Hilton Hotel Environmental Analysis Template Using the table below, list 3 external trends for each of the 5 areas. List the trend, an opportunity and/or t

Hilton Hotel Environmental Analysis Template Using the table below, list 3 external trends for each of the 5 areas. List the trend, an opportunity and/or threat that it creates, how your company should respond to the trend, and the source. Note: The source must be an external source– not your company’s website. This section should be approximately 2-3 pages once the table is filled with your content.More details and examples please see attachment.Please note, only do the first part “Environmental assessment”. [Company Name] Environmental Analysis
[Group Member Names]
Environmental Assessment
[Using the table below, list 3 external trends for each of the 5 areas. List the trend, an
opportunity and/or threat that it creates, how your company should respond to the trend, and the
source. Note: The source must be an external source– not your company’s website. This section
should be approximately 2-3 pages once the table is filled with your content.]
Trend
Trend
Trend
Trend
Trend
Opportunity
Sociocultural
Threat
Response
Source
Opportunity
Technological
Threat
Response
Source
Opportunity
Economic
Threat
Response
Source
Opportunity
Ecological
Threat
Response
Source
Opportunity
Political
Threat
Response
Source
Porter’s 5 Forces
[This section should include three parts. The first part defines your company’s industry,
suppliers, customers, substitutes, and competitors. The second part is a visual model of Porter’s 5
Forces, which includes criterion for each force to evaluate its strength/power. The third part is a
discussion about the implications of the model. This section should be approximately 1-2 pages.]
•
•
•
•
•
Industry definition: [Provide a definition of the industry.]
Suppliers: [Provide a list of suppliers that your company uses.]
Customers: [Provide a brief overview of the types of customers for your company.]
Substitutes: [Provide a list of at least 3 substitutes for your company.]
Competitors: [List at least 3 competitors.]
Threat of New Entrants:
[List whether the overall threat is high/low
based on your assessment]
• [List and explain criteria]
• [List and explain criteria]
• [List and explain criteria]
Rivalry:
[List whether the overall threat is
intense/not intense based on your
assessment]
Bargaining Power of
Suppliers:
[List whether the overall
power is high/low based on
your assessment]
•
•
•
•
•
•
[List and explain
criteria]
[List and explain
criteria]
[List and explain
criteria]
[List and explain criteria]
[List and explain criteria]
[List and explain criteria]
Threat of Substitutes:
[List whether the overall threat is high/low
based on your assessment]
•
•
•
[List and explain criteria]
[List and explain criteria]
[List and explain criteria]
Bargaining Power of Buyers:
[List whether the overall power is
high/low based on your
assessment]
•
•
•
[List and explain criteria]
[List and explain criteria]
[List and explain criteria]
Porter’s Five Forces Conclusion
[This section should include a discussion (1 paragraph) of the implications of the model: What
forces present the biggest threat to your company? What actions do you recommend the
company take to manage the 5 Forces?]
Future Trends
[This section should include an explanation of the 2 most important trends to pay attention to
now and the 2 most important trends for the future. Discuss how these trends impact your
customers and stakeholders. This section should be approximately half a page.]
References
[This section should include all references used in this progress report. Please cite references in
APA format.]

By the end of this class, you should be able to:
◦ Understand what is required for PR 2
◦ Have an understanding of the factors in the broad
environment that affect an organization
◦ Understand how to conduct a Porter’s 5 Forces
model
1

Environmental Assessment
◦
◦
◦
◦
Identify 3 trends for each of the 5 areas (STEEP)
Describe an opportunity and/or a threat that each trend creates for your company
Provide a response
List an external source

(Note: This information will not be found on your company’s website. You will need to research sources in the
library databases and other credible sites).


