Portfolio: Macro and Micro Environmental Analysis in Hospitality Industry

This portfolio provides an analysis of the macro and micro environmental factors affecting the hospitality industry, with a focus on the challenges and opportunities in the field. It includes a PESTLE analysis, Porter's 5 forces analysis, and consumer and competitor analysis.

PORTFOLIO

Table of Contents
INTRODUCTION ..........................................................................................................................3
1. Macro environmental analysis................................................................................................3
2. Micro environment analysis ...................................................................................................5
3. Core challenges and opportunities..........................................................................................8
4. Conclusion...............................................................................................................................9
REFERENCES .............................................................................................................................10

INTRODUCTION
Portfolio is defined as management that requires to manage the investment effectively.
This is one of the crucial components for managing an investment effectively (Gupta, Gupta and
Gupta, 2019). Thus, present report will be based on hospitality industry. It is field that provides
services inclusive of lodging, drink service, event planning, food and transportation facilities etc.
However, the report will be based on new start up as Exquisite stay. For effective set up
study will conduct PESTLE analysis, Porter's 5 forces analysis and micro analysis will be
collected with help of consumer and competitors analysis. Additionally, challenges and
opportunities will be defined so that better market analysis can be conducted.
1. Macro environmental analysis
There are several things that have bought major changes to industry. Thus, technological
innovation, political instability, changes in expectation of customers and some another
components have influenced the working conditions in globally manner. Thus, PESTLE will be
conducted in following manner as are-
Political factor- This has direct and deep impact on hospitality industry. Thus, the main target of
hotel industry is to attract the international tourism that will host various level of different
properties (Racz and et.al., 2018). Therefore, hotel industry is the backbone of the legal
authorities and government also provide assistance to sustain in competitive world. Thus, small
steps taken by government has ultimate impact on growth and sustainability of industry. For ex-
attack of Taj and Oberoi hotel attack has substantially dropped the rate of tourism.
Economic factor- The components as taxation changes, inflation, economic growth, interest
rates and exchange rates are the crucial components that affects the working of industry.
Therefore, economic changes leave a significant impact on the behaviour of the enterprise. Thus,
guest also ready to pay for the extra service they demand. Additionally, the current economy tax
in Australia is about 30%. Thus, changes in economic condition also impact the working of the
industry.
Social- Changes in taste and preferences of customer also affect the working of the industry.
Thus, willingness and availability of individual to work impacts the working of industry. In the
business hotel, there must be variety of options which are availed and this has huge impact on

working of industry. Thus, each entity must have different classes of guest and availability for
each kind of rooms.
Technological factor- The technology must be beyond the standards in order to set up effective
management system within hotel (Greene, Morgan and Foxall, 2018). In Australia, local firms
are investing in technologies to meet out the growing demands of customers. This is one of the
most technologically advanced country in the world. Thus, hotel providers must use the
computer & equipment, tech consultancy services and artificial intelligence are the core
components that results in more innovation and design.
Environment factor- It is said to be the one of the more beautiful country in the world and it has
stunning beaches, forest and mountains. Thus, it has high rate of tourists. Additionally,
environment factors that impacts the hotel business are flood, heavy rains etc. The hotel
management teaches proper measures to employees to take care for customer’s at the time of
emergency cases.
Legal factor- It is essential for the growth of hotel industry. There are various that have been
made and this also affected the behaviour of the enterprise. It is the components that is inclusive
of safety and healthy laws. However, the current situation and war condition highly affects the
law of the hotel industry. Thus, it can be stated that the external components may leave a
negative impact on hotel industry. In the present scenario, the individual get attracted to the
leisure based hotel that are legal and also offers secure services.
Porter's 5 forces analysis
This is one of the effective technique that aids to identify the sustainable competitive advantage
that allows firm to outperform the average competitors. Thus, its defined in following manner as
are-
Competition in the industry- The rivalry in hotel industry is at the intense because the cost of
there is cost differentiation and switching cost of enterprise is very low. In the hospitality
industry there is high capital cost and to pressure to sell the capacity by the price cutting is high
and this enables the competition to be become intense. Only at the time of weekends and
holidays, this entity can charge the high cost for the services.
Potential of new entrants into industry- This is the industry that is highly characterized by the
high capital cost that is total cost that aids to undertake the better services. Thus, this is the most
profitable industry and hotel has to make sure that high capital cost is gaining its worth in

