PESTEL Strategic Analysis and Research Methods

Strategic Analysis Report
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Table of Contents
 TOC \o "1-3" \h \z \u  HYPERLINK \l "_Toc61300625"
List of Tables  PAGEREF _Toc61300625 \h
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Introduction  PAGEREF _Toc61300626 \h
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External Analysis  PAGEREF _Toc61300627 \h
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1. PESTEL Analysis  PAGEREF _Toc61300628 \h
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2. Key factors for Success (KFS)  PAGEREF _Toc61300629 \h
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Internal Analysis  PAGEREF _Toc61300630 \h
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1. VRIO analysis  PAGEREF _Toc61300631 \h
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2. Categorization  PAGEREF _Toc61300632 \h
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Key Strategic Issues  PAGEREF _Toc61300633 \h
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Conclusion  PAGEREF _Toc61300634 \h
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References  PAGEREF _Toc61300635 \h
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List of Tables
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Table 1: PESTEL Summary  PAGEREF _Toc61300598 \h
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Table 2: VRIO Analysis Summary  PAGEREF _Toc61300599 \h
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Table 3: Tangible & Intangible Resources  PAGEREF _Toc61300600 \h
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Table 4: Hierarchy Analysis  PAGEREF _Toc61300601 \h
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Strategic Analysis Report
Introduction
This strategic analysis will focus on the hospitality industry that serves as a significant aspect of the economy. Several businesses and companies are involved in the industry, which provides employment opportunities while also adding to the cash flow by attracting customers to spend their money on various delicacies offered. Furthermore, the Lucky Star Restaurant will be the focus of the internal analysis section of the paper. Being a Chinese restaurant, it offers traditional Chinese food to the residents of Plymouth. The restaurant lies under the Small and Medium Enterprises (SMEs) due to its relatively small size and few employees running the establishment.
External Analysis
PESTEL Analysis
The PESTEL analysis offers an overview of the macro-environment concerning the company's future with regard to its industry. This analysis further helps the business make strategic decisions that might influence its performance in the long run (Lynch, 2018). Consequently, the following PESTEL analysis shows the potential external factors likely to affect the business.
Political Future
Political stability can affect the industry with changes affecting the proper running of restaurants. With the United Kingdom has left the European Union (EU) with the expiry of the transition period on December 31, political changes and relationships between the country and others might change. As a result, people's employment from the EU may become problematic, thus requiring businesses to look for alternative sources (Cole, 2019). Apart from that, taxation can hugely affect small businesses in the foodservice industry due to the small margins. Therefore, businesses that may rely on importing products from other countries may face an increase in taxes as the government looks for avenues to increase internal and external revenue.
Economic Future
Changes in labour costs may affect the business's performance since it would lead to an increase in operational costs. Government directives increasing the minimum wages may cut into the profits since the human resource costs would significantly increase.
Socio-cultural Future
Since the business offers exotic foods, most of the population may not have tried the foods offered by the business. Consequently, changes in cultural perspectives may negatively affect the business's ability to market the food to potential clients. A negative outlook to both the Chinese culture and its people may decrease visibility, thus ultimately reducing the restaurant's profitability.
Additionally, changing demographics may also change preferences, thus reducing the popularity of Chinese food in the newer generations. With younger populations gaining spending power, they are likely to be the most financially active within the next five years. Therefore, Millennials and Gen Z offer the business an opportunity to capitalize and grow its popularity (Kalkan & Bozkurt, 2013).
Technological Future
With the internet now playing an important role in e-commerce, restaurants must adapt to offer their services online to capture the growing demand. Technological diffusion thus determines the rate of spread of innovations in the sector. Therefore, the ability of social media sites such as Tiktok and Instagram to propel the marketing strategy of restaurants offers significant gateways for future success (Qehaja et al., 2017). Furthermore, the adoption...