External and Internal Environmental Analysis - Case Study Example

Environmental Analysis Environmental Analysis Introduction In any business, there exist both internal and external environmental factors that affect its operations. The firm will need to identify these factors using quality analysis tools. They may affect the business either positively or negatively. The external factors involve those that are found outside the enterprise while internal factors are those within the firm. For any organization to grow and expand it has to put into consideration these factors. The internal environment provides the company with opportunities and weaknesses creating a need to examine organization’s resources. Companies should assess their competitive position to come up with strategies to make them outstanding in the industry (Albright 2004). Groups come up with organizational structures that aid the in running the firm operations. These structures affect organization’s performance. Hilton Worldwide Holdings Inc. aims at achieving its goal of the growth of their business. External business environment There are several factors that compromise business performance thus there is a need for evaluating them to have successful business growth (Muthaih and Venkatesh, 2012). The external environment is those factors found outside the business and affects how it operates. It may affect the company ability to achieve its goals and objectives in an efficient way. Regardless of operational planning there is a need to assess the external environment. In evaluating this situation, there is a need to view it in terms of both opportunities and threats (Cheermack et al., 2007). It exists in three dimensions, the remote, industrial and operating environment. For Hilton Worldwide Holdings Inc. to grow as proposed analysis tools have to be used to evaluate these factors. Some of these elements can be changed by the firm’s operations while others push the business to change its structure to counteract its negative impacts. The organization intends to look into the three elements to ensure that changes in external factors do not take it by surprise. Remote environment The remote environment comprises of a set of forces originating beyond an enterprise’s operating situation. They occur irrespective of any single organizations management activities. They involve factors such as technological, economic, social, political and legal opportunities. They work differently to create constraints, threats and also opportunities for the firm. At times, the elements work together to make a meaningful impact to the company for example economy and infrastructure can contribute to each other’s success in affecting the business. Also, the elements can lead to the rise of other elements. For example, technological factors result in changes in business operation. Companies utilizing different technologies have varying quality of products. Use of these techniques in turn results in competition among firms in the industry. The Economic element may have credits available to large masses resulting in competition (Asheghian&Ebrahimi, 1990). Industry environment Industry environment involves entities that react with the business performance originating within firm’s industry. Hilton Worldwide Holdings Inc. is expected to face challenges from the hospitality industry. The industrial factors include economies of scale and competition. In this setup, the game is the major factor. It is contributed by other elements that include, increasing business entry, supplier cases, potential buyers and having product substitutes within the industry. The organization needs to lay down measures that will handle the situation to make its operations effective. The industrial variables are viewed to be directly affecting the enterprise’s prospects. If not looked into they will paralyze the efforts for attaining firms goals (Kennerly& Nelly, 2003). Operating environment Operating environment has a direct influence on business activities (Grant, 1999). The factors involve those that the company encounters when getting its inputs and also while marketing and selling its outputs. The operating environment is also referred to as competitive environment. It mainly focuses on the business rivalry, especially within the industry. It involves competitive situations that compromise success in getting resources needed and profitable running business operations. The factors in this category include customer profile, competition position, labor market, market changes and supplier and creditor relations. The business reputation is vital in a competitive environment both before the clients and the providers (Kruger, 2004). Customer goodwill is needed to be examined for it is a tool for identifying customer profile. Firms to be successful they ought to attract and recruit competent employees to be outstanding. According to Morone and Testa (2008) business is affected by many factors as we have seen above.However the three sectors of external environment the most important factor that is directly or indirectly demonstrated is competition. Organization’s strengths Hilton Worldwide Holding Inc. has various strengths that enable it to be efficient in service delivery. From its related articles, one of the major strengths is its sound financial position. The firm has proved to have quality returns and profitability. It is expected to drive the business through successful growth. The financial status has been contributed by having efficient finance management. They control the company’s inputs and outputs in terms of money in a responsible and accountable manner. It takes advantage of this strength to manage its objectives. The business has a competent workforce. Employees are given the right skills and knowledge to produce quality products and services. It has attractive employee benefits that motivate the employees to produce quality products. The enterprise uses the employee