European Tour Operators:
The macro-environment looks at broad trends shaping the national and international environment. An analysis of the macro environment is crucial in determining the factors which have a direct impact and/or might influence the strategic direction of an organisation. The macro-environment is difficult for organisations to influence and changes can be far-reaching. The media is usually rich source of both information and speculation and as such cannot be a reliable source of reference. There are available tools for analysing the macro-environment in an attempt to identify those factors, which might have an impact upon the organisation, both in terms of being a threat or an opportunity and these include: * The PESTEL framework
* Key drivers
The PESTEL framework: categorises environmental influences into six main types: * Political
The PESTEL analysis evaluates the broad societal trends that affect many industries. It identifies current and future developments that will shape the micro-environments of each industry sector. Key drivers for change: are environmental factors that are likely to have a high impact on the success or failure of a business strategy. Scenarios: are detailed and plausible views of how the business environment of an organisation might develop in the future based on key drivers for change about which there is a high level of uncertainty. Question 1: Key drivers of change
Using the PESTEL framework, which helps us understand the key drivers of change and external influences on the organization, we can identify the underlying forces in the macro-environment driving the competitive forces as follows;
1.1) POLITICAL: Terrorist attacks that resulted in tight security measures and strict immigration laws. Following these attacks many countries put some destination off-limits, travel insurers would refuse to cover tourists if they went there despite the government ban or warnings against such travels. Tourism also suffered when prolonged tourist abductions began to affect tourist perceptions.
1.2) ECONOMICAL: the economic crisis can positively and negatively impact tourism industry. Economic crisis became the major threat which results in the collapse of some major players in the industry, for example the closing down of ‘XL Leisure Group’. Given that the UNWTO’s Tourism 2020 Vision had forecast that international arrivals are expected to reach nearly 1.6 billion by the year 2020; this implied that more opportunities and more competition was to be expected in the coming years. Hence the assertion that recession can have positive impacts. It therefore was an opportunity for the survivors as they get more market space and more consumers to absorb in.
Moreover, a post-recession boom could be expected and taking into consideration that tourism contributes 10.6% of world GDP they always get their stake from the disposable income. 1.3) TECHNOLOGICAL: Customers relying on internet and online sales were increasing. Statistics show a mere 72% of UK households had access to internet in 2008 and is increasing compared to previous years. Even though online sales make it easier for customers and cut costs by reducing staff and intermediaries, it also possesses a threat to companies. Internet has a low barrier for entry (Porter, 2001) and newcomers can easily pop into the competition.
Question 2: Porter’s analysis structure:
Michael Porter (HBR, 1989) says awareness of the five forces “can help a company understand the structure of its industry and stake out a position that is more profitable and less vulnerable to attack”.
Five force framework helps identifies the sources of competition in the industry (Johnson et al., 2005). Five forces which are not independent of each other, draws a connection between competitive forces and the...
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4. Porter, M. E. (2001). Strategy and the Internet. Harvard Business Review, 63-79.
5. Porter, M. (1987). From Competitive Advantage to Corporate Strategy. Harvard Business Review, 43-59
6. TUI website. (n.d.).Retrieved November 6, 2009, from http://www.tui-group.comTUI Case Study UNWTO. (2005). Tourism 2020 vision. Retrieved October 31, 2009, from World Tourism Organisation: http://www.unwto.org/facts/eng/vision.htm
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