Impact of Micro Environment and Internal Environment on Fairmont Hotel and Resorts

This report discusses the impact of micro environment and internal environment on Fairmont Hotel and Resorts. It includes a PESTLE analysis, SWOT analysis, and the use of Porter's Five Forces Model. The report also explores the strategic planning frameworks used by the organization.

Unit 41 - Hospitality
Business Strategy

Table of Contents
INTRODUCTION.....................................................................................................................................3
PART A...................................................................................................................................................3
MAIN BODY............................................................................................................................................3
P1 Impact of micro environment and its strategies on organization................................................3
P2 Evaluation of internal environment of given enterprise...............................................................4
P3 Use Porter Five force model in relevance with given organisation...............................................7
PART B...................................................................................................................................................8
P4 Use frameworks for strategic planning with enterprise................................................................8
CONCLUSION.......................................................................................................................................11
REFERENCES.........................................................................................................................................12
Books & Journal:..............................................................................................................................12

INTRODUCTION
Business strategy is defined as process of actions adopted by firm to achieve
competitive advnatyage in market. It is wider and broader concept which is used by firms in
most suitable manner. Fairmont Hotel and Resorts which is luxurious 5 star hotel which is
headquartered in Canada. They provide quality of services and hospitality to their guest and
consumers. This report includes SWOT and PESTEL Analysis, Porter Five Force Model,
concepts & theories. To survive in market, they use business strategy in most effective
manner so that everything is done in proper way.
PART A
MAIN BODY
P1 Impact of micro environment and its strategies on organization
Business organizations are run within the environment they are directly affected with
environment as they are building up of environment factors. Business environment can be
defined as the combination and agreement of all the events, conditions and influences which
surround and directly affect business organization. Blake’s is one of the most popular 5 Star
hotel of London and it is famous for its interior design luxury services and providing royal
series to their customers. This organization is also directly affect by its micro environment
effects of micro environment can be explain by using PESTLE strategy.
PESTLE analysis

It is a tool of strategic management policies which is used by manages for their environment
scanning procedure. Management department of Blake’s hotel use this technique for identify the
impact of their micron environment factors.
Political factors: it includes those factors which are related and affect by the political
policies, environment law, and labour law rules and regulation made for foreign trade. It
consists of those elements which related with the management of public affairs. Fairmont
hotel and resorts is situated within the London, organization directly affect with BREXIT
agreement as their most of labours belong from European Union countries thus their business
activity affect from this agreement. (Wulandari, 2019).
Economic factors: These factors include those elements which are directly related
with the means of production and distribution of wealth they are directly influence on
demand and supply of firm. Due to the BREXIT, the profitably rate goes down because
before the agreement tourist can easily came in London but now due to heavy tax duties the
customers rate decrease. But government of England provides loan at lower return. (Johnson,
2016).
Social factors: These factors consists those elements relationship of human beings culture of
organization, age, demographic factors. They directly influence the hospitably industries as many
tourist came room different regions to stay in hols they get satisfies when department of hotel and
their employees provide them full facilities and behave in earlier manner. It is important to focus on
social factors so that all decision making and correct measures are taken in the process.
Technological- These environment include elements of software as well as hardware. They
are used by hospitably sector organization to solve their problems and for securities and also for
promotion of their organization. Fairmont hotel and resorts use social media advanced software for
promotion of their hotel facilities to attract customers. But advance technology device is also the
cause of increase of cyber-crime in the hospitality industry.
Environmental: These includes elements which is related with the nature, geographical,
ecological factors, whether, climate conditions port faculties, air, water pollutions problems. Different
environment conditional need to change the marketing strategies thus it is environment factors affect
the business organization. It is essential for Fairmont Hotel and Resorts that they made policies which
is in favour of environment and do not use any irrelative chemise or material which dangers for
natural environment.
Legal- Every country follow their own constitutional law. Thus, ever organization needs to
follow rules and regulation foliage environment. It includes laws regarding wages, health and stay
measure prices and opportunities. In hospitably sector they have direct impact on the

productivity .Regarding with the Fairmont hotels, their manger department makes strategies within
which they follow all the rules and lag regulation. They also contract with their workforce in large
manner.
From above analysis of above matter, it is seen, that PESTEL Analysis is crucial for
business so that all factors which have impact on firm progress and performance are
examined properly. Moreover, this also assists identifying the other problems related to
business (Holmes, 2018).
P2 Evaluation of internal environment of given enterprise
Internal environment can be defined as the part of business environment which is
related with the elements exists within the business firm. They are controllable factors.
Internal environment also defines as micro environment. To evaluate the impact of internal
environment business organizations use SWOT analysis technique. SWOT is a part of
environment scanning technique through which business manager easily recognises their
strength, weakness of business organization. Following are the SWOT analysis of chosen
hotel (Ardley, 2019).
STRENGTH WEAKNESS
 Fairmont hotel and resorts have strong
brand image within the market
economy.
 They have great strength of employers
who provides best services, thus this
hotel have a competitive advantages of
customers satisfaction.
 Fairmont hotel and resorts have strong
relation with politicians and famous
celebrities of all over the world they
will help in build good will within the
market place.
 Due to BREXIT agreement their
workforce has been resign from job as
they all belongs from European Union
countries.
 There is dispute within the organization
due to lack of management.
 Fairmont hotel and resorts depends on
foreign customers market and due to the
CORONA virus pandemic their future
sales will be decreases.
OPPORTUNITIES
 They have opportunity to enhance their
THREAT
 At present time, Marriott, Black pool,

