PEST Analysis: Trendy Jazz Bar

PEST ANALYSIS

Introduction

The business our team has chosen to analysis, set up and create is a trendy jazz bar, located in the heart of Sydney. In order to analyse and build our establishment, we must research a variety of aspects that can harm or affect our business in any way. This involves researching our external environment such as the political/legal, economical, social and technological issues that are current in today’s world. They will all help us to determine our goals and objectives throughout the business activities.

It is essential that we conduct our PEST Analysis to ensure that our marketing plan is effective and successful. XTC management has researched these topics by using relevant articles from various media outlets.
One of the articles researched as a political and legal issue headlines “Regulations on energy drinks and alcohol tighten” May 13, 2010, by Australian Food News.

The article discusses the regulations on mixed energy and alcohol drinks served within the closing two hours of operation on weekends. The ban comes from WA Liquor Commission and could possibly extend Australia wide. A further investigation by The New South Wales Food Authority found energy drinks contained more than the standard amount of caffeine permitted by The Food Standards Code.

From this particular investigation, this is giving NSW Food Authority a probable cause to follow WA tightened regulations on energy drinks being served within the last few hours of operation on weekends. This will affect our business if these laws are introduced in NSW, by limiting our menu through government restrictions which in turn will lower our revenue. It will also put more restrictions and more reasons for people not to go out, as there are already too many rules and regulations. The Bar scene is becoming stricter and tighter by the day, which in the end will affect our business is some way. Less people will go out, due to violence caused by alcohol.

Social trends are moving at a fast pace within our Hospitality Industry.
It is vital that we keep up to date with what is going on around us. This means finding out the latest trends, discovering what people like and what makes them go back. We must find out what makes them ‘tick’ and what makes them excited. We must find out their values and what they believe in. For example in this point of time, our world is in the process of changing and helping out the environment, so people may choose to pick a particular bar to socialise for more of an eco friendly reason, if that is the case. However from the article chosen “Little smitten-small bars winning women over” by Rachel Olding, July 9, 2010, states that the social trends are now moving towards smaller bars instead of larger establishments such as the Ivy and the Establishment. There are a number of reasons for why this is happening. The article states that a majority of women enjoy a drink after work at the Grasshopper Bar on Temperance Lane (the bar which our company would like to take over) without being hassled by drunken men. Women are ditching pubs and night clubs for small bars. They state that they feel safer and more civilised. They also believed that smaller bars have a friendly vibe, and it should be more about the company you’re with, nice drinks and food without
“pretentiousness”.

The article expresses that smaller bars are attracting more women to go out; in fact groups of two and three women are one of the biggest clientele at this inner-city Small Bar. This has a positive impact on our business as there is a market for more mature drinking, market for a safer environment for women and a market for a smaller, friendlier, and more intimate bar that provides more meaning to people’s lives. Our concept of our bar is very much similar. We would like to provide guests with the same outlook and feeling the women receive about small bars. However we would like to enhance their experiences even more by providing live entertainment, and improving the style and comfort of the bar.

The social trends of small bars are affecting our business deeply, mostly in a positive way. Our research has shown that there is a high demand for smaller intimate bars that provide a safe and friendly environment. This means that our bar could have the potential to meet those needs and wants of the customer, providing them with a memorable experience each time. Our company believes in providing the right atmosphere, comfort, efficient and friendly service, that maybe some bars can’t offer.

Another example is the type of bars that are located in Melbourne.
The social scene is extremely different in Melbourne then Sydney. Melbourne is more known to trendy intimate bars, restaurants and cafes, while Sydney provides a more upmarket, fast pace, and bigger establishments. Some research has been done to establish that the people in Sydney would like to see more of the Melbourne trend of small bars in small laneways, which are hidden and unique. This is why we are excited to create an intimate bar, that is hidden in a laneway in Sydney and to change the social scene of the bars in Sydney. From researching this particular social trend, XTC management realises that our business will relate well to the Small Bar trend, as we now understand that there is a large target market out there, for example women, business people, tourists, people who live in the city and like to go out. However to break it down even further, these particular people that enjoy this trend are also people that appreciate more private and intimate conversations and outings to catch up with friends or after work
drinks.

The article also describes that intimate bars provide more of a personalised experience with the staff. This is another advantage for our business, as people will want to come and experience not just a drink, but the whole experience behind the drink, the way it was made, the service it provided, the relationship between the customer and staff and the comfort level the customer received. It all comes down to a personalised experience, which is becoming popular by the minute.