as a significant asset in achieving their goal. Also, the company has massive economies of scale due to its size. It has in return increased its profitability through this. It runs the business on extensive portions thus enjoying substantial economies of scale. It has a vast market for its products. The firm utilizes this opportunity to extend and improve its services. The Company has its operations in 93states thus it highly known to many people. The state branches are located in the major cities especially the capital cities whereby there is a ready market. It makes it easy to be accessed by the potential customers in different countries. Organization’s weaknesses Despite the success and strengths of Hilton Worldwide Holdings Inc., there are several weaknesses found within it. The weakness may hinder the business from attaining its set goals. The company has poor management of workers. Some employees work outside their native countries and lack sufficient compensations. Some employees, especially in the substandard positions, are not well catered for hence can result in poor performance. The slight alleviations made by them in their work may cost the business a lot. The firm also has its goods made for high-income earners. Their products are quite expensive for medium and low-income earners. In some countries especially the developing countries it is very limiting for individuals to access the organizations services. It is due to the majority of the people being below the poverty level. It scares away customers who may be willing to utilize their products though not financially capable due to the high prices. The company may incur a loss of willing customers due to this. The enterprise has a lot of businesses to manage. It gives a challenge to the managers since they have a workload to do in ensuring that the businesses succeed. The managerial staff has to be packed to make the planning especially for attaining the strategic goal appropriate. It therefore, leads to increasing the staff hence more salaries needed. It weakens the enterprise’s financial stability. Organization’s competition position and possibilities Hilton Worldwide Holdings Inc. has been the leading in the hospitality industry. However, there are some situations emerging that tend to create a competitive environment in the industry. There are new business entries in the industry that offer the same products and services hence leading to a rivalry.. Fortunately, the firm has outstanding features that make it thrive in the competitive environment. It has broadly expanded making its services accessible to a broad market. The customers can easily get Hilton Worldwide Holdings Inc. services as they travel to different countries across the world. The business provides quality products that are recommendable in the hospitality sector. It has made it be above other firms within the industry. Despite the variety provisions in the market, the business increases the quality of its goods hence maintaining its customers. The firm has the possibility to remain the most competitive in that field due to its competent and devoted workforce. The workers are qualified to work hence expected to give a significant outcome. They are motivated to work for the best of the company. It can attain a sustainable growth because it has a better customer profile compared to other businesses. Its services attract more customers and maintain the existing ones making it be in a better position in the industry. Its improved productivity has made it operate on profits thus will still outstand and move successfully to further enhancement of the company. Organizational structure Hilton Worldwide Holdings Inc. owns, manages and franchises a portfolio of brands. It has a flexible and feasible organizational structure. The company has managers who control and coordinate the activities of the businesses. They are categorized into different departments for quality management. Human resource management is involved in attaining the strategic goal of the enterprise. They coordinate the workforce and align it with the objectives of the goal. It is a useful partner in moving towards achieving the strategic purpose of the business. For this reason, they have a procedure of recruiting, promoting, and sacking employees. The human resource also determines the wages and salaries that are proportionate to the employees performance and the organizations output. The human resource is equipped to plan for training and developmental programs for workers to enhance their performance. The firm publishes its books of account. It is essential in determining the financial position of the company. Franchising has helped in increasing expansion rate of the business. Conclusion Business need to analyze their environment both internal and external. They have to identify their weaknesses and do something about them. Also, it is important to examine the strengths to boost on them. Identifying opportunities and threats help the business in strategic planning. Hilton Worldwide Holdings Inc. is a great company. It understands its weaknesses, strengths, opportunities and strengths. It is the leading in the hospitality field. The competitive position is likely to move the enterprise to the desired future situation. Its organizational structure makes a significant impact in its improving condition. Despite the competition factor, the firm is likely to achieve its strategic goal resulting in its growth. References Albright, K.S. (2004). Environmental Scanning: Radar for Success. Information Management Journal, 38(3), 38-45 Chermack, Thomas J.; Bernadette K. Kasshanna (December 2007). "The Use of and Misuse of SWOT analysis and implications for HRD professionals". Human Resource Development International 10 (4): 383–399 Kennerley, M. and A., Nelly, 2003. ‘‘Measuring performance in a changing Business environment.’’ International Journal of Operations and Production, 23(2), 213- 229. Read More