This assignment reflects a basic outline which assists the growth of hospitality organization whereby considering the environmental factors which can be detrimental towards the development of business. The aim of this report is to estimate the amount of competition bear by the current market which has been evidently gathered by the enforcement of strategic frameworks like Porter Five Forces and PESTLE model. This report will create a scope for the readers to understand the amount of competition and the primary business environmental factors which can affect the development
Hotel Holiday Inn must evaluate the political, economic, social, technological, environmental as well as legal factors (PESTEL Analysis) before expanding its operations in the country Thailand. A vast array of political factors at regional, governmental as well as international levels will have a major impact on the operations on the Hotel Inn. Other than the effect of the crucial political factors, the political situation in Thailand will have a major impact on the operations on the chosen hotel, Holiday Inn which may reflect pessimistically on the hospitality sector in Thailand (Singh, 2016). For the expansion of its business in the Thailand market, it needs to take resort to the usage of application regarding multi-layer for ensuring the security of their products. Besides, it needs to take into account the Import restrictions factor, which may an obstacle for its operations, which is why the laws, as well as regulations, need to be considered. Moreover, Political Intervention, Tax Policy in Anti-Trust laws and new deals need to be considered. The current political situation of the country is high uncertain due to the elections thereby affecting the lives of the people. Hence, Holiday Inn needs to take the political factors into consideration before expanding its operation there since it may be negatively affected by the political uncertainty.
In terms of the economic factors, Holiday Inn needs to consider the recession or economic growth along with the interest rate, which may largely affect its business (Singh, 2016). Nevertheless, a larger section of the population has higher incomes, which will contribute to its operations positively. This will enable the customers to spend more money, which will have a positive impact on its operations. Nevertheless, the GDP of the country is $504.900 Billion, which is expected to rise by 3.4% thereby making it highly prospective for business expansion.
The businesses operations of Holiday Inn will be largely affected by the socio as well as the cultural aspects of Thailand since they have a pivotal role to play with constant changes in the demographics. Emigration will have a positive impact on its business (Racz et al., 2018). Since the majority of the people are known to be highly educated as well as earn a high wage, the purchasing power has increased thereby contributing positively to its operations. Besides, most of the people are seen to be switching to a healthier lifestyle. Hence, Holiday Inn needs to be highly updated and incorporate health spa, organic food as well as sport activities.
In terms of technological factors, Thailand is seen to be expanding technologically. In this technologically advanced era, most of the operations are seen to handle technologically Oey & Nitihardjo, 2016). Therefore, with technological advancements, the organization will be able to take resort to the product as well as service development along with continuing research.
Thailand is seen to be highly affected by several environmental issues including water scarcity, soil deforestation as well as waste issues (Oey & Nitihardjo, 2016). Holiday Inn in order to have uninterrupted effective operations needs to consider these factors and proceed accordingly. The ministry of environment has imposed laws for the reduction of this environmental issue, which needs to be considered. It should conduct its business operations without harming the environment.
A vast array of legal factors needs to be taken into account including E-Commerce legal, which is at its early stage. Several regulations have been formed for the protection of the employees, which need to be ensured by Hotel Inn.
The consideration of the fives factors shown in the porter model supplements the business in making tactical adjustments to ensure greater sustainability in the market. The factors have been highlighted proficiently in the following.
Bargaining power of customers: The aspect of the power of the customers or the buyers is o0ne of the major influencing factors which is shown in the model. In the tourist friendly area like that of Thailand the tourist are the primary buyers or the customers (Van Rooyen, 2018). The tourist is the main foundation for the hotel business to flourish. Since the Pattaya is a tourist hotspot the power of the buyer in terms of bargaining is comparatively higher due to the presence of multiple options. The power of the customer is mainly higher when the customer base for the hotel is comparatively less and the service quality is not up to the mark. In the case of Holiday Inn, since it is a renowned hotel brand they attract significant amount of customers into the frame the power of the customers is moderate.
Power of suppliers: In the context of the hotel business developments in the area of Pattaya the power of the supplier is considerably low. This is mainly because of the large number of the supplier present in the market delivering quality to the hotels. A supplier in charge of providing exclusive line of raw materials has an immense power of bargaining, but in the tourist zone of Pattaya almost every supplier offers more or less the same facilities to the group of hotels. Furthermore, the number of options of the suppliers is considerably higher which results in the lack of power for the suppliers.
Threat of the new entrants: The threat of the new entrant is major influencing factor for the hotels operating in the beaming market of Pattaya. The area attracts a vast range of tourists throughout the year and the introduction of a new hotel can hinder the developments of Holiday Inn. The threat of the new hotels or a group of hotel with esteemed reputation is a massive factors (Huttasin, Mommaas & Knippenberg, 2015). This is mainly because the loyal and the definite customer base of Holiday Inn get diverted by the lucrative introductory offers provided by the new entrants. In order to build a strong threshold in the market of Pattaya the new hotels provide the same facilities and the services at comparative lesser prices than the established firms. This affects the growth of the business of Holiday Inn as the customer case gets lowered.
Threat of substitutes: The options which are presented to the customers act in the form of substitutes to the business of Holiday Inn. The tourist zone of Pattaya is a highly economic zone and provides the customers group with a vast array of options to select from. There are multiple hotels which provide almost the same range of facilities to that of Holiday Inn. As in this area close substitute in terms of the products and the services are available to the tourist the power of the Holiday Inn is a bit lesser and the threat of the substitutes are on the high.
Competitive Rivalry: The impeccable service quality and the high standards set by the hotel group of Holiday Inn has been satisfactory to the customers and over a considerable period of time they have developed a strong identity of their own through their high quality products (Loysmut, Sritabutra & Pitayarangsarit, 2018). Thus a loyal base of customers has been generated for the brand of hotel over the past few years in every corresponding business market. Thus in this case it can be justified that the power of the customer is moderate. The renowned hotel group like that of the Mariott and the Pan Pacific offers a stiff and sturdy competition to the business of Holiday Inn. Thus, the aid of creativity and innovation in service methods is adopted by the Holiday Inn to achieve greater completive edge. The completive rivalry is high to moderate in Pattaya.
Hotel Holiday Inn must evaluate the political, economic, social, technological, environmental as well as legal factors before expanding its operations in the country Thailand. Pattaya is a tourist hotspot the power of the buyer in terms of bargaining is comparatively higher due to the presence of multiple options. The power of the customer is mainly higher when the customer base for the hotel is comparatively less and the service quality is not up to the mark. In the case of Holiday Inn, since it is a renowned hotel brand they attract significant amount of customers into the frame the power of the customers is moderate.
a Holiday Inn should focus on a problem related to high exchange rate of the U.S dollar that discourages them from foreign visitors from visiting.
b Holiday Inn should concentrate on the political issues.
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