Topic: BusinessIndustry

Last updated: June 22, 2019

1) Potential Entrants (Threat of new entrants) – When it comes to the hotel industry there are considered to be several big hotel giants that are already in the market such as Marriott, Hilton, Hyatt, Accor, IHG etc. Therefore if a new hotel chain plans to enter the market the new entrant has to go through a lot of difficulties. Hotel Industry is all about changes in terms of services, products through technology and if a new entrant can possess technology in a unique way to sell its products or services, customers might be impressed with it and might switch in this case so there is always a threat to big chains from new entrants. An example can be seen where Ovolo Nishi formerly known as Hotel Hotel has acquired the market because of its unique ways in terms of services through technology.
2) Power of Buyers – Consumers, Guests actually known as buyers acquire the advantages as hotels cannot make money, profits until and unless their products and services such as rooms, restaurants, bar’s etc are being used. There are considered to be millions of people that use the products/ services of IHG Hotels and therefore if the buyers (guests) didn’t like the services/ product it will be very easy for them to switch brands resulting in losses, collapse to the organisation. In order to avoid it hotels need to be very careful in terms of their guest’s preferences, what they dislike. Preferences can be in terms of rooms, food and beverage, other services provided by the hotel.
3) Power of Suppliers – IHG has different suppliers across the world. Suppliers hold an advantage in terms of particular rates offered to a particular hotel. For example rivalry among hotels such as IHG and Hyatt will influence the suppliers to increase their rates on supplied products as well as services. Suppliers have a key and can damage a hotel’s reputation if something goes wrong.
4) Competitive Rivalry – It can be classified as competition between the hotels in order to increase market share. In order to retain customers (guest’s) hotel offers different types of loyalty and membership programs to have an edge over their rivals. Hotels are seen these days acquiring smaller brands to obtain competitive advantage. An example can be seen where Accor Hotels have merged with Mantra Hotel Group to obtain competitive advantage. Therefore, Crowne Plaza an InterContinental Hotel Group Brand offer excellent services to its guests including business, corporate, leisure, families etc and is itself competitive.

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