PEST analysis report for three leisure firms that operate in different sectors of the market
PEST analysis report for three leisure firms that operate in different sectors of the market
.0 Introduction
We were asked to prepare a PEST analysis report for three leisure firms that operate in different sectors of the market. As a group (of four people) we were required to analyse the business environmental factors, that they affect the leisure industries as a whole. In our analysis and reports we should distinguish between the impacts on the different sectors/firms and draw conclusions and recommendations based on our analysis reports. In our chosen firms, (Odeon cinema, Alton Towers, Ministry of Sound, Crowtree Leisure centre) we examine the PEST factors that related to the leisure industry as a whole.
To manage to prepare a PEST analysis report to our chosen firms, we had to search and analyse the leisure industry market as a whole first, so to be able to prepare an analysis of the factors that have an effect to the chosen firms.
The contribution of each member of the group to the chosen firms is as follows:
* Ioannides Andreas : " Odeon Cinema"
* Lambis Christos : " Alton Towers"
* Vidos Evaggelos : "Crowtree leisure centre"
* Evanthia Matiaki : " Ministry of Sound"
2.0 PEST Analysis of the Leisure Industry in UK
Before starting to analyse the PEST (political, economical, social and technological) factors that affect the leisure industry as a whole we would like to give a definition and explanation of the PEST Analysis as follows:
" All the external political, economical, social-cultural and technological factors that affect the environment of a market or company"
The political, economic, social and technological factors which impact on the leisure industry in UK is as follows:
2.1 Political
* The government has a tight regulation for selling alcoholic drinks in the leisure industry.
* A new government could bring many changes in regulations for the leisure industry and apply for new legislation. It could also give more emphasis in the cultural environment such as museums.
* An unexpected war will be dramatic for the whole country in all sectors
* Government's regulation for all the closing times of different firms that operates in leisure industry. For example pubs and bars must be closed at 11 o'clock and night-clubs at 02:00.
* The government's decision to invest in leisure industry. National Lottery for example has detracted other established gambling business such as casino, bookmakers and bingo.
* The government by sponsoring leisure facilities and at local council by involved in ownership or management of concert halls and local swimming pools.
2.2 Economical
* The Bank of England could increase the interest rates and this will had tremendous changes in leisure industry.
* The inflation of the country is a factor that could affect the leisure industry.
* The change of Government in 1997 has returned many changes in UK economy, at least in terms of consumer spending.
2.3 Social-cultural
* In leisure industry the social groups are divided in different leisure activities. For example elderly people are particular interested in reading, teenagers are targeted by night-clubs and pubs.
* The increased ownership of cars, within all age of groups who use the car to access leisure outlets.
* Also the entertainment affected by seasonal holidays such as Christmas, Easter and school holidays because its opportunity for many people and students to entertain themselves and get away of the routine of work.
* The need for leisure outlets to segment the different types of the social groups has created new leisure chains such as pubs and restaurants.
* The different budget of each single person during a certain period is affecting the leisure industry.
2.4 Technological
* The rapid development of the technology such as the Internet helped the leisure industry as well. For example many leisure firms have a website in the net, in order to advertise the products or services offered or even book tickets online.
* By the time that technology is being established for good in our lives technology competition between leisure firms was borned. For example a cinema or a theatre which is equipped with high tech products have much more chances to be successful than the one which is equipped with normal/old equipment. The same thing is happening to all leisure firms.
* The music market has been driven by technology for more than a decade, both in terms of replaying the recordings (the CD revolution) and digital equipment for the studio and the concert hall as well as on the quality of the sound. So this way leisure industries such as night-clubs or pubs have much more clients than they used to have before cause of the quality of sound for example. Through technology revolution computerised music has been introduced to music consumers as well as the people enjoying themselves to night-clubs or pubs.
* The latest technology can be seen in sports and keeping fit, where health club members queue up to use the latest machines. In gambling, bingo and National Lottery, or bookmaking can be transformed by electronic communications.
3.0 Introduction to Odeon Cinemas
Before analysing the PEST factors that affect the Odeon Cinemas it would be a good idea to give some information about the company background.
