External Environmental Analysis: Flavourhood Tours Report

This report presents an external environmental analysis of Flavourhood Tours, a food tour business, utilizing the PESTLE framework to assess the political, economic, social, technological, legal, and environmental factors impacting its operations. The analysis begins with an overview of the Australian political landscape, highlighting its stability and government support for tourism, including intellectual property protection. Economically, the report examines Australia's moderate economic stability, fluctuating exchange rates, and the tourism industry's significant contribution to the economy. Socio-cultural aspects are explored, focusing on Australia's strong travel culture, multiculturalism, and growing demand for local food experiences. The technological section highlights Australia's advanced infrastructure, internet penetration, and the availability of digital tools for business growth. Legal considerations include the Fair Work Act, consumer and fair trade laws, and food safety standards. Finally, environmental challenges like deforestation, forest fires, and plastic pollution are discussed, emphasizing their potential impact on tourism. The report concludes with a discussion of the implications of these factors on Flavourhood Tours and provides relevant references.

Running head: EXTERNAL ENVIRONMENTAL ANALYSIS: FLAVOURHOOD TOURS
EXTERNAL ENVIRONMENTAL ANALYSIS: FLAVOURHOOD TOURS
Name of the Student
Name of the University
Author Note

1EXTERNAL ENVIRONMENTAL ANALYSIS: FLAVOURHOOD TOURS
PESTLE Analysis: Flavourhood tours
There are significant external factors that can affect the business prospects of
Flavourhood Tours. Food tourism is a new segment of tourism which is booming. The food and
wine culture in Australia is famous internationally and are proving to be important tourists
attractions (Abc.net.au. 2019). However, food tourism being a part of tourism industry comes
heavily under the impacts of the macroeconomic factors which would be considered using the
PESTLE analysis.
Political
Australia is politically very stables and this factor is one of the key drivers of different
segments of the tourism industry like the food tourism. The Government of Australia promotes
tourism through its dedicated body called Tourism Australia which in turn works under the
direction of the Ministry of Foreign Affairs (Australia.gov.au. 2019). The government forms
laws regarding tourism which in turn is heavily dependent on the bilateral relationship of
Canberra with various countries. The government has strong bilateral relationships with both
developed and developing nations which result in immense inflow of tourists. The Government
of Australia has also formed intellectual property protection laws to protect the originality of
designs and product formulae. IP Australia is the department of Government of Australia which
oversees acquisitions and protection of intangible assets like copyrights, trademarks and patents.
This ensures that the companies in Australia including tourism companies are able to retain and
use their intellectual properties for their own business operations (Austrade.gov.au. 2019).
However, it can also be pointed out that political tensions and terrorist are threats looming over
tourism in Australia (Mason 2015).

2EXTERNAL ENVIRONMENTAL ANALYSIS: FLAVOURHOOD TOURS
Economic
Australia is economically a moderately stable country. It is the world’s 13th largest
economy. The growth of the economy however has been slow in the recent years. As per 2017
records the growth rate of the economy is 2.4 per cent, which was below the normal
expectations. In 2018, however, the economy growth was almost 3 per cent (Ellis 2018).
Taxation of the government is fairly large. The tourism industry of the country is large and
booming. The industry supports 100 thousand jobs in the country. The recent worth of revenue
generated by the country’s tourism sector is more than 41 billion dollars (Tra.gov.au. 2019).
Figure 1. Graph showing exchange rate of AUD to USD
(Source: Rba.gov.au. 2019)

3EXTERNAL ENVIRONMENTAL ANALYSIS: FLAVOURHOOD TOURS
Figure 2. Five years trend of AUD against USD, GBP, EUR, SGD and CAD
(Source: Bloomberg.com. 2019)
The two graphs shows that AUD is gaining strength against several international
currencies namely, GBP, USD, EUR, SGD, and CAD. This means that the tourists coming to
Australia from these countries would have to spend more money in future which means that
tourism industry would generate higher revenue. This can positively boost the food tour business
of Falvourhood tours. More, importantly the company can generate greater revenue with the
larger portion of the increasing tourists wanting to explore the food various places across the
country offers (Tra.gov.au. 2019).
Socio-Cultural

