Strategic Jd Wetherspoon

2. Strategic Analysis

The environment is what it provides for the company to be survived in the market. Environmental change can be a fatal for organisations, hence, the organization needs to analyse their environment carefully in order to anticipate the environmental change. There are sources of threats such as revolutionary technologies or the entry of new competitors and environmental change can be fatal for organisations (Johnson et al, 2009).

2.1. Macro environment analysis

Macro environment is the highest – level layer in the business environment. This consist of factors such as political, economic, social and technological which impact to the organization. Gillespie (2007) identified that there are many factors in the macro-environment that will affect the decisions of the managers of any organization. Tax changes, new laws, trade barriers, demographic change and government policy changes are all examples of macro change. To help analyze these factors managers can categorize them using the PESTEL model (refer to appendices 1).

2.1.1. Political factors

This may refers to the government policy such as the degree of intervention in the economy. Government alert with the health of the nation as well and restricted areas for smoking, JD Wetherspoon pioneered completely to non-smoking in most of the pub which this could attract family type customer. Government responsible for the economic policy and regulation as well which leads the economic to determine the extent of population's spending power on goods and services and this might bring impact on the hospitality businesses. Government may imposed tax on the good and services such as the value added tax (VAT), and hence businesses like JD Wetherspoon need to pay tax for their businesses (Gillespie, 2007; Hassanien et al, 2010; JD Wetherspoon, 2010). According to Thomas (2009), JD Wetherspoon attacked the Government over its "opportunistic tax grabs", which it believes are contributing to the demise of the struggling pub sector where the pub industry as a whole is under great pressure and that the costs of taxes and regulations have gone too far.

2.1.2. Economic factors

According to Hassanien A. et al (2010), economic factors are concerned with fiscal and monetary issues that have a great impact on hospitality businesses. According to the interim report 2010 of JD Wetherspoon PLC, there have been 2 pubs closed down but 17 pubs opened in a total of 775 now. This shows that the economic issues does not affect much of the company to continue expanding. JD Wetherspoon has battled against the smoking ban, recession, above-inflation increases in beer duties and cheap booze offers in supermarkets, which kept drinkers at home (JD Wetherspoon plc, 2009). Jeffs (2008) stated that the economic environment is an evaluation of a country's statistical data provides an insight into all manner of factors such as inflation rates, consumer spending, unemployment and exchange rates. According the BBC News (2009), the recession hits Wetherspoon's sales where else the taxes and regulation faced by the industry had made them increasingly expensive compared drinking at home. And hence, the consumer spending may decrease.

2.1.3. Social factors

Changes in social trends can impact on the demand for a firm's products and the availability and willingness of individuals to work for. Social influences include changing cultures and demographics. The social structure will affect people's lifestyle and expectation and so will strongly influence their attitudes towards their work and their demand of goods and services (Johnson G. et al, 2009; Hassanien et al, 2010). To follow up the consumer trend, JD Wetherspoon did a series of changes such as offering breakfast to be served in their pubs during day time which cause them to expand their business hours from 7 in the morning. They even strengthened its cider, beer and wine range to offer customers a choice of nine ciders in its outlets across the UK (Morning Advertiser, 2005).

2.1.4. Technological factors

Hassanien et al (2010) and Evans (2003) both stated that the internet has generated a process of disintermediation and reinters mediation in the hospitality goods and services where technological influences may refer to innovations such as the internet, nano-technology or the rise of new composite materials. In recent year, e-commerce and information technology have given a great impact on the hospitality and tourism industry. Technological factors did affect JD Wetherspoon as well, they set up their own website on the internet by providing information about what are they serving,