Impact of Macro and Micro Environment on Hospitality Business Strategy - A Case Study of The Savoy Hotel

Unit 41 - Hospitality
Business Strategy

Table of Contents
INTRODUCTION.................................................................................................................................3
TASK1..................................................................................................................................................3
P1 Apply frameworks, analyse impact and influence of macro environment on given organisation. 3
TASK 2.................................................................................................................................................4
P2 Examine internal environment and capabilities of a given hospitality organisation.....................4
TASK 3.................................................................................................................................................6
P3 Apply Porter Five force model in relevance with given organisation...........................................6
TASK 4.................................................................................................................................................8
P4 Apply concept/ frameworks for strategic planning in relevance with organisation.......................8
CONCLUSION...................................................................................................................................10
REFERENCES....................................................................................................................................11
Books & Journal:.............................................................................................................................11

INTRODUCTION
Business strategy is used by many organisations to take competitive advantage in
market. In market, competition is increasing at rapid level and it is not possible for enterprise
to survive without using or adopting strategies or tactics. In hospitality sector, many scales of
competitors have been increasing and many firms are using different types of strategies. The
Savoy, a famous 5 star hotel on headquartered in UK. Hotel is famous for its panoramic view
of river across Savoy place and Thames Embankment. This report includes PESTEL
Analysis, SWOT, porter five force models and range of theories, concepts and models. With
help of business strategy it becomes easy for enterprise to run their business smoothly and
effectively. It is wider and broader concept which is to be used and understood in proper
manner.
TASK1
P1 Apply frameworks, analyse impact and influence of macro environment on given
organisation
Environment in business affects the productivity and progress at deeper level. It is
crucial to implement strategy for business so that it is easy to run functions and operations
properly. So, it is essential to be aware of market and trends so that changes are adopted in
management effectively. The Savoy hotel is also gets affected by these macro environment
factors and to analyse them firm use PESTEL Analysis.
PESTEL Analysis
This is tool which is used by enterprise to analyse and examine the impact of elements
so that decision making is done properly. It is time consuming but is used by many firms so
that they are able to carry out their activities in proper manner. Also, when using this it is
responsibility of manager to make ensures that tool is being used appropriate manner (Boella,
2019). So, main aim of using this model is to analyse the market and be aware about market
situations and changes so that resources, manpower and capital is used in appropriate way.
So, it includes various elements which are discussed below-
Political factors- These are those in which labour law, environment law, trade
restrictions tec. are involved. It depicts the degree up to which involvement of government in
economy is present. In this, The Savoy is affected by this element such as increase of labour
and higher taxes have deep impact on their business and slow down their business. These are
controllable and non- controllable factors depending upon the level of situation (van der
Meulen, 2018).

Economic factors- In this, it includes factors such as inflation and deflation,
unemployment, interest rates etc. These are non-controllable elements which and slow down
the growth as well as overall develop of business. Implication of BREXIT has changed the
industry sector and is creating a problem for The Savoy to access the global market. Also, as
they import many resources from outside the country, interest rate is rising at rapid scale
(González-Rodríguez, 2018).
Social factors- Further comes the social elements which includes population, age
distribution, culture etc. They also have impact on business because in hospitality industry
different types of customers visits the hotel and it is crucial to analyse the market and
understand all what stimulates customers to visit hotels. In relevance with chosen firm, they
serve variety of services and dish such as American, Italian, Chinese etc. so that guests are
able to select according to the choice of preference (Rhou, 2020).
Technological- In this competitive world, importance of technology has increased
and all firms are using technology in their firm. It includes usage of advanced tools and
devices, software, hardware etc. Augmented reality is also been used by many entities to use
resources and products in effective way. In relevance with selected entity, they use online
management system and as chances of frauds and digital theft are rising, it is necessary for
them to update their technology and make it safe as well as secure.
Environmental- This comprises of climate changes, pollution, weather, waste
management. Many companies put them priority in business so that they perform social
responsibility properly. These elements are plays vital role in growth of firm. In context to
The Savoy, they need to be more aware about such factors because it might increase their
goodwill in market.
Legal- This comprises of laws, rules, regulations, contracts, agreement etc. In
hospitality industry, legal factors exist and have deep impact on business productivity.
Neglecting these might cause a huge problem for overall development of enterprise. In
relevance with The Savoy, legal department of hotel make ensures that activities, operations,
agreements or contracts are being carried out after under the legal and government
considerations.
So, the above paragraph depicts that external environment affects that business at
deeper level. It helps the business to prevent from external threats and conflicts or assist in
understanding them in effective way. Moreover, through macro environment factors new
ideas and thoughts are also generated which are then used solving problems.