Task: What are the main micro and macro environment factors driving Sofitel Hotel operations?
Introduction: This report principally aims to study and examine both the micro and macro environment factors influencing the operational and commercial activities of Sofitel Hotel situated in Australia. A brief analysis of micro environmental elements like competitor analysis, customer analysis, and analysis of the company is done in this report. Where as the macro factors like technology, financial condition and the demography of the company is evaluated in the later sections. If described in a simple language, the analysis of the external factor is macro environment factors analysis and the analysis factors is micro environmental analysis. Talking about Sofitel, it is the only French luxury hotel in Australia which has extensive number of branches in several cities and countries. Sofitel has established many 5 star hotels in various cities of Australia such as Sydney, Brisbane, Gold Coast, and Melbourne and has over the years developed clear micro and macro environment factors guidelines (AccorHotels Australia, 2016).
Analyzing the Micro Environmental Factors
Customer Analysis: The primary motive of the Sofitel hotel is to provide the economically superior public with world class luxury service all over the world. The reach of the Sofitel is only limited to the rich people since the service offered by them is costly and not affordable to the middle class. In order to enhance its goodwill and the brand value, the company has devoted themselves to deliver high quality service to its customers. The customers availing the service of Sofitel majorly consists of tourists visiting Australia. The tourists coming from all over the world in Australia always look for a high-class luxury service, which actually works in favor of the company (Hollensen, 2015).
Overview of the company: Sofitel hotel is a French giant company shaped by the Accor group. The hotels created by the Sofitel reflects ethnic and traditional beauty of French culture. The company has created vast chain of hotels in 40 countries. The company has constructed many hotels in various cities of Australia. The hotels of the company are dispersed all over in the major cities like Gold Coast, Sydney, Brisbane and Melbourne (Wentworth, 2016).
Analysis of Competitors in the Market: If analyzed the hospitality industry of Australia, it can be observed that the Accor group is facing strong challenges from other giant competitors. The major competitors of the Sofitel had already created their place and identity in the market. Competitors like Hilton hotels, Starwood, Hyatt and Marriott are well established and are well empowered to challenge the position of Sofitel in the market. The competitors of the company are very astute and are targeting the factors like quality of service, facilities, price etc. to challenge its status. The company is facing increased risks since there a lot of new competitors entering the market. The Australian population is craving to get luxurious service from hostels, the demand for expensive hospitality is increasing. This trend is attracting a lot of investors in the Hotel industry which is posing great risk to the present hotels. Since there are many new entrants in the market, the regular but price sensitive customer of the Sofitel hotel micro and macro environment factors are focusing towards changing their preferences and are opting for cheaper services (Erel et al. 2012).
Analyzing the Macro Environmental Factors
Economic Factor Analysis: The economy of Australia possesses several factors which have the potential to fluctuate the business of Sofitel hotel in the country. In Australia the tax for luxurious products and services are considerably high. If the government decides to increase the luxury tax, it will affect the business of the company in an abrupt way. This will also affect the tourism sector of Australia since the further increase in hospitality charges will force the tourists to select a cheaper destination. Since Australia is a developed nation, its economy is generally observed to be stable. Although a minor fluctuation in its economy will negatively impact the profit of Sofitel. The fluctuation in the economic factors has the potential to affect the demand in market, cost of services, prices and range of profit made by the hotels. Apart from these comparatively trivial factors like merging and acquisition of the institutions will also affect the business of Sofitel. Even though these factors are present in the economy, Sofitel is doing well and increasing its profit range (Skokic et al. 2016).
Technological Factor Analysis: Among the factors of macro environment, technological factor is a major one which simultaneously affect both the customers and the business. The company management has encouraged the installation of most modern technologies in their hotels to attract more customers. As a part of this the company has created websites providing all information with online facility to the customers. Accor group had encouraged the use of online payment, prepaid cards, and other way of transactions to customer in order to make the payments more convenient. The digitalization and use of online payment methods had created a great impact on the market of Sofitel (Skokic et al. 2016).
Demographical Factors: In the hospitality business, the lifestyle of the population and the trend followed by it plays a great role in generating profit. The change in demographical ratios like gender, population, age, lifestyle and sex has the ability to make an impact on the business. This demography not only includes the customers but also the employees of the Sofitel. Company management has followed the policy of equity among men and women in their strategies since its inception. The demand of a service or product totally depends on the purchasing power of the population especially for the company like Sofitel which provides costly and luxurious services (Skokic et al. 2016).
Political Factors: This micro and macro environment factors bear high importance as a little political change may drastically affect the business processes and its even its existence. The government of Australia is very supportive to the hospitality industry as it generate lot of finance by attracting the tourists. Australia is a developed country with stable political conditions which provides best environment for companies like Sofitel. Tourists generally avoid a destination with unstable political conditions (Skokic et al. 2016).
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Skokic, V., Lynch, P. and Morrison, A., 2016. Hotel entrepreneurship in a turbulent environment. International Journal of Hospitality Management, 53, pp.1-11.
Wentworth, S. (2016). Luxury hotel SYDNEY - Sofitel Sydney Wentworth. [online] Sofitel.com. Available at: https://www.sofitel.com/gb/hotel-3665-sofitel-sydney-wentworth/index.shtml [Accessed 22 May 2016].