Business environment has been defined as a sum total of internal and external factors that has an influence on operating situation being faced by company (Horgan, 2005). With the help of business environment, the places where amount of money that has to be allocated is decided (Nixon, 2004). It plays a significant role in the stage where organization is in developing stage of its growth. A thorough review of micro as well as macro environment is required to be carried out so as to understand the impact made by the factors on overall business strategy (Chaiprasit and Swierczek, 2011).
Hence, in the present report, there will be an overview of strategic impact of the business environment with reference to Thistle PLC. It entails for critically evaluating the critically evaluates the micro and macro environments of Thistle PLC. Areas such as evaluating the key stakeholders, organizational culture, PESTEL analysis, Porter’s Five Forces Analysis as well as SWOT would be given a thorough review (Black, 2000).
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ASSESSMENT CRITERIA 1
Examine the Current Business Environment Issues That Impact on Hospitality and Tourism Organisations and the Evolving Business Environment Issues and Their Impact on Hospitality and Tourism Organisations
1.1 Examine the current business environment issues that impact on Hospitality and Tourism Organisations
Introduction to Thistle PLC
Size – Thistle hotels is a hotel company that is based in UK and is run by Guoman Hotel Management. It has a portfolio of 56 hotels that are considered into luxury one among various hotels. These are inclusive of around 22 hotels in London itself (Wetherly, 2014). In UK, it is one the largest lodge that comes on sixth position in all the chain of hotels that are there in the country. But it is considered as the largest hotel chain in London. The company is further responsible for managing 37 other hotels that are largely regional in nature (Jain, Trehan and Trehan, 2013).
Customers – Customers of this hotel are mainly people visit UK for the purpose of traveling. They are generally the tourists from which companies made their profits by serving them (Allen and Raynor, 2004). There is also a presence of many business executives that are there for the business related works and make use of wi fi facilities as well as conference halls provided by it (Kew and Stredwick, 2005). The guests are from UK as well as across the world. They consist of families, corporate clients among others.
Products and services - Thistle Hotels PLC has been offering varied kinds of product and service offerings. Number of facilities like Otium Health & Leisure Club is being provided by this organization. This provides for a full scale spa concept that was initially introduced at five hotels. There is also a presence of other services such as Just Gym, brewpubs, Bar and Grills among others. It has also introduced a new restaurant concept known as CoMotion that has combined the atmosphere of New York deli with that of café that is having look and ambience totally based on culture of India (Wessels, 2006).
Staffing – Thistle PLC is having several departments so that functioning in hotel of all the divisions can be made in an appropriate manner. The departments are inclusive of sales, operations, food and beverage, public relations, marketing, finance, purchase, human resource among others (Khattab and et.al, 2012). The employees are staffed on the basis of their caliber and experience (Lindelöf, Dettwiler and Löfsten, 2006).
Micro environment is consists of those factors that have their direct impact on the functioning of business operations as well as its success. So initially there is a need to carry out a fully fledged analysis of the overall micro environment followed by corporate strategy of business (Parker and et.al., 2014).
Analysis of key stakeholders
Suppliers, who are one of the very main stakeholders of Thistle Hotel, are the one who used to supply raw materials in form of groceries, linen, technological equipments, and machinery (Kryzanowski, 2006). They have got very much interest in the operations undertaken by company as well as the its several judgments but pose a less power to impact the system of working.
Marketing Intermediaries of this hotel also referred to as intermediaries are in form of agents, marketing agencies (Parker and et.al., 2014). Generally they include promotion of products and services of this hotel that is being offered by it in order to serve people with superior quality so as to get the maximum sales from consumers. It is just not the operations of organization that influences it but there is also a huge impact of king of functions that company carries out (Gregory, 2013).
The next and most major form of stakeholder are the consumers who are a part of this hotel. These are the stakeholder group which is directly affected by the set of operation that is undertaken by any company (Moon, 2010). They can further be divided into infrequent consumers that are having their presence at a very low level. Along with that, their power is also low. Then presence of regular consumers is also there who are facing low power with them but is having high level of interest in overall operations undertaken by firm.
1.2 Examine the evolving business environment issues and their impact on Hospitality and Tourism Organisations
Analysis of organizational culture
The organizational culture at Thistle hotel can be judged with the help of The McKinsey 7S Framework. It is the model that assists in ensuring that all areas that are a part of organization are there to work in harmony (Cornuel, 2007).
The firm has followed by organizational strategy where a value as well as importance is given to all the employees so as to manage talent within the organization. In this regard, the strategies are framed in such a meaner so as to embrace the principles of diversity, offers fairness and equality of opportunity in every respect. Organization has been structured in such a manner so as to ensure communication from both the sides so that it can have accuracy and reliability in it (Brinkman, 2014).