manner of output and resources. Additionally, it can be stated that the new entrants in he market
needs to be conscious about the target market and quality of commodities. Thus, to attract the
customer the entrant need to invest in innovation services that are provided to customers.
Therefore, they also need to select the best location so that customer can be attracted.
Power of suppliers- The power of supplier at the hotel industry is relatively low. It is subjected
to power of the labour, trained staff and personnel and industry has huge demand of it. Hotel are
not subjected to negotiate the power of suppliers. To get the leading league the hotel has to
maintain the advantage of cost over its competitors. Thus, they need to be more innovative about
differentiating themselves in the own strategic group.
Power of buyers- In this, it can be stated that the concentration of the buyer is higher than the
players of market. Thus, industry is subjected to the high power of buyers. Thus, the buyers use
to show high level of the power at the time when they are purchasing the hotel room in bulk as
per their requirement. These group is inclusive of domestic, international airlines, tour opertaors
and convention organizers etc.
Threat of substitute- It is relatively low within the hospitality industry. Thus, this situation only
occur at the time of recession within the hotel industry, so this can thrive without ant threat.
Thus, people more looking for the cheap accommodation facilities with quality services. Thus,
market is price sensitive and hotel target the audience becomes the cost conscious people. Hence,
in the case of accommodating the large group of people like business travellers and travelling
groups. The hotel do not face the threat of substitute however this faces the competition of
differentiation.
2. Micro environment analysis
Consumer analysis- It can be defined as process in which information about the consumer can
be found on from the market research after analysing the needs and wants of customer’s. Thus,
customer analysis can be defined as one of the critical component of business plan during the all
stages of growth ( Di Mascio, Laura and Temperini, 2018). It will be undertake with the help of
wheel of consumer analysis that is simple model that defined as key components in order to
understand the behaviour of consumer and this also guides marketing strategy. Thus, its defined
in following manner as are-

1. Affect & Cognition- This is defined as one of the wheel of the consumer analysis and also for
the sake of understanding the behaviour of consumers. Thus, it breaks into two parts as are-
Affect- This is term that defined as how people feel about the product and services offered by the
entity. It is the term that needs to be taken into consideration to analyse the requirements of the
consumer. By depending on how consumers feel about something helps to undertake the decision
accordingly.
Cognition- It is the term that need to identify about the latest trend within the market. In the
present scenario, the customer are looking for high technological services that provides smart
services to customers. Thus, the use of cloud, artificial intelligence and smart key room facilities
are the common source of techniques that aids to gather the attraction of customers. Additionally,
this can be stated that the market strategy has to be target one such as thought process. After
conducting it effectively, the better analysis of consumer can be undertaken.
2. Consumer behaviour- There are number of the things that influence the choice of consumer
behaviour. Henceforth, the affect and cognition is treated as separate and influenced factors that
has huge impact on choice of customer’s. Thus, behaviour of consumer is observational and this
needs to be measured out effectively (Meyer and Cohen, 2018). The consumer behaviour is the
term that aids to study about the physical action of customer’s irrespective if thought and
background process. It is the consumer behaviour that needs to influenced separately to enhance
the sales and also improves the turnover.
3. Consumer environment- It also plays the major role on the thinking process and
behaviour of customer’s also impacts the affect and cognition. Additionally, consumer
are influenced by the environment as they present in. Henceforth, the income,
demographic level and marketing strategy all play the major role in decision making.
Thus, consumer environment needs to be undertaken into consideration so that better and
attractive decision about the product and services can be undertaken.
Competitors analysis-
It is analysis that defined as process of identifying competitors and also aids to evaluate
the strategies that aids to determine the strength and weakness that relatives to business, product
and service. Thus, goal of competitive analysis is to collect the intelligence crucial to find a line
of attack and develops market plan of action. This is defined as one of the tool that undertake the
better research within market. Henceforth, its defined in following manner as are-

Current strategy- The present plan of action of the enterprise is to put focus on needs and
demands of the customers. Herein, entity will use technological advancement that can assist to
undertake better management facilities. High advanced tool aids to undertake better facilities and
also provide ultimate satisfaction to customers.
Objectives- The maim aim of entity will be as to gain high competitive advancement within
market with help of maximisation within market share. By providing technological based
innovative services the entity can undertake the operations in better and effective manner. To get
50% of the profitability within 3 months after setting up operation. Thus, to gain the long term
sustainability the entity will take the initiatives to provide ultimate customer’s satisfaction.
Resources and capabilities- The resource within the enterprise can be defined as the tangible
and intangible sources that affects the working of the industry at huge level. Thus, hospitality
resources can be defined as man, labour and capital etc. These are the crucial components that
affects the working of entity. Henceforth, better recruitment of staff and skill labour workforce
plays as backbone to the enterprise. However, effective workforce leads to carry out better
performance within the enterprise. Thus, better use of resources and capabilities helps out to
frame the sustainable competitive advancement within the hotel industry.
Illustration 1: Framework for competitor analysis
(source: Framework for competitor analysis briefly discuss,
2018)