market area within the world economy
by using attractive social media
platform.
 They increase their ales revenue by
offering attractive offers and strap up
new events in the hotel premises.
 Fairmont hotel and resorts have
opportunity to increase their revenue by
dealing with local personals’ they will
help in attractive customers and incising
their revenue rates.
Hotel Western, many rival organization
build strong position in the market place,
they chase the market area of Fairmont.
 Due to the pandemic the rate of foreign
customers will be decreases it is also a
threat as their profitability rate goes
down.
 They need to pay customer duty and
heavy tax rate on purchasing raw
materials from European countries after
the implication of Brexit government
After examining the above paragraph, it is seen that it is also important to identify the
internal capability of enterprise so that strategies as well as tactics are implemented in
properly. Furthermore, going through the SWOT Analysis, it becomes easier to analyse
performance level of business in market. To use this tool, correct credentials is required by
entity so that conflicts or problems do not arise in future (Pan, 2019).
VRIO Analysis
Another way of analysing the internal capability of firm is the VRIO Analysis. In
marketing, there are many tools and it is responsibility of manager to selects that most
appropriate one. VRIO is defined as tool in which evaluation of resources is done and then
further process is carried out. In relevance with Fairmont hotel and resorts through this
analysis they will able to evaluate their resources in efficient way. It is time consuming
process but is adopted by many firms for effective utilisation. It involves several elements
which are discussed below-
Valuable- It states that at what degree the resource or product is valuable to for firm
and what value does it have in market. It is necessary to identify such resources so that
company use them in most efficient manner. In relation with Fairmont hotel & Resorts, their
most valuable resources are their employee. They maintain a positive relationship amongst
the subordinates so that perform in better way.

Rare- Then comes rare component, which show that how rare and important are
resources is because if degree of resource is high then it will have more price in market. In
context to selected hotel, they have skilled and expertise staff and chefs which is profitable
for them. Also, when rareness of a resource is analysed it becomes easy for entity to
strengthen the base of corporation and management (Turkyilmaz, 2019).
Imitable- Further arise the intimacy which specifies up to what degree of resource
can be intimated by other brands or companies. It is crucial so that resources are used in such
a way that no other firm can use them or make copy of those resources. There are many firms
which duplicate the product and sell it into the market. In relevance with selected hotel, they
make ensures that no other employee at same time for other party.
Organised- At last is organised which depicts the company has well-structured
system and management or not. Through this, it becomes possible enterprise to achieve goals
and objectives in proper way.Mostly, HR manager of company assures that work is being
carried out in appropriate way without any problem. An organised organisation is always able
to achieve the mission & objective within a period of time. Thus, Fairmont has a well-
managed and structured management which helps them to run their business smoothly.
Therefore, after going through the above matter, it is seen that bot VRIO as well as
SWOT Analysis are useful for business and are to be used after proper considering the all the
factors appropriately. Through, VRI0 entity is able to analyse their main resources which are
increases their profitability & sales revenue (Büyüközkan, 2019).
P3 Use Porter Five force model in relevance with given organisation
Market is wider and broader which shows the degree of competition which is high. It
also means that to deal with competitors and rivals new tactics are to be implemented so that
most suitable way. This also shows that new thoughts are also generated when such tools are
adopted by organisations. In relation with Fairmont Hotel and Resorts, they use Porter Five
Forces Model so that they take competitive advantage in market and run their business.
Porter Five Forces Model- It is a toool in which is used by many organisations to
achieve competitive advantage. To implement it properly it is important to have knowledge
regarding market, trends & about a particular field. It involves five force which are explained
below-
Bargaining power of suppliers- This force states that suppliers also do have
bargaining power and their wish to keep their power with aim of earning more profit and
sales revenue by providing buyer low quality of products. It is seen that mostly power is high