4EXTERNAL ENVIRONMENTAL ANALYSIS: FLAVOURHOOD TOURS
Australia has a very strong travelling culture. With the local population as well as the
large number of visitors travelling across the country. Australia is a multi-cultural country with
many different cuisines to offer. The tourists today want to experience more local cuisines and
there are increasing number of tourists from emerging economic giants like China. The
backpackers want affordable lodging with local feel which obviously includes food. The
generation Y people are more multicultural and want to experience local food. Moreover,
tourism also prefer local food due to the latter being more health compared to easily available
fast food. This can be a significant factor on which Flavourhood can focus more to effectively
increase their business proposition. The socio-cultural aspects of the country are greatly
dependent on food and the country has a large food loving population. Moreover, Australia is
one of the most developed nations in terms of health, education, wealth and living standards
(Studyinaustralia.gov.au. 2019). These will definitely work in the favor of the food tour venture
of Flavourhood. There is a good food culture in the country that can be utilized significantly.
Technological
Technologically the county is one of the most developed countries. There is availability
of all kinds of technological aspects that the organization requires. Australia has a strong
transport network served by advanced roads, railways, air transport as well as water transport,
both inland and offshore. The Government of the Australia plays the pivoting role in investing in
advanced technology to enable building and improvement of modern transport system. This also
means that the logistics industry, which is dependent on technology is also advanced enabling
transport of people and goods (Austrade.gov.au. 2019). Effective, internet penetration is
available in the country. Meaning that the potential for online growth of the business of the
company is very good. The communication across the country is good and stable. This can

5EXTERNAL ENVIRONMENTAL ANALYSIS: FLAVOURHOOD TOURS
enable the effective growth of the organization (Mason 2015). Already the various food related
apps and social network pages are very popular in the country (ABC.net.au. 2019). This can be a
significant factor that enhances the business growth of the organization. Artificial intelligence,
software and other required resources are readily available.
Legal
The legal framework of Australia can moderately affect the operations of the company. The
company will be mostly affected by the fair work act of 2009 that regulates the country’s
employment factors. The business of Flavourhood will also be affected by consumer laws and
fair trade laws. Since, the business of flavourhood will essentially depend on food services across
the country the legal food safety standards would need to be strongly followed by the
organization. Safe food Australia provides the legal standards of food and beverages that can be
provided to the consumers (Buckley2015). This is relatively strict and can significantly affect the
business of Flavourhood tours.
Environmental
Australia suffers from several environmental issues like destruction of natural habitat and
deforestation. The issues like cleaning of forests to make rooms for more settlements and
drought. Forest fires: The environment issues like forest fire are serious threats to tourism
because they destroy settlements and cause loss of assets worth billions. Moreover, forest fires
also pose serious health risks to tourists and even life risks.

6EXTERNAL ENVIRONMENTAL ANALYSIS: FLAVOURHOOD TOURS
Plastic pollution- The international English daily, The Guardian reports that as much as eleven
billion pieces of plastic are present in the coral reefs around Australia which are one of the most
sought after tourist destinations in Australia (theguardian.com). The outcome of this massive
scale of plastic pollution on the reefs are death and decay of corals. They are developing diseases
thus, affecting the entire marine food chain.

7EXTERNAL ENVIRONMENTAL ANALYSIS: FLAVOURHOOD TOURS
References:
ABC.net.au. 2019. ABC.net.au. [online] Available at:
https://www.abc.net.au/news/2018-04-13/the-dark-kitchens-of-food-delivery-apps/9642460
[Accessed 12 Jan. 2019].
Austrade.gov.au. 2019. Austrade.gov.au. [online] Available at:
https://www.austrade.gov.au/International/Invest/Guide-to-investing/Running-a-business/
Understanding-Australian-business-regulation/Australian-Intellectual-Property-laws [Accessed
14 Jan. 2019].
Bloomberg.com. 2019. Bloomberg.com. [online] Available at:
https://www.bloomberg.com/quote/AUDUSD:CUR [Accessed 12 Jan. 2019].
Buckley, J.A., 2015. Food safety regulation and small processing: A case study of interactions
between processors and inspectors. Food Policy, 51, pp.74-82.
Carrington, D. 2019. TheGuardian.com. [online] TheGuardian.com. Available at:
https://www.theguardian.com/environment/2018/jan/25/billions-of-pieces-of-plastic-on-coral-
reefs-send-disease-soaring-research-reveals [Accessed 12 Jan. 2019].
Ellis, L., 2018. Where is the growth going to come from?. Economic Papers: A journal of
applied economics and policy, 37(1), pp.4-16.
Mason, P., 2015. Tourism impacts, planning and management. Routledge.
Pmc.gov.au. 2019. Pmc.gov.au. [online] Available at:
https://www.pmc.gov.au/news-centre/domestic-policy/technological-change-and-future-work
[Accessed 12 Jan. 2019].

8EXTERNAL ENVIRONMENTAL ANALYSIS: FLAVOURHOOD TOURS
Rba.gov.au. 2019. Rba.gov.au. [online] Available at:
https://www.rba.gov.au/statistics/frequency/exchange-rates.html [Accessed 12 Jan. 2019].
Studyinaustralia.gov.au. 2019. Studyinaustralia.gov.au. [online] Available at:
https://www.studyinaustralia.gov.au/english/live-in-australia/living-costs [Accessed 12 Jan.
2019].
Tra.gov.au. 2019. Tra.gov.au. [online] Available at:
https://www.tra.gov.au/Economic-analysis/tourism-industry [Accessed 12 Jan. 2019].