External Business Environment
Task 1.1 Structure and operation of the UK economy • UK is a 10h largest economic nation in the world and 5th largest national economic country. It is a fastest growing economic country in glob. • This place can be called birthplace of industry revolution as well as a place where the technology is continuously develop and change. • Economy of UK was highly affecting during World War 1 and 2.
Conti…. • But, now in the present time, this nation is become more globalized and most of the countries are learning the lessons from it to improve good economic system. • In 2008 recession period, economy of UK was greatly affected but government was taking different measures and actions to minimize the impacts economic downturn on nation and businesses. • UK believes in free movement of goods, people, services, money etc in all countries. It is a part of European Union but still deal in own currency i.e. Great British Pounds.
Conti….
Conti…. •About to 25% land of UK is arable which is not suitable for agriculture activities. •It is count in 20th largest labour force across the world but more than 40 million populations are still facing unemployment situation. • It is growing with the rate of 8% every year which is not good for the nation.
•1.4% labour are in doing job in agriculture, 20% are manufacturing sector and 81% are engaging in service industry.
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Conti…. • UK is a home big MNC's and these all are running their offices in different nations and serving the community with different purpose.
•
Due to high competition, a perfect competitive market is developing.
• UK is a country where natural resources are found in plenty amount and due to this, most of the nations are doing importing and exporting business with it. • Such kind of business is major source of earning for the country. Finance and banking are two most important services of UK.
Task 1.2 Analysis of current government economic policy and its effect on business and service industry • Present UK government economic policies are related to monetary and fiscal policies. Impacts of these policies on Red Carnation Hotel are as follows: • Monetary policy: UK government has developed and imposed monetary policy on different business industries for taking decision regarding supply of money and interest rate.
• The main aim behind formulation of this policy is boost up nation economy and prevent it from any economic downturn in future.
Conti…. • Central Bank and NBFC's are focused on monitoring monetary policy. They are either decreasing or increasing the interest rate with an intention of maximize or minimize the supply of money in the market. • In the case of lower interest rate, it can be easy for the hotel to take cheaper loans as well as increase spending on different business operations. • But, if interest rate is high than organization can face difficulty to acquire loans from the bank and market.
Conti…. • Along with this, customers will cut down their spending on luxury products and services. • It will directly affect financial performance level of Red Carnation Hotel.
• Hence, hotel has to modify its business operations according to the changes in monetary policy.
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Conti…. • Fiscal policy: It is related to taxation and spending and it is formulated by UK government. Generally, government has increased tax on goods and services for increasing revenue and giving simulating growth to the economy.
• Demand of Red Carnation Hotel services is increasing with the time. • In this context, hotel management hires more and more employees to increase the level of hospitality services. • For this, organization pays high amount because of increase tax rate and it leads to raise the prices of final services.
Conti…. • Due to increase tax rate, service users are cutting down their spending over the consuming Red Carnation Hotel services.
• The result of it is it will decrease the sales of services and lower down financial performance of hotel. • The above discussion shows that monetary and fiscal policies of UK government positively and negatively affect the business of Red Carnation Hotel.
Task 1.3 Income, wealth, employment and occupational distribution in relation to the provision of business and service operations • Hospitality industry of UK gives huge contribution in developing the economic condition of nation. • Red Carnation Hotel offers different types of services to the customers which are very much expensive. • It is very well known that growth of hospitality industry is completely depending on the buying power of service users.
Conti…. • Income earns from the target customers is a major source of hotel which makes it more competitive in the marketplace. • Improved and good quality services of the organization help to meet customer satisfaction level with the time. • This thing attracts customers and leads to improve the wealth of Red Carnation Hotel. In 2015, net income of hotel is about to $3310 million. • This thing attracts customers and leads to improve the wealth of Red Carnation Hotel. In 2015, net income of hotel is about to $3310 million.
Conti…. •Wealth defines the quantity of valuable and priceless resources that occupy by the organization to run its different business operations. • It can be said that total market value of intangible and tangible resources. •Due to high income level and good wealth of Red Carnation Hotel, employees like to stay long with it as well as try to bring new innovations and improvements in the hospitality services. •Along with this, to enhance the quality of services and deliver the great experience to the customers, hotel management starts to give training to the staff.
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Conti…. • Changes in economic condition of UK brings alteration in the wealth of people. • The result of this, needs and requirements of the end users become change. • Allocation of roles and responsibilities between the employees is done on the basis their abilities and skills.
• So, effective occupational and employment distribution within Red Carnation Hotel are important to run the business operations in a successful manner.
Task 1.4 Demographic trends that influence the employment pattern in the hospitality industry • Percentage of working women between the age of 16 to 64 increases as compare to working men. • The number of women part time work has raised as compare to part time working men in 2014 by 18.1%. AGE
PERCENTAGE (%)
16-24
34.3
25-49
48.5
50-State Pension Age
14.0
SPA
5.1
MALE
FEMALE
47.2
55.6
Conti…. • From the last 40 years, the percentage of working women between the age of 16 to 64 increases as compare to working men. • Between the period of 2008 to 2014, the number of part time employed people in hospitality industry. • The number of women part time work has raised as compare to part time working men in 2014 by 18.1%. To get the opportunities of working in hospitality sector to women has boost the economic conditions of UK.
Conti…. • From the following trend, it has been forecasted that by equalising labour force participation rates of both men and women I UK will increase GDP of nation by 10% at the end of 2030. • But due to caring responsibilities, most of the working women left the jobs and start do more part time occupations. • It has drop out the full time employment percentage of working women. • On the other hand, the percentage of part time working women in UK in hospitality sector has raised by 6.5%.
Conti…. • In hospitality industry, the breakdown of workforce according to age group and gender is showing in table. • Rate of women between the age of 25 to 49 has significantly dropped down in 2013 in hospitality sector.
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Conti….
Conti…. • The statistics of 2011 shows that 4.9% of UK economy has accounted by hospitality sector and 1 out of the 15 people of UK are engaging in this sector. • In the present time, this area is providing about more than 2.1 million jobs to the UK community and it is able to give 7.5% employment out of the total working population.
Task 1.5 Social structures of people employed in Red Carnation Hotel Category
Male (%)
Female (%)
Manager
52
48
Non Manager
48
65
Conti…. • Red Carnation Hotel is a major group of hotel in UK and more than 2000 people employed by hotel at different locations across the world. • In the future, hotel is planning to increase the number of workforce at global level. • The female ratio who are currently employ in hotel is about 60% and rest are men. • These figures shown that Red Carnation Hotel is giving equal opportunities to both female and male.
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Conti…. •Average salary of working women in Red Carnation Hotel is £19,000 - £70, 254 and average salary of working men is £19,000 - £65, 524. •If the entire hospitality industry has taken into the consideration than it has found that the average salary of employees is not more than £250 per day. •Although, the jobs in this sector area are stable but not too much secure. •It has brought decrement in employment percentage in UK by 2.1%.
Conti…. • Average salary of working women in Red Carnation Hotel is £19,000 - £70, 254 and average salary of working men is £19,000 £65, 524 • It is most important to resolve the following problem because it gives about to 7.2% contribution from total revenue of UK economy
Conti….
Conti…. • From the above figures, it has been clear that UK hospitality industry is most popular between the young age people for doing the jobs. • The male and female ratio in the sector is nearly equal and they are earning very good income. • There is only one single issue in hospitality industry of UK is lack of employment as compare to another industries. • It is most important to resolve the following problem because it gives about to 7.2% contribution from total revenue of UK economy.