Employees are communicated properly on areas of concern so that they seek opportunity so as to keep staff members engaged and grow with them. Response from customers is taken with due consideration from employees of this hotel and suggestions are given a listening ear (Business and environment, 2013). In this hotel, there are systems in which employees are made to perform in a better way by following a continuous process of training and development sessions to every employee that is a part of Thistle PLC (Elements of Business Environment, 2013). The company has created a strong induction by which employees are introduced to the company in the best possible manner (Horgan, 2005).
Every employee is further provided with a personal development plan which is reviewed on a regular basis. This is done so as to ensure that career and personal development stays. In the same way, various policies of shared values are made where Thistle Hotels has provided an opportunity to employees where they get a chance to build up a good career in hospitality (Nixon, 2004). The employees have reported towards the presence of tag team support structure where senior team members are quite supportive and listen to the ideas.
However, on a negative note, there is an absence of integration between different areas that are present in Thistle Plc. Different teams have got a presence of 'they and we type of opinion (Chaiprasit and Swierczek, 2011). Some of the employees also depicted that they have faced the issues of Low pay. In spite of these flaws, the hotel management treats the employees with dignity, respect as well as fairness. Diversity has been embraced and is viewed as strength for any business (Black, 2000).
The firm has further formulated a very important policy that made for avoiding discrimination among employees of the hotel is robust in nature. In this regard, any allegations are dealt on a serious note. Thus clearly shows that participatory style of leadership is followed. The employees are further judged on the areas of capabilities and competencies of the employees within the constituent parts of the organization (Wetherly, 2014).
If employees do not perform in a desired manner, appropriate training and learning sessions are provided to them so as to have talent management in the hotel for making all people skilled and knowledgeable enough. To make the culture more work friendly, the human resource team has been providing the employees with a range of benefits as well as special offers (Jain, Trehan and Trehan, 2013). These are inclusive of getting a reduced room rates across all hotels, provision of 50% discount on food and beverage section. Proper meals are provided to the people along with some discounts too.
ASSESSMENT CRITERIA 2
Use analysis tools to determine how changes in the external environment impact on Hospitality or Tourism Organisations and their market and to determine how the market for Hospitality or Tourism Organisations is changing and evolving. Analyse the internal factors that impact on Hospitality and Tourism Organization’s strategic performance and make recommendations on how a Hospitality and Tourism Organisation should develop or adapt strategies to respond to market changes
2.1 Use analysis tools to determine how changes in the external environment impact on Hospitality or Tourism Organisations and their market
Political - There is a presence of varied kinds of political facets that have affected the overall functioning of Thistle plc in UK. On a positive note, there has been a presence of Positive and pragmatic collaboration with government of UK that has ensured for more employment at Thistle plc hotel (Allen and Raynor, 2004). In the same way, areas such as consumer protection and employment laws that are present in UK put a direct impact on overall operations of hotel.
Economic - The economic recession has affected the sales at Thistle plc. Hence, people are making choices before spending a single penny. In the same way, essential impact puts impact on sales and revenue figures of hotel. For example, during the time of Olympics most of the hotels present in UK have been occupied as well as fully booked. However, the situation went a change when Olympic Games got over. Inflation has increases the costs and expenses of their business (Kew and Stredwick, 2005). Another economic issue is the fluctuation in foreign currency rates as organization also offers the services to international guests and fluctuation in currency prices affects the profitability of the hotel.
Social - Under this, Thistle hotel give preference to customer's expectations because their wants and needs are keep on changing. For this purpose organization offer cost effective product and attractive services (Wessels, 2006). In the same way, there has been an increase in the number of young consumers that are coming to UK. These are inclusive of emerging economies like China and India. Hence, thistle hotel has got a good chance to tap the new consumer base in the best possible manner.
Technological - thistle hotel in order to attain success is required to be in tune with technological infrastructure which puts a great impact on overall performance. Under this, Thistle hotel need to use latest electronic technology to have effective communication with customers and employees (Khattab and et.al, 2012). It is further required to show n increased presence on Facebook, tweeter and websites like trip advisor to help consumers. In the same way, organization need to adopted highly equipped technology to keep pace with changing environment (Lindelöf, Dettwiler and Löfsten, 2006). Thistle PLC is thus required to provide technological advancements in such a manner so as to offering instant value to its customers.
Legal – It plays significant role in the performance of organization. Under this, Thistle hotel need to comply rules and regulation made by UK government for service industry. There are many countries such as Australia which impose visa restriction rules that has impact on the performance of organization (Parker and et.al., 2014). These regulations create barriers on the international visitors of the firm.
Environmental – There are various efforts made by Thistle hotel to prevent high carbon emission. On the other hand, global warming is an issue which has negative impact on the environment (Ramanathan and Yu, 2012). There is also a presence of strict rules and regulations of the tourism industry which have been made towards safety and protection of the environment. These are related to green hospitality and sustainable development (Kryzanowski, 2006). Hotel has been facing issues in terms of optimum utilization of resources such as water, lights and other non-renewable resources.
