Running head: External and Internal Analysis Paper

External and Internal Analysis Paper

STR/581-Strategic Planning & Implementation

External and Internal Analysis Paper

External and Internal Analysis Paper

Villa Verde Inn es un negocio familiar el cual apenas esta comenzando. Le Ang Hotel is
a start up business that has not yet been fully established to be affected by most external and
internal factors. To gain background on the organization the mission, vision, and value
statements are provide. Then the external and internal factors will be reviewed below to
determine their current effect on the organization or the affects that may occur in the future.
Mission, Vision, and Values Statements
The Mission Statement of Le Ang Hotel is as follows, Le Ang strives to provide great
customer service, low prices, and unbelievable rooms. The Vision Statement of the hotel is to
reach all corners of the world with a smile, a service, and to become part of everyones family.
Le Ang wants to become a known name while making a difference. Le Ang upholds the
values of honesty, integrity, trust, respect, quality, teamwork, and leadership to achieve the
mission and vision statements.
External Environmental Analysis
The external environmental factors in the remote, industry, and operating environments
are reviewed as they relate to the organization. Not all external environmental factors apply to
the organization; however, external factors can have such a drastic effect on a business that the
applying factors are carefully considered.
Remote

External and Internal Analysis Paper

Economic factors have the largest impact on any business. Unemployment enables the
hotel to hire the employees necessary to ensure the guests are taken care of and the hotel stays up
to standards. However, unemployment also affects the prices and the revenue the hotel makes.
When unemployment is on the rise as it is now, the hotel is forced to lower its prices to bring
more business into the hotel. Lowering the prices means less revenue for the company, which
also causes the company to reduce the number of people employed. Unemployment is a cycle
that hurts any company and is can be difficult to break.
Inflation causes the costs to go up for the hotel, which also cuts into the revenue.
Inflation can cause rising prices for soap, cleaners, food, and more. The hotel is forced to raise
prices to counter the rise in prices elsewhere, which can cause a loss of business. Le Ang is a
new business, which means investors relied upon loans to build and start the business. The
interest rates on the loans are a crucial factor in having the ability to pay the borrowed money
back. The business looks for lowest interest rate that is fixed for the term of the loan. If the
interest rate is variable the company stands to hurt itself because the payments may become too
much and the loan term too long.
The interest rates lead into another concern for the business; the possibility of
bankruptcies. Bankruptcy is nothing a company wants to file for, it does not only hurt the
company financially, but it hurts the companys reputation significantly. The majority of the
companies that file for bankruptcy are not able to fully recover if they are able to stay in
business. Another environmental factor, retail sales plays a large role in the revenue for the
company. While there are shops that are brand name such as Starbucks, other areas of retail exist
such as the spa. The spa not only sells services, but products as well like robes. If these retail

External and Internal Analysis Paper

areas are not performing as required, then the companys revenue suffers, therefore affecting all
areas of the company.
Raw materials availability, made a large difference when the hotel was built. Though the
majority of the products used were recycled materials, a need for raw materials still existed. For
example the company needed a large amount of bamboo, which is a renewable resource, to build
with for items such as flooring and cabinets. A need for the materials could be greatly affected if
the materials do not exist. The prices of raw materials also affect the price of good the hotel
buys such as sheets and towels. The producers of the goods are pushed to raise their prices
because of the raw materials, causing the hotel to have more expenses.
Social factors can cause a great deal of problems for the company. If the company does
not hold up its end in social responsibility such as recycling, the company faces the possibility of
persecution by the public. The hotel has already started doing its share buy using as many
recycled materials and green rated products as possible. While the hotel has no way to
completely eliminate wasted, the company has taken the steps to be as socially responsible as
possible. Another social factor is acting ethically. According to Carter McNamara (N.D.),
Social responsibility and business ethics are often regarding as the same concepts. The hotel
has high standards for ethics and is not willing to let the staff have lower ethics. If the company
allows the employees to have lower standards, a chance of issues to arise is very likely, thus
creating a number of problems with the public and possible causing the company to be closed.
Political factors make a difference in the hospitality industry just like any other industry.
Wars, law changes, even elections all can factor into the success of a hotel. As other industries
are affected, those effects are felt throughout the economy. Those effects can boost business, hurt

External and Internal Analysis Paper

business, cause prices to go up, or prices to go down. The hotel is still new enough that the
majority of political issues are not affecting business; however the company is still suffering like
other companies are.
Technology is constantly evolving and makes a difference for all businesses. The
company offers technology most consumers expect to have, but as the technology updates it will
not be able to buy the new technology every six months. Therefore, the company must try its
best to offer new technology to the consumers when it is feasible.

Industry
Competitive rivalry will be high if there is little differentiation between the products
sold between customers. This reduces customers brand loyalty. (VentureNavigator.com, 2010)
The company has set standards that make it stand out from the rest of the market such as offering
all the services it has and at the prices the hotel sells for.

