Business Environment Analysis of London Dungeons Tourism

This report provides a comprehensive analysis of the business environment surrounding London Dungeons, a prominent tourism operator. It begins with an introduction to tourism and its economic contributions, followed by an examination of the external business environment using PESTLE analysis to assess political, economic, social, technological, legal, and environmental factors. The report also delves into micro-environmental factors influencing London Dungeons, such as capital structure and resources. It further investigates macro-environmental trends impacting the tourism sector. The analysis includes the identification of opportunities for market expansion and the effects of environmental changes on the company's strategy, with the goal of informing strategic decision-making for London Dungeons to achieve its organizational objectives and adapt to a dynamic business landscape.

Tourism

Table of Contents
Contents
INTRODUCTION...........................................................................................................................1
1. MAIN BODY.........................................................................................................................2
Apply methods for analysing external business environment................................................2
Analyse how a hospitality and tourism business environment changes.................................8
Critically evaluate how changes in the business environment affect the strategy of a
hospitality and tourism operator...........................................................................................12
CONCLUSION..............................................................................................................................15
REFERENCES..............................................................................................................................16

INTRODUCTION
Tourism is considered to be travel for the pleasure of a person. It includes a couple of
services in this such as accommodations, entertaining services to the tourist such as various
sporting activities, adventurous activities etc. The tourism includes various businesses such as it
leads to the development of the hotels, tour and travel companies, restaurants and many more.
Tourism can be at national level or at international level it depends upon the taste of the tourist
and the level of attraction of the destination present in the country.
According to the world tourism organisation the tourism is defined as an act of travelling
from one place to another with the aim of recreational or leisure purpose along with various
supportive services that are must while travelling (Moutinho, 2018). Tourism contributes a lot in
the overall development of the economy as it provides sources for the income generation with
the visiting of the people of different countries and their spending. Also due to this a large
number of employment opportunities are generated for the local people as with the development
of the businesses they have to recruit more people. To promote the tourism significant steps are
taken by the governments of the countries so that they can attract a large number of people
towards the destinations in their country. With the changing taste and preference of the customer
significant changes are taking place in the services that has been offered to the customer as well
as the types of activities that are undertaken at the destination. The youth prefers to visit to the
places famous for history and culture but are also attracted to the places which are adventurous.
This has developed the concept of dark tourism which is associated with the travelling of the
individuals to the places which are historically related with the deaths and tragedies. The
attraction to the places which are part of dark tourism includes the historical values of them not
the deaths and the sufferings of the people.
In this report the destination which is considered is London Dungeons which is part of
Merlin group. They provide an experience to the customers of the light hearted version of the
history of London. London Dungeons attracts the customers throughout the world for their
ability to present the historical events in a gallows humour style which includes live actors
coupled with special effects and various rides. They want to expand their market share by
focusing upon the marketing strategy. To support this, the report includes the analysis of the
external factors and the environmental changes along with their impact on the London
Dungeons. In addition to this the critically analysis of the environmental changes is discussed so
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that they can determine the strategies accordingly that can facilitate them in accomplishing their
organizational goals.
1. MAIN BODY
Apply methods for analysing external business environment
For the organization it is crucial to analyze the impact of various external market factors as
they have direct influence on the performance of the organizations. The external factors includes
all theirs factors which cannot be controlled by the management of organization but for
managing its impact nod influences it is important for them to determine their ability to have an
impact on operations. The external environment can be classified as macro environment factors
and micro environment factors (Morrison, 2018). Various macro factors include the political
factors, economic factors, social factors, technological factors, legal factors and environmental
factors. The success of the company is dependent upon the ability of the organization to adapt
such changes. The micro environment includes those factors which can be controlled by the
organization and also has direct influence on their performance. Such factors include suppliers,
customers, marketing intermediaries, financiers and public perceptions.
