CHAPTER THREE ENVIRONMENTAL ASSESSMENT By Maris Chen for Dr. DeMicco

1. CHAPTER THREE ENVIRONMENTAL ASSESSMENT By Maris Chen for Dr. DeMicco

2. OBJECTIVES Describe the importance of the environment in making strategic decisions that are future oriented. Define the major concepts underpinning the environmental assessment process. Explain the dynamic and complex nature of the business environment. Identify the challenges and uncertainties associated with the business environment. 

3. Vision Future Describe the importance of the environment in making strategic decisions that are future oriented. Visioning the future is the ability to understand how the business environment provides opportunities and threats. This ability begins by asking, and answering, the questions outlined below. How will the guests be traveling in the future? How will be guests be communicating in the future? How will be the firm�s products and services be distributed to the guests in the future? What new customer benefits will be needed to meet future demand? What competencies will be needed to serve the guest in the future? What standards will be accepted in the future? What will be successful hospitality firm look like in the future? What new competitive methods will demand the majority of your resources in the future? Please read article 1-4 and 10 to gain knowledge of the trends in the hospitality industry.

4. Parable of Boiling Frog What does the parable of the boiling frog tell us? The need for anticipating the future and monitoring change and developing a forward- thinking philosophy. Ex1: Disappearance of small roadside due to ignorance the signs of a warming competitive environment. Ex 2:Failure of Hotel Corporation of America and Victoria Station Restaurant because the owners failed to recognize changing consumer patterns and shifts in capital market requirements. Please read page 63 and 64 in the textbook for the details of these examples. These examples demonstrate that to be at the cutting edge, managers must develop the ability to identify the forces driving change, understand the variables making up these forces, and assess how they will impact the organization.

5. Rearview Mirror The metaphor of Rearview Mirror: we try to interpret the future by looking at the past. Ex1: Managers count on boomers driving their unlimited growth plan. Ex 2: Managers have usually relied on basic forecasting models to project future cash flow. Please read page 64 in the textbook for the details of these examples. What the metaphors of boiling frog and rearview mirror suggest is that to be effective in tomorrow�s competitive and complex environment, managers must develop a forward-thinking philosophy.

6. Major Concepts Define the major concepts underpinning the environmental assessment process. Managers today must enhance their conceptual toolbox to understand the complex and dynamic nature of the business environment. The more tools and frameworks that managers possess, the greater likelihood that they will come up with better solutions. The following slide contains a list of these key concepts essential to understanding how to manage changes in an increasingly complex environment. Please pay attention to their definitions.

7. Concepts of the Environment