Joy of Travel: Startup Success in the UK Tourism Industry Case Study

Introduction: Analyzing the External Factors Impacting Joy of Travel's Operations

Business refers to the continuous process of purchasing and selling goods or providing services in exchanges of money. To start as business an individual needs to conduct various market analyses to determine the factors that can impact the working of organisation. This report is based on setting up a start-up business in UK which is going to operate in near future. This report will include all the information required of planning, organising and controlling tourism business (travel planner) in UK. Macro environment analysis and porter five forces analysis will be connected to determine all the external factors that can impact firm's working. Influences of these factors on an origination's operation will be provided through this report.

Main Body:

The tourism company which is going to operate in near future is concentrates towards provided walking tourism services to the individual. Joy of travel is targeting people who are interested in determining the local culture and belief of the population. This business will be operated as a private limited company in London. There are various internal and external information that need to be considered at the time of decision making such as:

Internal Information

Under this all the information that is related to capability and ability of organisation will be collected. This includes determining information related to financial, human resources, physical resources and management team within the company.

• Finance: The working and stability of organisation within industry is determined through these resources (AlBar and Hoque, 2019). Company needs to collect information regarding the total finance which is needed at initial level. This also includes making decision regarding the additional capital which will be needed in near future and identify sources of the funds. Collection of all information regarding requirement and sourcing of funds, will help in making appropriate decision and assists in formulating plan accordingly.
• Human resources: This is the most important element of every business that impact overall operation of business entity. Under this, data will be collected regarding the number and type of human resources needed in the organisation. This will help in deciding the skills that are needed in employees and assists in planning accordingly for training & development session.
• Physical resources: Company will evaluate all the physical resources such land and machinery that will be needed in organizational operations (Berdik et al, 2021). This will help in making appropriate allocation of financial resources to different resources that helps in optimum utilization of funds.

External Information

Under this information will be collected regarding the entire external shareholder that can impact the operations of organisation. This stakeholder includes the customers, investors, government, supplier and community. It will help in making strategies and policies that through which the needs and wants of individual could be fulfil results in maintaining stability in industry.

• Competitors: These are the organisation that are operating in the same industry and provided similar type of services to the individual. Collecting competitor's information will help in understanding their way of working and helps in evaluating their strategies (Birru, Sudarmiatin and Hermawan, 2022). This will Support Company in forming strategies through which customer could be attracted and helps in gain competitive advantages in industry.
• Supplier: Information will be collected regarding the availability of suppliers within the market. This will include supplier that are near to operating company and from where resources could be generated at reasonable prices.
• Government: As company is operating in tourism business, there are various rules and regulations that need to be followed by organisation. This helps in taking decision which does not hamper the laws of country and helps in effective working of organization.

Collecting all the information will help in increasing the efficiency and effectiveness of planning, decision making and controlling process. This has been achieved as company is able to making appropriate resources allocation and mobilization decision by identifying the financial position of the company (Capobianco et al, 2021). Planning will be improved as company is able to identify the technology that needs to acquired and form polices that do not hampers the operation of business entity. During controlling process all the decision take based on information will be taken as based on which further comparison will be done.

Pestle Analysis

This is the macro environment analysis that assists in determining all the externals forces which will impact the operation of organisation. These factors are not in control of the organisation but have great influences on the working of the business entity. Carrying out Pestle analyse will help informing strategies by which the impact on the organization can be reduced. The pestle analysis of the tourism company is as follows:

• Political factors: This includes polices of the government that impact the decision of the organization. It has been determine that UK is having stable government as country is having low corruption rate, effective government strategies and working through rule of law (Fernando, 2021). Brexit has result in restrictive company to expand its operation in other countries of UK that is part of UN. Government has imposed various fees on the tourist of country which increases cost for them. This results in reducing the number of tourist leading to negative impacting the customer base of organisation.
• Economic factors: This are the factors that influence the decision of individual and organization based on financial position (Pestle analysis of tourism industry in UK, 2021). There are increases in the tax rate by 2% within country, these results in reducing the purchasing power of the tourist leading to reduction in number of tourism. Inflation has been increasing in UK that creates negative impact on the financial position of individual. It has been determine that interest rate in country has been increased results in making the funds expensive for the company results in creating barrier in raising additional capital. The exchange rate also has huge impact on the decision of tourist as changes in exchanges rate will impact on the saving of tourist results in influencing their decision. As the number of tourist decreases within county, the tourist company will have less customer results in negatively impacting its profitability position.
• Social factors: Based on finding, it has been identified that there is constant change in the taste and preference of the consumer which impact the working of organisation. It has been identified that individual's concern towards protecting environment has been increasing and tourism in UK is results in enhancing pollution and degrading of natural resources. This cultural and social belief of individual creates restriction for the company to adequately carrying out its operations.
• Technological factors: This factor creates impact on organization working in both negative and positive manner. As the technology has been introduced in the industry, organization will able to carrying out its operation in more efficient and effective manner (Jamil, 2023). Technology keeps on changing on the regular basis as to become competent in the industry; firm need to invest high amount results in impacting on the budget of the firm.
• Legal factors; There are various law and regulation that has been formed by the company for safeguarding right of consumer and workers. Theses legal factors creates obligation for company to follow all the guidelines that support in effective working of organization. The company needs to compile with employment law, tourism guidelines, health and safety act and the equality act which will help in protecting the rights of tourist and employees. Compliances with entire rules and regulations will assists in creating goodwill and reputation in industry leading to attracting large number of customers.
• Environmental factors: It has been identified that there is increases in amount of pollution and waste by 9% in the UK due to increases in tourist (Increase in pollution due to tourism in UK, 2019). This leads to formulation of various law through which pollution within country could be reduced. Joy of travel should compile with all the policies and practices that can helpful in safeguarding natural resources and assists in maintaining stability within industry.