Assumption- It will be assumed that better action plan can aids to undertake effective services
and this also allows to gain sustainable competitive advancement. High advancement and
effective techniques aids to bring our the better performance within market. By use of modern
advancement the entity can perform their best and gain maximum amount of profitability.
3. Core challenges and opportunities
Hospitality is one of the fasted growing industry in the world as per the present scenario.
This is the enterprise that experience the high turnover of skilled people. Additionally, core
challenges and opportunities relate with hospitality is defined in following manner as are-
Challenges-
Cleanliness- The one of the main challenge is to demand for the cleanliness as this is one of the
pronotum for choosing and recommending hotel services to other customer’s. Thus, efficient
housekeeping teams are crucial term for managing brand reputation and this also aids to drive
loyalty among the guest.
Technology- It is considered as to be the one of the integral part of hospitality industry. The
hotel must provide the facilities that offers the guest the basic right to get connected with hotel.
Additionally, technology can be defined as constant travel companion. However, this can be
stated that innovative use of technological advancement benefits the customer’s to manage the
operations of the enterprise effectively (Meyer and Cohen, 2018). The one of the challenge for
hospitality to implement technological based services is that it require huge investment. It assists
to hotel chains to stand out of the competition and also aids to attract new customer’s.
Excellence service- In the hospitality sector, the customer’s demands for quality services. For
this, the management authority of entity need to hire the highly skilled and attentive staff that has
ability to assist the customer and to make their stay comfortable and relaxing. This can be done
only after analysing the needs and wants of customer’s. Thus, recruitment of good staff takes
long time.
Meaningful experience- In the hotel industry, the design, trends, techniques and personalisation
cal assist to provide the meaningful experience and also supports to drive guest loyalty. Thus,
better customer services aids to build up the reputation of the enterprise. Hence, it can be stated
that the quality of services plays the crucial role as it needs to be considered to be one of crucial
aspect that provide better meaningful and improved personal experience to guest.

Sustainability- It is defined as one of the rapidly climbing agenda of each enterprise. Thus,
management staff of hotel must invest in corporate responsibilities programme that can assist to
win the trust of customers. Additionally, there are many opportunities for the hotel to raise the
brand profile in terms of environment impacts by considering over the factor as to reduction in
food waste, general waste, consumption of water and energy (Meyer and Cohen, 2018).
Thus, it can be stated that management staff of the hotel must provide extra level of
service that can help to generate brand loyalty and repeat custom. In order to build up the
sustainability there is crucial to develop the deep understanding of the type of the customers and
must provide the facilities that can helps to cater the needs of the target base customer.
4. Conclusion
From the above aforementioned report it can be concluded that portfolio management is
defined as the one of crucial skill that requires for attractive managing the investment effectively.
This is one of the effective tool that aids to making decision about the investment. The present
report is based on business activities of Hospitality industry.
However, the report has focused on activities as to conduct the macro environmental
analysis with help of tools as PESTLE and Porter's five forces. Additionally, study has focused
on consumer and competitor analysis for identify the microanalysis. Lastly, report has defined
the core challenges and opportunities that impacts the working of enterprise.

REFERENCES
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The impact of Europe 2020 policy. NOLEGEIN-Journal of Corporate & Business Laws.
Racz, L. and et.al., 2018. Extensive comparison of biodiesel production alternatives with life
cycle, PESTLE and multi-criteria decision analyses. Clean Technologies and
Environmental Policy, 20(9), pp.2013-2024.
Greene, M.N., Morgan, P.H. and Foxall, G.R., 2018. Connectionist Modelling of Consumer
Choice. In Quantitative Research Methods in Consumer Psychology (pp. 247-271).
Routledge.
Di Mascio, T., Laura, L. and Temperini, M., 2018, April. A framework for personalized
competitive programming training. In 2018 17th International Conference on Information
Technology Based Higher Education and Training (ITHET) (pp. 1-8). IEEE.
Meyer, C. and Cohen, D.G., 2018, July. Porter’s Five Forces in the Post-industrial Age. In
Academy of Management Proceedings (Vol. 2018, No. 1, p. 16589). Briarcliff Manor, NY
10510: Academy of Management.
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Framework for competitor analysis briefly discuss. 2018[Online] Available
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310-framework-competitor-analysis-briefly-discuss-importance-four-dimensions-
q24824620>.
Gupta, Gupta and Gupta, 2019 Racz and et.al., 2018 Greene, Morgan and Foxall, 2018 Di
Mascio, Laura and Temperini, 2018 Meyer and Cohen, 2018