Impact of Macro and Micro Business Environment on Travel & Leisure

This report provides a comprehensive analysis of the business environment, specifically focusing on the travel and leisure sector. It begins with an introduction to the dynamic nature of the business environment, encompassing both micro and macro-level factors. The main body delves into significant macro issues impacting the sector, such as Brexit and economic fluctuations, using PEST analysis (Political, Economic, Social, and Technological) to assess market conditions. The report then explores the potential micro-level impacts on the sector, including suppliers, customers, and competitors. Furthermore, the report discusses appropriate strategies for overcoming the challenges identified in both the macro and micro environments, providing a well-rounded perspective on the sector's operational dynamics and strategic responses. The report concludes by summarizing the key findings and implications for the travel and leisure industry.

Business Environment

Table of Content
INTRODUCTION...........................................................................................................................1
MAIN BODY..................................................................................................................................1
a. Macro issues in the business environment that are significant for the ‘Travel & Leisure’
Sector...........................................................................................................................................1
b. Explain the potential impacts at micro level............................................................................3
c. Appropriate ways of overcoming such challenges..................................................................4
CONCLUSION................................................................................................................................4
REFERENCES................................................................................................................................6

INTRODUCTION
Business environment is dynamic in nature and involve several micro as well as macro
level factors. Here, micro are customers, employees, competitors, distribution channels and
suppliers. Whereas, macro include trade cycle, level of income, policies and nature of an
economy, distribution of income and wealth. Modification in all these factors give wide impact
on operation of the organisation which can be positive or negative (Hilton and Platt, 2013). This
report is based on travel and Leisure sector of United Kingdom, it is the widest and fast
developing industry in the business environment. Below mention assignment will going to
explain macro issues within business environment and who they are important for respective
sector. Along with this, potential impacts at micro level and issues involved in them are also
explained. As well as ways to overcome with these challenges.
MAIN BODY
a. Macro issues in the business environment that are significant for the ‘Travel & Leisure’
Sector.
Macro environment refers to all those factors which are external parts of the company's
activities and beyond the control of anyone (Bharadwaj and et.al., 2013). Travel and Leisure is
the widest sector in the business environment as well as fast growing. BREXIT is the macro
environmental factor which affect respective sector a lot because funds for running business in
UK is taken from the European Union. There are several issues in macro business environment
for Travel and Leisure sector. Explanation of these are as follows:-
PEST analysis – It is the measurement tool which is utilise to assess market-area for a
specific goods or a business within a given time frame. PEST stands for political, economic,
social and technological factors. If these factors are analysed by the Travel and Leisure sector
organisation's then they can take better decisions for their working. Political – United Kingdom consist England, Wales, Scotland and Northern Ireland as
well as it is most powerful nation in the world (Berg and Kilambi, Siebel Systems Inc,
2014). Political stability is the strength of the country, where BREXIT has created
uncertain and political debates in the economy. Such modifying political condition give
wide impact on the organisation of travel and Leisure sector. Present corporation tax rate
for enterprise profits is 19%. However, the government announced to reduce the

corporation tax at Budget 2016. From 1 April 2020, the rate will be 17% (PEST analysis
of UK, 2017).
 Economic – United Kingdom is the 5th largest economy in the entire globe by nominal
gross domestic production. But in 2008 recession but overall economy is trouble which
affect operations as well as profit maximisation of travel and leisure sector (Schaltegger,
Lüdeke-Freund and Hansen, 2012). Here, microeconomic environment include particular
industry, market, firm and individual. Whereas, macroeconomic environment involve
national as well as international economic factors and effect of government policies.
Government is the one which can take several major steps for up-liftment of economy
and it will result in development of travel and leisure sector.
(Source: Direct and total contribution of travel and tourism to the global economy,2018)
Above mention graph shows direct as well as total economic impact of travel and tourism
on the global economy from 2006 to 2017. The direct economic contribution of travel and
tourism amounted to circa 2.57 trillion U.S. dollars in 2017.
Illustration 1: Direct and total contribution of travel and tourism to the global economy