The analysis of the external business environment for London Dungeons is given below
that can be done with the help of analysis of various micro and macro factors as well as analysis
of various other business related factors. Macro factors can be analyses with the help of PEST
factors which are given below:
 Political factors: Political conditions in UK are quite stable due to which it is an
opportunity for the travel and tourism organisations to expand your business as well as it
has positive impact on the potential customers because frequent changes in the policies
affect the conditions to travel to the country. Transportation infrastructure of the country
is effective and efficient as the government has significant plans for their development.
Such as land has been provided for the expansion of the airports, the availability of red
Double Decker buses is ensured so that the experience of the tourist can be enhanced. For
encouraging more number of tourist the UK government has reduce the visa fee which
has positive impact on the organization operating in tourism industry. With a growing
awareness of green environment various policies are imposed on the organization to
manage the impact of where operations so that the environment can be protected. Such
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implication has impact on London Dungeon as it increases implications that they have to
comply with. This increases the burden on the management to manage such implications.
 Economic factors: Most of the countries throughout the world have been suffering from
recession due to which purchasing power of the individual has decreased and this has
affected the travel and tourism industry adverse meaning. But the exchange rate of pound
to other foreign currency is not that strong due to which the visitor can plan their trip to
UK as they have to spend lesser than before. This has a positive impact on London
Dungeon as with more number of visitors they can attract more people to the destination.
But the increasing inflation and the seasonal issues also effect the business operations
such as inflation increases the prices of the goods and services due to which has to spend
more on the commodities which ultimately increases their travelling cost while the
planning to travel is based upon the season or the holidays of the students and individuals
(Medlik, 2016). The inflation can adversely affect London Dungeon as this will affect the
choice of the customer and the seasonal influences sometimes offers opportunity as
customer increases while on the other hand it effects adversely when number of
customers decreases.
 Social factors: The changing taste and preference of the people directly affect the
operation of the organizations in any industry. To travel to different destinations has
become trendy among the youth as they are inspired by social media platforms and their
own social groups. This trend among children and youth has positive impact on London
Dungeons as with better promotional activities they can easily attract them. In addition
to this with increasing consciousness towards safety and security the people tends to
travel to the countries which are safe from crime and other activities. UK is considered to
be quite safer for the tourist due to whom a large number of people visit there offering
various opportunities to the travel and tourism organization operating there. On the other
hand various social events organized in UK such as cricket World Cup, commonwealth
games etc. attract lot of tourists that offer opportunity enhances share market for London
Dungeon.
 Technological factor: With the increasing use of the internet for making online bookings
of transportation, accommodations, and other destinations the travel and tourism industry
has seen significant growth. London Dungeon also offers an online booking system for
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them due to which the time of the customers is saved so that they can utilize it for other
destinations. This has a positive impact on the behavior of the customers towards them.
In addition to this with the increasing use of internet, people gather information about the
destinations through travel blogs which is an opportunity for London Dungeon to
promote their business through travel blogs on the internet and on various social media
platforms (Altin, 2018).
 Legal factors: In the tourism it is crucial to focus upon various legal factors for the
organization. The consumer has to take visa before travelling around the world which is
quite lengthy and time consuming legal process. This affects the interest of the customers
to visit the country strict norms for Visa. But the government of UK has reduced the fee
for Visa as well as the process is not much lengthy. This has positive impact on the
London Dungeon as with this more tourists will be attracted to the nation so to the
London Dungeon as well with better promotional activities.
 Environmental factor: With the increasing consciousness for the environment various
laws are imposed by the government protecting the environment and to manage the
impact of the organization on environment. To protect various beaches and coral reef
various waste management implication are imposed on nearby restaurants and hotels.
This creates positive impact on the customer due to which they contributes to the
organization in managing pollution and other destruction. This will enable London
Dungeon to attract customer and manage pollution from their destination in the
environment along with their eco friendly practices.
In addition to the understanding of these factors it is important to take into consideration
various macro environment trends so that while formulating policy each and every aspect
hospitality and tourism is considered. Various macro environment trends that have impact on
London Dungeon includes:
 Unpredictable change in the weather has impact on the visiting of the tourist also it forces
organization to update their infrastructure so that impact can be managed (Inkson and
Minnaert, 2018).
