Economical and social factors of AHG business environment and strategy

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Objectives:

Find out the economical and social factors and explain their affects on AHG business environment and strategy.

Outline the ways in which the Director of Administration and Corporate services and her team can ensure they provide and effective administration service to achieve Accent`s 'commitment to excellence'.

Business Environment:

Raj M.G and Prakash V [Raj M.G., Prakash V., 2005, 1-2] defined Business Environment as these external factors which have direct or indirect influence on the business or operations of an organization and these external factors are not controllable. These external factors can be the following like customers, competitors, suppliers, distributors, industry trends, substitutes, regulation etc. External factors which are uncontrollable but have effects on any business environment but there are some other factors which are manageable and can be controlled by the organization. These controllable factors called internal factors. The internal factors which have effects on the operations of any organization can be human resources from inside the organization's boundaries, firm's mission, policies and corporate culture. These factors have a major impact in determining the interaction, between human resource management and other departments within the organization as I analyzed in the Starbucks at Stratford and look into their mission and their shop culture its reflect that their staff are working just to provide maximum customer service and their maximum satisfaction to each and every customer I feel that there is a proper coordination of work its seems to be a strong culture in the line of company suppliers, staff, customers, competitors, and other company stake holders like partners and investors.

The economical and social factors and their effects on Accent Hotel Group business are being discussed below.

Economical Factors:

INCREASE IN VAT - A rise in VAT means investment and expansion plans are put off resulting in failing to create more opportunities to increase the revenue. It also increases the costs of their products as AHG management uses outsourcing for different products to serve their customers. Economic Growth - Economic growth is another factor which plays an important role in the growth of any business. In the case of AHG, low economic growth like in recession, downfall of economy destroys the business. In these kinds of conditions, as the income level of consumer drops the buying power drops as well. This effects the growth of AHG business and other businesses as well.

Inflation Rates - Inflation is a condition of increasing prices. It is measured using the Retail Price Index (RPI) in the UK. Business costs will rise for the products which have been outsourcing for AHG through inflation, menu costs, services costs and other costs will rise as AHG has to create new price lists. Also, uncertainty is created when making decisions not least because inflation redistributes money from lenders to borrowers. A firm that borrows L1000 during an inflation period will pay back less in 'real terms' as the value of this money will decline over the period.

Competitors Pricing - Competitive pricing from competitors can start a price war for AHG that can drive down profits and profit margins as they attempt to balance their sheets by increasing the prices of their products and services or at least maintain, their share of the market.

Globalization - Globalization is another factor which affects the business of AHG as the management needs to take actions in order to provide same level of quality services in every chain of their hotels.

Exchange rates - As AHG is an international hotel chain and operating in different countries and as operating a business at international level the exchange rate is another factor in economical conditions that have affects on the business strategy. AHG management needs to keep an eye on the exchange rate in order to get the cheap but high quality products to serve their customers.

Employment rate - Employment rate is another economical factor because it falls in the category of costs as the employment rate increases the costs go up as well. Like in England, per hour rate increases twice yearly and this increase in rate increases the employees costs for the companies.

Social Factors:

Attitude - Attitude is an important factor in customer service industry. AHG is basically a service business and attitude and behavior are those social factors which help to improve the customer services. AHG can plan training programs that how to provide customer services.

Skills - The policy of AHG management is "commitment to excellence" which can be achieved by using right skills. To hire right persons with right education and skills and by improving those skills with training programs, this goal can be achieved.

Working conditions - Working conditions are some other factors like safety, cleanliness, hygiene, professionalism, hospitality, etc and in the case of AHG these conditions need to be at their highest level for employees and customers.

Location - location is one of the important social factors in AHG business as they have four branches in capital cities and many at airports. Due to location factor, AHG attracts more customers especially at airports as people do not want to travels after flights and this location factor plays an important part in their revenues and sales.

There are many ways and steps which can adopt by corporate management and AHG teams can achieve their goal.

TRAINING - a better training program can use to train AHG employees especially about customer services and as being a service industry business, providing better customer services will help AHG to achieve their goal.

QUALITY SERVICES - better customer services are another way to achieve commitment to excellence. The AHG management can use survey in order to find out the shortcomings of their customer services and can design training program accordingly.

EMPLOYEE'S SATISFACTION - if employees are satisfied with their jobs and company then they can provide better services to their customers so to satisfy their employee different schemes or discounts can be used.

CUSTOMER SATISFACTION - AHG business is dependent on the satisfaction of their customers and customer satisfaction is their prime prospective. To achieve the customer satisfaction, trained employee and better services can play crucial parts.

QUALITY PRODUCTS - AHG does outsourcing for different products and they can design a program to keep an eye on the quality of these products so that they provide good quality products to their customers which will be helpful to achieve customer satisfaction.

TQM - total quality management is another way to check the quality of their services, management and all other services. This policy will help AHG management to keep an eye on all their attributes and will allow them to improve along.

PERFORMANCE MANAGEMENT - performance management is another way to check the performance of their manager. The best thing about this policy is that it allows the higher management to check the performance level of their managers and managers will try to apply this policy to their staff.

COMMUNICATIONS - Better and clear communications will be helpful for all employees of AHG because a clear communication process means delivering the instructions with clarity and it will increase the better understandings among all the employees.

PROFESSIONAL REALTIONS - professional relations among the employees of AHG will be helpful for better understandings and better services.

These are some of the ways which can be helpful for AHG management to achieve their goal of commitment to excellence.

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