Strategic planning in tourism Essay

PESTLE Analysis

Strategic planning is a really of import measure that is required before our company before it gets into a joint venture with the other international touristry harmonizing to Ritchie and Crouch ( 2003, pp. 63-81 ) . Strategic planning can be described as a procedural procedure with specific aims every bit good as coveted terminal consequences that can be executed and examined. Basically, it is a method through which we will look carefully into the hereafter of our company, acquire air current of the image of the foreseen hereafter giving mention to the bing tendencies, and influence the forces that will impact us. It involves puting ends and developing an attack to accomplishing those ends.

Strategic planning is a really cardinal activity of concern as the chief purpose is to ease a company in the choice and the organisation of its concern in a mode despite unforeseen disturbances go oning. It is to size up the current every bit good as the jutting future status by determining the way of the house, and develop agencies of accomplishing the mission. In analysing the company ‘s future joint venture with this other company, we shall do usage of a PESTLE analysis ( Political, Economic, Social, Technological, Legal and Environment ) to acquire clasp of the right information required for this partnership.

Strategic Planning in Tourism

Sing the manner the touristry industry is vivacious and unprompted, the significance of strategic planning will together and hand in glove have control of the future outlooks and the destiny of the concern even with the alterations in the surrounding environment. In the past, planning in touristry has experienced strategic alterations with the progresss in new engineerings, the chase of a relationship attack with clients and providers, every bit good as the importance of sustainability issues in selling. Social orientation for our company will take into consideration the demands every bit good as the wants appropriate to the clients and besides will non disregard the long-run economic, environmental, societal and cultural involvements of the local population. There is significant grounds that promotes the importance of our organisation utilizing strategic direction constructs in order to execute good.

Strategic planning will assist better our organisation ‘s public presentation harmonizing to Vanhove ( 2005, pp. 63-71 ) . In fact, through strategic planning in topographic point we will exhibit superior long term fiscal public presentation both comparative to the industry sector and in absolute footings. Over the past two decennaries, there has been increasing acknowledgment of a possible function for constructs of strategic direction and their application in assisting organisations in the touristry industries achieve and maintain competitory advantage and we are taking to go portion of this. The strength and value we have in strategic planning utilizing the PESTLE tool of analysis is that it will help us in understanding the dynamic and complex nature of our environment and in believing through jobs in a strategic mode to get at more sound determinations. Therefore, strategic planning is a must for us. I intend to utilize an organisation based in Malaysia.

Political Factors

We must analyse the nature of fundamental law of the female parent state ( Malaysia ) of our spouse. The construction and organisation of a state ( Malaysia ) has a batch to state on the determination we are about to do. It is really important that we set up the influence the authorities has on the thriving of the touristry industry in that peculiar state. It is imperative that we set up whether the authorities has a strong association with many of their major concerns, either moving as a beginning of equity or holding an active engagement in the running of these concerns. This factor may or may non put strain on the company ‘s success in exporting our country of operation because the authorities could be found frequently concentrating much of its influence towards advancing the success of all organisations found in the touristry industry.

The Government could be one which is widely inflicted with corruptness and extremely influenced by graft. This may be due to the fact that the construct of corruptness & A ; the values assigned to it are culturally located, where actions seen as corruptness and malpractice could be accepted pattern in the state, doing struggles among the involvements of relevant stakeholders in the touristry industry and its operation. This could nevertheless be in the procedure of being combated by a freshly introduced run against corruptness and cronyism within authorities.

Economic Factors

The currency used within the state of entry is besides a major factor to be considered. For case in Malaysia, the currency is the Malayan Ringgits ( RM ) . With 2.83334 RM equal to 1 AUD ( Malaysia presently holds a Gross Domestic Product ( GDP ) of US $ 147 billion which converts to about RM499.288 billion. It besides occupies a GDP per capita of US $ 5570 of which continues to turn at a rate of 5.5 % . This is a lessening from 2004 of which the growing rate was at 7.1 % , nevertheless has increased since 2005 by 0.3 % . Malaysia is presently the most developed of the universe ‘s developing states. Private ingestion makes up about half of Malaysia ‘s Gross Domestic Product ( GDP ) , with a per centum of 46.3 in 2003.

