Analysis of Macro and Micro Environment of HOTS Hotel
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The report analyzes the macro and micro environment of HOTS hotel and develops strategies to help the hotel achieve its goals. SWOT analysis, Porter’s five forces analysis and PESTLE analysis have been conducted.
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Running head: STRATEGIC BUSINESS MANAGEMENT STRATEGIC BUSINESS MANAGEMENT Name of the Student Name of the University Author note
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1STRATEGIC BUSINESS MANAGEMENT Executive summary The purpose of the report is to analyze the macro and micro environment of HOTS hotel in order to understand the advantages and shortcomings of the company. In order to perform the above mentioned analysis, SWOT analysis Porter’s five forces analysis and PESTLE analysis have been conducted. After analyzing the environment, strategies have been developed in order to help the hotel to achieve its goals. Finally it has been concluded that with the help of the strategies the company will be able to gain prosperity in future.
2STRATEGIC BUSINESS MANAGEMENT Table of Contents Introduction......................................................................................................................................3 Discussion........................................................................................................................................3 Environmental analysis................................................................................................................3 Analysis of HOTS Hotel Micro environment..........................................................................3 Analysis of HOTS Hotel Macro environment.........................................................................5 Strategic Direction for HOTS Hotel............................................................................................7 Conclusion.......................................................................................................................................8 Reference List:.................................................................................................................................9
3STRATEGIC BUSINESS MANAGEMENT Introduction Strategic management can be defined as the process of formulating and implementing of the chief initiatives and goals of an organization’s top management. This process involves consideration of resources along with detailed analysis of external and internal environments, in which the particular organization competes (Hitt, Ireland & Hoskisson, 2012). In this report, detailed analysis of the micro and macro environments of the HOTS hotel have been performed alongwiththedevelopingstrategicdirectionfortheorganization(Avilova,Ermakov& Gozalova, 2014). While for analyzing the Macro environment of the company, PESTLE analysis is performed, SWOT and Porter’s five forces model have been used to understand and analyze the micro environment of the mentioned organization. Discussion Environmental analysis Environmental Analysis helps an organization to understand both internal and external condition that has direct impact on the prosperity of the organization. Once the management of the organization becomes aware of the external and internal factors that are affecting the growth of the business, the managers can successfully design long term business plan to cope up with the weaknesses and availing the opportunities of the company (Grant, 2016). Analysis of HOTS Hotel Micro environment Micro environmental analysis includes analysis of the external factors that has direct impact on the sales of a specific organization (Eden & Ackermann, 2013). These factors are
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4STRATEGIC BUSINESS MANAGEMENT beyond the organizations control. In order to analyze the Micro environment of HOTS hotel, Porter’s five forces model have been used. Porter’s five forces Model of HOTS Hotel Bargaining power of the Buyers Strength: Moderate Considering the fact that the number of hotels with modern facilities and well constructed structure are present in Brisbane, tourists have a great number of options to choose from. However, since HOTS Hotel is situated at the town centres and has a minimum distance from the shopping centers, these two factors add competitive advantage for the mentioned hotel in Australia since tourists prefer hotels that are nearer to the shopping centers. Bargaining power of the suppliers Strength: High As mentioned earlier, a good number of hotels are present in Brisbane (Vecchiato, 2012). As a result, the suppliers of goods and services of the HOTS hotel have a number of options to provide their services. This means, if sufficient wages and value for the products supplied or services given is not provided by the mentioned hotel, suppliers have the option to shift. Threat of new entrance Strength: Low Due to the high barriers of entering the hotel industry in Australia along with the complex entry laws and legislation implemented by the government, the threat of new entrance for the
