1. Chapter 5

2. Chapter 5 Strategic Management Model
Environmental Events
Remote
Task
Industry
Firm
Functional

3. Comparison of Inductive and Deductive Approaches to Environmental Scanning
A theory is formulated about
how this pattern will affect the firm
The scanner suggests a hypothesis about these patterns
The scanner observes activities
in the environment
The scanner confirms
the observations with research
The scanner observes activities
in the environment
The activities form a pattern of events that will probably shape a trend
The scanner suggests a hypothesis about these patterns
A theory is formulated about
how this pattern will affect the firm

4. Tracking Value Drivers
Sub-
categories
Identify the primary
sources of
information
How often
do you review
this informa-
tion?
Based upon your information sources used, list and briefly describe
the key value drivers you believe are important to monitor in
understanding the cause and effect relationship with your firm.
Key
measures of economic
well being
World Bank
OECD
Domestic Statistic Offices – US Department of Census
Monthly
KEY value drivers:
GDP (Gross Domestic Product)
Private consumption
Brief outlook on the key value drivers
Real GDP growth is projected to decline from 3.4% in 2000 to a range from 2.2 to 2.8% in 2001, and to remain in a range from 2.1 to 3.1% in Domestic demand is expected to decelerate and the contribution of external trade to growth is projected to weaken significantly in 2001 and to be broadly neutral in both 2001 and 2002.
Private consumption growth is expected to decline from 2.7% in 2000 to % in 2001, and to be % in This reflects continued strong growth of real disposable income, mainly due to the implementation of tax reductions in a number of countries.
After a year of particularly strong performance, economic growth in the OECD area has been weakening since the autumn of The 2001 growth rate is projected to be half that of 2000, at around 2% and the long-running reduction in unemployment is projected to come to a halt. However, the forces dampening economic growth are projected to dissipate in the second half of 2001, leading to a growth rate of 2.5% to 3% over the following twelve months. Inflation is expected to remain low.

5. Cause and Effect Relationships of Value Drivers From the Remote Environment to the Impact upon the Firm

6. The Relationship of Value Drivers and Possible Outcomes in the Remote and Task Environments of the Hospitality Enterprise

7. Likelihood of Wage Increase due to Settlement with the Union
Event
(A)
Possible wage
increase
percentage (B)
Probability of
wage increase (C)
Expected value
(D) = (B) x (C)
Low increase 2%
30%
.6 %
Medium increase
2.5%
60%
1.5 %
High increase
3.5%
10%
.35%
Total expected percentage increase in wages due
to settlement with union
2.45%

8. Hotel Industry Cycle Curve
Hotel Industry Cycle Duration (years)
High
Low
High to High
Low to Low
Expansion
Contraction
1967
1969 2
1972
1974 5 3
1976
1977 4 1
1980
1981
1984
1986
1989
1991
Mean
4.4
2.8
1.7
Standard Deviation
0.5
0.9
0.4

9. Leading and Lagging Indicators for the Hotel Industry

10. Competitive Methods of Multinational Hotel Companies Over the Ten Year Period of Analysis
Number of Competitive Methods
Direct to
Consumer
Marketing
Human
Resource
Programs
Revenue
Max.
Frequent Stay Perks
Return to
Core Business
Database
Systems
Business
Services
Environment/ Conservation
Courting
Travel
Agents
Management Contract
Limited
Service
Resort
Brands
Going Global
Meetings
Market
Service Concept
Yield Mgt.
Cost
Containment
Price
Discounting
Niche Marketing
Purpose of visit marketing and
advertising
Brand
Proliferation
Amenity
Programs
Use of
Technology
Frequent Stay Programs
Strategic
Alliances
Computer
Reservation
Systems
Decade of Analysis