The monetary value H2O Coopers ( 2005, par. 5-8 ) indicated that Malaysia ‘s unemployment rate has declined over recent old ages due to improved labour market conditions. 2003 statistics display the low unemployment rate of 3.5 per cent. The Australian and Malayan authoritiess have a good ongoing relationship, with Australia in the thick of active dialogues with Malaysia in respects to Free Trade Agreements harmonizing to Fletcher and Brown ( 2005, pp. 23-67 ) . This nexus between the two states is beef uping as clip base on ballss due to the regularly held meetings including the Joint Trade Committee, bilateral visits, and besides APEC ( Asia Pacific Economic Cooperation ) assemblages and the ASEAN ( Association of South East Asian Nations ) regional forum of which Malaysia is an active member of both.

With such strong ties between the two states ( due to the big export market existent in Malaysia for Australia and besides Malaysia being the 12th largest trading spouse to Australia ) this makes trade between the two states much easier as Australia has become a good trusted provider of a assortment of goods to Malaysia for many old ages, and has formed a positive relationship with Malayan consumers as shown in the Austrade, Malaysia Profile ( 2007, par. 7-12 ) . Malaysia has an purpose to achieve a developed state position by the twelvemonth 2020. It is through a five twelvemonth program that the Malayan authorities programs to make this end. The debut of merchandises, which help this procedure, will be readily accepted in the state. Such an illustration of this includes the sale of mineral H2O that aids in relieving the job of Malaysia ‘s dirty H2O supply, which is typically existing within developing states.

Social and Cultural Factors

As society is invariably altering, it is indispensable that we identify these alterations and how they may potentially impact us. The Malayan population is presently set at 26 million people harmonizing to Austrade, Malaysia Profile ( 2007, par. 5-7 ) , and holds an approximative population growing of 2.4 % per annum. With projected results calculating a population of about 31.4 million by 2025 as indicated in Earthtrends ( 2006, par. 4-9 ) , it is sensible to state that this growing may besides potentially lead to the growing of the market for bottled H2O.

In Malaysia concern is conducted otherwise from the manner it is conducted in Australia: the Malaysians topographic point great weight on constructing a personal relationship with concern spouses prior to making concern with them. It is hence of import for Australian concerns to take clip to assistance in developing these relationships, frequently through the class of a repast and besides by avoiding manners which they may happen violative, such as offering something over to them utilizing your left manus, neglecting to turn to them utilizing accurate rubrics, and dressing unsuitably ( particularly adult females who are expected to dress cautiously ) as found in the Austrade, Malaysia Profile ( 2007, par. 6-11 ) .

The chief linguistic communication spoken in Malaysia is Bahasa Malay, nevertheless English, Chinese idioms, and Tamil are besides spoken amongst several subcultures. This may do communicating during concern dialogues hard due to a deficiency of apprehensions or misunderstandings as portrayed in Cultural Profiles Project ( 2002, par.10-23 ) . However, it is most common than non, that English is used when taking portion in concern treatments harmonizing to the facts presented in the Austrade, Malaysia Profile ( 2007, par. 11-16 ) . There are a huge assortment of spiritual beliefs throughout Malaysia. All of which by and large have a high regard for one another due to the spiritual freedom granted by the fundamental law for all except those who are born as Malays, in which instance they are declared Muslims by jurisprudence as shown in Cultural Profiles Project ( 2002, par. 10-23 ) .

Islam, being the most dominant faith within Malaysia, normally reflects non merely a set of values and beliefs but besides by and large besides a manner of life. The Islam rites must hence be taken into strong consideration. During the holy month of Ramadan, followings of Islam undertake a fast, where they are restricted from leting anything to come into contact with their lips, this including the ingestion of any nutrient or drink ( including H2O ) from Sun rise to sunset for each twenty-four hours of the month. Therefore throughout this month, the industry is likely to see a low season of tourers. However, as much of the population is besides made up of Buddhists, Hindus and Christians, we must be careful as to non pretermit these sectors of the economic system by go oning to run into their demands throughout this month besides.

