Business and the Business Environment: London Marriott Hotel Report

This report analyzes the business environment of the London Marriott Hotel, exploring the various internal and external forces that influence its decision-making and profitability. It begins with an introduction to the business environment and then provides a detailed overview of the organization's structure and functions. The report then delves into a PESTEL analysis to identify the positive and negative impacts of political, economic, social, technological, legal, and environmental factors on the hotel's operations. A SWOT analysis is conducted to assess the hotel's strengths, weaknesses, opportunities, and threats, followed by an examination of the interrelation between the hotel's strengths and weaknesses and the external macro environment. The report concludes by summarizing the key findings and emphasizing the dynamic nature of the business environment and its impact on strategic planning. References to relevant sources are also included.

Business and the
Business Environment

Table of Contents
INTRODUCTION...........................................................................................................................1
TASK 1............................................................................................................................................1
P1: Covered in PPT......................................................................................................................1
P2: Covered in PPT......................................................................................................................1
TASK 2............................................................................................................................................1
P3: Covered in PPT ....................................................................................................................1
TASK 3............................................................................................................................................1
P4: Identification of positive and negative impacts of macro environment on business
operations.....................................................................................................................................1
TASK 4............................................................................................................................................3
P5: Internal and external analysis of organisations......................................................................3
P6. Analysing strength and weakness interrelation with macro environment.............................5
CONCLUSION................................................................................................................................7
REFERENCES................................................................................................................................8

INTRODUCTION
Business environment refers to a collection of internal and external forces which can
influence the decision-making and profits of an enterprise (Aithal, 2017). These forces can be
employees, customer needs, supply and demand, activities by government, innovation in
technology etc. They are also helpful for an organisation to become dynamic and avail the
available business opportunities. The company which has been selected for this report is London
Marriott Hotel which is a Five Star Hotel in London. This project will cover explanation about
different types, size and scope of organisations, demonstration of interrelationship of functions
within organisation. Also, effect of positive and negative influence of macro environment and
determination of internal strengths and weaknesses of businesses will be covered in this report.
TASK 1
P1: Covered in PPT
P2: Covered in PPT
TASK 2
P3: Covered in PPT
TASK 3
P4: Identification of positive and negative impacts of macro environment on business operations
For forecasting the positive and negative impacts of macro environment factors on
business operations PESTEL analysis is used (PESTEL Analysis, 2016). PESTEL analysis in the
context of London Marriott Hotel is as follows-
Political factors- These factors are government policy, political stability, tax policy,
labour policy etc. These factors have an impact on the operations of London Marriott Hotel and
affect its functioning (Sawng and et.al., 2016)..
 Positive impact- The concessions provided by the government in its new policy will
positively impact London Marriott Hotel. It will allow it to increase its profits.
 Negative impact- The instability in the political scenario of U.K. will affect the business
of London Marriott Hotel.
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Economic factors- These factors include economic growth, exchange rates, inflation
rates, disposable income of customers, emerging markets etc. London Marriott Hotel is affected
by a change in any of these factors.
 Positive impact- Emerging markets such as BRICS offer London Marriott Hotel a
chance to expand its business to other countries (Groza, Locander and Howlett, 2016).
This can substantially increase its profitability.
 Negative impact- Rapidly increasing rate of inflation has put a negative impact on
London Marriott Hotel's operations.
Social factors- These factors include population growth rate, age distribution, income
distribution, health consciousness, social technologies etc. These factors affect the long-term
planning of London Marriott Hotel.
 Positive impact- Social technologies is allowing people to connect with each other using
social media. This helps in creating a positive impact on the business of London Marriott
Hotel.
 Negative impact- Income distribution of society is uneven in nature and is something
which affects the operations of London Marriott Hotel.
Technological factors- These factors are innovations in technology, cyber security, R&D
etc. These factors affect the functioning and profitability of London Marriott Hotel.
 Positive impact- Increase in awareness about cyber security creates a positive impact on
London Marriott Hotel as it needs to keep the data of its guests secure from hackers.
 Negative impact- Rapidly changing technological requirements bring with it a challenge
of adapting to them which creates a negative impact for London Marriott Hotel.
Legal factors- These are laws, rules and regulations framed by the government such as
discrimination laws, employment laws, consumer protection laws etc. These factors create a far-
reaching impact on operations of London Marriott Hotel.
 Positive impact- The new rules and regulations framed by the government makes it
easier to do business for London Marriott Hotel (Schaller, Vatananan-Thesenvitz and
Stefania, 2018).
 Negative impact- Certain strict laws of the government threaten to impact the operations
of London Marriott Hotel.
