Strategy Development Tools for Tourism Industry

Running head: STRATEGY DEVELOPMENT TOOLS
STRATEGY DEVELOPMENT TOOLS
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1STRATEGY DEVELOPMENT TOOLS
PESTLE analysis:
PESTLE is an acronym for ‘Political, economic, social, technological, legal and
environmental’. It identifies all the different external factors which may affect the business.
By judging these factors, the managers can assess the risks that these factor identify then use
this knowledge to make perfect decisions.
Political Factors: this factor focuses all about the degree and extent to which the government
intervenes in the country’s economy.it can include political stability and instability of the
foreign markets, government policies, trade policies of the overseas market. Tax policies,
labor law, trade restrictions and most recently the trade laws (Tribe, 2016).
Economic Factors: this factor includes economic growth, interest rate, inflation, exchange
rate, disposable income and business of the country. By judging these factors, the firms can
assess the potential of the market and profitability in the business.
Social Factors: this factor is also known as socio-cultural elements as this particularly
focuses on the shared belief as well as approaches of the population. It comprises of
population growth, age distribution career attitudes and health awareness. These features are
of exact interest because they directly affect the marketers to understand the customers.
Technological Factors: in this current setting, the business largely depend on the
technological factors. This fast changing technological landscape is impacting the way the
organization market their products (Adu-Ampong, 2016). Technological factors greatly
influence marketing as well as management in three methods. It gives new ways of
production of goods and services, new methods of distributing produced goods and new ways
of communicating with the target markets.
Legal Factors: this includes equal opportunities, consumer rights, health and safety,
advertising standards, product safety as well as labelling of a market. In order to trade
successfully and ethically, the companies need to know every tricky area of their business.
Environmental Factors: it is a newly joined factor which has gained importance from the
last decade. These factors have become vital for assessment by the organizations because of
scarcity of raw materials, increasing carbon footprint and pollution targets. In this current
situation, more consumers are being driven to environmentally supported produces and
services.

2STRATEGY DEVELOPMENT TOOLS
In the tourism industry, political factors have far reaching effect. It can be changing
government regimes, terrorism and other political factors of a country in which the industry is
expanding. Economic factors were always remaining major elements in maintain high
demand of tourist globally. With stronger economy, the labor market continues to grow and
consumers are ready for spending (Barkauskas, Barkauskienė & Jasinskas, 2015). Due to
recent recession had reduced the number of tourists as the purchasing power had been
reduced. In the tourism industry of the world, the social factors like culture, ethnicity, history
and traditionalism have been influencing constantly. The consumer preferences are changing
in favor of private accommodations for which airlines and hotel brands are getting influenced
directly. In 21st century, technological factors have started to facilitate the industry greatly.
starting from communication, transfer of information and bookings of hotels and sites have
increased greatly. The legal factors in the tourism industry is very complicated. It is due to
the fact that both public and employee security remains chief concern of the industries. Any
type of legal risks can reduce market share and staff training has become more important for
legal hassles (Yang, 2017). Environmental sustainability remains key concern for this
industry. Ecological impact to waste management is important as people prefer visiting
cleaner places.
SWOT analysis:
It is a simple yet useful tool which helps to understand the strength and weaknesses of
the firms and identify opportunities and threats that the company may face in the market. The
technique of SWOT is commonly used by different business entities as well as the non-profit
organizations. This helps to strategic planning exercise. It is considered to be powerful
support to make decisions as this uncovers the possible opportunities for gaining success. The
threats are also highlighted which can be easily overcome to going competitive advantage.
Strength: identifying internal attributes as well as resources which support for a successful
result.
Weakness: identification of internal attributes as well as resources which may work against a
successful result.
Opportunities: the external factors that the organizations can use or exploit to its advantage.
Threats: the external factors affecting the success of the firms.