Cheng, Power of Buyers When the concentration of the buyers is higher than the market players then the industry is subjected to the high power of buyers. The average employee to room ratio in India is 1.
Cheng, Power of Suppliers The power of suppliers over hotel industry is relatively low. The hotel has to make sure that the high capital cost is gaining its worth in the form of output and the resources are used to it utmost potential.
Establishing a Premium hotel requires huge investment of the order of ten million per room for most of firms. Certain groups of buyers exercise power over the hotel industry when the purchasing of hotel rooms in bulk is required.
Also many of the firms in this industry have presence in various sectors which provide them a high financial backup.
The room occupancy in the initial years are expected to be low for a new comer, given that there are already known brand hotels in this segment and the supply is more than the demand for most of the year. Cheng, In an industry such as this where there is high capital costs, the pressure to sell the capacity by price cutting is high except at weekends and holidays and the competition becomes intense.
The five forces working on the Industry are: The existing hotel chains have an advantage over local entrepreneurs in this industry as afar the brand image and customer loyalty are concerned.
Cheng, The new entrants have to be conscious about target market and quality service. Harvard Business Review 79 3. This has been possible due to continuous improvement in the facilities and services provided by the domestic players and due to presence of various multinational brands.
Taj group till recently used to get bed sheets and other clothes from Bombay Dying through their Mumbai central warehouse. Both corporate customers and individuals enjoy some bargaining power given that their switching cost is negligible.
Cheng, Conclusion The two things the hotel industry thrives on is the ability to differentiate themselves and quality of service. Bargaining Power of Suppliers Suppliers are mainly of soap, toiletries, bed sheets and other clothes and similar articles.
The quality of service is dependent on the trained staff and personnel and good management. Also competitors can imitate innovative service offerings in a short time. In case of the economic recession, the hotel industry should be more durable Hotel sector five forces analysis the tourist market because of the fluctuation in the tourist industry.
Customers enjoy a good amount of bargaining power on the quality of service provided in this segment. However, Tourists are expected to increase from countries whose GDP has been performing well over the last few years due to increase in per capita income.
Some of the firms also have in house production of these supplies. The tourists have also been affected with the beauty of the nature getting broadcasted to their home through Television. Entry barrier is created due to the strong brand image that the hotels in this sector enjoy.
The hotel industry is only subjected to the power of the labor, trained staff and personnel and the industry has a huge demand of them. The number of tourists coming to a certain geographical area is a function of the scenery of the area, business activities, and connectivity of the area with air, rail and road.
The investment is risky in nature as well. It has increased the curiosity of some travelers, but by and large it had negative impact too.
The hotel industry can expand their business by selling their products like foods and beverages, by organizing entertainment shows and exhibitions and conventional events. Domestic players have been forced to continuously improve so as to enable themselves to effectively compete with foreign firms.
Corporate customers depend on the economic activity in the area. At the same time H1N1 epidemic Swine Flu hit the world and tourism deteriorated by various degrees.
Any new comer will have to either carry a brand name from other sectors or will have to create a brand name to exist. The competition is expected to intensify more as there are high exit barriers in terms of the physical assets created. Other industries like Fast moving goods industry FMCGauto industry, banking industry to a large extent etc do not get affected so much with global changes http: However the hotel industry in India in general faces the challenge of poor infrastructure, lack of maintenance of historical and cultural places, and high taxes.Porters Five Forces Analysis For Hotel Industry Porter five forces analysis From Wikipedia, the free encyclopedia A graphical representation of Porter's Five Forces Porter five forces analysis is a framework for industry analysis and business strategy development It draws upon industrial organization (IO) economics to derive five forces.
Porters Five Forces Analysis on Hotel Industry. 19 pages words. This is a preview content. A premier membership is required to view the full essay.
View Full Essay.
Report Summary. The purpose of this study is to analyze the premium segment of the hotel industry. We have. Hilton Porter’s Five Forces Analysis Posted on August 30, by John Dudovskiy The analytical framework of Porter’s Five Forces developed by Michael Porter ()  explains five separate forces that shape the overall extent of competition in the industry.
Porter’s Five Forces Analysis on Hotel Industry. Essay Info: words. We have carried out Porters Five Forces Model analysis of the premium segment of the hotel industry and compared it with some industries like IT, Cement and Textiles which have shown growth potential in recent times.
The industry chosen for the analysis is the. ANALYSIS OF HOTEL INDUSTRY IN PORTER’S FIVE COMPETITIVE FORCES Submitted By- Krati Chouhan Section- A BBA LLB(Hons.) III Semester. Transcript of Porter's five forces analysis - Hotels. Rivalry-Company ´s competitiveness safety and technical rules Environment energy waste water Buyer Power What's Buyer Power?
Porter's five forces analysis - Hotel Industry Bargaining Power of Suppliers REFERENCES high barrier to entry to the sector unique produkt or service.Download