Odeon cinema has a history of almost 70 years in film industry. It was founded by Oscar Deutsch in 1930. Odeon as market leader and biggest cinema name in Britain, boasts of its truly national presence. With its 82 cinemas and 449 screens, the chain has more cinemas and customers than any other chain in UK.
Odeon cinemas are a division of the Rank Group Plc and form an integral part of the Rank owned "Leisure World" entertainment destinations. These vast leisure complexes satisfy all entertainment desires with Restaurants, Bars, night-clubs and Odeon cinemas.
The Odeon cinema has prospered during the1990's, with more cinemas built each year than any time other than the 30's and 40's. Over the last decade, admissions have increased spectacularly with 138.923 000 million customer visits recorded in 1997 with an increased by 16% compared with 1994 (Appendix 1). The Odeon's revenue is estimated to be about £137.592.000 ...
This is a preview of the whole essay
Odeon cinemas are a division of the Rank Group Plc and form an integral part of the Rank owned "Leisure World" entertainment destinations. These vast leisure complexes satisfy all entertainment desires with Restaurants, Bars, night-clubs and Odeon cinemas.
The Odeon cinema has prospered during the1990's, with more cinemas built each year than any time other than the 30's and 40's. Over the last decade, admissions have increased spectacularly with 138.923 000 million customer visits recorded in 1997 with an increased by 16% compared with 1994 (Appendix 1). The Odeon's revenue is estimated to be about £137.592.000 million in 1997 with a percentage 19.6% of £702 million in total (Appendix 2).
Odeon's mission statement is to consolidate its position as market leader and to become the most dynamic cinema brand in the U.K.
4.0 PEST Analysis for Odeon Cinemas
4.1 Political
* The tight regulation involving selling alcoholic drinks in the leisure industry and more specifics in cinemas. In order to get a licence they must apply locally and determined the type of licence they need. In the cinema facilities is restricted and it's an offence to sell alcohol because even if it's in leisure industry, its main purpose is to entertain differently than a bar does.
* Government is planning legislation concerning the rate limit of growth in multiplex cinemas in the future. This will prevent Odeon Cinemas to expand in the market and affect their development. If this legislation voted to take place in the cinema industries it will affect the Odeon in all business sectors.
* The change of government could bring many changes in regulations for the leisure industry. A new government might give more emphasis in home entertainment by providing licence to the video clubs, to rent new films which at this moment only the cinemas has the advantage to show. This would lead to a significant decrease to a number of people that go to the cinema for the opening night and the market revenue for cinema industry would decrease as well. Even a change in regulations regarding the opening and closing hours would affect the cinema industry.
* The results of an unexpected war will be dramatic for the whole country and in the case of the Odeon cinemas and the industry, as a whole is that people won't be attracted any more with the possibility to shut down, if this war take a place in dimensions.
* The present Government decision to maintain the same stance as the previous Government for the new multiplex cinemas. The regulation regarding the development of those in low attractive town centre locations. This is against the operators and consumers who prefer the multiplex cinemas in an attractive location with easier accessibility.
4.2 Economic
* The change in Government could affect the economy as well. An increase in interest rates and the inflation of the country could affect negative the people from spending a significant amount of money for their entertainment. This is very obvious because most people have a budget to spend monthly. With an increase in rates, they will spend more money in more important priorities rather than the leisure activities.
* An important revenue of the cinemas is earned from the sales of food and drinks within the facilities. However, a percentage of 84% of regular cinema-goers, believes that the prices are extremely high and that has a bad influence on consumer's behaviour.
People already pay enough for the admission and in some cases they can't afford to spend too much money in food and drinks, so they prefer to spend them somewhere else.
* As the price of tickets increased by the opening of the new multiplex Odeon cinemas, the admissions fell from £137m in 1997 to £135.2m. This movement has decreased their profit because people react in this change. Many people suggest that they use to go to a cinema once a week but now with the change in tickets price, they go once in two weeks.
* The opening of new cinema industries in the market affected the Odeon cinemas from their revenue as well. New big cinemas such as UCI, Virgin, Warner Bros, ABC are famous as well and they have a significant revenue percentage in the market.
