Strategic management in travel and tourism

The relationships between the STEEP influences 3.. Conducting macro-environmental analysisScanning Monitoring Forecasting Assessing Scanning macro-environments for warning signs and po

Nguyễn Thị Thùy Linh

Đào Thị Thanh Xuân

Chapter 7 :

The external environment for

travel and tourism organizations –

the macro context

1 Introduction of macroenvironment

1 Introduction of macroenvironment

2 STEEP analysis

3 The relationships between the STEEP

influences

3 The relationships between the STEEP

1 Introduction of macroenvironment

What is the macroenvironment?

The broad environment outside of an organization’sindustry and markets

• Beyond the influence of the individual organizationbut can have significant impact on the

microenvironment

• Beyond control

Bring about the birth or death of an entire industry, make markets expand or contract, determine the level of competitiveness

A vast amount of information

Conducting macro-environmental analysis

Scanning

Monitoring Forecasting

Assessing

Scanning

macro-environments for warning signs and possible

environmental changes that will effect the business

Conducting macro-environmental analysis

Conducting macro-environmental analysis

Conducting macro-environmental analysis

Scanning

Monitoring Forecasting

Assessing

Current and future trends in terms of the effects such changes would have

onthe organization

Extremely complex and at any one time

there may be conflicting and contradictory changes

taking place

Extremely complex and at any one time

there may be conflicting and contradictory changes

taking place

The pace of change is increasing and

becoming more turbulent and unpredictable

The pace of change is increasing and

becoming more turbulent and unpredictable

Uncertainty has some doubt over the

value of carrying out a macro-environmental analysis

Uncertainty has some doubt over the

value of carrying out a macro-environmental analysis

 Overview of the STEEP influences

◦ Complexity

◦ Four categories are interrelated and constantly

interact with each other

◦ Because of the uncertainty of the effects of environmental change on the microenvironment

macro- identify and consider the possible outcomes of the changes

2 STEEP analysis

 The extended framework

◦ Communications and infrastructure

◦ Administrative and institutional

◦ Legal and political

2 STEEP analysis

Figure 7.1 Old and new tourism compared (adapted from Poon, 1993)

to work, savings and investment, ecology, ethics, etc.

•and patterns of demand.

by age, sex, location, populationdensity in different areas, etc

Technological influences

Goods and services

Operational processesInformation and communications.Transport and distribution

4 Society, politics and economics.

Technological influences

Developments in information and

communications technology

Activities are better co-ordinated

Research and development is speeded up

Changes in transport technology have revolutionized business ; changed

societies and cultures

Economic influences

Fiscal policy

Monetary policy

$$$

Economic influences

When the fiscal & monetary policy work, they can affect:

Economic growth rates

Levels of income in the economy.

Economic influences

All of the factors above will affect:

People’s ability to pay for goods and services

Levels and patterns of demand

Costs of production and

competitiveness

Ecology and ‘green Issues”

global climate change, ozone layer depletion, deforestation, extinction

of species, soil erosion, desertification, acid rain, toxic wastes and water pollution

traffic congestion, deteriorating

buildings and historic sites,poor urban planning, and visually intrusive buildings

First, they all have international dimensions

Second they are not exclusively tourism related but nevertheless have important

implications for tourism managers amongst others.

Environmental influences

Natural environment

Built environment

Unifying characteristics

Change of concern

Be aware of the need to protect environment

combined desire for products which are environmentally friendly and produced

by ‘green’methods

Laws that influence employment, consumer protection, health and safety at work…

owned businesses

Governement-Fiscal policy, set policy over the levels of taxation and expenditure

Nationalized industries

Governments have direct control or influence over:

Political, governmental, legal and regulatory

influences

Governement international policy

Governement international policy

Government intervention to influence exchange rates, international trade

Political, governmental, legal and regulatory

 Stabilization of exchange rates.

 Control of balance of payments.

 Control of monopoly power, both by businesses and trade unions.

 Provision of public and merit goods like health, education, defence, etc.

 Control of pollution and environmental protection.

 Redistribution of incomes ……

Political, governmental, legal and

The relationships between the STEEP

influences

The example of environmental

influences

A temptation when carrying out a STEEP

analysis is to think of each influence as

separate when in fact they are often

interlinked

A macro-environmental analysis should

recognize the ways in which the four STEEP factors might be linked to each other

Using the STEEP analysis

Scanning and monitoring

Assessing Analysing Assessing

s markets

An organization’

on product markets and resource

markets