Technological Factors

With the development of new engineering so excessively has come the development of a big possible menace towards the success of the touristry industry as there is more usage of the cyberspace than the travel bureaus in selling. Tourists have been found to do engagements for their finishs for vacation online. The touristry vacation finishs engagements through travel bureaus have for a long clip been in usage since clip in the yesteryear. These services are undefinable since they can non be touched. The public-service corporation enhanced hence to the client is experiencing the services being offered. The touristry falling under this class of services hence needs an exerted attempt to do certain that they are felt by the client.

The excellence in the advertizement channel has been realized through the inclusion of such characteristics of services pertinent to the touristry industry. The cyberspace harmonizing to Vanhove ( 2005, pp. 63-71 ) has hence been instrumental in doing a wider coverage of the possible sections than the travel bureaus harmonizing to Kehoe ( 1996, pp. 45 – 67 ) . It is hence needed that any advertisement bureau should make a necessity in the possible clients refering the finish of the proposed vacation. Unlike in traditional tools of selling, the cyberspace is really flexible in updating the information. The touristry sector is an of all time turning filed that experiences alterations from clip to clip. The handiness of these services in Malaysia will do our occupation easier in the entry procedure into the market.

Legal Factors

The Malayan authorities has passed statute law to guarantee the protection of their wildlife and rain forests, which may in bend have a negative consequence on the engagement procedure in a joint venture with this company in the Malayan state. The authorities close monitoring of its resources in the touristry sector could be a great challenge to get the better of in the procedure of set uping ourselves in the state of Malaysia. The sector seems to be more controlled by the Torahs regulating the land which means there could be a significant sum of challenge for aliens in acquiring established in the touristry industry. This will be found to hold a major influence on our subject Parkss.

Environmental Factors

With Malaysia ‘s wet content which is approximately 80 % throughout the twelvemonth on norm with temperatures which range from 21 to about 32oC it is extremely affected by monsoons which normally occur throughout November to March in the Northeast and May to September in the Southeast. Therefore with the state ┬Čbeing preponderantly flood prone throughout the bulk of the twelvemonth, with heavy rainfall during the staying periods, it is frequently faced with many clime crisis as depicted in Cultural Profiles Project, ( 2002, par. 3-5 ) . The wake of these inundations frequently cause sewerage to overrun into infected armored combat vehicles and oxidization pools, doing their manner finally into the armored combat vehicles and lights-outs of household places.

This dirty, tap H2O is most frequently unsuitable for imbibing and frequently even bathing and cleaning due to its low hygiene degree and overly high ammonium hydroxide contents. In these state of affairss consumers are forced to look towards alternate H2O beginnings for day-to-day usage, other than tap H2O, therefore giving tallness to consumer ‘s general demand in the full touristry activities. It has besides been apparent that many Malayan occupants have used bottled mineral H2O non merely for imbibing but besides to rinse kitchenware and cookery utensils as to avoid hazards involved with utilizing the unhygienic pat H2O, this may turn out to be a challenge to our enlargement procedure as much is needed to run into the demands of the tourers.

The polythene terephthalate ( PET ) normally used for doing fictile H2O bottles is derived from rough oil. This may raise issues within Malaysia ( who tend to be an environmentally witting state ) , as Malaysia is place to ‘one of the most complex and rich ecosystems in the universe ‘ and used bottles produce toxic byproducts, some of which include Cl gas and ash incorporating heavy metals.

Market Analysis

We are viing in the country of supplying touristry services within Malaysia. The tendencies in touristry activities in Malaysia have changed significantly as life criterions have risen over the past several old ages and the bulk of Malaysians are traveling towards a more advanced life style. Ritchie and Crouch ( 2003, pp. 63-81 ) say that, with this increased wellness witting attitude and travel towards urbanisation, a larger market is expected to be realized in the touristry industry which offers all kinds of recreational installations.

