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PESTTG Analysis
PESTTG Analysis
The tool we use for understanding the macro-environment (big picture) in which we operate.
The Big Picture
PEST
PoliticalEconomicSocialTechnicalMegatrendsGlobalisation
Political
Critical Success Factor
Your main Critical Success Factor is your ability to:
COMPLY WITH THE RULES
Political
ecological/environmental issues – kyoto protocol current legislation host market future legislation international legislation regulatory bodies and processes government policies ADS (Approved Destination Status) government term and change trading policies (FTA’s) funding, grants and initiatives home market lobbying/pressure groups international pressure groups wars and conflict
http://www.eturbonews.com/8828/tourism-and-politics-collide-thailand-and-fiji
Rules of the game
You must understand government policy relating to your industry
Most policy is discussed for months and sometimes years in advance
You going to monitor these potential changes that could seriously affect the viability of your business
Economic Environment
Economic
home economy situation overseas economies general taxation issues taxation specific to product/services seasonality/weather issues market and trade cycles specific industry factors market routes and distribution trends customer/end-user drivers interest and exchange rates international trade/monetary issues
Burton’s Four phases of Tourism Participation
Phase Economic Developments Tourism Participation
ONE Mainly subsistence-based and pre-industrial.Rural, Agrarian.Large Gap between poor masses and small elite.
No mass participation in tourism.Elite travel to domestic and international destinations.
TWO IndustrialisingRapid Growth of urban areas.Growing middle class
Widespread participation in domestic tourism .Increased scope of international tourism by elite.
THREE Almost industrialised.Population mostly urban.Middle class becoming dominant.
Mass participation in domestic tourism, and increase in short haul international tourism.Elite turn towards long hall international tourism.
FOUR Fully industrialised ‘high tech’ orientationMostly urban.High levels of affluence throughout the population.
Mass participation in domestic and international (long haul and short haul) tourism
Economic Environment
The most common approach to the study of economics of tourism is to divide it into two major areas:
Supply (destination resources) Demand (people or market)
Supply
Movements away from the market equilibrium cause inefficiencies
Undersupply of product, leads to high prices and profit loading, with not everyone being able to buy what they wish, frustration
Oversupply of product leads to low prices and questionable sustainability, empty rooms, unused capacity, inefficiency of investment
Demand
Demand = Motivators x Facilitors Resistance Factors
Economic Factors affecting demand Disposable Income
Inflation Interest rates (including Official Cash rates) Employment Foreign Exchange Rates
Non-economic Factors Health Time
Socio-Cultural
Socio-Cultural Impacts
People and their attitudes are the focus of socio-cultural impacts.
Social lifestyle trends demographics consumer attitudes and opinions media views law changes affecting social factors brand, company, technology image consumer buying patterns fashion and role models major events and influences buying access and trends ethnic/religious factors advertising and publicity ethical issues trinketisation overcrowding corruption
Technology
Technology
Technology
Scan and evaluate horizon looking for changes in technology that will enhance business
More to technology than just computer technology
Think faster, lighter, stronger, Think of how you can make your customers
ability to book easier! If you aren’t innovating I bet your competitors
are!
Technological competing technology development research funding associated/dependent technologies replacement technology/solutions maturity of technology manufacturing maturity and capacity information and communications consumer buying mechanisms/technology technology legislation innovation potential technology access, licensing, patents intellectual property issues global communications research and development
MegaTrends
Advancements in Communications
Internet Smartphones Tablets Laptops Wi-fi Accessibility Viral marketing Blogs Forums Youtube
Eco Tourism
ENVIRONMENTAL PROTECTION Protect natural assets Conserve resources Maintain cultural assets Protect lifestyle Monitor Impacts Set limits to change
Aging Population
Over 50% of the discretionary spending power
boomers accounting for about 80% of all leisure travel
10,000 Baby Boomers will reach the age of 65 every day for the next 18 years
http://www.youtube.com/watch?v=bu4v1F2LwpM
Globalisation
Globalisation
International Competition Legislative requirements across Borders Passport and Visa obligations Diversity of staff Cultural misunderstanding Company structure
Using PEST to develop strategy
Change type (PESTTG) Nature of change Impact implication Market driver Key success factors for winners Strategy response
Using PEST to develop strategy