Porter’s 5 Forces
◦
◦
◦
◦
◦
Create a visual chart of the Porter’s 5 forces model for your company’s business segment
Describe the type of suppliers, customers, substitutes, and competitors
Evaluate the strength of each force based on 3 criteria
Briefly justify why strength is high/low
Discuss implications of the model
◦
Based on the environmental assessment and Porter’s 5 Forces analyses , list the 2 most important
trends for today and the 2 most important trends for the future. Discuss how these trends impact
your customers and stakeholders.
All of this information is contained in today’s lecture slides.
Future Trends
◦
2
The Broad Environment
Technological Influences
Sociocultural Influences
The Operating Environment
Activist
groups
Suppliers
Unions
Competitors
The Organization
Owners/Board of Directors
Managers
Employees
Financial
intermediaries
Local
communities
Customers
The Media
Government agencies
And administrators
Economic Influences
Political Influences
Ecological Influences
3
◦ Sociocultural
 Attitude changes/Sensitive issues
 Consumers demanding companies be environmentally sustainable and treat
employees well. More diversity and inclusion in the workplace. Issues regarding
harassment, racial inequality, etc.
 Public opinions/public opinion leaders
 Demographic shifts
 Minority groups are increasing, creating a need to cater to different consumers
(i.e, larger Hispanic market, what are their needs/wants?)
 Generational shifts (i.e., Millennials, Generation Z—How can we meet the needs
of these generations?)
 New fads
 Popular chefs
 Popular products
 New processes/concepts
4
◦ Technological
 New products/ideas/processes that enhance the
guest’s experience





Apps (food delivery, online ordering)
Mobile check-in
Keyless room entry
Robots in hotels and restaurants
Digital concierge
 Examples:
 Hospitality Technology
 Latest Trends in Hospitality Technology
5
◦ Economic
 Economic growth
 Current state of the local, domestic, and global economy
 Unemployment rates
 High unemployment may mean that consumers do not have high disposable
income; but can also be an opportunity to have a large pool of potential
employees
 Inflation
 The increase in costs of products/services, which can affect whether
consumers can afford a company’s products/services (current CPI is +.1%
increase—source: BLS.gov)
 Bureau of Labor Statistics
 Foreign-Exchange Rates and Interest Rates
 A weaker US dollar makes it challenging to compete in countries with stronger
currency, but can be beneficial for international tourists coming to the US
 Higher interest rates make it more expensive for companies and consumers to
borrow money
 Federal Reserve
6
o Ecological




Water/energy usage
Waste Management/Recycling
Pollution
Climate change
◦ Examples: Droughts, wildfires, hurricanes, storms, oil spills, and
earthquakes have caused damage and disrupted operations of many
hospitality companies. Both can lead to shortage of products used in F&B
operations, as well as disruption of daily operations for companies
affected.
7
o Political
 New laws (i.e., labor/tax)
 Examples of labor laws can include:
 Overtime regulations (Federal or State level)
 Department of Labor
 Examples of tax laws can include:
 Tax cuts/increases for businesses
 Our current political administration is suggesting tax cuts and this
could affect how businesses invest in future projects
 New regulations
 Food safety, health regulations, health care
 International relations
 Trade regulations, travel restrictions, threat of terrorist attack
8
A major part of strategic planning
involves understanding both the
operating and broad environment.
Start by scanning: General indicators –
early warning signs
Scanning
Monitoring
Following specific indicators – regular
ongoing observation of certain trends
(those in your Environmental
Assessments)
Projecting
Adapting
Forecasting impact of key trends
Implement changes in organization
based on trend importance and
influence (organizational response in
EA)
9

Steps in environmental assessment for project:
1: Identify external forces that can influence the business being
evaluated (see Table 2.3 on p.55 in book for more examples)
2: Evaluate the opportunity and/or threat created by that force
3: Recommend an organizational response
4: Determine source of information (description and reference)

Tips:
Don’t confuse the trend with the opportunity/threat it creates
A trend can present both an opportunity and a threat
The sources must be trackable over time (not a single article)
Describe the general source in the assessment table, place the
citation in the reference list (i.e., Department of Labor)
◦ www.xxxxxxx never stands alone as a source description
◦ See PR 2 template for more information
◦
◦
◦
◦
10