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Environmental factors- These factors include weather, climate, pollution level,
environmental policies framed by the government, digital revolution on production and
consumption etc. London Marriott Hotel is affected by a change brought in any of these factors.
 Positive impact- Digital revolution on production and consumption is promising to bring
a change for the better in the environment which gives a positive signal for London
Marriott Hotel.
 Negative impact- Stricter environmental policies and rules have increased the cost of
London Marriott Hotel and therefore creates a negative impact for it.
Organisations such as London Marriott Hotel have to confront the dynamic and ever-
changing business environment (Hachicha and et.al., 2016) They have to use different
techniques and have to be creative by bringing regular innovations if they have to stay relevant in
the market. They need to work according to the Customer is the king approach. Thus, they need
to find out the changing needs and demands of customers and provide services to them
accordingly. It is important if London Marriott Hotel has to get ahead of its competitors in the
market. The managers of hotel need to reframe their strategies according to changing business
dynamics.
TASK 4
P5: Internal and external analysis of organisations
SWOT analysis is a strategic management technique which is used by managers of a
company to assess its strengths, weaknesses, opportunities and threats. Strengths and weaknesses
are internal in nature (McDowell, Harris and Geho, 2016). Opportunities and threats are external
in nature. This analysis helps the management of an organisation in strategic planning and helps
it in doing a thorough assessment of positioning of company in the market. SWOT analysis in
the context of London Marriott Hotel is given as follows-
SWOT Analysis of London Marriott Hotel
Strengths Weaknesses
 As London Marriott Hotel is a Five Star
Hotel its rates and charges are quite
high which allows it to increase its
level of profits. It also leads to more
 Unfavourable tax rates due to a change
in tax policy of the government has put
extra burden on the finances of London
Marriott Hotel. This can affects its
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chances of maximisation of profits in
the future.
 Strong marketing and promotion
strategies adopted by London Marriott
Hotel allows it to extend its presence
among multiple customers. Its
promotion strategies create a significant
impact on the customers. Its strong
presence on social media which is a
new medium for digital marketing
ensures its dominating presence in the
market.
overall profitability as it has increased
its overall tax liability.
 Recession in the global economy has
significantly decreased the arrival of
international tourists in the country
(Munoz and Cohen, 2017). This will
impact London Marriott Hotel's
business. This is so because a lot of its
peak-season business is dependent upon
the arrival of international tourists in
the country.
Opportunities Threats
 Expansion in new markets other than
U.K. gives London Marriott Hotel a
chance to increase its international
footprint. This will allow the hotel to
do its business globally. It will enhance
its reputation and goodwill
internationally.
 New innovations brought in by London
Marriott Hotel gives it an opportunity
to attract new customers towards it. It
will increase its presence in the market.
It can manage to attract the customers
using creative methods.
 Increasing level of competition in hotel
industry threatens to decrease the
overall profits of the hotel because it is
under constant pressure to keep rates
according to the rates charged by its
competitors.
 Worsening market conditions in the
period of recession threatens to create a
negative impact on the business of
London Marriott Hotel.
External macro factors-
 Competitive environment- Competitive environment created by the entry of new
competitors in the industry has affected the business of London Marriott Hotel. Due to
increasing competition from other hotels the rates need to be reduced so as to attract the
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customers which decreases the profitability of the hotel. Also certain customers can shift
to other competitors as a result which will reduce the profits of London Marriott Hotel.
 Government intervention- Intervention of government in the business operations affects
the prospects of London Marriott Hotel. Frequent changes in the policy and tougher laws
made by the government affect the operations and functioning of the hotel. Thus
government intervention is a key macro factor which affects the planning of a business
enterprise in the long-run. It can decrease the profitability of a business significantly
(Rasouli and et.al., 2016).
P6. Analysing strength and weakness interrelation with macro environment
Basis of interrelation Strength Weakness
Political Factors In UK, the political factors
such as stability, foreign trade
policy, labour law, etc., have
the great impact on macro-
environment. The strength for
political factor is it remains
stable for long duration which
have positive impact on
London Marriott Hotel in
achievement of its long term
goals and objectives
(Schlesinger and Rahman,
2016).
In UK, the political factors
also generate weakness for the
London Marriott Hotel when
there sudden change in politics
occurs, which have negative
impact on organisation through
its unstability which affects the
organisation growth.
Economical Factors In UK, the economical
elements which depends on the
economy performance. These
factors are exchange rates,
interest rates, disposable
income of consumers, etc. The
strength of economic factor in
In UK, the economic factors
are adversely impacted by the
fluctuation rates which creates
negative role in the reducing
the demand of consumers
which effects the minimisation
of sales and profits.
