Impact of External Environment on Business

Economical - National macro-economic situation and events impacting the environment are major factors affecting the Savoy hotel. For example, during the Olympic games and Queens Jubilee most of the rooms were occupied and booked fully for the whole period. However, the situation was completely different once the Olympic Games were over. Additional economic factors that affect Savoy may include slow economic growth, national taxation policies and seasonality.

The main purpose of this paper is through the company 's external and internal environment analysis to evaluate the company in the industry and future developments. Assess the external environment mainly through PESTLE Analysis and Porter 's 5 Forces. Strategic Recourses & Capability Analysis for internal environmental assessment is conducted. Finally, the company somehow SWOT analysis, concluded ••••

The hospitality and leisure industry hug a variety of sectors and businesses across hotels, restaurants and restaurants, travel and tourism, gaming, sport and leisure. The sector is reliant on the consumer confidence and business sentiment and is facing rising pressure to deliver innovation, value and quality. Hospitality is that business that helps people to feel welcome, relaxed and to enjoy themselves. It is all about customer service and providing the best quality and experience possible for the customers. (Discover Hospitality, 2012)

The decision to focus on the domestic market was heavily impacted by the decreasing number o international tourist. A thorough evaluation revealed that three main contributing factors to the decline in international visitation were the strength of the Australian dollar, International financial factors and competing international theme parks.

Overall Exchange Rates change every day and depending on how it changes can affect inbound and domestic tourism.

For example, the flight that Virgin Atlantic provides to Asian countries will contribute to the nation tourism aspects. Foreign tourist from the Europe and all perhaps from all over the world will come to Asian countries. This will boom the tourism industry in the particular country. This will develop the infrastructure of the country itself (Tucker, 2010). In terms of employment, especially that rely on tourism industry, more and more labour will be needed. Hence, the requirement for workers will increase. Job seekers around the world will come to that country to seek for job. In fact, the local people themselves will need to compete with foreign workers to get the job. Hotels for example, will be built and increased from time to time.

Our team chose the hotel industry in the United States for our economic analysis. The hotel business has existed since the earliest times, and has influenced the development of the economy since the founding of this country.

Another barrier for entry into the market is due to the industry greatly impacted by the economy; most companies in the industry have to cut prices of rooms and lower rates to stay competitive. When the economy is declining it has a positive correlation to the

Economic factors include the operation in tourism and hospitality industry. Such factors can influence the expenses and revenues of the organisation that are working in tourism and hospitality industry. The prices of raw material, inflation rate and product prices also impact the industry. Exchange rates and rate of interest greatly influences the industry. The financial recessions all around the world has led to reduce the purchasing power of the tourists and customers. Thus, therefore, the overall revenues generated from tourism and hospitality industry impacts the financial

Every now and then disruptive events happen in the business world such a technological change, industry changes, market changes or even societal changes that greatly impact the continual success of a business. More so we live in era where these changes are only accelerating increasing uncertainty and the growing complexity of the business world. Economic power continues to shift eastward and different markets and trade linkages are emerging causing the boundaries between industry and sectors to blurring. Discontinuities and megatrends are an inherent part of today’s business environment and it is important the businesses assess the impact of both these concepts on their strategic objectives and daily operations of the business in order to stay ahead in today’s competitive environments. Most importantly CEO’s need to be at the head of the business’s strategic objectives to ensure that the business remain on track and able to quickly adapt to these changes in the environment.

After graphing the figures we saw that the mathematical model that we had previously used would not be adequate with the explanation. So we then did another 31 day comparative between a 31 day period in 2007. Then again in 2013. These figures were then compared to the national average for hotels for the same period. The interesting fact that came about was the direct correlation between the falls in sales figures both nationally and here in south Florida and the corresponding securitization and real estate bubble burst.

It is defined as all the forces or conditions that are available within an environment that affects an organization and business. It is also known as controllable factors because business can control them. The internal environment deals with the management of resources like human resources, physical resources, technology, monetary resources and others that constitute the organization in order to implement or execute a strategy. Internal environment also includes culture and other intangible aspects like teamwork, coordination, efficiency level of employees, employee’s salaries and monitoring costs. The strategy for competition should also be in sync with the internal resources especially the internal environment.

One of the biggest problems of McCain was obesity in children. This problem related to external challenges, which faced by the organisation. McCain had to focused on the healthy problem occurred due to their products. McCain had to understand the dietary of the customers, which should be balanced as well as healthy. In relation to understand the customer’s requirement and other issues, it was mandatory for the company to analyses its environment whether it was internal or external. Following figure show the external challenges:

The internal business environment includes factors within the organisation that impact the approach and success of the business operations. Formerly presented as core competencies, capabilities, leadership style and culture of an organisation. To understand its sources of competitive advantage from within a firm or an organisation will implement specific tools such as SWOT analysis (Strength, Weaknesses Opportunities and Threats), Value chain analysis, Resource based view, VRIO framework and BCG Matrix for instance.

In today’s world, tourism has become one of the key factors of many countries, which contributes significantly not only to the countries’ economies, but it also helps resolving lots of problems such as employment. According to the World Tourism Organization (WTO), n.d., tourism consists of activities of people travelling and staying in places outside their usual environment for not more than one year for leisure, business, and other purposes. Nevertheless, in order to stay overseas for a period of time, travelers have to use the currency of the country that they are staying by exchanging with their own currency. Business Dictionary (n.d.) defines exchange rate among the currencies as the prices, which is influenced by the interest rates, inflation rate, political stability, and so on. However, the currency exchange rates among countries are changing every day. Consequently, tourism will be affected by the fluctuations, and it is believed that they do have both negative and positive effects on tourism. In this report, the researcher will investigate the following question, “How do USD - NZD exchange rate fluctuations influence New Zealand’s tourism patterns?” in order to provide insights for the New Zealand tourism industry as well as travelers.