Analyzing External Environment: Sydney Harbour Bed & Breakfast Case

This report provides an external marketing environment analysis of Sydney Harbour Bed and Breakfast, a small hotel business in New South Wales, Australia. It examines the political, economic, social, technological, legal, and competitive factors influencing the hotel's operations. The analysis incorporates Porter's Five Forces to assess the competitive landscape, including the threat of new entrants and substitutes, the bargaining power of suppliers and customers, and existing industry rivalry. The report identifies opportunities such as leveraging technological advancements and Australia's strong tourism sector, as well as threats like increasing competition and potential human rights concerns affecting tourism. The study concludes that while the hotel operates in a moderately competitive environment, it must develop robust strategies to address future challenges and sustain its market position. Desklib offers a wealth of resources for students, including similar reports and past papers.

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External marketing environment analysis
A case study of Sydney Harbour Bed and Breakfast, New South Wales Australia

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Executive Summary
This report has focused on external environmental analysis by considering the case study of
Sydney Harbour Bed and Breakfast which is located in the cities of New South Wales and
Sydney in Australia. In an analysis of the external environment of the hotel competition,
political, social, legal, economic and technological influences have been mentioned.
Theoretical discussion based on Porter’s five forces has helped to understand the competition
and situation of the hotel in the hospitality industry in Australia.

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Table of Contents
Executive Summary...............................................................................................................................2
Introduction...........................................................................................................................................4
Case Background...............................................................................................................................4
Theoretical Framework......................................................................................................................4
External Market Analysis..................................................................................................................4
Summary of Opportunities and Threats.............................................................................................6
Conclusion.............................................................................................................................................6
References.............................................................................................................................................7

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Introduction
External marketing environment remains useful determinant for an organization to devise
strategies based on products and services. Analysis of factors of marketing environment
becomes the crucial basis for a firm to understand present standing in a competitive industry
(Dwyer et al, 2009). This report has focused on the importance of external marketing
elements out of the environment and the significance of analysis external environment from
point of views of a local firm based on services or products. A proper knowledge basis could
be built out of this report regarding Sydney Harbour Bed and Breakfast in Australia. Service
ranges of the company include facilities of events and conferences, accommodation of many
business travelers and so on. Based on the report the service strengths in response to existing
marketing environment can be adequately understood. However, the limitation of the report
also prevails and this is the inadequacy of discussion on a recommendation for service or
product improvement of the Sydney Harbour Bed and Breakfast.
Case Background
Hotel Sydney Harbour Bed and Breakfast has a presence in Sydney and New South Wales.
The hotel group puts up efforts to maintain travel experiences of customers and travelers. The
hotel offers first-rate standards of quality in services and products to travelers and customers
by offering them bed and breakfast accommodation and hospitality services in the centre of
the Rocks, birthplace of Australia at comfortable places. The structure of the organization is
kind of matrix structure and employees often have a dual reporting requirement. Projects and
opinions are coordinated through each functional department of the hotel.
Theoretical Framework
In an analysis of competition and external environment, Porter's five forces are the important
hypothesis that also appears to be reasonably related to this present discussion in the report
pertaining to services of the hotel in the hospitality industry. The hospitality industry in
Australia is identified with five important aspects which are much relatable to Porter's five
forces involving the threat of new entrants, the threat of substitutes, existing competition,
bargaining power of suppliers and bargaining power of customers (Scott, Cooper and Baggio,
2008). These are vital driving forces that influence the industry of hospitality in Australia.
External Market Analysis
Competition - Hotel Sydney Harbour Bed and Breakfast confronts with the stiff competition
with other competitors in the hotel industry and they closely compete with each other with

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almost similar service variants and products. The main competitors of the hotel are several
small and medium-sized budget hotels in the Sydney and New South Wales market.
Therefore competition in the industry is high but not as much rigid from the hotel’s
perspective. The industry poses a moderate level of threat in terms of new entrants in the
industry by new operators and the reasons are pro-industry support of government but high
capital expenditure linked to investment in the new business in the hospitality sector in the
country (Alonso and Ogle, 2010). Substitute products and service ranges are high making it
necessary for the hotel Sydney harbour bed & breakfast understand the usefulness of its
service like accommodation and facility for customers like enjoying adventurous sights such
as the Rock Ghost tours, Taronga Zoo, iconic Harbour Bridge. This subsequently increases
the bargaining capacity of customers as they have many choices alongside low bargaining
position of suppliers as maximum hotels are always interested to improve their supplier base
with focus on continual collaboration of small and big distributors and suppliers which is the
reason the industry has many suppliers to facilitate seamless services to customers (Brooker
et al, 2012).
Economic growth and Stability - economically the country is strong and dynamic with the
reputation of being the 13th biggest economy in the globe although the growth of the economy
was only 2.4 percent in the year 2017. The country has a better economic pattern that is
supported the better contribution of hospitality and tourism industry. This is favorably
influential for the Sydney Harbour Bed and Breakfast regarding service dimension e.g., event
hosting for local and outside customers as they are expected to have better spending capacity
(Mair and Jago, 2010).
Political Trends - politically the country has a high rate of stability. The country is
considered as the preferred destination of many people across the world and government is
also focused to maintain the tourism attraction of the country (Solnet, Kralj, and Baum,
2015). However, the country receives many criticisms from the United Nations for the low
level of security for refugees as well as low protection of human rights. Services to facilitate
customers for enjoying adventurous sights such as the Rock Ghost tours, Taronga Zoo, iconic
Harbour Bridge of the Sydney harbour bed & breakfast by keeping this in consideration must
show extra layer of humility and cordiality to its guests who are not always indigenous
people in the country (Fraj, Matute and Melero, 2015).