 Social – United Kingdom have big consumer market, according to the data of 2017
population of UK was 65.6 million in 2016. Every individual have different needs and
wants related to travel and Leisure sector also. In the same country there are several
destination places for travelling which is the main reason that same industry companies
have many opportunities (Ballard and et.al., 2012). There is an ever increasing attitude for
positivity towards ‘going green’. People are purposely searching to only buy products from
companies with sustainable practises in place. Hence, it is important for the tourism
industry to take on these attitudes as well, as it is becoming an important part of our society
today to have environmental policies incorporated into everyday business practises. There
is an ever increasing attitude for positivity towards ‘going green’. People are purposely
searching to only buy products from companies with sustainable practises in place. Hence,
it is important for the tourism industry to take on these attitudes as well, as it is becoming
an important part of our society today to have environmental policies incorporated into
everyday business practises.
 Technological – This is rapid developing factor which is affecting business in United
Kingdom as well as all over the world. Changes and updation in technology has change
travel and Leisure sector organisation manner of business operation i.e., online booking
of tickets as well as holiday packages (Werbach and Hunter, 2012). Moreover, faster
development in technological factor creates an requirement for several business in order
they want to maintain the competitive environment through offering same innovation
services, which is offering by their competitors.
Thus, these are the macro environmental factors which are affecting travel and leisure sector
business in negative as well as positive both ways (Vitale, 2011). So companies have to
analyse all these factors in proper manner so that they can take better decision and remain in
market for long duration as well as maximise profit.
b. Explain the potential impacts at micro level
Business environment is the term related to marketing as well as refer to those elements and
forces which affect ability of enterprise in building or maintaining good relation with customers.
Business environment have three level of environment (Janita and Miranda, 2013). These are as
follows –

 Micro (internal) environment – These are the small forces in the company which
affecting its ability of serving customers better services. In simple term it can be said
that, these are the factors which affect an organisation at small level. As well micro
environmental factors are in the control of association. External factors also have
their impact on internal such as advancement in technology required to arrange
training and development program for employees. Apart from this, if political factors
get modify companies of travel and leisure sector have to implement all these for their
easy and smooth flow.
 Internal environment – These are properly inner part of the company and can be
controlled by the staff members and management of the business (Weiss, 2014). But
external factors can influence internal but it cannot.
 Macro (external) environment - It is the larger society factors as well as forces which
affect micro and internal both the factors. Political factor is the part of external
business environment but have negative impact on the working of travel and leisure
company. Because changes have their negative impact on the working of industry as
well as at the time of business expansion it play crucial role.
Along with the issues of macro environment within travel and Leisure industry there are
some micro factors are also issue (Avramenko, 2012). Explanation of these are as follows :-
 Suppliers – they can be local or overseas but travel and Leisure sector gain several
advantages in price, quality as well as delivery by procuring resources. Whereas, at some
level such decision of overseas supplier can result in uncertainty because of exchange
rate. Moreover, relation between supplier and organisation is totally depended on the
situation of market.
 Customers – These are important part of every business and company take initiate for
creating customers as well as grabbing from the market area. Aim of business enterprise
is to earn profit which can be possible through serving or fulfilling customer demand.
Now a day’s every travel and leisure sector organisation find customer for their offering
and even attract them by serving attractive packages (Wheelen and et.al., 2017). In travel
and Leisure sector customer play important role every organisation have to fulfil needs
and wants of their customers for remaining in market. Changes in taste and preferences of
buyers can affect business of same industry (Ullah and Lai, 2011). Moreover, customers

