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Oyo is one of the largest Indian Company that is operating in the hospitality industry. For analysis of business environment, it is observed that political and social as well as technological conditions are in support of the business firm. Economic conditions of the nation are not good and this will surely affect revenue and profit of Oyo. Further, corona virus will certainly affect tourism industry which will lead to loss in Oyo business. Oyo has sufficient IT and human resource in its business which are valuable, but not rare and are easy to imitate. Oyo must further expand its business in the international market because it has sufficient resources in its business. By doing so it can easily tap the opportunities that are available in the international market.
Introduction:
Business always operates in uncertain business conditions and these greatly affect business firm performance. This is the reason due to which consistent analysis of business conditions and available resources is required. In this regard, firms usually do PESTLE analysis and VRIO analysis. In the present research study, business environment analysis from Oyo is done. In the middle part of the report, VRIO analysis of Oyo is done. Thereafter, by taking into account business environment and VRIO analysis results recommendation is made in Oyo. At the end of the report, concluding section is prepared in the research study.
External and internal environment:
Management of single time faces multiple issues in the business. This is because the business environment is uncertain in nature. Due to uncertainty in the business environment, it becomes difficult to make accurate decisions. Thus, it becomes very important for the companies to analyze the business environment constantly, so that particular course of action can be developed to improve business performance. External environment factors are explained below.
• Political environment: Business in any nation increase when there is the suitable business related environment in the country. More is congenial environment for the business, the firms’ business rapidly grows in any nation. Political parties play a crucial role in the development of congenial environment for the business. In most capitalist economies from many years business friendly ruling Governments comes in power and due to this reason there large corporations come in existence. On the other hand, nations that are in Africa have corrupted Government and dictator Government which work for social and self welfare. Due to this reason African nations are underdeveloped and small numbers of firms are there. It is clear that political environment plays crucial role in promoting business in the nation. If political party’s ideology is to support business, then many new start ups come into existence in the nation. Thus, growth of business in the nation depends on business friendly policies of central Government that is operating in the nation (Prajogo, 2016).
Oyo is one of the Indian Company that is operating in the hospitality industry. It can be observed that Oyo recently acquire Data science company of Denmark namely Danamica. Danamica is basically a data science and business intelligence company that assists firms operating in the hospitality industry to do business decisions and earn more revenue in the business (Oyo acquires Copenhagen-based data science company Danamica for an undisclosed sum, 2019). Modi Government understands the significance of tourism and due to this reason it is paying special attention on the growth of the tourism sector in India. With the passage of time tourism sector in India is growing at a fast pace. Hence, it can be said that the political environment is congenial to Oyo and acquisition will surely help firms to earn more revenue in the Indian market (Bitkowska, 2015). Hence, there is opportunity on this environmental factor.
• Economical environment: The economy of the nation directly affects people spending pattern and income level of the people. It is the spending pattern of the people and propensity to save that greatly affect company’s revenue and profitability. Spending pattern depends on multiple factors like employment opportunities, salary and economic growth of the nation. During economic crisis, many people lose their job or earn less and consumption decline. Due to decline in consumption firms earn less revenue and profit I the business. It can be said that economic environment greatly affects companies’ revenue and profit. The GDP of the India declines from 7% to 4%, which is one of the major matters of concern for the firm (Bah, and Fang, 2015).
Low growth of GDP is indicating a slowdown in the Indian economy and less consumed by the people. When people consume less reduced amount is spent in the market. This directly affects companies’ revenue and profit in the business. Oyo acquires data science company, but if further economic growth, reduced then it will lead to decline in the company revenue growth rate. Corona virus is prevailing across the globe and due to this reason tourism sector will observe the sharp decline in its business for few months. It can be said that it will take long time to cover investment amount (Bocken, Rana, and Short, 2015). Due to poor economic condition of India it low profit is expected in the business. Hence, there is threat on this environment factor.
Conclusion:
On the basis of the above discussion, it is concluded that there is significant importance of business environment for the business firms. Oyo does not have threat from any component of business environment other than economic factors. Oyo has sufficient resources in its business. It has well trained IT team and data science as well as BI technology, which assist companies to take decisions on a real time basis and recommend accurate things to traffic according to their needs. All such kinds of technological advancement assist firms to create customers in the business at a fast pace.
Reference:
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Online
Oyo acquires Danish data science firm Danamica, 2019. [Online] Accessed through <https://www.livemint.com/companies/news/oyo-acquires-danish-data-science-firm-danamica-1567436914872.html>
Oyo acquires Copenhagen-based data science company Danamica for an undisclosed sum, 2019. [Online]
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