Competitors or substitute?
Competitors
These companies
compete directly with
each other in the same
market.
A substitute for these would
another type of beverage (i.e.,
juice, tea, water, coffee, etc.)
11
These are
examples of
substitutes to
hotels
12
Watch the
Porter’s 5
Forces Video
posted in
Canvas
13




Porter’s 5 Forces is used to assess the
attractiveness of an overall industry
For PR 2, you must assess the overall industry that
your company operates in to determine what forces
are important to be aware of and manage.
This is intuitive model, which means you already
know most of the information. Minimal research is
needed to complete this model. However, you likely
need to research growth rates for the industry or
other important factors.
The following slides provide a checklist to assess
the strength of each force.
14
See p. 59-69 in text book
for a detailed description
of each criteria
Buyer Power is _____ when
High Low
Number of customers is
Low
High
Volume of purchase is
High
Low
Price sensitivity is
High
Low
Switching costs are
Low
High
Product differentiation is
Low
High
Threat of backward integration by buyers is
Buyer’s knowledge about the companies from which
they buy is
Importance of quality to the buyer is
High
Low
High
Low
Low
High
Heterogeneity of buyers is
Low
High
For PR 2:
Pick 3 criteria from this list to
evaluate the strength of a force
15
Supplier Power is ____ when
Number of suppliers is
Availability of substitute supplies is
Differentiation of the supplier’s products and
services is
Importance of business to the supplier is
Switching costs of the buyer industry are
Threat of forward integration by the supplier is
Knowledge about buyer industry is
Organization of suppliers is
High Low
Low
Low
High
High
High
Low
Low
High
High
High
High
High
Low
Low
Low
Low
For PR 2:
Pick 3 criteria from this list to
evaluate the strength of a force
16
Threat of substitutes is ____ when
High Low
Profitability of company producing substitute is
Switching costs are
Availability of alternatives is
Suitability of alternatives is
Price sensitivity is
Potential new substitutes are
High
Low
High
High
High
High
Low
High
Low
Low
Low
Low
For PR 2:
Pick 3 criteria from this list to
evaluate the strength of a force
17
Threat of new entrants is ____ when
High Low
Economies of scale are
Low
High
Capital requirements are
Low
High
Switching costs are
Low
High
Existing companies’ control of distribution
channels is
Existing companies’ proprietary knowledge is
Low
High
Low
High
Government regulations are
Low
High
Brand equity/reputation existing companies is
Low
High
New entrant’s access to market/customers is
High
Low
For PR 2:
Pick 3 criteria from this list to
evaluate the strength of a force
18
Rivalry is ____ When
The number of competitors in the
industry is
Industry growth is
Fixed costs are
Availability of substitutes is
Barriers to exit are
Product differentiation is
The ability to copy pricing strategies is
Intense Not
Intense
High
Low
Low
High
High
High
Low
High
High
Low
Low
Low
High
Low
For PR 2:
Pick 3 criteria from this list to
evaluate the strength of a force
19

Define your industry segment by listing:
◦
◦
◦
◦

Types of suppliers in that industry segment
Customers
Substitutes
Competitors
Evaluate based on 3 criteria (previous slides)
◦ Justify your evaluation (see pages 59-69 in text
book for detailed description of each criteria)


Reach overall conclusion about the strength
of each force
Discuss the implications
20

Defining the Fast Food Industry:
◦ The fast food industry is typically mass-produced food prepared and
served quickly.
◦ Suppliers: This industry has many suppliers including food suppliers,
beverage suppliers, paper goods (napkins, straws, etc.) suppliers, uniform
suppliers, cleaning product suppliers, and equipment suppliers
◦ Customers: This industry has a broad range of customers including
individuals of different age groups and families
◦ Substitutes: This industry has many substitutes, including fast-casual
restaurants, such as Chipotle and Panera Bread. Customers may choose to
eat at home or have delivery from another restaurant.
◦ Competitors: This industry has many competitors. The main brands in this
industry include:

McDonald’s

Burger King

Wendy’s

Jack in the Box

Del Taco
21

Evaluating Buyer Power
◦ Using 3 criteria from the list presented earlier:

Number of customers is:
◦ High: There are many customers that purchase fast-food. Because there
are many customers, this decreases the buyers’ power

Volume of purchase is:
◦ Low: Customers typically buy a few meals at a time and do not have power
to negotiate a better rate based on buying high volume. This decreases
buyers’ power.

