Organization Expansion

Expansion of Organization



Expansion of Organization

Introduction

In today's world where entrepreneurship and owning your own business is considered to be the latest fashion to acquire wealth and status we see a lot of new businesses launching every month and every year but only few of them are able to maintain their position in the cutthroat competition and rivalry. This paper talks about the expansion plan of the hotel into the Eastern Europe region. The paper outlines the expansion plan and recommends strategies and challenges that the hotel management would likely to face during their expansion of the business.

Organization Selected for Expansion

Global Hyatt Corporation is a US based organization that operates the business of hotels and motels. There are two hotel companies with the name of Hyatt Hotels Corporation and Hyatt International from which Global Hyatt Corporation operates all their businesses. Hyatt hotels leases, franchises and operates a number of hotels and resorts. Besides hotels Global Hyatt Corporation also runs the business of casinos (Hyatt.com, 2010).

PEST Analysis

Following is the PEST analysis for hotel industry in Russia:

Political Factors

The collapse of Soviet Union caused its impact on business in variegated aspects. For instance, after the collapse of Soviet Union the Russia was indulged mainly in exports to satisfy the needs of consumers. First it gave a boost to the development of foreign hotels in Russia. Secondly, it gave rise to the sales of the hotel industry as foreigners and foreign investors used to visit Russia to look after their business as the Russians decided to consume exported goods (DataMonitor, 2009). Russia exited a strict socialist regime to become a more economically open society during 1991-2009. Throughout this period, Russia has endeavored to closely integrate with the international community, resulting in large investments pouring into the country.

Economic Factors

The business of hotel and motel industry is also dependent on the travel or tourism sector because boost and prosperity of this sector generates sales for hotels and motels. When we talk about the economic statistics the first thing that comes to mind that can affect the sales of the hotel industry is the unemployment rate. The unemployment rate is increasing in Russia. The number of unemployed individuals rose from 4.6 million in 2007 to more than 6.4 million in 2009, with an unemployment rate of 8.4%. In 2010, the number of unemployed individuals stood at 5.6 million, with an unemployment rate of 7.5%. This increased rate of unemployment can be troublesome for the hotel industry. Unemployment means that there would be fewer amounts available to people to spend. This would reduce the sales of the hotels in Russia (DataMonitor 2010).

Social Factors

Social factors include attitude, culture and values that may cause an impact on the overall performance of the organization. A recent change in the social attitude and immense importance paid by media brought the change of awareness of environmental concerns. In today's era people are more concerned about the issues of environment and global warming. In today's era, the preference of customers and consumers is ...