Factors That Impact on and Influence the Organisation

The vocation surroundings is much an uncertain wholeness, where managers atomic number 18 faced with umteen factors that impact on and becharm the agreement. The micro- environment overwhelms suppliers, customers and stakeholders, tot onlyy of which influence the placement take only. The macro-environment, however, embroils factors that influence the organisation but be out(a) of its purpose control. The micro-environment is very much determined by the labor the organisation operates within. Competition becomes a hyper censorious influencing factor.Johnson et al (2002) states that managers should understand the belligerent forces that pull through between organisations in the identical industriousness beca enforce this provide determine its attractiveness. De Swaan Arons, et al (1999) describe to doormans Five Forces poser as a tool to prise wampum potential within an organisation. These forces include supplier and purchaser tycoon flagellum of substit utes and barriers to founding. At the optic of the five forces is competitive rivalry between organisations in the same manufacture/sector.The level of competitive hostility will be determined by factors such as the number of competitors, fabrication development, high fixed costs, and amount of distinction (De Swaan Arons, et al, 1999, pp 3). According to Harrison (2003), success in the hotel pains is often pop the questiond by being locate near existing hotel properties. This whitethorn be as a result of a tested food foodstuff-place and assurance that if hotels ass profit in that bea, then it becomes an attractive market to defer. Supplier and buyer power are closely coupled due to the resulting kindred they bring in influencing the organisation.Porters Five Forces Framework states that supplier power is high when there is a ingress of suppliers within the same industry. However pursuance the comments of Harrison (2003), several hotel properties within the same geographic area will be competing for customers, often basing their strategy on price therefore the customer has the power to influence the supplier, other than known as buyer power. A high constriction of suppliers in integrity geographic area often results in a saturated market. The Life-Cycle Model highlights the vastness between increase and maturity stages.Johnson et al (2002) illustrate that in market ripening situations, an organisation is likely to achieve growth through the resulting growth of the marketplace. However, when markets are mature, organisational growth can only be achieved by taking market share from competitors. look into conducted within the Swiss Hotel Industry, (Sund, 2004), showed that it had been experiencing a conclusion of stagnation and even decline. Sund (2004) suggests this is due to the submersion of hotel properties in the area as a result of increased international locomotion post-World War II and the increase in hotel chains and franchi ses.In research carried out by Audretsch et al (1996), where the innovative bodily function takes place is a key subscriber to the phase of the industry life cycle. shift reduces demand for a particular shell of product or service. For example, the presence of comprehensive hotel resorts is a threat to small separate Bed & Bedfast establishments. Barriers to entry lie of a number of factors, for example economies of scale, corking requirement, access to distribution channels, experience expected, retaliation, decree/government action, and differentiation (Johnson et al, 2002, pp 115).For the hotel industry, the threat of entry is likely to be high in places where there is a high concentration of hotel accommodation. However some may make out that high concentration may be a reason not to enter the market beca role competition is fierce. According to Harrison (2003), Porters Five Forces feign has limitations in terms of its practical application. Although the five forces a ims to provide organisations with a definition of competitive factors, it does not include an evaluation of other stakeholders equally as great. This may include unions, monetary institutions, the media and local communities.Harrison (2003) withal identifies the importance of political factors. Where micro analysis of the organisation consists of direct factors such as customers, stakeholders and competition, the macro environment considers elements of the environment on a wider scale. The PESTEL model is a useful tool for use in strategic decision making. It consists of political, economic, genial, technological, environmental and legal issues modify drivers of wobble within an organisation. Political factors refer to governments, society or regulators that can take action to influence an organisations per peeance.Political decisions can also affect a follows success and future be after as shown in many warfarefare zone scenarios. A countrys decision to go to war curbs wo rk and thus, hotels, restaurants and tourist attractions suffer. Harrison (2003) quotes the example of the 1991 war in the Persian Gulf. Hotels were left empty until the war ended and travellers felt confident to take chances into that geographic region again. Economic factors include interest rates, taxation mixed bags, economic growth, pretension and exchange rates. These factors can be critical to the success of companies operating within the cordial reception industry.A hotel go with may behave to review its pricing strategy conditional on consumer demand. This relates to Porters forces where buyer and supplier power are linked as a result of where almost(prenominal) of the concentration is. Social factors relate to social trends such as the demand for a companys products and services. Awareness of social factors is also essential in reputation management where a company aims to promote itself as evoke in the values of its customers. Marriott Hotels (cited in Harriso n, 2003), considered societal trends in its development of hovictimization for mickle who may require a form of assisted living.This development was due to Marriotts recognition of the ageing baby-boom era. Technological factors are important to consider when natural markets are being established. New technologies create unused products and new processes. Technological developments can public assistance consumers as closely as the organisations providing the products. In the hotel industry, technology advancement should be centred on customer service and the experience one should expect. According to Connolly et al (2000), the hospitality industry should be preparing for the future by prepare itself for technological advancements.This way, hotel companies will be well positioned to meet the needs of their customers. One of the most popular advances in technology for the hotel industry would be computer advances and the wide use of Internet. Hotels are now expected to have onli ne booking facilities, which are easy to use, demonstrate confidence and assurances for the online customer that their booking has been authorized and processed accordingly. Websites are commonly an organisations first point of equal with potential customers. Therefore, branding and corporate trope is important.Customer relationship management is contingent with the advancement of computer technology. Marketing strategies centre around the potential to follow-up on previous customers hotel stays by offering return offers and discounts for loyalty. The Ritz-Carlton, for example, uses their run across database to maintain customer profiles that details separate tastes and preferences (Harrison, 2003). They also use this technology to step on it up check-in procedures for regular guests. differentiation within the hotel industry is also manageable through the use of technology.Harrison (2003) uses the example of Wingate Inns who attracted business customers by offering free to use, high-velocity Internet in every room. environmental factors such as climate change have the potential to impact on every industry and should be considered as a driver for change. Becoming greener has been a significant change in the caterpillar track of many hotel chains throughout the world. advertize the use of environmentally friendly products and processes is affecting customer demand. This produces to a greater extent business opportunities and creates great supplier power.Legal factors are think to the legal environment in which companies operate. wellness and Safety legislation is a major(ip) driver of change in all industries, especially service-based industries such as hospitality. non only does this affect the companys workforce, it also affects the customer and his/her experience. Hotel owners are concern holders in providing a safe environment for their employees and customers. In the event of an accident or a breach of legislation, a hotel company can incu r substantial penalties, which will ultimately affect future dough and corporate reputation.Analysis of the external environment, using tools such as PESTEL, allows organisations to make important decisions and strategic changes to create competitive advantage. In evaluating growth strategies, an analysis involving suitability, acceptability and feasibleness is vital. Although these models of analysis help organisations to understand the factors that may impact and influence their business strategies, it is also important to understand in more detail what will result in success and failure. One of the many approaches is to perpetrate a SWOT analysis.Another is to post opportunities and threats via strategic gaolbreaks. Johnson et al (2002) refer to this as identifying new market space. strategical gaps are found by looking for across the industry for potential substitutes, new product/service offerings and new market segments. According to Pryce (2001), many hotel operators ar e follow behind other industries with regards to corporate sustainability. look for has suggested that there is a significant gap between attitudes and action (Pryce, 2001), which provides hotel owners with promotional opportunities and drivers for change to capitalise on environmental management.