Analysis of European Tourism Industry - Case Study Example

Analysis of European Tourism Industry By Student’s Name Code+ course name Instructor’s Name University Name City, State Table of Contents Table of Contents 2 Executive Summary 2 Introduction 4 PESTLE analysis, 4 Opportunities in the industry 7 Porter’s five forces tool 9 Supplier Power: 10 Buyer Power: 10 Competitive Rivalry: 10 Threat of Substitution: 10 Threat of New Entry: 11 Industry attractiveness 11 Reference list 12 Executive Summary This paper delves analyzing the market plan for European Tour Operators. This marketing plan is developed to assist the industry in ascertaining proper methods and techniques of improving their output. With the high competition that is prevalent in this industry, it must be noted that this restaurant needs a vibrant plan to improve their competitive advantage. This paper will also look into situation analysis. This will include quality and the relevance of audit. It is fundamental to note that this section will also incorporate the use of tools of analysis like PESTEL, SWOT and porters five. Introduction Pestle analysis, porters five model and SWOT analysis are the major theories that are used in analyzing the market. This paper will address the three theories but will especially dwell on PESTLE analysis and porters five models. It is also worth noting that this paper has incorporated aims and objectives of the marketing plan. These will clearly explain in a vivid manner the reasons behind the marketing plan in as far as the operations of the company are concerned. The aims and objectives will be clearly explained and listed so as to meet the requirements of the paper. His paper will also examine the appropriateness of different aspects of marketing. For instance, the appropriateness of segmentation, positioning and targeting will be properly explained so as to give a fundamental understanding of the marketing plan of the above company. These will be clearly justified so as to give out a clear understanding of the same. The targeting process will be explained in a sequence. PESTLE analysis, It is also referred to as PEST analysis. This is a great concept that is crucial and part of marketing in general. In addition, it is a tool that is used by companies in tracking and evaluating the environment in which they are operating in. this is especially crucial when a company wants to open up a new project, a new service or even a new product. Pestle analysis can be broken down into P for Political. This is the surrounding politics around the product or the project to be launched. An example is if the project involves the national government of a country. The company in charge must address all the issues involving politics. E for economic, How economically viable is the project or the service? How much resources are required? The resources are supposed to be identified in terms of quantity and cost. The resources can include capital or other factors of production like land. I would therefore identify the resources that would result in maximization of profits by my organization. In the course of identifying the resources I would recommend a strong tendering committee. The ultimate role of the tendering committee will be to ensure that a reliable and efficient supplier is identified. After this the supplier will be liable to supply the identified resources according to the stipulated budget S for social, how socially viable is the project and the service to the user? For any project to be socially viable it is necessary that communication is incorporated. After prioritizing of objects and how it would benefit the community. I would then ensure that I communicate the strategic plan to all stakeholders of my organization. This will involve printing of newsletters and posting of the same information in the website. Communication of the strategic plan will ensure that ensure that there is building and maintenance of momentum. The communication will also familiarize the plan among important stakeholders of the organization so as to give time for observations. At this time I will ensure that I get suggestions and comments from members of my organizations in as far the strategic plan is concerned. After communication and receiving comments from people, I would then make appropriate alterations that are likely to improve the strategic plan. It is vivid to note that each and every person has his own culture that is unique. This culture may include issues like beliefs, religion, clothing and even eating habits. Cultural differences may also include difference in attitude that someone has about a given environment. It is therefore salient to note that cultural differences affect how we interpret any information relayed to us T for technological, technology in the world is moving very fast and its landscape keeps on changing. This has a very high impact to the products being produced. This factor affects management of the industry as well as marketing. This is a factor where one should ask the new and improved ways of goods and services production, new, fast and cheap ways of product distribution. Lastly this factor also covers the new and effective ways of communication to the existing and the target market. L for legal factors, these are the most crucial of all factors related to this analysis. The factors include equal opportunities to everyone, health and safety, consumer rights and protection, product and production safety and advertising laws. It is necessary for any organization to have a legal representative who will interpret the legal aspects in the trade. This is brought about by the fact that every organization needs to know what is illegal and what is legal in the business. Each country has a different legal set up and hence this factor changes from one country to the other depending on laws of a country (Kotler, 1986). E for environmental, is the project likely to result in to deterioration of the environment due to higher rates of pollution caused to the community? The pollution is likely to result in to disease infection among the people living in the surrounding community. This infection would majorly result from the fact that there is pollution which emits poisonous gases to the environment. In as much as the company would very proud to be one of the large distributors of food products in the region, it must be very careful never to feed the society while infecting them on the other hand. It is also worth noting that the poor decision pertaining to environmental conservation would actually result in to bad image of the company as viewed by the public. This can as well impact on the profitability of the company. The bad image of the company would result in to deterioration of the consumer confidence and loyalty on the company. It is therefore wise to highlight and recommend that the new owner if the company must ensure that he adheres to the environmental conservation. The new owner of the company must also realize that it would be very difficult to realize his goals of making large profit margin while ignoring the policies that pertains to the environmental conservation. It is also fundamental to note that the company would make profits in the short run. In the long run the company is likely to make huge losses due to breakdown of the image of the company (Pride & Ferrell, 2008) Opportunities in the industry There are several opportunities in this industry however they can only be utilized if there is a good political will of the organization. The industry has a chance of growing to the fullest after realizing the potentials. In realizing the opportunities, the industry will also trigger economic development. At this point, the industry should focus ahead and see what opportunities are there when their operations are harmonized. For any industry to realize its opportunities managers are the most crucial factors, according to me, a tourism company should always consider both sides. For instance, the manager should consider good aspects of the company’s culture and combine it with the current changes that the company really