 There are various descriptive forces such as people adopt various travelling packages
which include all the services and this affect individual service of hotels in other
destinations as customer visit to the pre-decided place as per their packages.
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 The income inequality among the travelers has a severe impact on London Dungeon as
due to this, they faces an issue related to the prices of the tickets. Most of the travelers to
UK are from Asia and they have significant income inequality due to which their policies
get affected.
On the basis of the analysis of macro factor it is identified that the London Dungeon has
opportunity to expand their market within the nation by attracting more customers which there
promotional activities. The political, economic, technological, social, legal and environmental
factors are in favor of the development of the tourism in UK as it contributes a lot to the
development of the economy. This will offer opportunity to them as well as they will have a
large number of tourists available in the country that they can attract with the concept of dark
tourism that reflects the history of London in a humorous and style.
In addition to the analysis of macro environment, various factor of micro environment is also
to be analyses by the organizations operating in travel and tourism industry. It consists of various
forces that are very close to the organization and affect the services to the customer such as the
capital structure, capabilities of management and staff, the suppliers, stakeholders, customer
market etc. Better understanding of these factors enables the organization such as London
Dungeon to manage their strategies and policies of operations (Cheer, 2017). The analysis of
various micro factors is given below:
Capital structure: This enables to understand how the finance is used and is allocated
among different activities of the organization. Also with this the sources of funds can be
identified and planned so that effective marketing programs can be organized by them.
Resources: With the help of resources available with the organization they can take
competitive advantage over others either by way of cost strategy or differentiation strategy. The
resources of the organization can include patents, trademarks, intellectual capital, installed
customer base, battle brand equity etc. London Dungeon unique image in the eyes of the visitors
as it is based upon the concept of dark tourism and significantly attracts the customers was there
differentiated services to the customer. The ambient so developed by them in terms of special
effect and rides enhances the experience of the customers and thus gives them competitive
advantage.
Capabilities: It can be defined as the ability to utilize the resources which are held by the
organization. London Dungeon has efficiently utilized their resources as the ambience that they
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have developed is efficient enough to attract the customers easily. With the help of resources and
capabilities distinctive competence is developed by them that enables them to offer quality and
customer responsiveness with innovation and efficiency due to which they could take
differentiation advantage over other destination in UK (Kim, 2016).
Marketing intermediaries: The suppliers have impact on the operations of the organization
as they ensure the availability of the material with which final services can be provided on time
to the visitors. The supplier in the tourism amenities exert pressure on the businesses because if
supplier fails to supply or resist to supply the final services can be affected. In context of London
Dungeon can be analyses that the supplier has significant role to play as consistent supply of
electricity, better supplies of software, delivery of maintenance products enables them to provide
uninterrupted services to the tourists.
Analyzing competition: It is important for the organization to analyses the competitor by
conducting an assessment of their strengths and weaknesses for both current and potential
competitors. With this it can be determined that whether the organization should follow offensive
or defensive strategy for identifying the opportunities or threat in the market. The identification
is in context of route network, timing, quality of the services, cost of operation etc. For managing
the competition various generic strategies need to be focused by the London Dungeon such as
cost leadership, differentiation and focus (Mir, 2019). They feature 19 shows with twenty actors
and two rides that facilitate the visitor to go through a journey of 1000 year of the history of
London. This is a unique experience for understanding the history which gives a significant
competitive advantage to them over others.
On the basis of these micro factors, it can be identified that they have significant ability to
manage their operations and to take competitive advantage over others. To London Dungeon
both micro and macro factors are favorable which implies that they can focus on their marketing
strategies. On the basis of prevailing economic factors the pricing strategies can be formulated
while on the basis of social and technological factors various promotional activities can be
planned such as social media network, direct marketing etc. All such decisions can be taken by
them by analyzing their resources and capabilities along with their capital structure which is
favorable for undertaking various marketing strategies to attract a large number of customers.
