Strategic concepts in tourism, hospitality and events
Individual project: Grande Bretagne Hotel Athens; Exterior business environment
INTRODUCTION
No company on earth is working standalone and in isolation. Thats even more emphasised in the tourism industry where in fact the location of the tourism companies employs the location of the tourism product, the tourism vacation spot. A hotel can't be located standalone in a no attractive travel and leisure vacation spot and expect success, it should be as near the epicentre of the travel and leisure happening and movements. The catch is, every travel and leisure company wants that, and they all have to be competitive in the saturated, constant market with each other and with the surroundings like a whole.
In this assignment we will discuss the problems and implications of the exterior environment put on our hospitality company of your choice predicated on the specific theoretical model. Further evaluate the competitive environment using the Porters Five Makes Model with closing recommendation for the future of the business.
BRIEF DESCRIPTION OF CHOSEN SUPPLIER
For the goal of this assignment we'd chosen the brand new Hotel Athens.
New Hotel Athens (formerly Olympic Palace Hotel), along with 4 other hotels, is an integral part of Yes Hotels string, and they're part of the worldwide Design Hotel company with an increase of than 250 indie hotels in over 50 countries worldwide. (http://corporate. designhotels. com/about_design_hotels)
Situated in Plaka area in central Athens, New Hotel is a 79 room establishment designed by the Brazilian award being successful design duo Fernando and Humberto Campana. The hotel also sports activities lovely all-day bar-restaurant, New flavour, and Workshop Floor, getting together with space with teleconference facilities.
IDENTIFICATION OF FACTORS ISSUES WITHIN THE EXTERNAL ENVIRONMENT (MACRO ANALYSIS)
Business environment identifies those factors of the surrounding of business enterprise which have affect on the functioning of a business. The business enterprise cannot control these aspects but can react to change if needed. This is also call macro environemnt.
(http://books. yahoo. gr/books?id=nfADHVmJkTUC&pg=PA3&dq=external+business+environment&hl=en&sa=X&ei=jiJvVNnjHJP5asqEgvgL&redir_esc=y#v=onepage&q=external%20business%20environment&f=true)
External business environment
Economic conditions
Economic conditions are global as well as nationwide, and when there's a global financial crisis just as 2007, and the recent one, changes in the external environment can be remarkable. Positive financial condition of the nation also have positive influence on their spending behaviors. And contrary, when the country is suffering financial hardship, the money that'll be spent for entertainment and vacations will be less. Indirectly, the negative financial condition increase the unemployment rate and the interest and taxations.
New Hotel Athens, functions within the European union and Greek monetary environment. Considering the not so positive financial condition of the country and the Euro area generally, we can say irrefutable which it reflects adversely on the business. After a calamitous recession in which the current economic climate shrank by 30%, government debt now stands at 174% of GDP and the budget deficit this past year was almost 13% of GDP (The Economist 2014). This leaded to intense surge of the fees, increased interest rate for bank loans and credits and overall increase cost of the raw materials and imports.
In the desk below we can easily see the countrys economic independence index and few other overall economy related facts and figures like, the the freedom of problem, fiscal flexibility, business, labour and trade liberty etc. (The History Foundation 2014)
Greece, Economic Freedom index 2014 - Source The Heritage Foundation
Regardless of today's negative condition in the united states, there is a positive forecast for the future economy of the country from international and domestic experts. High administration official also promised a new taxation "roadmap" that would be unveiled in the future, with the utmost income tax trim to 32 % from 42 per cent and the corporate duty rate reduced to 15 % from 26 per cent. (ABC Reports 2014)
Market (competition)
The market/competition is a constantly amending element in the external environment of the business enterprise. Not just that new competitors occur and other disappear, but also the existing ones are changing and adapting their marketing strategies, product lines and prices. Often those changes are not evident therefore the businesses must be alerted from what their competition are doing.
Our hotel is one of the 23, exclusive 5 star hotels in the central portion of Athens, excluding Piraeus and Glyfada (Greekhotels. com 2014), and one of the 176, 5 star hotels in the united states. (Hellenic Chamber of Hotels 2006). For the reason that saturated market are included as well the big international players like Starwood, Intercontinental, Hilton and other hotel chains with great influence on the market and provide brutal competitiveness. But New Hotel Athens diversificate in many ways from your competition, and their business design follows the fresh market tendencies providing something for a distinct segment travel and leisure clients.
Technology
In the last half of a century, one of the quick change factors in the exterior environment and the frequent pusher on the firms and organisations has been the technical change. In case the dont behave sufficiently quick to this change, they can face with the chance of shedding market stocks. The technical change dont affects only on the design of the merchandise, but as well on the delivery of service.
In the example with this hotel, we must say that this external factor is taken into consideration seriously, and even used for competitive advantage. The property is recently renovated based on the latest criteria and tendencies, with carried out computer controlled internal systems, offering free WiFi to the customers (unlike almost all of the 5 star hotels), and having great interactive website and internet sites presence.
Climate change
Climate change can be an insidious menace because the speed of change may be recognisable only when considered over a decade-by-decade basis. The result of weather change won't fall equally on all nations and everything businesses. Businesses that be dependent on a good way to obtain drinking water e. g. agriculture, field sports will be adversely effected if environment change brings about reduced rainfall. Nevertheless the flow on have an impact on of drought will eventually work their way to all businesses in the damaged community.