4.3 Social-cultural
* The lifestyle of different age groups has an impact on the cinema industry as well. The leisure activities for elderly people are different from those of teenagers or families with children. For example elderly people are particular interested in reading or gardening rather than go out to a cinema. From the other hand, teenagers are more attractive for sports leisure facilities and night-clubs and for those with children preferred home entertainment like video and home games. But all this research is based on people's reactions and behaviour. This does not stop Odeon cinema to entertain all ages because with its offers and the facilities providing such as bars, night-club and restaurant still attract people who wants this kind of entertainment.
* Also the cinema going is affected by seasonal holidays. The School holidays, bank holidays, Christmas season and Easter give the opportunity to people to look for cinema entertainment more often.
* The weather is also an important factor that affects people from going to cinema. In UK the weather is usual unstable and it rains regularly as a result by giving a motivation for people to prefer cinema more often. From the other hand if the weather would be better, people would prefer other outdoor leisure activities.
4.4 Technological
* An important aspect for technological factors is the web services that offered. The online internet-based booking allows people who has access to the web to check for movies, availability and book tickets from their own environment. Odeon cinema has invested £2 m in a dedicated booking centre with 150 operators for those who want to book tickets trough telephone.
* The improvement of technology nowadays has increased rapidly. Multiplex cinemas offered at least five wide screens, surround digital systems, more luxury seats with leg space and air-conditioning. These combinations attracted many people to favoured by Odeon cinemas as well and increased the number of cinema- goers.
* Many people take into consideration factors such as accessibility. The Odeon multiplex cinema offers so many advantages for customers such as free parking place. The Government by providing traffic signs showing which direction to follow in order to get there.
* The quick distribution of the latest films in the UK cinemas from US film industries is an important factor that people take into account. The whole procedure is very fast because of the same language and similar cultural and to a number of joint venture films that UK cinemas have with US film studios. These capture the imagination of the public and result in high box office takings.
5.0 Introduction to Alton Towers
Since 1991, the UK's most popular fee-paying tourist attraction has been Alton Towers, which had 2.7-m visitors in the previous year. The Alton towers is one of the biggest amusement park in England and people travel all trough UK to visit it.
Alton Towers has a large number of rides the big 5 being, the Black Hole, Nemesis, Oblivion, Ripsaw and the Corkscrew. There are a number of entertainers in the park for younger children as well.
Many people only associate Alton Towers with the high profile thrill rides and overlook the beautiful gardens that have been established there for over 1000 years originally planted by the 15th Earl of Shrewsbury. There are around 200 acres of garden to explore while the kids enjoy the rides. There are a number of fast food establishments at Alton Towers.
The Alton Towers Hotel offers many facilities such as 175 rooms to suit all budgets and tastes, Swimming pools, sauna and Jacuzzi, Restaurant and much more.
PEST Analysis for Alton Towers
5.1 Political
* The political environment influences demand in several ways. Through government legislation all what can and cannot be bought and in what circumstances. As well as though, Government role in determining the distribution of wealth and income in the country with the taxation and the welfare system.
* On the other hand there are three main ways in which Government affects supply. Firstly, Government can proposed legislation on how firms should operate, what they can produce, how they can make it and what inputs they can use to make it. Secondly, by specifying how certain groups should walk (safety standards) and finally Government can also affect firms cost trough taxes and subsidies.
* On Alton towers, the political environment can have effects such as governmental changes through laws above the limit of age using the facilities, which may result in the reduction of visitors especially young people.
* Through taxation and welfare system, that the Government will determine, more people cannot afford to go to Alton Towers, since most of the people going there will have to use some kind of transport.
* Trough health and safety regulations, the government may not find some of the facilities unsafe and not permit the operation.
* The government may enforce heavy taxes, which will lead to an increase of the firm's cost.
* The Government may also give subsidies to the firm that will increase the supply and this will lead to an increase of the profit.
5.2 Economic
* An increase in the interest rates by the government would affect negative the people from visiting the Alton Towers for their entertainment since they will give more emphasis in other priorities.
* Many people believe that the prices within the facilities on Alton Towers is extremely high, especially in the hotel the prices are unapproachable, so visitors from other towns in UK must travel back at the end of the day.
