Strategic Management Tourism Industry Porter Five Forces

Introduction The model of the Five Competitive Forces was developed by Michael E. Porter in his book Competitive Strategy: Techniques for Analyzing Industries and Competitors in 1980. Since that time it has become an important tool for analyzing an organizations industry structure in strategic processes. Porter’s model is based on the insight that a corporate strategy should meet the opportunities and threats in the organizations external environment. Especially, competitive strategy should base on and understanding of industry structures and the way they change. Porter has identified five competitive forces that shape every industry and every market. These forces determine the intensity of competition and hence the profitability and†¦show more content†¦Hence, if vital resources are unavailable or very costly, entry will clearly be constrained, as well as this airport slots provide a classic resource barrier to entry. In some industries, there are very substantial costs associated with switching from one supplier to another. Airline fleet planning illustrates this point. An airline only using, for example, Boeing aircraft will have built up a large investment in Boeing spare parts, Boeing orientated flight simulators, and in the training of its staff to be familiar with Boeing products. Therefore there will be a strong financial incentive to continue to buy from Boeing. In the event of the Airbus to break the stranglehold of Boeing at such an airline, they will have to offer very large discounts on the purchase price of their aircraft, in order to effectively pay themselves for the Switching Costs of moving away from Boeing. Incentives and substantial amounts of pilot training would be best case scenario. The problem for airlines is that they do not have the Switching Cost protection which assists aircraft manufacturers in retaining their customer base. An airline may be getting a worthwhile amount of business from a major customer as a result of having a corporate deal with them. It will be a simple task for another carrier to come along and offer theShow MoreRelatedAnalysis Of Accor Hotels : Company Profile947 Words   |  4 Pages Suite Novotel, Mercure, Mama Shelter, Adagio/ Adagio Access and economy and economy brands are IBIS, IBIS Styles, IBIS Budget, and Hotel F1(Accor, 2016). 2. Analysing the macro- environment of Accor Hotels Macro environment comprises external forces that organisation cannot directly control, instead organisation need to manage their macro environment in a way that benefits them (The Macro Environment Pest Analysis, 2016). The PESTLE analysis is the most widely recognized approach for consideringRead MoreExternal Trends1214 Words   |  5 PagesDefine the term environment in this context. 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