At the time of analyzing the external business environment it is important for the
organizations to take into consideration their performance as well. The performance of the
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organization can be defined in terms of the quality of the services that has been offered to the
customers. In addition to this analyzing the benchmarking the organisation can analyse the
impact of various factors and various strategies to meet with them. For achieving the objectives
London Dungeon need to focus upon tourism benchmarking in UK as well as various
performance indicators so that they can attract a large number of customers.
Tourism benchmarking: Benchmarking is considered to be a continuous process with the
help of which product, services and practices can be measured against the offerings of the
toughest competitive. With this a snapshot of performance can be gathered by the organisation so
that they can take competitive advantage by planning efficient strategies for them (Tribe, 2016).
The regional tourist board has developed various National benchmarking schemes with which
the performance can be compared against similar destination in the country in context of
opinions, level of satisfaction etc. With the help of this the London Dungeon can determine the
financial support both internally and externally, the corporate action to be taken to manage the
impact of competitors as well as market forces, to develop various marketing strategies creating
awareness among the customers etc. The tourism benchmarking that is undertaken by the
government of UK provides a baseline with the help of which the performance on the basis of
different activities so that improvement plan can be developed by the organisation.
Tourism indicators: In addition to the benchmarking it is important for the organisation to
take into consideration various indicators that affect the behaviour of the tourist while travelling.
For monitoring the performance efficiently it is important to consider four themes such as
economic, satisfaction, environmental, unity and social. With the help of these themes various
factors crucial in the tourism and hospitality industry in context of visitors can be identified. The
economic themes enable to understand the expenditure done by the visitor on accommodations,
food, shopping; number of days they are staying back at the destination etc. And on the basis of
this the London Dungeon can set up their price of the ticket so that it can be afforded by the
visitors easily (Jiang, Ritchie and Verreynne, 2019). The satisfaction theme facilitates to
understand the factors that can satisfy the customer such as the ambience of the destination, the
customer services, facilities available to the customers at the destination etc. and with this the
London Dungeon can plan the changes required in the ambience. The environmental theme will
facilitate to understand the impact on the environment due to the behaviour of the customers
such as dumping of the garbage etc. By considering all these factors and its impact London
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Dungeon can plan for the improvement of the quality of their services which will enable them to
improve their performance and to satisfy the customers efficiently.
Analyse how a hospitality and tourism business environment changes
The hospitality industry must have provide the different aspect that are more related to
the environment and with that their working norms get affected by the different significant
impacts of the environment. It is the industry whose working will totally dependent on the
several activities as the users of the hospitality must have consume the different resources as like
the energy and the water on continuous basis by which they have generate more amount of the
effluents and the solid waste as well (Krstić, Radivojević and Stanišić, 2017). The hospitality
industry must have include the different factor that get associated with the hotels industry,
banking sector, historical tourist attractions, restaurants and many others as well and all get
provide various facility and the information about the different residual that get reflected from
the historical background. These hospitality industry have indulge different strategy in their
business in order to gain more competitive advantage by which more suitable outcome will get
received within the appropriate period of time by that in addition to this more customer or
visitors will get attracted to get served the better and quality services. The survival of the
hospitality industry is more relative to the different environmental aspect and under this the
possible policy and strategy get used by the business in order to lead more success and induce
more improvements to get managed all the activities in proper and systematic manner.
In context of The London Dungeon, that is the tourist attraction and has recreated the
gory and macabre events that are associated with the historical aspects with including the
humour style. It is also being more relative that more of the people are more aware about their
responsibility towards the taking care of the surround and also have understood its need as well.
The future environment is more validating for the upcoming generation and in this the ability of
the better and effective surround is more needed. There are some random aspect that are related
to environment which is collaborative to the day to day live and the daily activities of a human
that are will increases the level of trafficking. It is more related to the air pollution by which the
green belt has been lost somewhere and the actions must have been taken with respect of the
primary, secondary, tertiary effects (Pulido-Fernández and Merinero-Rodríguez, 2018). As the
environmental factor has huge impact on the development and the construction of the different
land projects as like the protection from the fire, safety of endangered species, archaeological
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artefacts, population. There are some of the adverse impact as well that has the negative impact
on the development of the surround as from the industrial, infrastructural projects by which the
need of the long terms sustainability will get increases that contrast the different modes which
will lead to the ecological and the social damage that will arise at both level as local as well as
global. By considering the different factors of environment The London Dungeon preserve their
environment and add the additional efforts to satisfy the visitors and that makes them more
attractive and by managing these factors they get improvises their cost and profitability.