Legal
The most popular rules changes that affect business include Work place Health and Protection, Consumer Coverage, Industrial Relation and Environmental Legislations. But most apparent change in laws through legislation is the taxation. Sometimes the taxation changes occur fast and with little warning and there is not much time for the business to get ready.
The New Hotel Athens guests are shielded by the overall Greek consumer cover law for all trades you make while going in the united states. As venture, the hotel is obliged to issue written receipts, that safeguards the buyer in the event of any say or dispute with the enterprises. (VisitGreece 2014)
Media
The significant changes in the technology and the go up of the internet, reflected on the mass media as well and modified it from surface up. That affected deeper on the exterior business environment. The old route for communication where suffocated, transformed and completely new ones appeared. The businesses had to embrace this change and adapt to it as quickly as possible.
New Hotel Athens following a modern media developments, had build extensive online presence all over the internet (as a medium). And got gained significant positive opinions. For example Trip Advisor, according to the votes by the clients, had given this hotel with the Travelers Choice Award for 2014 and had positioned it as # 7 7 out of 324 hotels in Athens. Except the booking sites, New Hotel Athens greatly uses the communal media for advertising and communication with the clients and the general public.
Political
Just like law, changes in the general government insurance policy can be well notified and talked about or changes with no warning. Many organisations is determined by the government financial assistance and if there is a change in the federal government policy, those funding can be reduced or to completely fade away. Also any politics instability in the country, causes destabilisation of the society and also have repellent effect on the tourism. For example the recent political crisis in Greece and the surge of the radicalism got negative effect on the tourism as a whole. Some of the media even frightened out the tourists with warnings of racist attacks (Hamilton Spectator 2012). Or the few cases when the strict immigrants coverage mistreated few holidaymakers by the authorities in Athens (BBC 2013).
Demographic
The people changes include increasing or lowering of the population, change in the age group proportion, change in the cultural variety, change in the number of two-income families, variety of marriages and geographic society distribution. All those changes affects the exterior environment of a business. Recruiting, security and mentality smart.
New Hotel Athens operates in quite diversive demographic environment that just adds to the colourfulness of the business enterprise.
USING THEORETICAL MODELS TO AID THE Talk?????
PORTERS 5 FORCES (MICRO ANALYSIS)
Porter five makes evaluation is a platform to analyze degree of competition within an industry and business strategy development. It includes three causes from 'horizontal' competition and two makes from 'vertical' competition. Porter described these makes as the micro environment, to contrast it with the more standard term macro environment (Porter 1980).
The Porters Five Causes is a powerful and simple tool for understanding where in fact the power lies in an enterprise situation. Conventionally, the tool can be used to recognize whether services, services or businesses have the potential to be profitable. Nonetheless it can be quite illuminating when used to understand the total amount of vitality in other situations.
Porters 5 Makes (Source Wikimedia)
Supplier Electric power:
The bargaining vitality of suppliers is also referred to as the marketplace of inputs. Suppliers of components, recycleables, labor, and services to the organization can provide power over the firm when there are few or no substitutes. Suppliers may refuse to provide those materials to the company or fee high prices for the initial resources. Potential factors are:
Supplier transitioning costs, supplier awareness, amount of differentiation, replacement, labor unions, distributor competition etc.
New Hotel Athens, being area of the YES Hotels talk and part of Design Hotel chain, can maintain vast supply chain because of the dispersed suppliers connection of the sister companies and the mom company. If there is leak of equipment from one source, they can simply transition to other supplier connected to some of the other properties or globally with the mother company, Design Hotel Chain. From F&B materials to technology. Though, thats not applicable to the suppliers who provide unique products to the hotels.
Buyer Vitality:
The bargaining power of customers, is detailed also as the marketplace of outputs. It is the ability of customers to produce a pressure over business, therefore to influences the customer's sensitivity to price changes. The companies can take steps to lessen buyer ability, such as bringing out a devotion program and marketing promotions. If the buyer have many alternatives then his electric power is high and opposite. Potential factors for this are: buyer concentration, buyers turning costs, buyer information, substitute products, barganing leverage, customers price sensitivity etc.
Competitive Rivalry:
For the majority of industries the intensity, competitive rivalry is the largest determinant of the competitiveness of the industry. Potential factors includes: Technology, advertising, competitive strategies, company attention, amount of transparency etc.
Threat of Substitution:
The existence of different products that can gratify the same need, can make the customers switch to alternatives. Potential factors here includes: the propensity to replace, price performance of alternative, buyer turning costs, product differentiation, variety of alternative products available, simple substitution, quality depreciation etc.
Threat of New Admittance:
Power is also affect by the power of companies to get into the market. If it generally does not cost enough time or money to type in the marketplace and contend effectively, if there are few economies of level set up, or if there is little safeguard of the key technologies, new competition can quickly get into the market and weaken the prevailing business position. The following few factors make a difference on how much new entrants can be a threat: lifetime of obstacles to entry, administration coverage, capital requirements, utter cost, economies of scale, product differentiation, brand collateral, expected retaliation, access to distribution, customer commitment, industry success etc.
BASED FOR THE Examination, FEW REALISTIC Suggestion FOR CHANGE
Conducting macro and micro environmental examination we will come up with some bottom line
