ANALYSING THE ENVIRONMENT FOR THE SET UP OF A TRAVEL AGENCY

1.0 Objective

Naman and Govind were planning to set up a travelling agency. The business plan was based

setting up a travelling agency that will be able to book tickets and air tickets on commission.

They plan to differentiate their service by providing tickets within ten minutes. However, their

business plan left out the impact of the environments on the business of a travelling agency. The

objective of the case study is therefore to provide an insight to Naman and Govind on the

environmental factors that will affect their business decisions. Also to provide them with insight

on how technological improvements and shifts in consumer behavior may hinder their business

performance.

2.0 Analysis of Business Environment

When setting up a business like a travel agency is it very good to set up the goals and objectives

of the business. However, this goals and objective must take into consideration the business

environment that may impact on the performance of the organization. The business environment

that may impact the setup of the travel agency can be classified into two. The internal

Environment and External Environment the internal environment is composed of the factors

within the organization, including current employees, management, and especially corporate

culture, which defines employee behavior. The internal environment has two components which

are the Strength and weakness of the organization. The external environment is factors that are

external to the business organization but have impact on the business decision. The external

environments are further broken down into Macro and Micro Environment. Micro Environment
deals with the Individual and the Industry like Customer, Supplier, competitors and Public, while

the Macro environment deals with the aggregate these includes the Social-cultural, Economic,

Political, Technology, Global, Demographic and others.

Understanding the internal environment otherwise called organizational environment will enable

to recognize their strength and weakness. The strength will enable them to harness the

Opportunities within their external business environment while minimizing their weakness. The

understanding of their external environment will allow them to understand the threat and

opportunities within the external factors.

3.0 Recommendation

Norman and Govind should scan the business environments continuously and adjust their

business decisions according to the actions presented by their business environment. This is one

of the prerequisites for business success. The business organization is an open system and it

interacts in a dynamic way to affect the business activities. They must align their policy, goals

and strategy in Management style with their business environment.

4.0 References

Worthington and Chris Britton: The Business Environment, Pearson 2006

Justin Paul: Business Environment, 1e 2006, Tata MH• Francis Cherunilam:

Business Environment: Text and Cases, 17/e, Himalaya, 2007.

Campbell, D. J., Organizations and the Business Environment, Butterworth-Heinemann, 1997.

Morrison, J. The International Business Environment: Diversity and the Global Economy,

Palgrave,