Our chief purpose is to put a suited bundle for tourers that come to see Malaysia. Since our mark market is divided into parts there are seven to take from which are Asia, Europe, Middle East, Africa, North America, South America and Australia, with our chief marks based on Middle Eastern and European parts because they are the large Spenders due to their strong currency rate. Europeans frequently leave their state during their winter clip to avoid the cold conditions and have an gratifying clip on our beaches therefore we aim to take this chance to catch them and propose similar fantastic topographic points that they could see in our state.

Middle Eastern tourers are known to see Malaysia during the center of the twelvemonth as they tend to prefer tropical conditions and besides to shop. Furthermore they feel comfy visiting here because Malaysia is an Muslim state. Other part such as Asia, Africa and America are portion of our mark every bit good but our focal point would non be every bit much as the other two parts that have been mentioned. We take our beginnings from the Malayan Tourism Statistics web site, which states that the English people from the European part are the most figure of people who visit Malaysia. From the Middle East most travellers to Malaysia are from Saudi Arabia. Based on the same statistics, we would wish to concentrate more on that.

Our chief aim is to offer a bundle usage suited to their involvements. For illustration, a tourer from China normally would wish to chance before sing the beaches. Therefore, we set up a bundle to Genting Highland and perchance someplace along the east seashore of Peninsular Malaysia. Our chief rivals would be companies that have been good established in the industry, such as Mayflower, etc. To vie, we need to offer bundles that could convert our clients and convert them to choose our circuit bundles instead than our rivals ‘ .

Tourism is a moneymaking sector in Malaysia that would hike the state ‘s economic.

That is really true, as mentioned by Malayan authorities when they mooted the thought few old ages back to get rid of the enrollment to construct Casino. Malaysia is hence expected to continuously reinvent itself to prolong its economic growing. More centres such as Incorporate Resorts ( IR ) have been approved to the slack building industry, every bit good as create more resort centres for tourers. The market forces in this case have pushed a authorities to re-position to derive economic growing. Malaysia continues to be an economic leader in Southeast Asia and an of import market for the U.S. , supplying much to both the exporter and investor in a similar mode.

The Joint Venture

Having considered the above factors that could impact our entry into Malaysia ; the followers are some of the grounds why a Joint venture would be a more efficacious manner of entry.

Reasons for organizing a joint venture

  1. It will assist in edifice on the strengths of our company.
  2. A joint venture will assist distribute costs every bit good as hazards which are involved in planetary scheme and enlargement.
  3. This will bettering entree by our organisation to fiscal resources
  4. A joint venture will assist us bask the economic systems of graduated table and besides the advantages of size
  5. It will be besides of benefit in accessing new engineerings every bit good as clients
  6. Furthermore, there will be an entree to innovative managerial patterns

In order to accomplish our competitory ends, a joint venture in come ining Malayan market will assist in the undermentioned ways.

  1. Influencing the structural development of our company and the full industry
  2. A joint venture will do us remain in front of completion as it Pre-empties competition
  3. Furthermore, a joint venture offers a defensive response to film overing industry subdivisions and boundaries
  4. We know that we will see the creative activity of stronger units of competition.
  5. A joint venture will increase the needed velocity to market and besides improved legerity

Advantages of the Joint Venture

Gain entree to rational belongings, engineering, accomplishments, and endeavor every bit good as material resources including funding, which it would otherwise be unable to obtain. The joint venture in this instance will be in a place to supply us with the opportunity to increase new capableness and know-how. It is besides expected that we enter in this related concerns or this new geographic market places or derive new high-tech information. A joint venture of this signifier will give us an entree to greater resources, including specialised staff and engineering and besides the distribution of hazards and menaces with the spouse.

Joint ventures establishment can so be flexible. For case, a joint venture entry can hold a restricted life span and may merely dwell of a portion of what we as a company make, therefore keeping both our committedness and the exposure of the concern. This joint venture will offer us a resourceful manner to come out of non-core activities of making concern. Companies can easy detach a concern from the full organisation, and eventually, sell it out to the other chief company.