* The other Theme parks in UK such as the Blackpool pleasure beach affect the economy environment of Alton Towers negative because it offers roller coasters and other kind of entertainment.
5.3 Social-cultural
* The different lifestyle of people affects Alton Towers through many ways. For example elder age people can't take the ride on the roller coasters than the other middle-aged people. But from the other hand elder people can walk and explore the beautiful gardens while the kids enjoy the rides.
* Negative term at Alton Towers operation is the weather. Since most of the Alton Towers facilities such as roller coasters is outdoors. Many people affected from the weather and this discouraged them from visiting it.
* People can be socialised while visiting Alton towers which is also working as a meeting point for youth and middle aged people, that's why this is another reason for many people to visit Alton Towers.
5.4 Technological
* The rapid development of technology is affecting Alton towers as well. Alton towers has a web page in the website that customers can book their tickets or rooms in the hotel. Alton towers has also online merchandise store that customers can buy souvenirs.
* Technology has been harness to make tourist attraction much more interesting. That's why Alton Towers it is appropriate equipped with the latest equipment.
* Tourists and customers take into consideration factors such as accessibility. The Alton Towers is located in the middle of England so it's accessible for many people-many areas. The parking for the busses and cars provided make it more attractive. In the main roads of UK, Government provides traffic signs showing which direction to follow in order to get there.
6.0 Introduction to Crowtree leisure centre
Crowtree L.C is one of the most efficient and well-organised leisure centres based in Sunderland. It is situated in the centre of the town next to the Bridges shopping centre so the public can have an easy access to it. It offers a wide range of leisure activities such as: swimming, ice-skating, sauna, sports & courts and all these in a modern and functional building. .
In a friendly environment its well-trained stuff will, in any case, help you, fact that will confirm its good fame.
6.1 Political
* Local council authorities sponsor Crowtree leisure centre in many ways. For example sports entertainment for students, youth or elderly aged and other leisure facilities for disable people or for people with limited income, are sponsored partly from the government. This way government is giving to everybody equal chances for leisure and especially to people who really need it.
* Political restrictions prevent the existence of any dangerous facilities, which can harm the visitors of the leisure centre.
* Political restrictions for higher and lower prices on any activity, which takes place at the leisure centre.
* Strict Health and Safety rules for any facilities taking place at the leisure centre.( e.g. clean pool water, fire alarms, safe equipment e.t.c)
6.2 Economical
There are many things that can effect the economical environment of the leisure centre. As we all know the economical environment is one of the most important terms in an operation/project/organisation, because in today's business world, ideas and cleverness is not enough for a firm to be successful. Therefor every operation is giving over-normal attention to its economical environment.
In our case, Crowtree leisure centre, is one of the most well organised leisure centres especially in the field concerning the economical environment. To justify the above we will have to mention:
* Crowtree LC is one of the most, well advertised and is definitely the most popular leisure centre at Sunderland. That's the main point that this leisure centre in counting at.
* It co-operates with other operations such as "universities training sessions" government sponsored programs, helping this way, firstly the increase of its reputation, and secondly to increase its incomes.
6.3 Social-cultural
* The United Kingdom consists of many different social groups. This can effect negatively the Crowtree leisure centre since not all countries have the same habits (e.g. sports,entertainment etc)
* There are many students participating in Crowtree's facilities so it's logical to work as a socialisation point for many students.
6.4 Technological
* Crowtree leisure centre during his try not to lose any clients it is equipped with the most reliable/technological improved products.
* A new technological equipped leisure centre improves its reputation, which simultaneously increases the amount of clients.
* New equipment which automatically means new facilities open to the public.
* With high tech equipped facilities, leisure becomes more easy and entertaining.
But somehow there are some conservative people who are insisting to the old or not improved way of leisure so the best think for a leisure firm is to try to combine both, which is the only way to satisfy everybody in order not to lose a client.
7.0 Introduction to Ministry of sound,
The Ministry of sound in London opened in 1991. Ministry Is one of the UK's most fashionable club and its main policy is " value for money". This means that it offers quality in a high price. It is operating through the most famous artists or musicians in the world and this is the reason for being so popular.