The environmental impact is more on the different activity that is performed within the
business as it increases the attitude of the customer and with that indulges more responsibility on
the business of The London Dungeon. As they have provides education and entertainment that
are more often drives the major attraction of the customer. The London Dungeon have been
worked with the dark tourism and as it has the potential of the ethical and moral conflicts as well
and with that it is biggest responsibility on them to manage the dignity and the subject will
matters the most which is more related to the need of the visitors (Stylidis, 2016)(Andrades and
Dimanche, 2017). The tourism has been found the scalable growth all across the world and in
this traditional tourism also get supported a lot by which more importance will get provided to
the cultural aspect and in balance of it the profit will get enhanced. The marketing of the tourism
is more related to the sustainable development by which the futurity, equality, balance in
between the environmental and economic factor, participation, capacity, enhancement in quality
and the compatibility, and inter generation and many others as well. More of the hospitality
industry get exposes more conflict that is related to the different policies that get developed to
measure the environmental concern. There are a lot of hotel and restaurants get retrieve around
the cities or areas that are having the historical background and thus more facilities will get
developed but in addition it will get destroy the uniqueness of the tourism. The hospitality and
the tourism industry have worked with the approach that is more based on the customer centric
by which the ultimate changes will get implied as per the requirement and the demand of the
customers or the visitors by which more success will get achieved and with that having the major
concern towards the generation of profit. In addition to this they have ensure that the customer
will get more pampered and with that get needed facility with more convenience and get easy
availability of different sources. In this the collection of feedback from the customer is the major
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concept and in regard of this the different changes will get induce with more satisfactoriness as
it provide more relief to the customer as well by which trust get developed.
The hospitality industry and tourism are not the front line concern about the environment
as they didn’t consume more amount of non-renewable resources and with that didn’t have create
or cause the gross pollution as well (Scheyvens and Biddulph, 2018). These industry will have
more relatively with the small operation and function as like the consumption related to the
energy, water, food and in collectively have produce the minimal amount of pollutants, noise and
chemical pollution etc. Thus have consider the usage of the legislation and put pressure on the
consumers group to reduce the waste as much as possible and with that also takes the
management of the environment more seriously.
The essential impact of the environmental impact that gets generate by the hospitality
industry and the tourism are as follows as:
Climatic changes: It more basically get include all the changes that get associated with
the nature as like the CFC emission. It will also include the wider impact that get more linked as
per the global warming and has the serious impact on the vulnerability of the sources and be the
epidemic of the climate change. CO2 emissions which is the related to the increment of the
carbon emission and that get accelerate the change of climate and have larger impact on the
biodiversity and the communities. In this the methodology or the tool named as The Hotel
Carbon Measurement Initiative (HCMI) will get used to measure the amount of carbon emission
and with that carbon footprint has been measured by which easy access will get provided to the
tourism and the hospitality industry. It will include the pollution as well that is related to the air
and noise and more of the programmes will get conduced and in terms of this the random
changes has been noticed under which more uncertain outcomes will get conceived.
Wastage: It will also be more related to the diverse factors as like the wastage of water,
energy, food, disposal by which more pollution will get developed in the market and on the basis
of that the hospitality industry and the tourism have make their contribution (Jaelani, 2017). For
this they have take the initiative and uses the different strategy as like the shits, conservation
sources like the solar panel and make more conservations.
Purchasing policy: It is the policy that is more related to the behaviour and attitude of
the business and with that the companies have uses more attractive strategy and policy and under
which make the suitable changes by which have satisfy the need and requirement of the business.
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