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Legal and Regulatory Issues - the hospitality industry is labor intensive with consideration
of customers as important stakeholders. Thus the Sydney Harbour Bed and Breakfast is
exposed to several laws in the country and these are a fair trading act, competition law, and
consumer law. In a matter of employment, the Fair Work Act 2009 is an important legislation
the hotel is to follow along with other existing rules and regulations (Tribe 2011).
Technological Development - Australia has grown in technology and the country expects to
increase technological application. In accordance with this, the nation is likely to increase
technology related purchase in 2019 by investing approx $65 billion. This could help the
hotel to improve its service with more technological involvement (Chan, 2011).
Social and Cultural Trends - The country does not have a dense population and is the
habitat of people of diverse cultures and races. Knowledge among people in the country is
high with better spending capacity strengthened by the better economic pattern of the nation.
Sectors such as sports, tourism, and hospitality are important in terms of GDP contribution.
The social and cultural pattern of the country is helpful for the hotel to design its services
with more focus on quality with low consideration of low price options (Kusluvan et al,
2010).
Based on the above analysis the Sydney Harbour Bed and Breakfast requires preparing
marketing strategies for its customers of diverse cultures so that they can be satisfied with
high-quality services at competitive prices excluding low price planning (Dief and Font,
2010).
Summary of Opportunities and Threats
This section in this discussion highlights threats and opportunities for the hotel. The service
quality is likely to get a boost from technological supports. The growth of economy and
importance as a tourism destination may improve more as the hotel is likely to achieve more
growth due to its customers’ base including local and outside guests. With the advent of
growth, operational benchmarks laid down by industry will put up challenges for the hotel
(McManus, 2013). The competition will also increase and the firm may not always be able to
retain their best-talented people as an industry will offer many kinds of employment options
for them. If the country does not improve its present situation regarding the protection of
human rights, then the country may lose its tourism attraction among people n the country
and business will face losses.

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Conclusion
The report herein presents the discussion about the competition and market situation of the
Sydney Harbour Bed and Breakfast. The overall nature of the industry is moderately
competitive with firm’s reasonably better place amid competition in the hospitality sector in
the country. But challenges exist for the hotel in future and these need better strategies to
confront those with success in the industry.

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References
Alonso, A.D. and Ogle, A., 2010. Tourism and hospitality small and medium enterprises and
environmental sustainability. Management Research Review, 33(8), pp.818-826.
Brooker, E., Joppe, M., Davidson, M.C. and Marles, K., 2012. Innovation within the
Australian outdoor hospitality parks industry. International Journal of Contemporary
Hospitality Management, 24(5), pp.682-700.
Chan, E.S., 2011. Implementing environmental management systems in small-and medium-
sized hotels: Obstacles. Journal of Hospitality & Tourism Research, 35(1), pp.3-23.
Dief, M.E. and Font, X., 2010. The determinants of hotels' marketing managers' green
marketing behaviour. Journal of Sustainable Tourism, 18(2), pp.157-174.
Dwyer, L., Edwards, D., Mistilis, N., Roman, C. and Scott, N., 2009. Destination and
enterprise management for a tourism future. Tourism management, 30(1), pp.63-74.
Fraj, E., Matute, J. and Melero, I., 2015. Environmental strategies and organizational
competitiveness in the hotel industry: The role of learning and innovation as determinants of
environmental success. Tourism Management, 46, pp.30-42.
Kusluvan, S., Kusluvan, Z., Ilhan, I. and Buyruk, L., 2010. The human dimension: A review
of human resources management issues in the tourism and hospitality industry. Cornell
Hospitality Quarterly, 51(2), pp.171-214.
Mair, J. and Jago, L., 2010. The development of a conceptual model of greening in the
business events tourism sector. Journal of Sustainable Tourism, 18(1), pp.77-94.
McManus, L., 2013. Customer accounting and marketing performance measures in the hotel
industry: Evidence from Australia. International Journal of Hospitality Management, 33,
pp.140-152.
Scott, N., Cooper, C. and Baggio, R., 2008. Destination networks: four Australian cases.
Annals of Tourism Research, 35(1), pp.169-188.
Solnet, D., Kralj, A. and Baum, T., 2015. 360 degrees of pressure: The changing role of the
HR professional in the hospitality industry. Journal of Hospitality & Tourism Research,
39(2), pp.271-292.
Tribe, J., 2011. The economics of recreation, leisure and tourism. Routledge.