are the most important part of micro environmental factors because sale of goods and
services are depended on the degree of customer satisfaction. From the view point of
travel and leisure industry customer should be from several groups as well as legions
because it will help in easy sustain demand for the travel and tourism packages etc..
 Competitors – These can be direct or indirect both which means Travel and Leisure
sector companies have competitors from local as well as overseas. This is the widest
industry having larger number of business firm which result in high level of competition
for each other (Prins and Cybercrime, 2011). Thus, respective sector have must
competition in business environment. In simple term it can be said that business
environment is full of competition and manily organisation in travel and leisure sector
facing common competition which is product differentiation i.e., holiday as well as other
travelling packages of every company is different from each other and result in creating
competition.
c. Appropriate ways of overcoming such challenges
Business environment is the combination of internal and external factors which influence
operation of companies. It is dynamic in nature which gives direct impact on working of
organisations which exist in it. Moreover business environment is divided into two parts i.e.,
micro and macro. In business environment there are micro and macro both level challenges.
Where, macro are beyond the control of travel and leisure sector because it include external
forces which are not controllable. But to over with the challenges faced by the business these is
requirement of time to time analysis of macro environment factors such as political, economic,
social and technological. So that there negative impact can be minimise and opportunities will be
gained. Business environment is dynamic in nature modification on these factors take place this
is the main reason it require time to time analysis.
While conducting PESTEL, I face several issues such as identifying they major problem
which have to be resolve first. As well as economical factor is wide it become much hard for me
to identify all those elements which affect overall industry. Furthermore, business environment is
dynamic so while analysing these factor several modifications take change place.
Along with the, macro factors there are some micro environmental factor and these are in
the control of business firms at some level. Because it includes customers, suppliers, competitors

and so on. Tin travel and leisure sector customer’s play its important role as well as companies
have to fulfil demand of their buyers so they get satisfied and become loyal towards the
company. Moreover, suppliers also play important role because for working of every sector
organisation there is requirement of raw material which comes from suppliers so it is important
to build good relation with customers. Apart from this, competition is high because travel and
leisure industry is wide and having large number of organisations. They all are offering variety
of holiday packages with different features which result in high level of competition for each
other. Thus to come out from the competition companies have to take major steps.
CONCLUSION
From the above assignment it has been concluded that business environment is flexible in
nature as well as include several micro and macro level components. Modification in these
elements gives negative and positive both impact on working on travel and Leisure sector.
Companies which come under this sector have to do continuous market analysis so they can take
better decision for daily operations and profit maximisation. Moreover, issues involve in
business environment need proper solution because they can give major impact on working of
the business or entire travel and Leisure sector.

REFERENCES
Books and Journals
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Bharadwaj, A. and et.al., 2013. Digital business strategy: toward a next generation of insights.
Berg, E. and Kilambi, K., Siebel Systems Inc, 2014. Method and apparatus to facilitate
development of a customer-specific business process model. U.S. Patent 8,639,542.
Schaltegger, S., Lüdeke-Freund, F. and Hansen, E.G., 2012. Business cases for sustainability: the
role of business model innovation for corporate sustainability. International Journal of
Innovation and Sustainable Development. 6(2). Pp,95-119.
Ballard, C. and et.al., 2012. Dimensional Modeling: In a Business Intelligence Environment.
IBM Redbooks.
Werbach, K. and Hunter, D., 2012. For the win: How game thinking can revolutionize your
business. Wharton Digital Press.
Vitale, R.P., 2011. Business to business marketing. Pearson Education India.
Janita, M.S. and Miranda, F.J., 2013. The antecedents of client loyalty in business-to-business
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Wheelen, T.L. and et.al., 2017. Strategic management and business policy. pearson.
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Prins, J.R. and Cybercrime, B.U., 2011. Diginotar certificate authority breach’operation black
tulip’. Fox-IT, November.
Weiss, J.W., 2014. Business ethics: A stakeholder and issues management approach. Berrett-
Koehler Publishers.
Avramenko, A., 2012. Enhancing students' employability through business
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Online
PEST analysis of UK, 2017.[Online]. Available Through<https://www.howandwhat.net/pestel-
analysis-uk/>
Direct and total contribution of travel and tourism to the global economy,2018.
[Online].Available through<https://www.statista.com/statistics/233223/travel-and-
tourism--total-economic-contribution-worldwide/>