Price sensitivity is:
◦ High: Customers are used to paying low prices for fast food and may
choose a substitute if prices go up. This gives buyers power to ensure
companies keep prices low.
Overall Buyer Power is Low-Moderate
22

Evaluating Supplier Power
◦ Using 3 criteria from the list presented earlier:

Number of suppliers is:
◦ High: There are many suppliers available for fast food companies to
choose from. Thus, the suppliers’ power is low.

Availability of substitute supplies is:
◦ High: Because quality is not of the upmost concern, fast food companies
can switch to a different product for a lower price. Thus, the suppliers’
power is low.

Differentiation of the supplier’s products and
services is:
◦ Low: All suppliers offer very similar products and a fast food company can
easily change suppliers. Therefore, suppliers’ power is low.
Overall Supplier Power is Low
23

Evaluating Threat of Substitutes:
◦ Using 3 criteria from the list presented earlier:

Profitability of companies producing substitute is:
◦ High: Companies that are substitutes for the fast food industry are
profitable because consumers also like their products. Thus, threat of
substitutes is high.

Switching costs are:
◦ Low: There are no switching costs involved for a customer who wants to
switch from eating at fast food restaurants to eating at a fast-casual or
other dining options. Thus, threat of substitutes is high.

Availability of alternatives is:
◦ High: There are many alternatives available for eating fast food, such as
grab-and-go, fast casual, and delivery. Thus, threat of substitutes is high.
Overall Threat of Substitutes is High
24

Evaluating Threat of New Entrants:
◦ Using 3 criteria from the list presented earlier:

Economies of scale are:
◦ High: Companies in the fast food industry can be more profitable with a
larger number of locations because they are able to streamline costs,
leading to a lower cost per unit amount. Thus, threat of new entrants is
low because it would cost a lot for a new company to compete against
these larger companies.

Capital requirements are:
◦ Moderate-High: It requires a large amount of money to open a fast-food
restaurant and compete effectively. Thus, threat of new entrants is low.

Switching costs are:
◦ Low: Customers can switch to any brand without any costs involved. Thus,
threat of new entrants is high.
Overall Threat of New Entrants is Moderate-Low
25

Evaluating Rivalry:
◦ Using 3 criteria from the list presented earlier:

The number of competitors in the industry is:
◦ High: There are many competitors in the fast-food industry. Thus, rivalry
is intense.

Industry growth is:
◦ High: The fast food industry continues to grow domestically and globally.
Thus, rivalry is not intense because there is opportunity for all companies
to grab a piece of this growing market.

Fixed costs are:
◦ Moderate-High: It is moderately expensive to run a fast-food restaurant,
thus rivalry is intense because companies have to fight to gain enough
revenue to cover costs.
Overall Rivalry is Moderate-Intense
26

Implications
◦ Based on the 5 Forces Analysis, we see that the fast-food industry has
moderate to intense rivalry. There are many brands competing in this
industry. Buyers and suppliers do not have much power over this industry,
thus allowing fast-food companies to be more profitable. The threat of
substitutes is high. Therefore, companies in this industry should look to
continuously attract customers and provide unique offerings so that
customers choose them over other options. The threat of new entrants is
moderate to low. Therefore, companies in this industry should be aware of
potential new brands that may enter the fast-food industry, however the
main focus should how to manage substitutes.
27



Research factors existing in the board environment
and come up with an opportunity and/or threat
that each poses for your company
Create a Porter’s 5 Forces model using the content
from this lecture, the text book, and the PR 2
template to assess the overall industry segment
that your company operates in
Determine what 2 trends are most important for
your company today and what 2 trends are most
important in the future
28

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