need. It is also very important that the mangers must be very keen on the type and nature of change that they incorporate in the company. This is because some changes might seem to be so good, but short lived. This would force the company to deviate away from its long term curve. Instead the company will operate on the short run curve instead of the long run curve. This is only good in the short run since the company will only make profits or gains for shorter periods. However, the gains will not be consistent hence will not propel the company to its long term realization goals which are always more important for the company. Tourism industry in the European market has a high potential if well natured. Many are the tourists from the Asian countries, American countries as well as from the African countries where development is their key agenda. With the development of the European countries, it is expected to have more tourists touring the nations. It is therefore, crucial for industry to operate in high spirits to identify the opportunities. Hotel industry also is another opportunity in the tourism sector. The more the tourists visit the continent the more the hotels’ business is boosted (Bangs & Halliday, 1997) Threats facing the sector are majorly cost related. Various contingencies are deemed to occur in the future. However vibrant controls have been put in place so as to ensure that such contingencies are properly managed. Control on the tourists is likely to be effected so as to maintain brand loyalty and tourist confidence. Customer acquisition costs in restaurants and hotels will be properly managed. This is because the costs always have a negative effect on the net income of the organization. The management of hotels and restaurants will also ensure that the repeat customers rate is maintain at a very high magnitude. Repeat customers are very important for the progress of any restaurant. This is because it shows very well that the restaurant has good image. It also shows the rate at which customers are satisfied. This shows very well that customers who repeat themselves in as far as he services of the restaurant are concerned always get maximum utility on the good that they are served at the restaurant. Customer satisfaction is a key factor in as far as the marketing of the restaurant’s products are concerned. This case not only applies to a single restaurant but also to the whole country and especially when that it is tourism is faced with challenges. Terrorism is another major threat to the tourism sector. There are no tourists who want to go to places where they feel not safe and hence the European Union should find proper of tackling the menace. The plan developed must ensure that tourists are maximally satisfied from the services. The government is also likely to control the rate of competition in the hospitality industry by serving highly elastic goods. It must be noted that in the past years the hotels and restaurants sector has not been able to record larger volumes of sales just because it always charged higher prices. The prices will therefore be reduced so as to accommodate different cadres of people. This will ensure that the products of the restaurant are highly elastic in terms of demand and price (Chan, 2012). Porter’s five forces tool This a simple to understand tool but very effective when put into operation. It is especially very powerful so that one understands where in the situation of a business the power lays. It is considered very influential as is explains the competitive position of the business at present and the predictable competitive position which the business considers moving into. This analysis assumes five important forces behind competitive power in any business situation. Supplier Power: In the suppliers’ case, it is crucial to analyze if the supplier is likely to increase his prices and how likely and easy is it. Suppliers are an important factor in the business and hence the elements affecting them should be properly dealt with. The supply uniqueness, the key input and the strength that the supplier holds over the business should be properly and keenly looked into. Every business should have a variety of choice in suppliers. Buyer Power: In this case the business should analyze how easy it is for the buyers to shoot down prices. In case of conspiracy by the buyers will they shoot down prices? The number of buyers is crucial for a business because it is better if a business has a higher number of small scale buyers other than one large scale buyer. Is it easy for the business to change the buyers? Is it easy for them to leave your product for your competitors? It is also salient to note the cost of changing the customers. Competitive Rivalry: What is the capability of the competitors of your business? If the business has a number of competitors, they attract very attractive product from your business. This is because if the competitors give better products they will run away from you. Hence very attractive product must be produced into the market. Threat of Substitution: The ability of the customers to find an alternative way of doing things and especially alternative products affects this factor. If the customers have a number of alternatives then the business power are reduced. This is because any slight change in your product the customer quickly jumps to the alternative. Threat of New Entry: It is the ability of competitors entering into the market. Is it possible for the competitors to get into the market? If the cost of entering into the market is low that means the business has no power. If the costs are high it means the business have a high protection in the business. If the barriers to the business are low that means more competitors to the business and hence the business will lack power to control the market (Cook, Macaulay & Coldicott, 2004) Industry attractiveness A higher level of competition is evident in the industry and the international market has resulted in reduced prices for the goods. This is due to the fact that free market for all allows many companies to compete for the same market. This always results in to even lower prices for the goods. It is also fundamental to note that economic globalization has an effect of reducing monopoly in the market. In this case, market participants are faced with the same market conditions hence ensuring favorable competition. This effectively improves the living standards of the people in the world. This is due to the fact that consumers are able to get high quality goods and services at very low prices. Pricing strategy is very crucial for a business growth, since a customer is the most important element of the business. European tourism industry has a proper pricing strategy improves attractiveness of tourists. Different strategies are used by different business though they aim at one thing, which is increasing the profits of the business. Most of the tourists’ business owners and the operators, including the marketing managers, work towards a common goal. They try to determine what the competitors charge as their prices and modify their prices from that. They always aim at beating or meeting the prices set by others in the industry. In the short run, this strategy is successful; though this is not the only way that helps them make a decision due to the fact that customers make decisions of purchases based on other considerations and not price alone. Reference list Pride, W. M., & Ferrell, O. C. 2008 Marketing. Boston: Houghton Mifflin Co. Kotler, P. 1986 Principles of marketing. Englewood Cliffs, N.J: Prentice-Hall. Bangs, D. H., & Halliday, M. I. 1997 The Australian market planning guide: Creating a plan to successfully market your business, product or service. Mona Vale, N.S.W: Woodslane. Chan, E. 2012 Harvard Business School Confidential Secrets of Success. Chichester, Wiley. http://public.eblib.com/choice/publicfullrecord.aspx?p=1120343. Cook, S., Macaulay, S., & Coldicott, H, 2004. Change management excellence: using the four intelligences for successful organizational change. London, Kogan Page. Read More