This has created pressure on the existing firms to provide better services consistently. Hence, it automatically creates entry barriers of the new comers. The investment is risky in nature as well. The new entrants will be at disadvantage as the best locations are limited in the metropolitan cities.
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.
In case of the economic recession, the hotel industry should be more durable than the tourist market because of the fluctuation in the tourist industry. It is as yet not clear whether the broadcasts about the natural beauty has increased or decreased the number of domestic tourists.
Pressure from Substitute With technical innovations and developments, this industry can perceive a functional threat from Net meetings and video conferencing.
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. Also due to economy of scale a new firm will have to face this barrier. Both corporate customers and individuals enjoy some bargaining power given that their switching cost is negligible.
Customers are more particular to the service provided than other factors such as price charged by the hotels. The average employee to room ratio in India is 1. Threat of Entry Threat of entry can be assessed from the barriers of entry in the Industry which can be created by various means.
Cheng, Where business travelers are concerned the differentiation becomes significant and the hotels are under pressure to keep their brand unique. Average employee cost in varied from Rs 4 lakhs to Rs. After suffering these blows, the hotel industry managed to gain back its footing on the economic map.
Any new comer will have to either carry a brand name from other sectors or will have to create a brand name to exist. Tourist demand is seasonal in nature and hence to a large extent the industry faces a seasonal demand. Cheng, Conclusion The two things the hotel industry thrives on is the ability to differentiate themselves and quality of service.
The quality of service is dependent on the trained staff and personnel and good management.
Cheng, Bibliography Porter, M, As the hotels run on product differentiation, the entrants have to invest in the innovation of the services that are provided to the customers. Entry barrier is created due to the strong brand image that the hotels in this sector enjoy.
Domestic players have been forced to continuously improve so as to enable themselves to effectively compete with foreign firms.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.
The Five Forces Analysis was created by Harvard Professor Michael Porter in and it provides a framework for industry analysis and business development. Porter proposes there to be five forces which either inhibit or prohibit a company’s.
Due to the economic recession in the past, the business travel all over the world suffered a decline which consequently had a bad effect on the hotel industry.
At the same time H1N1 epidemic (Swine Flu) hit the world and tourism deteriorated by various degrees. After suffering these blows, the hotel industry managed to gain [ ]. 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.
52 The Journal of Global Business Management Volume 9 * Number 3 * October issue Analyze the Hotel Industry in Porter Five Competitive Forces Dr. David S.
Y. Cheng, Faculty (Business) Upper Iowa University – Hong Kong Campus. ANALYSIS OF HOTEL INDUSTRY IN PORTER’S FIVE COMPETITIVE FORCES Submitted By- Krati Chouhan Section- A BBA LLB(Hons.) III Semester.Download