Operating
Competitors are a constant for any company in the hospitality industry. Though hotels
may be able to offer services that are unique in their own way, for the most part the hotels are
similar. Therefore the company has to find a way to stay in the market with the competitors or
face losing its customer base. The majority of difference comes from the customer service
provided. However, the company also has to study the competition and perform research to see
what others are offering so that the hotel stays on the same level as other hotels in its service
range.

External and Internal Analysis Paper

Creditors ensure the company is staying on top of its financial responsibilities and paying
all the money owed. Creditors are a necessary part of finances; however the company is new
enough to be in debt, but to be able to pay all its obligations in a timely manner.
Customers are the life of the business, to determine the best way to understand the
environment to market in the business research must be done to separate the customers based on
geographic, demographic, psychographic, and buyer behavior information. (Pearce and
Robinson, 2011, p.104) The hotel wants to ensure that it develops the right marketing plan and
promotions to bring guests into the hotel. By using the information the company will be able to
make the best business decisions. If the company chooses to ignore the information the company
uses the wrong marketing tactics and promotions, therefore causing the company to lose out on a
large number of customers.
The labor force is a driver for the company. Labor is what helps keep the business going,
such as housekeepers, groundskeepers, maintenance, and even the masseuses. The labor for is
needed at all times and have to be kept motivated. The company offers incentives to the
employees to keep them motivated and happy with the work they are doing.
A positive relationship with the suppliers is necessary to help keep the business running
smoothly. If the suppliers are not paid or kept informed both the businesses suffer. The suppliers
are part of what allows the company to keep offering what it is able to, such as clean rooms or
spa services. Without the suppliers the company would lose all of its customers from the lack of
services.
Internal Environmental Analysis
Through identification and analysis each of the internal environmental factors in the
remote, industry, and operating environments will be reviewed as they relate to the organization.

External and Internal Analysis Paper

Not all internal environmental factors apply to the organization; however internal factors mean a
great deal to the company and cannot be overlooked.
The personnel of Le Ang are the frontline and backbone of the company. The personnel
keep the hotel running and enable the hotel to provide the best customer experience. The staffs
of the hotel, spa, restaurant, and other areas are trained to respectful to the customers. The staff
is also hotel is also trained to handle almost any situation that may arise. Management wants the
staff to be comfortable, happy, and relaxed in their positions, so that they provide the best
customer service possible. If the employees are unprepared and unhappy, they are going to
provide poor customer service, causing the hotel to suffer. The poor services the employees give
the customers are likely to ruin the reputation of the hotel, causing a loss in customers and
revenue.
Quality Management is one of the biggest factors in the success of Le Ang is providing a
quality service to the customers. This starts from the time the customer calls to make a
reservation or walks in the front door. Every aspect of the hotel must meet the highest quality for
the customers satisfaction. To provide a quality service, staff is constantly managed and
monitored to guarantee success. The staff is trained and tested to ensure they are prepared and
have a clear understanding of what is expected. Management and staff will be on the constant
vigilance to keep the hotel clean, organized, and working smoothly to increase the customers
enjoyment of the business. If a guest reports a problem the problem will be corrected
immediately and completed in a respectful manner. Without quality management, the hotel can
guarantee it will fail within its first year of business.
The last internal environmental factor is the information systems. The information
systems enable Le Ang to stay organized, communicate with suppliers, manage levels of

External and Internal Analysis Paper

customer service, and provide all information quickly. Organization is a key to the company
flowing well and providing good customer service. Organization allows the company to handle
cash flow, reservations, cleaning, and much more within the hotel. If the information system
fails or is not used the company is likely to lose customers and have errors within paperwork.
The system also gives the hotel a way to communicate to the suppliers by ordering supplies when
needed and receive them in a timely manner. Supplies must be kept in stock at all times in order
to provide the best customer service. The information systems also provide information to any
staff member quickly when necessary to make decisions, such as providing rooms or business
decisions.
All external and internal factors can make or break a business. Each factor is considered
carefully before a company is started and while the company is open. While Le Ang is in
business it will continue to monitor and use these factors. The factors will be used to uphold the
mission statement and work towards the vision statement. However, through the course of the
business the company will never lose sight of its ethics.

External and Internal Analysis Paper

9
References

McNamara, Ph.D., C. (N.D.). Business ethics and social responsibility. Free Management
Library. Retrieved from http://managementhelp.org/ethics/ethics.htm#anchor9534
Pearce, J. A., II, Robinson, R. B. (2011). Strategic management: Formulation, implementation,
and control (12th ed.). Boston, MA: McGraw-Hill/Irwin.
Venture Navigator. (2010). Competitive rivalry. Retrieved from
http://www.venturenavigator.co.uk/content/318