The ability to originate and drive alteration is a cardinal component of entrepreneurship and is important to prolonging the length of service and competitory advantage of our company. However, it could be argued that the gait of alteration within the current environment can do it hard for our company to last allow entirely originate an docket for alteration in the planetary enlargement procedure. There are two cardinal factors finding the nature of the competitory environment we are come ining into: the measure every bit good as quality of the hazard takers which form other new concerns in touristry sustaining and developing bing 1s ; and the being and enlargement of spirited forces which shape the fight in the whole parts every bit good as in the industries.

This fight is driven by the volume and part the touristry services make to, the Malayan and planetary economic system following the parts of Ritchie and Crouch ( 2003, pp. 63-81 ) . We should hence be receptive to factors that occur within the external environment. Therefore, our organisation and its employees need to be flexible to alter. This will bring forth a sense of invention in the joint venture and stress the ability to be originative in the attack to developing new merchandises and services and besides responding to the exchange of information received by the organisation ‘s stakeholders.

However, there are a figure of factors that can take to this procedure of alteration weakness. The cultural orientation of the house can be one of the biggest hurdlings to instilling the procedure of alteration and can ensue in a deficiency of flexibleness to alter. Our spouses can go entrenched in their ain concern patterns, with deeply embedded concern modus operandis and procedures, taking to reluctance to introduce. This latter point reflects what is known as the ‘endowment consequence ‘ in concern battle, defined as the ‘fear of loss being stronger than the attractive force of addition ‘ therefore taking to a civilization of opposition to alter.


It has been acknowledged that alteration is an ever-present characteristic of organisational life which all organisations in all industries are affected by. This includes the attempts made by our company to come in into the Malayan touristry industry, which is progressively faced with alteration. There is hence needed an apprehension of alteration direction is important, irrespective of the size or intent of the concern. It is non surprising that touristry will take a predominately reactive and ad hoc attack to alter direction the directors might perchance be constrained by limited ‘know-how ‘ in alteration direction kineticss and procedures. It could be argued that more witting determinations being made sing the direction attack to alter would enable us to seek out ways in which a competitory advantage can be gained.

The attack through PESTLE analysis is a really of import strategic be aftering tool in pull offing organisational alteration in touristry planetary entry and enlargement ; although arguably non by witting pick, can be characterized as being rough incremental, bumpy uninterrupted and planned. Furthermore, it can be argued that an attack concentrating on easing alteration instead than supplying programs for how to cover with single alteration enterprises should be advocated in the joint venture scheme. The direction seemingly should non emerge through opportunity and happenstance but instead through pick and determination as realized in the PESTLE analysis. Refering alteration that is characterized by how it comes approximately, the attack adopted by a bulk of directors is chiefly planned. Our enlargement procedure requires persons who are adaptable, flexible and non-complacent, who strive for uninterrupted acquisition and betterment, who are matter-of-fact and willing non merely to undergo alteration, but besides to place, originate, program, implement and pull off it at all degrees of the organisation. In order to retain these persons, the organisation must value and acknowledge from the outset their part through uninterrupted motive, challenges, wagess and the chance for personal development.


  • Austrade, Malaysia Profile ( 2007 ) , – accessed March 2010
  • Cultural Profiles Project ( 2002 ) , – accessed March 2010
  • Earthtrends: The Environmental Information Portal ( 2006 ) , ; World resource Institute- accessed March 2010
  • Fletcher, R. & A ; Brown, L. ( 2005 ) , International selling: an Asia-Pacific position, Prentice Hall, Sydney, pp. 23-67
  • Kehoe, B.P. , ( 1996 ) . Zen and the Art of the Internet ( 4th edn ) . Upper Saddle River, NJ: Prentice Hall, pp. 45-67
  • PricewaterhouseCoopers ( 2005 ) , ‘Malaysia ‘ , – accessed March 2010
  • Ritchie JRB, Crouch GI. 2003. The Competitive Finish: a sustainable touristry position. CABI Publication: Wallingford. Pp. 63-81
  • Vanhove N. 2005. The economic sciences of touristry finishs. Elsevier: London. Pp. 63-71