Michael porters five forces essay

Porters 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 based on an understanding of industry structures and the way they change.

Michael porters five forces essay

However the pure competition model implies that risk adjusted rates of return should be constant across firms and industries while different economic studies have opposed the model going on to state that different firms can have varying profitability levels from one given time to another.

A change in any of the forces make a business unit to re-assess the marketplace. Some business may have better market place and earn higher profit whilst another business in the same industry may end up at break even point. To overcome this an organization must apply their core competencies, business model or network to achieve a profit over the other competitors.

Architecture, arts, music, dance, cuisine — Amaya incorporates each aspect of local culture into its retreats. Yet majority of large chain hotels have established their authority with operating efficiency, and key marketing-mix outflow. This influential force has an immense impact on the small ordinary Hotels, Restaurants, bakers, Guest Houses and motels etc.

Therefore, it possesses Michael porters five forces essay tough obstacle for new companies who wish to enter in to the hospitality industry. For instance, it becomes rather complicated for new competitors to raise adequate resources and establish extremely developed service.

Amya Lake has overcome threat of new entrance with their insistent operational strategies in product development, promotional activity and better service.

Michael porters five forces essay

Suppliers can be the holy owners of the decision making in terms of price. Yet that can be influenced by foremost hotel chains. By having number of suppliers as an option and also by bargain improved promotional prices that small individual hotels are unable to compete will enable the control over the suppliers.

On the other hand suppliers are also vulnerable by the rising capacity of large hotels to resource their supplies from overseas at better deals.

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At Amaya Lake they have well controlled the supplier power choosing many numbers of suppliers using their growing ability in hotel industry and as well as having and strong and better relationship with the other suppliers.

If a hotel does not identify customers need and break the informality of the service, retaining customers will become bit of a hard task. At this point Amya Lakes famous loyalty card remains the most successful customer maintenance strategy that drastically increases the profitability of there business, also by taking care of customer needs, providing customized service, ensuring low prices, implementing better choices, adding value additions, having constant promotions they have attract many numbers of customers under their wing.

This has contributed to retain their customer base over the period of time. Ecologically kind and ethically sound food and beverage products makes customers more glued to Amya Lake than the competitors in the market.

Customers of Amaya Lake — mostly the leisure market have been targeted by Amaya Lake, and by maintaining a better customer relationship portfolio they kind of have their own market segment. Since customers mostly get their desired experience at Amaya Lake they prefer to stay with them. For example in-house guest who wants to enjoy a meal have many choices.

One is going to hotel restaurant and have the meal or order room service and have meals or go to an out side restaurant and have his meal. Having third option chosen reduces the demand, as there is a threat of consumers switching to the choices. In the hospitality industry this can be seen in the form of service-for-service or the substitute of need, and this takes place by new developments such as the way small hotels, restaurants, bars, clubs ect… this happens in a way of convenience, tailor maidens, easy access and proper customer care ect….

Amya Lake has overcome this by adding few value additions such as Bar, Restaurants, Gym, and Spots complex, DJ club for residents and non residence for affordable price with better service.

Substitutes to Amaya Lake — Restaurants, motels, sports centers, barsect 5 Threats of Existing Rivals Traditional economics model illustrate perfect competition as a result of competition among rival firms.

Today however, competition is more of a driver towards competitive edge rather perfect competition. Generaly, the concentration ratio CR is at most used as a measure of rivalry intensity in a given industry by the use of industry concentration as an indicator whereby, a high CR indicates a large percentage of the market share is held by the largest firms in the industry thus a less competitive landscape and a low CR indicates a presence of a very fragmented market with many rivals none of them with any significant market share leading to a very competitive landscape.

A lower rivary among firms in a given industry is ussualy a sign of discipline within the industry, this harmonious environment may be a result of an informal compliance of certain generally understood code of conduct or simply the role played by the leading firm.Porters Five Forces Essay Industry profitability depends upon just five factors, the so-called "five forces" argues Michael Porter.


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Michael porters five forces essay

Porter's five forces framework is used to evaluate the competitiveness, and hence the attractiveness and profitability of different markets and market segments. It is important for business managers to realize that a 5 forces analysis should be conducted at the level of strategic business units (SBUs), and not at the level of the whole organization.

Michael Porter’s Five Forces Essay Example | Graduateway