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foreign direct investment
which is expressed as high risk
provides high rate of return for
London Marriott Hotel results
in achievement of objectives.
Sociological Factors In UK, the sociological factors
such as demographic
conditions, population growth
rate, age and income
distribution, etc. The strength
for social factors are
population growth, which
increase the demand of
London Marriott Hotel results
in maximisation of sale,
profits, etc.
In UK, London Marriott Hotel
challenges the weakness by
minimum level of income
distribution to its labours.
These impact the negative role
in reduction in profits earning
of organisation.
Technological Factors In UK, the technological
factors such as innovation,
automation, research and
development, etc., are the
elements which have positive
impact on London Marriott
Hotel. The strength of the
organisation is to adopt new
technologies which reduces
labour cost and accomplish the
desired target effectively and
efficiently (Trad and Kalpić,
2016).
In UK, the weakness of this
factor imposed on London
Marriott Hotel have negative
impact on its achievement of
organisational goal and
objectives. The impact
challenged by the organisation
is to adopt new technology by
spending large amount of
money which will be obsolete
in future.
Legal Factors In UK, the legal factors are In UK, the weakness faced by
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described as legal and lawful
objectives, ethos, norms, code
of conduct, employment laws,
consumer protection rights,
etc. The strength of London
Marriott Hotel have positive
impact on social factor by
taking care of consumer
protection right which leads to
consumer satisfaction level.
London Marriott Hotel is
fluctuation in ethos, norms,
code of conduct which results
in breaking the continuum of
organisational goal
accomplishment.
Environmental Factors In UK, the environmental
factors such as environmental
pollution, local councils,
charities, insurance,
agriculture, climate, weather,
etc. The strength of London
Marriott Hotel is reduction of
environmental pollution as the
organisation are aware of
pollution norms, which results
in effective and efficient
organisation goal and
objectives.
In UK, the weakness faced by
London Marriott Hotel which
have negative impact on
organisation is economic
growth of environment.
CONCLUSION
From the above report, it can be concluded that business environment is dynamic and
ever-changing in nature and affects a firm's strategic planning for the future. Organisations need
to adapt to its requirements to stay relevant in the market and sustain in it in the long-term.
Different types of organisations, their size and scope, explanation of relationship between
organisational functions have been covered in this project. Additionally, positive and negative
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impact of macro environment factors, internal and external analysis of organisations and
interrelation of strengths and weaknesses with external macro factors has been analysed.
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REFERENCES
Books and Journals:
Aithal, P. S., 2017. A critical study on Various Frameworks used to analyse International
Business and its Environment. International Journal of Applied Engineering and
Management Letters (IJAEML). 1(2). pp.78-97.
Groza, M. D., Locander, D. A. and Howlett, C. H., 2016. Linking thinking styles to sales
performance: The importance of creativity and subjective knowledge. Journal of
Business Research. 69(10). pp.4185-4193.
Hachicha, M. and et.al., 2016. Performance assessment architecture for collaborative business
processes in BPM-SOA-based environment. Data & Knowledge Engineering. 105.
pp.73-89.
McDowell, W. C., Harris, M. L. and Geho, P. R., 2016. Longevity in small business: The effect
of maturity on strategic focus and business performance. Journal of Business Research.
69(5). pp.1904-1908.
Munoz, P. and Cohen, B., 2017. Mapping out the sharing economy: A configurational approach
to sharing business modeling. Technological Forecasting and Social Change. 125.
pp.21-37.
Rasouli, M. R. and et.al., 2016, October. Information governance as a dynamic capability in
service oriented business networking. In Working Conference on Virtual Enterprises.
(pp. 457-468). Springer, Cham.
Sawng, Y. W. and et.al., 2016. Business ecosystem-focused commercialization strategy for real-
time monitoring and detection technology for landslides. The Journal of Engineering
Geology. 26(2). pp.223-233.
Schaller, A. A., Vatananan-Thesenvitz, R. and Stefania, M., 2018, August. Business model
innovation roadmapping: A structured approach to a new business model. In 2018
Portland International Conference on Management of Engineering and Technology
(PICMET). (pp. 1-9). IEEE.
Schlesinger, P. A. and Rahman, N., 2016. Self-service business intelligence resulting in
disruptive technology. Journal of Computer Information Systems. 56(1). pp.11-21.
Trad, A. and Kalpić, D., 2016. The E-Business Transformation Framework for E-Commerce
Architecture-Modeling Projects. In Encyclopedia of E-Commerce Development,
Implementation, and Management. (pp. 733-753). IGI Global.
Online
PESTEL Analysis. 2016. [Online]. Available
through:<https://www.business-to-you.com/scanning-the-environment-pestel-analysis/>
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