ASSIGNMENT ON EXTERNAL ENVIRONMENT AND ORGANISATIONAL RESPONSE Essay - 1

ASSIGNMENT ON EXTERNAL ENVIRONMENT AND ORGANISATIONAL RESPONSE - Essay Example It is against this background that this paper provides an in depth analysis of the external environment of the proposed Castle Hotel in light of the PEST model. To enhance coherence, the paper begins by justifying the entry into the hotel industry. As indicated earlier, the hotel industry in New Zealand offers a lucrative environment for sustained growth. The decision to enter into this business was informed by various factors. To begin with, the industry is all seasonal. In this regard, Hall (2000) indicates that the hotel industry deals with the most basic human needs and it is unlikely that one would miss clients at any point in the year. Preliminary researches indicate that Auckland City is a hub for tourists and business persons from across the globe. Providing a hotel with six star standards will probably give the investor a chance to explore this market niche with ease. PEST analysis reviews the political, economic, social and technological facets of the business environment. This is fundamental in enabling the investors to identify any opportunities for growth and seize them in a timely and effective manner. Furthermore, investors can use this information to minimize threats that compromise sustainable growth and development of a particular business. The political environment of any country greatly influences the performance of both local and international business. Respective governments have put in place rules and regulations that need to be adhered to by investors. If these are not supportive of economic growth, they can cripple relative development initiatives. With respect to the hotel business venture, the political environment in New Zealand offers distinct opportunities that can be effectively explored for growth and development. In his review, Elebiary (2012) indicates that the enlargement of the European Union has opened up the destination for increased international tourist arrivals. In addition, the government has huge incentives for the est ablishment and development of luxurious hotels. This according to Elebiary (2012) is due to the fact that the hotels contribute significantly to the country’s gross domestic product. However, there are political threats that are likely to affect the success of this business. Reportedly, governments charge huge taxes from these star hotels. In addition, there are stringent rules and huge penalties for hotels that fail to comply with the established health and safety rules. To address issues pertaining to huge taxes, the hotel will equally charge high prices to cater for all the operating costs. The economic facet of this analysis underscores the economic trends in the country which have direct impacts on the performance of this luxurious hotel. Being an international venture, this business will attract clientele from the international pool too (Birt, 2004). The first opportunity offered in the economic sphere pertains to the 17.1% rise of the global net worth of individuals (E lebiary, 2012). This implies that the industry is likely to receive more clients. Then, economic trends ascertain that this industry is not commonly affected by recession. Most importantly, the growing national Growth domestic product (GDP) of New Zealand and other countries in the European Union imply that more individuals will be able to afford the luxurious services that