Pestel and Porter's Analysis of Tourism Industry
Contents:
Introduction Page 2
Macro Environment Page 2
Competitive Forces in the Tourism Industry Page 4
Conclusion Page 6
References Page 6
Introduction:
This paper will be dynamically examining the tourism industry during the 2000s. It will begin by using the PESTEL framework to analyse the macro environment and determine which factors drive the competitive forces within the industry. Following this, Porter’s Five Forces model will be used to analyse the actual competitive forces at work within the industry and determine the relative importance of these forces.
The macro environment
Before one can look at specific factors relating to the firm itself, it is necessary to first examine the nature of the external or macro environment. This involves using the PESTEL framework (Johnson, et al, 2008) which includes analyzing the political, economic, social, technological, environmental and legal forces applicable to the industry.
When looking at the tourism industry during the 2000s, it is important to realise that it is a very volatile, constantly changing atmosphere, due to a number of environmental factors. The first major factor that one must consider with regards to the tourism industry as a whole is the number of terrorist attacks that took place in this period, including the infamous September 11th attack in 2001, as well as the Madrid bombings in 2004 and London bombings in 2005. The first area this would have affected would have been the political environment. A great deal of political instability was created, mainly due to public fear and lack of knowledge on behalf of governments. This forced governments to implement greater security and control mechanisms at airports and other transport services. This would have the effect of increasing the cost associated with travel. Another political issue would have been the wars between America and Iraq and between Israel and Palestine. These would have caused a decrease in demand for travel to
Introduction Page 2
Macro Environment Page 2
Competitive Forces in the Tourism Industry Page 4
Conclusion Page 6
References Page 6
Introduction:
This paper will be dynamically examining the tourism industry during the 2000s. It will begin by using the PESTEL framework to analyse the macro environment and determine which factors drive the competitive forces within the industry. Following this, Porter’s Five Forces model will be used to analyse the actual competitive forces at work within the industry and determine the relative importance of these forces.
The macro environment
Before one can look at specific factors relating to the firm itself, it is necessary to first examine the nature of the external or macro environment. This involves using the PESTEL framework (Johnson, et al, 2008) which includes analyzing the political, economic, social, technological, environmental and legal forces applicable to the industry.
When looking at the tourism industry during the 2000s, it is important to realise that it is a very volatile, constantly changing atmosphere, due to a number of environmental factors. The first major factor that one must consider with regards to the tourism industry as a whole is the number of terrorist attacks that took place in this period, including the infamous September 11th attack in 2001, as well as the Madrid bombings in 2004 and London bombings in 2005. The first area this would have affected would have been the political environment. A great deal of political instability was created, mainly due to public fear and lack of knowledge on behalf of governments. This forced governments to implement greater security and control mechanisms at airports and other transport services. This would have the effect of increasing the cost associated with travel. Another political issue would have been the wars between America and Iraq and between Israel and Palestine. These would have caused a decrease in demand for travel to
References: Asian Market Research, 2003. “SARS, Thailand, tourism and business travel: How fast for recovery?” [online] Available: http://www.asiamarketresearch.com/news/000305.htm Birkland, T.A. 2006. “Impact of the Boxing Day Tsunami on Tourism in Thailand” [online] Available:www.eng.rpi.edu/.../Tsunami/asa%20paper%20version%202.2%20RL%20add%20in%20no%20endnote.doc - Similar [20 September 2010] Cashell, B.W. 2005, “The Macroeconomic Effects of Hurricane Katrina” [online] Available: fpc.state.gov/documents/organization/53572.pdf [20 September 2010] Ecclesbourne, 2007. “Factors Affecting Tourism – Technological Factors”. Derbyshire, U.K. [online] Available: www.ecclesbourne.derbyshire.sch.uk/.../A2%20Student%20Tourism%20Essays/Technology%20 [21 September 2010] Johnson, G., Scholes, K., Whittington, R. 2008. “Exploring Corporate Strategy: Text and Cases”. London: Prentice Hall Neto, F, 2002. “Sustainable Tourism, Environmental Protection and Natural Resource Management: Paradise on Earth?” United Nations [online] Available: http://www.mtnforum.org/oldocs/1423.pdf [21 September 2010] Liverpool Business School, 2009, “Strategic Management: Environmental Analysis of the Tourism Industry” [online] Available:http://www.scribd.com/doc/25781511/TUI-Analysis-and-Implications [21 September 2010] Viardot, E. 2005, in: Johnson, G., Scholes, K., Whittington, R. 2008. “Exploring Corporate Strategy: Text and Cases”. London: Prentice Hall Wade, R. 2008. “The First-World Debt Crisis of 2007–2010 in Global Perspective”. Challenge Magazine. [online] Available: http://www.challengemagazine.com/extra/023_054.pdf [20 September 2010]