Analysing The Present Macro And Micro Environment Of The Hotel Karma

Question: Discuss about the Analysing The Present Macro And Micro Environment Of The Hotel Karma. Answer: Introduction Karma is a medium sized hotel that has around 250 air-conditioned rooms, all fitted with private bathrooms. The hotel even contains a lobby lounge, a full-service restaurant and a pub bar with snack service. There is a separate enclosed garden and some of the outbuildings get used as office or storage. The hotel has its location at Bondi Beach in Sydney, which is in itself a world-class tourist attraction, attracting huge visitors each year. This report is composed with the aim of analysing the present macro and micro environment of the hotel. Porter's Five Forces Model, PEST, and Value Chain models would be used for this process. Vision, mission and CSR related strategic approaches would be developed, with final recommendations provided for the initial year. Macro and Micro Environment Analysis PEST The strategy team chose PEST model for macro environmental analysis. It has the capability of analyzing the external factors that have an impact on the organization. PEST is short for Political, Economic, Social, and Technological factors (Gupta, 2013). Political Australia is a democratic nation that has a capitalist system (Walker, 2012). The political forces of this country do not hamper with legitimate business activities. Economic The economic development in this country is fast. The commercial quotient of the Bondi Beach area is high. Social Australia as a country boasts of multiculturalism and is highly migrant. The Bondi Beach area experiences visits from a lot of international visitors. Technological Australia has invested a lot in RD and the country has become technologically advanced in their industries in a fast and advanced manner. Porters Five Forces The strategy team chose Porter's Five Forces model as their main tool for external analysis of the five factors that help analyse the fundamental competitive situation of any industry - Bargaining Power of Suppliers, Bargaining Power of Buyers, Threat of New Entrants, Substitutes and Rivalry (Dobbs, 2014). Bargaining Power of Suppliers Low - Sydney being a metropolis, it boasts of many suppliers. Therefore, majority of the suppliers and their products are substitutable. Bargaining Power of Buyers Medium Many of the international tourists have high demand for Bondi Beach and they have huge purchasing power. At the same time, they are extremely concerned regarding the hotels quality. Threat of New Entrants Low the barriers to entry are high as huge amounts of funding is required to be able to enter the hotel industry at Bondi Beach. Threat of Substitutes High as the products and services of the hotel can be imitated and replaced easily. Competitive Rivalry High as there is high level competition due to most of the hotels not being dominated. Majority of the products of the hotel are costly and similar. Porter's Value Chain The strategy team made use of Porters Value Chain model for determining the possible values of the resources and the competitive advantage, which directs to the view that each step is valuable for resource utilization, as that influences the ultimate creation of value and competitive advantage for the business (Michelini Fiorentino, 2012). For Karma hotel at Bondi Beach, the main products are the rooms and the dining facilities. The production and sales elements of the service asks for investment from each link. Therefore, in the analysis of the value chain for Karma, each step of the hotels operation would be influencing the end value and competitive advantage. Overarching Business Strategy Vision The vision for Karma hotel is having a long-term impact on the people who visit them, their potential customers and the local community they operate in. Karma is on the path of becoming the first choice of hotel for their patrons, employees and the communities they expand in after Bondi Beach. Within a year it would be difficult for Karma, a medium sized hotel, to acquire market segment monopoly. Mission The mission of Karma would be representing their specific business scopes for their purposes and operations that would also relate to proper allocation of resources and action decisions. Karmas main mission are: Making the guests happy at all times of their stay (Smith Ong, 2015) Guests would be always choosing Karma whenever they are visiting Bondi Beach Ethical Business Investment of CSR At the heart of Karmas operations and business is ethics, which would make them pay more attention to corporate social responsibility (CSR). CSR for Karma would imply them focusing in their stakeholder, market, finance, environment and community. Benevolent changes and investments made in CSR would help Karma acquire sustainable development (Chernev Blair, 2015). Strategic Direction The developed vision and mission, with the help of macro and micro-environmental analysis, would affect Karmas administration categories, including their exact operational measures. Karma lacks the capability of participating in the price war with its competitors, only have option of choosing blue ocean strategy, produced differences and carry out the development of niche market. The first decision would be of cooperating with organising with travel agencies and targeting the markets that are emerging currently, like India, China, and other South East Asian countries (Brotherton, 2012). Karma has a sustainable operational strategy. Therefore, its operations are completely subject to the needs of ethical business. As the decision is to be taken for the next year, the hotels CSR would be more worried about the community aspect and make use of citizenship strategy. The CSR strategy would be of building a CSR fund from every booking - a good way of serving the local community and benefitting the hotel (Hilson, 2012). Conclusion In conclusion, the environmental and resource analysis of Karma hotel was properly done with the help of PEST, Porters Five Forces and Value Chain models. The management has been able to develop an appropriate vision, mission and a completely ethical business operation approach, including CSR and its investments. Limitations are existing in the model and environmental monitoring, which is required to consider account internalities and externalities. More strategic research of the environment is required on this front, so that it is made sure that the teams strategic mission gets fulfilled in the first year of operation itself. References Brotherton, B. (Ed.). (2012).International Hospitality Industry. Routledge. Chernev, A., Blair, S. (2015). Doing well by doing good: The benevolent halo of corporate social responsibility.Journal of Consumer Research,41(6), 1412-1425. Dobbs, M. (2014). Guidelines for applying Porter's five forces framework: a set of industry analysis templates.Competitiveness Review,24(1), 32-45. Gupta, A. (2013). Environmental and pest analysis: An approach to external business environment.Merit Research Journal of Art, Social Science and Humanities,1(2), 13-17. Hilson, G. (2012). Corporate Social Responsibility in the extractive industries: Experiences from developing countries.Resources Policy,37(2), 131-137. Michelini, L., Fiorentino, D. (2012). New business models for creating shared value.Social Responsibility Journal,8(4), 561-577. Smith, R. A., Ong, J. L. T. (2015). Corporate social responsibility and the operationalization challenge for global tourism organizations.Asia Pacific Journal of Tourism Research,20(5), 487-499. Walker, D. (2012). Anxious nation: Australia and the rise of Asia 1850-1939.Anxious Nation: Australia and the rise of Asia 1850-1939, xv