6.5 Chapter Summary
This chapter underscores the significance of the environment in shaping organizations, using Subway as an example. It delineates the general and industry environments, emphasizing how organizations like Subway can influence and be influenced by societal trends, competitors, and external forces.
Executives must understand the environment for resource acquisition, identifying opportunities and threats, and making strategic decisions. The narrative then shifts to the Golf Tourism Market, projecting its growth to US$40.4 billion by 2033. Challenges, including the rise of fantasy golf, are highlighted, and regional insights point to North America leading in 2021, while Asia-Pacific shows the fastest growth.
The conclusion introduces the macro environment of hospitality, encompassing demographic, economic, political, cultural, natural, technological, and competitive factors. The microenvironment, focusing on customers, suppliers, and competitors, is emphasized for its impact on marketing strategies and business success.
Review Questions
- What are the three reasons that the environment matters?
- Which of these three reasons is most important? Why?
- Can you identify an environmental trend that no organizations can influence?
Key Terms
Competitive factors: Include the answers to questions such as who your competitors are, what new competition may enter the market, and what other forms of competition need consideration.
Cultural & Social factors: Include things such as drinking and driving, racism, smoking, senior affluence, wine for good health, and healthy food and diets.
Demographic factors: Include population, education, gender, ethnicity, income, age, and family formation and structure.
Economic factors: Include the amount of spending money people have, the financial environment, loans, mortgages, and interest rates, etc.
Environment: The set of external conditions and forces that have the potential to influence the organization.
Fantasy sport: Also known as rotisserie or roto, it is an online game in which players create virtual and imaginary teams made up of real players.
General Environment or Macro-Environment: Includes overall trends and events in society, such as social trends, technological trends, demographics, and economic conditions.
Industry or competitive environment: Consists of multiple organizations that compete collectively by providing similar goods, services, or both.
Macro environment: The environment within which we do business, and it is the environment that affects how we do business.
Micro environment: Includes your customers, your suppliers, your competitors and other elements of your distinct business world. Micro-environment marketing takes these elements into account when figuring out what will boost your branding and sales.
Natural factors: Include global warming, urban sprawl, weather, drought, water, flooding, wildfires, and energy.
Opportunities: Events and trends that create chances to improve an organization’s performance level.
Political and Legal factors: Include government laws and regulations, building codes, municipal provincial and federal laws, labour climate, taxes, health care, and war.
Technological factors: Include computers, smartphones, apps, and advances in all types of technology, which are changing consumer needs and, in turn, business needs.