5STRATEGIC BUSINESS MANAGEMENT HOTS hotel is low. Apart from that, the amount of money needed to establish a successful business in the hotel industry is another reason behind the less amount of entry in this industry (Hill, Jones & Schilling, 2014). Threat from substitute Strength: Moderate Considering the fact those services provided by the hotel industries in Brisbane are highly similar, every hotel management including the management of HOTS hotel is trying to introduce innovative leisure services to attract consumers. Threat from existing competitors Strength: High ConsideringthefactthatthereexistagoodnumberofhotelsinBrisbane,high competition exists between them (Wheelen et al., 2017). Since tourists seek for the best experience for the best price, the tendency of the hotels in Brisbane is to reduce the price to gain competitive advantages. Analysis of HOTS Hotel Macro environment A macro environmental analysis includes analysis of the whole economy of a country rather than analyzing a particular sector. In order to conduct macro environmental analysis of the HOTS Hotel, PESTLE analysis has been performed (Tanwar, 2013). PEST Analysis
6STRATEGIC BUSINESS MANAGEMENT PoliticalEconomicSocialTechnological Beingadeveloped country, the government of Australia and hence, Brisbane is stable. This imposesapositive impactonthe hospitalityindustry (Tansey,Spillane& Meng, 2014). Sincetheeconomyof the town has developed due to the relocation of severalbusinessfirms, the economic condition of Brisbane is favorable forestablishmentof hotel industry. Sincethelocalpeople havecommendable willingnessand availability to work, the social condition of the townisalsofavorable forhospitalityindustry (Dunning, 2014). SinceBrisbaneisa developedtown,the town is highly advanced in technology. Thus the hospitality industries in Brisbane can avail both offlineandonline facilitiestoenhance their quality of services to the consumers. SWOT Analysis StrengthsWeaknessesOpportunitiesThreats ï‚·Highly attractive location ï‚·Numberof facilities providedto the consumers are commendable ï‚·Deterioration of revitalization plan ï‚·Lackof training provided to the staffs ï‚·HOTShotel hasthe opportunity to gainmore marketshares by understanding theneedsof the ï‚·High turnover ratesofthe employees. ï‚·Presenceof highamount of competitors.
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7STRATEGIC BUSINESS MANAGEMENT Speciousand highly comfortable rooms. consumers. The quality of theservice givencanbe enhancedby incorporating newcuisines tothemenu list. Strategic Direction for HOTS Hotel From the above analysis the management of HOTS Hotel has derived several strategies to cope up with the competitive market. While the vision of the Company is to provide the consumers with a larger than life experience, the mission of HOTS hotel is to motivate and employees and other stakeholders by proving proper facilities and training. In order to achieve the goals and objectives of the hotel, Porter’s generic strategies have been implemented by the management.Thementionedstrategyiscomprisedofcostleadershipstrategy,product differentiation strategy and focus strategy (Dudin et al., 2014). While the cost leadership strategy includes reduction of the costs while keeping the quality of the service high, the focus strategy includesprovidingthestaffswithefficienttrainingandfocusingmoreonrevitalization (Bharwani & Mathews, 2012). The product differentiation strategy involves attracting the
8STRATEGIC BUSINESS MANAGEMENT tourists by providing unique facilities like special offer packages, free welcome drinks and gifts on the basis of lucky draw facilities. Conclusion From the above report it can be concluded that it is very crucial to understand the external andinternalenvironmentofHOTSHotelinordertounderstanditsshortcomingand opportunities. In order to overcome the issues that have been detected from the environmental analysis several strategies have been developed. It can be clearly understood that HOTS hotel needs to implement the strategies effectively in order to achieve its mission. The strategies will not only help the hotels to gain competitive advantage but will also ensure its prosperity in the future.
