Porter’s 5 Forces
e)Threat of
substitution
d)Bargaining a)Competitive b)Bargaining
power of power of buyers
suppliers Rivalry
c)Threat of
new entries
a) Competitive Rivalry
Competitor Balance: reasonable number of competitors therefore they focus on niches.
Industry growth rate: -11% (csimarket, 2016), not attractive. Growth only at the expense of rivals.
High fixed costs: High initial capital investments and high fixed costs in general.
High Exit Barriers: easy to sell high investment assets and equipment.
-structure of industry
-Industry growth rate (industry life cycle)
-High exit bariers/costs ( is it easy to go out? To sell everything fast?)
b) Bargaining power of buyers
Concentrated Buyers
There are a few large customers, but they are not price sensitive Therefore, is difficult to draw a
conclusion.
Low switching costs.
Cancelation policies (Low bargaining power of buyers)
Buyer competition threat
-how easy is to buy a hotel and just DIY/ buying your supplier) e.g. washing your own linen, instead
of a supplier (Backward vertical Integration)
Unless you own a large distribution channel this barrier stays high high barrier = Low bargaining
power of buyers.
Supplier competition Difficult to draw a conclusion
c) Threat of New Entry
- law (easily to enter in the country/industry?)
- differentiation (how much can you differentiate?)
experience and scale
e)Threat of
substitution
d)Bargaining a)Competitive b)Bargaining
power of power of buyers
suppliers Rivalry
c)Threat of
new entries
a) Competitive Rivalry
Competitor Balance: reasonable number of competitors therefore they focus on niches.
Industry growth rate: -11% (csimarket, 2016), not attractive. Growth only at the expense of rivals.
High fixed costs: High initial capital investments and high fixed costs in general.
High Exit Barriers: easy to sell high investment assets and equipment.
-structure of industry
-Industry growth rate (industry life cycle)
-High exit bariers/costs ( is it easy to go out? To sell everything fast?)
b) Bargaining power of buyers
Concentrated Buyers
There are a few large customers, but they are not price sensitive Therefore, is difficult to draw a
conclusion.
Low switching costs.
Cancelation policies (Low bargaining power of buyers)
Buyer competition threat
-how easy is to buy a hotel and just DIY/ buying your supplier) e.g. washing your own linen, instead
of a supplier (Backward vertical Integration)
Unless you own a large distribution channel this barrier stays high high barrier = Low bargaining
power of buyers.
Supplier competition Difficult to draw a conclusion
c) Threat of New Entry
- law (easily to enter in the country/industry?)
- differentiation (how much can you differentiate?)
experience and scale
