Essays on PESTLE Analysis for the National Center of Performing Arts Case Study

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The paper 'PESTLE Analysis for the National Center of Performing Arts" is a good example of a management case study. The National Center for Performing Arts (NCPA) is an institution that operates in the tourism industry, an industry that over the past couple of years has gained momentum as one of the prime gross domestic product contributors for most countries. However, in order to be effective in this industry NCPA needs to consider a number of factors such as the PESTLE analysis, which evaluates the political, economic, social, technological, legal and environmental factors that have potential to influence the performance of a firm.

This paper focuses on these factors in relation to NCPA. The PESTLE analysis has focused on the mentioned factors and their effect on the performance of NCPA. The resources and capabilities analysis is the other business model and helps a firm such as NCPA establish whether its capabilities match the resources it has in order to be effective. SWOT analysis focused on the strengths, weakness, opportunities and threats; which make up the internal and external factors that influence the performance of NCPA.

Value chain analysis and the five forces of competition focused on ways NCPA can add value in its operations and gain a competitive advantage in the market. Lastly, the blue ocean strategy canvas focused on cost-effectiveness and value addition to buyers. Appendices Appendix 1: PESTLE Analysis for the National Centre of Performing Arts Political Factors -Political stability is likely to influence the performance of the National Centre for Performing Arts (NCPA). -Hefty taxation is another factor that affects the performance of the NCPA, especially because it is partially viewed as a tourism entity. -Government expenditure in the tourism industry is another political factor that needs consideration as it assists in creating awareness of the existence of businesses such as the NCPA. Economic Factors -Business cycle; that is a recession and boom period determine the performance of NCPA due to their effect on disposable income. -The potential growth of the economy, China is listed among emerging markets, meaning NCPA is better positioned. -Demand elasticity in the market, China has a huge population of middle-class individuals, which means that NCPA is likely to reap the benefits associated with the same. Social Factors -Cultural orientation and language barriers are some of the social factors likely to influence the performance of NCPA. -The literacy levels of the target market determine whether they are aware of the existence of the business or not. -The recreational strategy applied by the target market also affects the performance of NCPA. Technological Factors -The use of internet marketing to create awareness among the target market can highly influence the performance of NCPA. -The ability of customers to book and place reservations online is another factor that NCPA needs to consider. -Maintenance of an uptrend of technology will help NCPA align with the changes taking place in society. Legal Factors -Regulations and changes in government policy regarding the performance of the business in the tourism industry can influence the performance of NCPA. -NCPA needs to adhere to all legal stipulations concerning its operations. Environmental Factors -Environmental conservation and sustainability should among the priority factors in NCPA. -NCPA needs to have a positive impact on the environment by adhering to the environmental regulations regarding business operations. (Tenev, Chunlin and Loup, 2002; Feng, 2008; Flew, 2013) Appendix 2: Porter’ s Five-Forces of Competitive Analysis (Corrocher and Guerzoni, 2009)   Appendix 3: SWOT Analysis Strengths -Strong brand image is one of the strengths that NCPA enjoys as it has been in the market for a couple of years -A strong reputation for cultural and societal training and development in the Chinese market -Established partnerships and alliances with the organization to enhance the training of respective members and facilitators. -Enhanced global reach and profitability margins -NCPA has a successful license relationship as it is partly owned by the Chinese government -Strong financial position, which offers the firm a chance to conduct its operations normally. High knowledge of the market Weaknesses -Transforming Chinese cultural integration -Increased internal costs reduce the firm’ s revenues -Decreasing market share as a result of increased competition domestically and internationally -Lose of principal employees to firms that offer huge employee benefits and are technology-based. Opportunities -Government policy towards foreign direct investment is likely to limit the level of foreign competition -The adoption of new technology in order to improve the efficiency and performance of NCPA -Availability of cheap labor can allow the firm to limits internal costs and focus on the formulation of strategies that will improve its performance. -NCPA is ISO certified as it offers quality services and products, this can attract foreign investors and customers. -NCPA has a green label, meaning it is concerned about the environment, thus, it is likely to attract more customers. Threats -Long-term threat of irrelevance following the adoption of integrated cultures by society. -Technology assimilation into arts increases the operational costs of the firm; thus, reduce its profits. -High competition locally and internationally. -Government policies and the seasonal tourism industry limit the profitability of the industry. -Cultural and language differences amid tourist and the locals, limit the number of tourists visiting the country; thus, reduces the revenues of NCPA.  

References

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Corrocher, N. and Guerzoni, M. 2009, "Product variety and price strategy in the ski manufacturing industry", Journal of Evolutionary Economics, vol. 19, no. 4, pp. 471-486.

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