making hotels able to be in the competition.
Hotels are also trying hard for being in the competition, so they have to satisfy the needs of
customers. But moderate force lower the profit margin of Best Western hotel so there is a
requirement of reducing the prices of services.
Power of suppliers: Intensity of power of suppliers is low that is beneficial for the
company. There are several suppliers in this industry. Suppliers are more than numbers of
hotels, so they do not have bargaining power. Due to several numbers of suppliers, hotels have
options to get suppliers. Suppliers in this sector want to retain with hotels for making their
effective position and getting chances of supplying so, they have to abide by all rules and
conditions related to products and prices. So, it can be said that for taking advantage and getting
raw materials at affordable prices, there is a requirement for Best Western hotel to improve
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relationships with suppliers and taking other advantages (Varelas, S. and Georgopoulos, 2017).
Due to lower intensity of power, Best Western hotel can take advantage of it and can expand
business successfully.
Threats of new entrants: This power has moderate intensity because of the
investment amount and fierce competition among existing players. For entering into this
industry¸ there is a requirement of investing amount to the great extent. So, it is quite difficult to
enter this market. After entering this industry, it can be difficult to compete with well-known
brands like Best Western, Hilton, Marriott, and others. There are several hotels that are new in
this industry but are striving hard for making an effective position in the market. So, it can be
said that by providing unique products and increasing trust among customers, company can take
advantage of this.
Threats of substitutes: This power has a lower intensity of power and it is beneficial
for this hotel. There are several fast food stores that are providing the same quality of food and
other services to customers. But in the context of hotels and brand of Best Western hotel that
offers premium services under its best western premium brand is unbeatable and other hotels or
substitutes find difficulties in competing with this hotel. Substitutes will require striving hard and
heavy investment in promotional activities for making customers aware of the effectiveness of its
features of products and services. Other fast-food stores can provide the same features of food
products but hotels are not limited to food products they provide leisure, rooms, and other
facilities. So, competing with this hotel is quite difficult. So, it can be said that by providing
qualitative features and improvising hotel room services, it can retain its customers with its brand
in the long run.
Competition among existing players: It has a strong intensity of power. Reason
behind high intensity is because there are several players in this industry that are increasing
competition and it is one of the biggest threats for Best Western hotels. Marriott's silicon valley,
Hilton, Host, Edwardian Inn are some big players and competitors of Best Western hotels so, it
can create barriers for this hotel in taking competitive advantages and also expanding business in
other countries (Pervan, Curak and Pavic Kramaric, 2018). So, it can be said that for becoming
the leader in this sector, Best Western hotel will require focusing on pricing and other strategies.
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From the above discussed all forces it can be said that competition among existing
players in the main higher intensity of force and other forces have lower and moderate power
which is beneficial for this hotel.
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LO 4
Critical evaluation of internal environment and strategic capabilities
Summary of SWOT
Overall it can be said that Best Western Premium is one of the largest hotel chains in the global
world and qualitative products and attractive features of services is its main strength that attracts
customers. This strength gives it the opportunity to improve the current occupancy rate of hotels.
On the other hand, it is also found that it has a lack of flexibility skills which can create barriers
in taking competitive advantages and adapting changes, occur in the business environment.
For accomplishing goals and becoming the market leader, the company requires
developing several effective strategies. Strategies are known as the main key and tools of
success. There are several strategies that can help this hotel in accomplishing its goals by
evaluating both internal and external environmental factors in a detailed manner.
Objective of the plan: Strategic planning is a systematic process that can help in setting
ambition for the business future. This hotel wants to become the market leader and expanding
business in other areas.
Strategic direction: Ansoff matrix is one of the best models that can help this hotel in
successful planning and developing strategies as per the analysis and growing business. This
model is categorized into 4 strategies such as: market penetration, product development, market
development and differentiation.. There are 4 main strategies under this that can be used by this
hotel as per their investment amount and main vision (Martins, 2020).
As per the mission, financial stability, competition in the market and availability of
human resource it can be suggested to company that it should focus on either cost leadership or
product development. By focusing one of these suggested strategies it can take advantages of
competition and can attract customers by providing qualitative products as lower price. By
making changes in an existing product or by developing new product in existing market that can
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satisfy needs of customers it can increase customers retention rate. All strategies have been
discussed below in a detailed manner.
Mission statement: To offer qualitative products and services to customers and
increasing their experience.
Vision: The vision of this hotel is to lead the hospitality industry in superior customer
care and for that, it offers a superior level of service to guests with honesty and integrity.
Competitive strategies: Ansoff matrix is divided into 4 strategies and for taking
advantages of competition, it can use these discussed strategies such as:
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Illustration 1: The Ansoff Matrix Model
Sources: (Ansoff Matrix to Identify Business Growth Opportunities, 2020)

Market Penetration: It is another best strategy and tool for taking competitive
advantages. In this strategy, the company requires focusing on developing new marketing
strategy and encouraging people for buying products and services. There are several other ways
by which company can take advantage of this such as focusing on prices, using Boston matrix
and others. The focus and aim of company is to sell more of the same things to the same market
and increasing sales.
