Management Report: Analysis of Macro and Micro Environment

This report, submitted by a student, provides a comprehensive analysis of the macro and micro environments and their significance in the hospitality industry. It begins with an introduction defining the external environment and its two key components: the macroenvironment and the microenvironment. The report then delves into a detailed examination of the macro environment using the PESTLE analysis, covering political, economic, socio-cultural, technological, legal, and environmental factors. It also explores the microenvironment, focusing on the immediate factors affecting a business's operations, such as suppliers, customers, competitors, and the company itself. The report highlights the importance of these environmental analyses for hospitality organizations, emphasizing how they influence strategic decisions, market entry, and overall business growth. The conclusion summarizes the key takeaways, reinforcing the critical role of both macro and micro environment analyses in effective business management and development.

Running Head: MANAGEMENT 0
Management
(Mohammed Alzahrani)
3/31/2020
College Number: 1939884

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Table of Contents
Introduction......................................................................................................................................2
Analysis of Macro Environment......................................................................................................2
Analysis of Micro Environment......................................................................................................2
Importance of Macro Environment in Hospitality Organizations...................................................3
Conclusion.......................................................................................................................................4
References........................................................................................................................................5

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Introduction
An external environment is a set of factors or events outside the organization, which in
certain cases influence it. This concept generally refers to the business world to aspects related to
areas beyond influence such as culture, environment, legislation, and government. The growing
company must consider the main external issues as organizations don't operate alone. There are
two types of the external environment which includes microenvironment and macro environment
(Maillet, Beaty, Kucyi & Schacter, 2019).
In the following part, there will be a detailed analysis of the macro-environment and
microenvironment analysis that will help in understanding the importance of such an
environment in the hospitality industry
Analysis of Macro Environment
The macro-environmental structure, which influences operation, performance, decisions,
and strategy is widely recognized in all market classes. It is also complex. In truth. It has to
change, then. The company directly influences its operation through external forces which are
not controlled by the firm. It includes staff, organizations, enterprises, divisions, and entities with
whom the firm works (Zinovieva et al., 2016). The Macro Climate studies are called PESTLE
Analysis. PESTLE applies to the factors in the surroundings, i.e. Politics, economics, socio-
culture, science, law, and the environment. Such variables take into account macro and
environmental considerations as well as non-economic influences such as social issues, politics,
family dynamics, economy, growth, GDP facets, income distribution, ethnic blends, political
stability, tax, duty, etc. For example, the macroclimate in the US economy focuses on the
economic cycle, including developments in growth, wages, gross domestic production and other
indicators assessing and integrating conditions around the economy as a whole. Industries and
industries that have an impact on the macroclimate, such as the domestic industry in 2008, where
the dot-com bubble burst in 2000 (Bai et al., 2017).

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Analysis of Micro Environment
Microenvironment applies to the climate in close interaction with the organization which
may affect the daily operation of the business at once. This is linked to a geographic region
where the business works. The micro-community is a collection with all the competencies
around the business. These forces are especially special in this business. They can influence the
performance and routine activities of the organization, but only in the short term. Its components
include suppliers, customers, government agents, buyers and the company itself (Petitprez et al.,
2018).
 Suppliers are the ones that provide market material, such as materials, machinery, etc. for
example Increased manufacturers 'prices for the raw commodity that they supply the
client would affect an organization's marketing mix plan that results with the increase of
finished goods costs. Getting a close relationship with the manufacturer will also allow a
business to take advantage of the competition.
 Rivals are the rivals that compete on the market and services with the product. for
example, Philip Television in the TV Industry competes with Videocon, BPL, Onida, and
others. A "Product Type" in which consumers demand various features and functions in a
company is the other type of rivalry. The buyer is, for example, equipped to buy a two-
wheeler car that can come automatically or manually with gears and without gear. These
are the product and service features that consumers should take into consideration during
the buying cycle.
 The consumers/buyers are the ones who buy the products to themselves. They are known
as the company leader.
 The company itself is a mixture of a variety of elements, such as owners, creditors, staff
and the management board. For example Employees influence the corporate climate to a
certain degree. If the incentive and the employees 'poor skills are noticed, the firms lose
because the workers are least willing to sell (Javeed & Mukhopadhyay, 2017).
Importance of Macro Environment in Hospitality Organizations
Analysis of macro environment plays a vital role in the growth and development of
hospitality organization as they are explained in the following points:

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 Regional or National government taxes, Pattern of licensing laws, Monopolies with
Restrictive Practices Act, Labor Law as well as laws related to the environmental can be
analyzed by the hospitality organizations with the help of macro environment analysis.
 Macro environment also help in analyzing the rate of inflation of the country, their
exchange rate, state of economy as well as the structure of employment that play a vital
role while entering in the new market or expanding the business in the existing country.
 Macro environment analysis provide the information regarding the socio cultural, factors
influencing consumers’ purchases as well as consumption behavior that help in targeting
the consumers for hospitality organization in an effective and efficient manner. The
lifestyle of people is another aspect. It may be part of the job duties because certain
people fly as they have to. When this work trip lasts longer than a day, the company hires
a hotel for passengers in order to cope with business issues (Demirciftci, Cetin &
Bilgihan, 2017).
 Technological factors help the hospitality organization to analyze the technological up
gradation that could help such organization to upgrade its business technically and can
control over the overall cost of the organization to the certain extent.
 Environmental considerations in all regions of the world are becoming more significant
as visitors understand the effects on the environment. Mass tourism, in particular, has
been much more contentious. Tourist services:
Foster new innovations in hotels and leisure
Affects human ecosystems
Creates waste disposal issues
Therefore, such macro environment analysis helps in coping of the issues that is faced by
the tourism and hospitality industry to the certain extent (Sheehan, Grant & Garavan, 2018).
Conclusion
From the above analysis it can be concluded that macro and micro environment help in
managing the business to the certain extent. Micro environment cover, consumers, suppliers,
competitors, intermediate and other factors that help in running the business. Macro environment

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covers external factors on which the business has no control such as change in laws, change in
technology and so on. Therefore, macro environment analysis plays a great role in the growth
and development of hospitality organization. Such analysis help in analyzing overall growth and
development with regulation applied in the country which can help them to attract maximum
number of consumers to the certain extent.

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References
Bai, Y., Wang, M., Song, Y., Wang, Q., Wei, X. U., Wang, D., & Guihua, X. U. (2017). Macro-
environment analysis and management countermeasures of nursing development in China
based on PEST model. Chinese Journal of Hospital Administration, 33(10), 784-786.
Demirciftci, T., Cetin, G., & Bilgihan, A. (2017). Coping with RM challenges in hospitality
education. Journal of Revenue and Pricing Management, 16(5), 499-512.
Javeed, N., & Mukhopadhyay, D. (2017). Exosomes and their role in the micro-/macro-
environment: a comprehensive review. Journal of biomedical research, 31(5), 386.
Maillet, D., Beaty, R. E., Kucyi, A., & Schacter, D. L. (2019). Large-scale network interactions
involved in dividing attention between the external environment and internal thoughts to
pursue two distinct goals. NeuroImage, 197, 49-59.
Petitprez, F., Vano, Y. A., Becht, E., Giraldo, N. A., De Reyniès, A., Sautès-Fridman, C., &
Fridman, W. H. (2018). Transcriptomic analysis of the tumor microenvironment to guide
prognosis and immunotherapies. Cancer Immunology, Immunotherapy, 67(6), 981-988.
Sheehan, M., Grant, K., & Garavan, T. (2018). Strategic talent management: a macro and micro
analysis of current issues in hospitality and tourism. Worldwide Hospitality and Tourism
Themes, 10(1), 28-41.
Zinovieva, C. G., Kuznetsova, M. V., Dorfman, T. V., Limarev, P. V., & Limareva, J. A. (2016).
Study of external and internal factors affecting enterprise’s stability. Advances in Systems
Science and Applications, 16(1), 62-71.