9STRATEGIC BUSINESS MANAGEMENT Reference List: Avilova, N. L., Ermakov, A. S., & Gozalova, M. R. (2014). An analysis of the international customerattractionexperienceinthehospitalityindustry.WorldAppliedSciences Journal,30(MCTT), 84-86. Retrieved from: https://www.cabdirect.org/cabdirect/abstract/20143157200 Bharwani, S., & Mathews, D. (2012). Risk identification and analysis in the hospitality industry: Practitioners' perspectives from India.Worldwide Hospitality and Tourism Themes,4(5), 410-427. Retrievedfrom: http://sci-hub.tw/http://www.emeraldinsight.com/doi/abs/10.1108/17554211211277851 Dudin, M., Lyasnikov, N., Veselovsky, M., Sekerin, V., & Aleksakhina, V. (2014).The problem of forecasting and modelling of the innovative development of social-economic systems and structures, 304-508. Retrieved from: http://profil.ranepa.ru/docs/pubs/p915/54fed23575043.pdf Dunning, J. H. (2014).The Globalization of Business (Routledge Revivals): The Challenge of the 1990s. Routledge, 402-490. Retrievedfrom:https://books.google.co.in/books? hl=en&lr=&id=8DpWBQAAQBAJ&oi=fnd&pg=PP1&dq=Dunning,+J.+H.+(2014). +The+Globalization+of+Business+(Routledge+Revivals):
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10STRATEGIC BUSINESS MANAGEMENT +The+Challenge+of+the+1990s.+Routledge,+402-490&ots=GNMR- nVikh&sig=JGofOkVI6W8YpM7pYQJ2xVYJUf4#v=onepage&q&f=false Eden, C., & Ackermann, F. (2013).Making strategy: The journey of strategic management. Sage, 235-240. Retrievedfrom:https://books.google.co.in/books? hl=en&lr=&id=UnYWfXigU4UC&oi=fnd&pg=PP1&dq=Eden,+C.,+%26+Ackermann, +F.+(2013).+Making+strategy:+The+journey+of+strategic+management.+Sage,+235- 240.&ots=FDwe6CAXVv&sig=wA9kam2YAqeoyK3rI2Kp5t8Xkjs#v=onepage&q&f=f alse Grant, R. M. (2016).Contemporary strategy analysis: Text and cases edition. John Wiley & Sons, 467-300. Retrievedfrom:https://books.google.co.in/books? hl=en&lr=&id=DTDvCQAAQBAJ&oi=fnd&pg=PP15&dq=Grant,+R.+M.+(2016). +Contemporary+strategy+analysis:+Text+and+cases+edition.+John+Wiley+%26+Sons, +467-300&ots=emJQeHi0ZF&sig=JQQD- kbo6evzO7qNQw84wvELxTg#v=onepage&q&f=false Hill, C. W., Jones, G. R., & Schilling, M. A. (2014).Strategic management: theory: an integrated approach. Cengage Learning, 654-666. Retrievedfrom:https://books.google.co.in/books? hl=en&lr=&id=Qy8aCgAAQBAJ&oi=fnd&pg=PP1&dq=Hill,+C.+W.,+Jones,+G.+R.,+
11STRATEGIC BUSINESS MANAGEMENT %26+Schilling,+M.+A.+(2014).+Strategic+management:+theory: +an+integrated+approach.+Cengage+Learning,+654- 666&ots=o9kLVlPQvt&sig=Ca9YFbCAtGELvSEW4Em- CalS2gA#v=onepage&q&f=false Hitt,M.A.,Ireland,R.D.,&Hoskisson,R.E.(2012).Strategicmanagementcases: competitiveness and globalization. Cengage Learning, 123-234 Retrievedfrom:https://books.google.co.in/books? hl=en&lr=&id=qaIKAAAAQBAJ&oi=fnd&pg=PR2&dq=Hitt,+M.+A.,+Ireland,+R.+D., +%26+Hoskisson,+R.+E.+(2012).+Strategic+management+cases: +competitiveness+and+globalization.+Cengage+Learning,+123- 234&ots=Emokvn6GBs&sig=P14A_Y5nE8nNuapO_8cTYvxiLys#v=onepage&q&f=fal se Tansey, P., Spillane, J. P., & Meng, X. (2014). Linking response strategiesadopted by constructionfirmsduringthe2007economicrecessiontoPorter’sgeneric strategies.Construction management and economics,32(7-8), 705-724. Retrievedfrom: http://sci-hub.tw/http://www.tandfonline.com/doi/abs/10.1080/01446193.2014.933856 Tanwar,R.(2013).Porter’sgenericcompetitivestrategies.Journalofbusinessand management,15(1), 11-17, doi( Nov. – Dec. 2013) Vecchiato, R. (2012). Environmental uncertainty, foresight and strategic decision making: An integrated study.Technological Forecasting and Social Change,79(3), 436-447.
12STRATEGIC BUSINESS MANAGEMENT Retrived from: http://www.hajarian.com/amaliati/1-s2.0-S0040162511001466-main.pdf Wheelen, T. L., Hunger, J. D., Hoffman, A. N., & Bamford, C. E. (2017).Strategic management and business policy. Pearson, 234-256 Retrievedfrom:https://testbank24.com/pdf/Solutions-Manual-Strategic-Management-and- Business-Policy-Globalization-Innovation-and-Sustainability-14th-Edition-Wheelen.pdf