Porter Five Forces Analysis

This is the model that helps organization in determining the direct and indirect competitors that influence organization's operations. These analysis helps in formulating strategies and policies that will helps in creating competitive edge and understanding the capability of rival companies. The porter five analyses for the joy of travel are as follows:

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• Competitor's rivalry: There is large number of competitors in the market which amount to 4831 company in UK. This indicates the necessity for firm to focus on investing in research and devolvement department of the company (Szymkowiak et al, 2021). Joy of travel is focusing on introducing a sustainable tour services that includes walking and cyclic tourism. There is less number of companies that are providing the same services results in increasing the competitive advantage in industry.
• Bargaining power of supplier: There are large numbers of suppliers that are working towards providing goods and services to travel company (Porter's analysis of tourism industry in UK, 2023). It leads to provide various options for the business entity to acquire good results in reducing the bargaining power of supplier. This helps in reducing the cost of the organization and results in improving its overall financial position.
• Bargaining power of buyer: It has been identified number of company that are providing the walking and cyclic facility in UK is very less. This indicates that buyer is left with no choice to pay the privies of organisation indicating less bargaining power of buyers. It is the positive factor of company as firm could keep the adequate rate for its services that will help in increasing the profit of joy of travel.
• Threat of substitution: There is low threat of substitution of the company as there are of less number of competitors in market. Firm is concentring on finding new ways of operating and investing towards R&D department that helps in determining new and innovative ways (Porter's analysis of tourism industry in UK, 2023). This assists in attracting large number of consumer towards company leading to reducing the fear of substitution and losing costumer.
• Threat of new entry: Setting up Tourist Company in UK requires going from lengthy licensing and financial requirement. This restricts company to enter in this industry leading to reducing the fear of new entry.

From the above two analysis it has been identified that company is facing issue related to large number of competitors, economic condition of UK and the environmental issue in the country. There are various benefit and usefulness of conducting this analysis of the company. Some of the ways it support business entity are as follows:

• Prioritizing activities: By conducting pestle analysis, information regarding the activities that are more crucial in the current time is identified (Tambunan, 2019). This helps in deciding the priority level of each activity and assists in timely completion of organizational functions.
• Reducing risk: Pestle and porter; s analysis helps in determine the external environment and competitors' risk that can hampers the operation of firm. Identification of risk helps in formulating strategies and polices at right time leading to mitigating all the uncertainty.
• Identifying opportunities: This analysis helps in proving information regarding the various opportunities that are available in the market. It provides information regarding latest technology and market needs which can be used by organisation in creating competitors edge in market.

Conclusion

By summing up the report it has been identified that industry analysis plays a crucial role in decision making process of organization. Internal and carnal information has been collected that will help in adequate establishment of joy of travel. Form the analysis; it has been determined that information regarding supplier, customer, financial and human resources of the company needs to be identified. This helps in increasing the efficiency of planning and decision making process within its operation. Increases in tax rate, continuous technology, changes in consumer preferences and inflation are various factors impacting organisational working. It has been identified that there is low bargaining power of supplier and buyer that assist in increasing profitability of joy of travel.

References

Books And Journals

• AlBar, A.M. and Hoque, M.R., 2019. Factors affecting the adoption of information and communication technology in small and medium enterprises: A perspective from rural Saudi Arabia. Information Technology for Development, 25(4), pp.715-738.
• Berdik, D., Otoum, S., Schmidt, N., Porter, D. and Jararweh, Y., 2021. A survey on blockchain for information systems management and security. Information Processing & Management, 58(1), p.102397.
• Birru, A.C., Sudarmiatin, S. and Hermawan, A., 2022. Competitive strategies in the lodging service sector: Five porter analyses and case study SWOT analysis. Journal of Business and Management Review, 3(1), pp.001-017.
• Capobianco, N., Basile, V., Loia, F. and Vona, R., 2021. Toward a sustainable decommissioning of offshore platforms in the oil and gas industry: A PESTLE analysis. Sustainability, 13(11), p.6266.
• Fernando, I., 2021. Assessing the competitiveness of Sri Lanka's tourism in the COVID period by Porter's diamond model. In Handbook of research on strategies and interventions to mitigate COVID-19 impact on SMEs (pp. 1-22). IGI Global.
• Jamil, J., 2023. PESTLE Analysis and Sustainable Event Marketing-Evidences from Mount Kinabalu International Climbathon Destination, Borneo. Journal of Event, Travel and Tour Management, pp.1-18.
• Szymkowiak, A., Melovi?, B., Dabi?, M., Jeganathan, K. and Kundi, G.S., 2021. Information technology and Gen Z: The role of teachers, the internet, and technology in the education of young people. Technology in Society, 65, p.101565.
• Tambunan, T., 2019. Recent evidence of the development of micro, small and medium enterprises in Indonesia. Journal of Global Entrepreneurship Research, 9(1), p.18.

Online

• Increase in pollution due to tourism in UK. 2019. Online Available through: < https://www.wastemanaged.co.uk/tourism-waste-uk/#:~:text=The%20amount%20of%20waste%20generated,promote%20sustainability%20in%20the%20industry.>
• Pestle analysis of tourism industry in UK. 2021. Online Available through: < https://www.howandwhat.net/pestel-analysis-tourism-industry/ >
• Porter's analysis of tourism industry in UK. 2023. Online Available through: < https://studymoose.com/porter-5-forces-on-tourism-industry-and-explanation-essay>