when there less numbers of buyers, resources is rare etc. In relevance with chosen hotel,
manager of firm make ensure that they management selects the most suitable vendors
because entities maintain relationship with them for longer period.
Bargaining power of buyers- Further comes the buyer, in which power depends upon
the several factors such as when there are fewer buyers and suppliers are many. Also, they
keep their power so that they get resources or products for their business at affordable prices.
In relevance with chosen hotel, their power is moderate so that they manage effective
relationship between the people. Aggressively making the power might cause a huge problem
for business and this is the reason they have moderate power (Bellver, 2019).
Threat of new entry- Many new organisations comes into sector & which affects the
existing business of companies at depth. Mostly new entry is more where there are less
restrictions of government, few companies’ area present, need and demand of customer is
raising etc. New entry often disrupts the market environment which leads to switching
behaviour of customers. In context to Fairmont hotel and Resorts, they do not worries about
new entries as they have a goodwill in market and but as new and local streets restaurants are
taking place in Canada and providing quality of service at affordable prices it is reducing the
customer ratio of business. Thus, they need to be more aware about the market trends and
situation.
Competition rivalry- In business, competition is crucial for higher growth and
development. But sometimes, from the competition rivalry comes out which negatively
impact the business at deeper level. In reference with chosen hotel they also have competitors
such as Omni hotels, Hyatt, Ritz Carlton, and Loews Hotels etc. Degree of competition is
high which also generate more rivalries within the same sector. A main benefit of competition
rivalry is that it gives a huge contribution to the economy. Also, new strategies & decision
making is done so that everything is done appropriately. Manager of firm assures that
accurate and reliable information is present of competitors so that measures are adopted
accordingly (Cleberg, 2019).
Threat of substitutes- A product has numerous substitutes of a single product. Threat
of substitutes is more when customers switching behaviour is high and product cannot satisfy
their wants. In context to Fairmont hotel, mostly they also have threat of substitutes which
slows down their sales ad revenue.
Therefore, the above explained model states that to survive in this competitive era it is
important to use proper market research so that firm use their resources and sources in most
efficient way.

PART B
P4 Use frameworks for strategic planning with enterprise
A strategic planning plays vital role in business because it helps them to run their
business smoothly as well as properly. Strategic planning is defined as method by which firm
manages and enhances their position and strength of business. With help of strategic
planning, it becomes easy for firms to make decision properly with correct measures. In this,
with new ideas & thoughts entity is able to carry out their activities properly. Therefore,
Fairmont use this after considering the marketing situations so that resources in used in
efficient way.
Mission- Main mission statement of Fairmont is to provide customers with quality of
products and service and to increase their market share growth.
Vision- Vision of firm is to access global market with innovation and inventions.
Objectives-
 To enhance the profit maximisation of company
 To maintain a positive relationship between firm and customers
 So, the above described plans are achieved through effectively using strategic
planning. To achieve them successfully, decision making is to be done in appropriate
way so that conflicts do not occur (Schawel, 2018).
Firms uses Blue Ocean Strategy model to implement a strategy in business which is
marketing tool and is used for implementation of strategies as well as tactics. In entity, with
help of his framework it becomes easy to decide which strategy is useful and beneficial for
business.
Blue Ocean Strategy model
Blue ocean is a strategy where the boundaries of existing markets are redefined, and
new uncontested markets are created. At its core, there is value innovation, for which
uncontested markets are created, where competition is made irrelevant. And the cost-value
trade-off is broken. Thus, company following a blue oceanstrategy offer much more value at
a lower cost for the end customers. Blue oceans denote all the industries not in existence
today – the unknown market space with no competition. In blue oceans, demand is created
rather than fought over. There is ample opportunity for growth that is both profitable and
rapid.

VALUE INNOVATION
Value Innovation is the simultaneous pursuit of differentiation and low cost, creating
a leap in value for both buyers and the company. The concept of Value Innovation is
developed by W. Chan Kim and Renée Mauborgne and is the cornerstone of market-creating
strategy. Because value to buyers comes from the offering’s utility minus its price, and
because value to the company is generated from the offering’s price minus its cost, value
innovation is achieved only when the whole system of utility, price, and cost is aligned.
COST
Cost savings are made from eliminating and reducing the factors an industry
competes on. Buyer value is lifted by raising and creating elements the industry has never
offered.
After examining the above paragraph, it is seen that making strategic planning is
essential for every organisation so that they mission as well as vision of company is achieved.
Moreover, proper research is to done before going with the strategies so that all problems do
not occur in near future (Moreno-Izquierdo, 2016). With use of this model, it is easy to
prepare a strategic plan which asssist firm in developing of goals as well as objectives. It is
easy conbcept to understand & can be carried out easir way with proper consideration.

CONCLUSION
From stated discussed report, it has been examined that it is necessary to make
effective strategy with aim to accomplish goal/ objective of business organisation. In addition
to this, they make appropriate strategy in order to compete with its rivals. In this report,
PESTEL Analysis is used for assessing external environmental factor which enforces direct
influences on productivity & profitability of corporation. In addition to this, SWOT and
VRIO Analysis is adopted for identifying internal capabilities and resources of firm which is
important to consider while making effective strategy which will useful in taking decision for
benefit of company. Apart from this, porter five force models are used for gaining
competitive advantage over rival firm at marketplace. At last, Blue Ocean Strategy is adopted
by organisation for strategic direction in order to achieve growth in future period of time.
And also, they make objective, vision as well as strategies used by firm for attaining goal and
objective in a period of time.

REFERENCES
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