7.1 Political
* There are restrictions concerning the level of the volume of the music. Indeed, there is an allowed point of volume, beyond which there are fines for the club.
* There are also regulations concerning the minimum age limit of the people who can entered the club, which in this case is 18th years old.
* In combination with the age limit we also have a certain alcohol limit which in case of overcoming this limit there will be strict fines.
* A negative effect of the political environment is the taxation and welfare system. In other words the taxes that the government enforces to the people, fact which means that they will have to reduce the expenses of entertainment from where usually a lot of savings can be done.
* There are also taxes enforced to the night-club itself and which are normally included in the ticket as a result to increase the price. This will prevent people from visiting a night-club as frequent as wanted.
* Finally health and safety regulations mainly exists for the protection of the public. These regulations concern the quality of drinks, the cleanliness of toilet or even the existence of good air-conditioning.
7.2 Economical
* One of the most important effects that the economic environment will have on the firm examined is that if the UK's economy increases then the wages will increase as well. This will lead in the general increase of the people's income per year, resulting in the spending of more money on amusement. People will not only go out more often, but they will also spend more money on alcohol drinks. This will also increase the profit of Ministry of sound.
* On the other hand if the economy of UK decreases then people will be paid less money for their job, which will result in the decrease of their yearly income. This will lead to people saving up and cutting off from amusement. Not only will they not be able to buy any drink if going out , but they will also considering a lot if they will go out at all. This will decrease the profit of the Ministry of sound.
7.3 Social-cultural
* Dressing codes are different from one place to another. There are many night-clubs allow you enter with training outfit but there are also other which they allow you only with smart dress. Different dressing codes are changing from an area to another for the difference of the financial standard, of the way they are used to dress or from the weather circumstances.
* Different nightlife it depends from things such as the population of the area the Firm is based, from the people used to go to the certain night-club etc. Additionally there are many night-clubs presenting different events every night such as student's night, cultural nights introducing through them a variety of night entertainment.
* Different dancing habits changing parallel with the different traditional kind of music. So again is a matter of location and how familiar are the inhabitants of an area with the local tradition.
7.4 Technological
* Technology improvement in the field of audio-visual equipment means better quality of sound as well as better visual effects, factor which, will attract the public and will improve its reputation. Indeed ministry of sound its consider to have the best quality in sound in the world, which is very important as the basic criteria for choosing a night-club is the kind of music it plays and its quality of sound. Visual effects in any case accompanied the sound and should be noticed that nowadays it is another attraction and a basic reason for choosing a night-club
* Technology also influences the night-clubs function in terms of advertising. Analytically, improvement of technology means the improvement of the means of the communication by which any kind of advertising can be achieved. For example the night-club can be advertised on TV, radio, or any kind of magazine or even through the internet. It is not uncommon that many people book tickets through the web, fact that shows that the promotion can be done in many ways.
* The effect of technology on the means of transportation also influences the club. In other words, new, faster and more comfortable means of transportation has been developed which makes the access to the club easier and safer as a result a large amount of people could visit the club every day.
8.0 Conclusion and Recommendations
From all the analysis of the leisure industry and to the chosen firms that operating in different sectors we conclude that the leisure industry is growing in many ways.
Firstly the average adults are now participating in far more activities than before especially in leisure market and the amount of leisure time available has only increased over the long -term period.
From the market research we've made, we must also say that the UK leisure market is forecasting to grow in the next few years because new firms will enter the market by providing different kind of entertainment.
Nowadays leisure is becoming more and more reliable and joyful through the research that specialist made in order to face this concept (leisure).
From all the factors we analyse we made some recommendations. Firstly, the involving of the Government and the tight regulations and the legislation that has set, is very good for the leisure market. By this way they can control the market and make sure that there is no possibility for abuse. On the other hand some regulations are very strict. For example the closing hours for most of the firms that operate in different sectors of the market, such as clubs and pubs are narrowing the nightlife and restrain the entertainment.
Government could give more emphasis in the cultural firms. Many people believe that entertainment is above all but that's not right. Government must not forget the traditions of the country as it affected from the rapid increase of technology meaning that every government is trying to emphasise to new projects forgetting the habits and culture of their country.