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2.2 Use analysis tools to determine how the market for Hospitality or Tourism Organisations is changing and evolving
Porters five force analysis
Potential entrants – There is a very low chance for entrants to make good position in UK based hotel industry in order to compete with Thistle PLC. This is as new entrants found it hugely difficult so as to compete with existing players that have got a renowned position in market (Parker and et.al., 2014). Long time is required by them so as to mark a respectable name in market followed by building up customer loyalty and retaining them for long tenures.
Suppliers - There is a presence of many suppliers that are working for Thistle PLC. Hence, the quality and price can be considered as key factors while making purchase decision. In this regard, there is a presence of low supplier in case of UK hotel industry (Gregory, 2013). The hotels are able to pick as well as choose from large supplier base.
Buyers – The buyers for Thistle PLC are quite large in number. These are in form of international tourist/travelers as well as consumers from UK itself. Hence, price and quality is requiring being competitive so as to attract them in large numbers (Moon, 2010).
Substitutes – UK hotel industry has got a presence of a lot many consumers. Hence, this has increased the overall chance for product-for-product substitution.
Competitive rivalry- At present Thistle PLC in UK has been facing rivalry from four major clients. These are inclusive of Granada Group, Whitbread plc, and Hilton Group (Cornuel, 2007).
2.3 Analyse the internal factors that impact on Hospitality and Tourism Organisations strategic performance
- High-profile city centre and countryside locations (Horgan, 2005).
- Loyal consumer base.
- Strong reputation in UK market Weakness
- Lack of coordination in different department
- Lack in usage of innovative marketing strategies (Nixon, 2004)
- Unable to deliver quick services to visitors
- Rebranding of hotel
- Tapping the growing sector of new consumers.
- Capturing four star deluxe markets (Brinkman, 2014).
- Increased brand communication activity
- Increased competition from budget brands, luxury venues and new entrants.
- Numbers of foreign visitors have fallen dramatically
- Uncertain future
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2.4 Make recommendations on how a Hospitality and Tourism Organisation should develop or adapt strategies to respond to market changes
Varied recommendations can be made on the basis of environmental analysis that has been conducted for Thistle PLC. The recommendation can be justified on the basis of analysis that has been carried out.
Changes in operations- Thistle hotel is required to focus on developing new and improved operational plans. It needs to take help from skilled and experienced employees (Chaiprasit and Swierczek, 2011). The retention of such staff members is also very important which can be done by offering higher salary with extra incentive as well as Better rewards.
Innovative marketing –Organization can offer free transportation services for visitors form from airport and hotel. It can further focus on providing CDs and DVDs about the London information. It will help the guests who are coming to London or UK for the first time. In the same way, Thistle hotel can make use of worldwide software that is meant only for guests arriving at the hotel (Black, 2000). It helps visitors to know about the details of the hotel as well as quality of services provided by the same.
Mixed menu - It is quite clear from the environmental analysis so that has been carried for Thistle hotel that consumers are a mix of national and international travelers. Most of them are majorly from China and India. Hence, new menu can be introduced for travelers who are coming from emerging economies (Wetherly, 2014). This can further be named as fusion menu. Here, original food can be made tastier by using different ingredients so as to mix of cuisines which give different taste and attract customers. This new trend is most favorable because of changes in the taste and preferences of visitors which ultimately increase number of customers as well as profitability.
Feedback and reviews from guests of their hotel- Under this, Thistle need to have followed up of customers so that they contact as per their requirements and firm can come to know about their expectations (Jain, Trehan and Trehan, 2013). Corporation also needs to give emphasis on complaints faced by their guests. Then only there can be an overall enhancement towards operational and business activities.
Employee management strategies – In this, firm need to launch various motivational programs for employees and they must be rewarded for their better performance. This will assist in boosting up long-term success for organization as well as employees (Allen and Raynor, 2004). Thistle hotel can give monetary and non monetary reward which boosts morale of the employees. In the same way, positive reinforcement can also play a key role to motivate the employees.
Creating consumers as brand builders –Consumers can play a role of brand builders if they enjoy their overall stay at Thistle plc. They are most likely to spread positive word of mouth publicity if they enjoyed the stay. Hence provision of a quality product and service offering is of utmost necessity in all accords (Kew and Stredwick, 2005).
Using of competitive advantage: Thistle is further required to offer some innovative and unique service to the guests. In this, hotel can get competitive edge by offering additional services such as free parking, magazines of hotel. In the same way making use of promotional schemes and offers is most likely to attract the guests (Wessels, 2006).
From the report it can be concluded that internal and external environment has significant impact on the strategies of organization. External factors like political, legal as well as social factors put an impact on decisions undertaken by a company. These factors are affecting performance of luxurious Thistle hotel of UK. In this regard, the firm has to take care of all the factors no matter how less significant they are. This is required so as to gain a competitive advantage over other rival firms in the long run.
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