Diversification: It is also known as a growth strategy because in this strategic business
move into a new market about which they do not have much experience. They have to take risks
and require focusing on improved and unique features of products. They require entering a new
market with new products. The company can make this strategy successful if it analyses external
environmental factors in an effective manner. It is also important for Best Western hotel to have
a clear idea of what it exactly wants to achieve and how it will enter into a new market. For
making the right balance between rewards and risks, the marketing strategy of diversification
also plays an important role. By making it successful, Best Western hotel can take a competitive
advantage.
Market development: In this strategy, the company requires focusing on the market and with its
existing product only they try to attract customers. For becoming successful in this strategy, the
company requires investing in promotional activities and other strategies (Chintalapati, 2020).
Market development can help this hotel in accomplishing financial goals like increasing profit
margin or sales up to 15% within 3-4 months, increasing revenue, and others.
Product development: The main focus of the company in this strategy on product development.
By producing new products in an existing market they try to increase sales and taking advantage
of competition. For focusing on product development strategy it will require adding some
features and making them attractive (Kiss and Barr, 2017). By making use of the internet and
technology it can improvise its hotel services. It can make use of robotic services as it can
increase customers’ satisfaction. It can also accomplish all of its goals like improving customers'
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experience and others. Improving current business operational activities is the main vision of this
hotel so, by improvising products and making use of technology it can satisfy the needs of
customers.
It is also important for this hotel to know their internal strengths as the help of employees,
finances, and other resources it can make any strategy successful. For entering the new market
and for attracting customers to the great extent it will require a skilled workforce because the
marketing department or human resources are responsible for improves performance.
Porter's Strategic: There are 4 strategies as per this porter's strategic competitive model such as
cost leadership, cost focus, differentiation and differentiation focus.
Cost leadership: By focusing on this strategy, company can take advantages of competition and
for that it requires: reducing cost or charging industry average price. By doing so it can increase
profit. By charging lower prices than other competitors it can also increase market share and
reasonable profit as well.
Cost focus: In this strategy, company seeks a lower cost advantage in 1 or small number of
market segment.
Differentiation focus: In this strategy company focuses on differentiating small number of
target market segment. By focusing on special customers and specific size of people, it can
increase profit. It can be targeted after analysing competitive situation.
Differentiation: As per this strategy, company requires making their products and services differ
than others. For making this strategy successful, company requires having an effective research
and development strategy and ability to deliver high quality of products.
Recommend strategic direction: Among all of these discussed strategies, it can be
recommended that Best western hotel should focus on either cost leadership or product
development strategy. By doing so, it can grab the attention of customers and can accomplish all
of its goals. It can also be recommended to company that it should focus on cost leadership
strategy, By lowering prices of products it can attract wider range of customers and increase
sales.
Recommendations
On the basis of the above-discussed strategies and market conditions in this hospitality
sector, it can be recommended to Best Western hotel that it should focus on cost leadership
strategy. This strategy can help it out in taking advantage of competition and other opportunities.
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It is found that there are several competitors in this industry who provides and offers almost the
same features of products and quality so, on the basis of pricing strategy it can make itself differ
and can attract customers (Kurt and Zehir, 2016). It is also stated that customers have bargaining
power in this industry that can lower their profit margin so, it can be recommended to this hotel
that it should focus on providing rewards and other benefits like gift vouchers, discounts, and
other rewards.
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CONCLUSION
It has been summarized from the above study that the PESTLE analysis model plays an
important role in analyzing macro-environmental factors. Analysis of macro-environmental
factors helps companies in developing their internal strategies for meeting goals. Further, it has
discussed the effectiveness of VRIO and SWOT analysis models as it also helps hotels in
evaluating internal environmental factors. Further, this study has discussed the reasons and the
main purpose of identifying competitive factors with the help of Porter’s five forces model. It
supports hotels in knowing market conditions and intensity of competition and on the basis of the
intensity of competition, hotels can take advantage of competition by developing strategies. The
strategic plan also plays an important role as in this plan, hotels develop their aims, and with the
help of effective strategies like diversification, cost leadership, and others they try to accomplish
their pre-determined goals.
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REFERENCES
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uncertainty, organizational agility, and organizational creativity in the hotel
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Khmiadashvili, L., (2019). Digital Marketing Strategy Based On Hotel Industry Study In
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and new venture performance: A contingency-based perspective. Journal of
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Kurt, A. and Zehir, C., (2016). The relationship between cost leadership strategy, total quality
management applications and financial performance.
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<https://www.smartinsights.com/wp-content/uploads/2013/10/Ansoff-matrix.png>
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