Businesses are affected by internal and external factors; to attain competitive in contemporary business era, business leaders need to manage their internal and external environments effectively. An understanding of prevailing business environment is crucial to make responsive business strategies that effectively address challenges facing an organization (Fred, 2008). This paper undertakes a PEST analysis on Italian restaurants in London.
Politics
It is through some political formation that rules and regulations are made in an economy; the government sets rules that should be adhered to by all businesses operating in the economy. Some of these rules may work for the benefit of the hospitality industry and some for the worse.
An example of political situation is when the country is undertaking national elections; during this time the hospitality industry mostly one that depends on tourists is negatively affected. The flow of Italians in the country is reduced creating a shortage of business in the restaurants. When the country is calm and political decisions favor the flow of international trade, there is high chance of Italians visiting the country and creating business for the hotels (Haberbeg and Rieple, 2001).
Social
Modern societies have continued to adopt new systems and styles of living, there are high levels of culture diffusion as people trade and interact. With the situation, there has been the emergence of social classes that can try other nations or cultures foods. With this notion, there are an increasing number of non Italians who are trying Italian foods; this is working for the benefit of Italian hotels in London (Jackson, 2002).
Technology
In modern civilized worlds, there has been the development of technology systems to undertake various activities in business sectors. For instance processes have been made simple and effective with the use of computers and other technologies. The United Kingdom is one of the nations with high level of technological developments, with this state Italian countries operating in the country benefit from low cost of operation that in turn lead to high profits.
London is a metropolitan state, this means that Italian restaurants operating in the state have higher tendency of getting Italian customers than those operating in other states. The strategic position of the city is to the advantage of Italian restaurants as accessibility is easy, this is further accelerated by good transport and communication systems in the state (Borkowski, 2009).
Economical situation
United Kingdom is one of the world richest countries, the country has reliable infrastructures and the living standards of the people are relatively high compared with other nations. The country has continued to have positive economic development with much emphasis placed on improvement of people’s social welfare.
The state of the economy works for the good of Italian restaurants as they can get customers from the balanced state. The world is recovering from global financial crisis of 2008; the state of the world has led to economic retardation of countries and their states. Italian restaurants in London are suffering from the effects of the crisis; they are experiencing slowed growth as people income has reduced with time.
Conclusion
Italian restaurants operating in London are facing a slowed positive growth in their revenues and expansions. Growth is enabled by the state of the metropolitan city but slowed by the effects of global financial crisis of 2008. Leaders in the sector need to be sensitive of changes in the industry and make policies to address any negative change.
References
Borkowski, N. ,2009. Organizational behavior, theory and design in healthcare. London: Jones and Bartlett.
Fred, D. ,2008. Strategic Management: Concepts and Cases. New Jersey: Pearson Education.
Haberbeg, A. and Rieple, A., 2001. The Strategic Management of Organizations. London: Prentice Hall.
Jackson, S., 2002. Diversity in the workplace: human resources initiatives. New York: The Guilford Press.