Porter’s Five Forces analytical framework developed by Michael Porter (1979)[1] represents five individual forces that shape an overall extent of competition in the industry. These forces are illustrated in figure below: Porter’s Five Forces Threat of new entrants in Marriott Porter’s Five Forces Analysis The threat of new entrants into the global hotel industry is moderate. There are a number of factors that make it difficult for new entrants to enter the hotel industry. These include high capital requirements, the importance of brand recognition, lack of access to distribution channels and the importance of economies of scale. Capital requirements The hotel industry is highly capital-intensive. New entrants need to have a significant amount of capital to invest in building or acquiring hotels. According to data from hospitality consulting firm HVS, ground up construction of a full-service hotel typically costs USD 323,500 per room in the US.[2] The similar pattern is echoed in many other markets as well. Accordingly, capital requirements are a significant entry barrier for new players into the hotel industry. Brand recognition Established hotel brands such as Marriott, Hilton, IHG Hotels & Resorts, Hyatt and Wyndham Hotels & Resorts have a significant advantage over new entrants. These companies have been developing and promoting their brands for decades and accordingly, have a strong reputation and customer loyalty. Moreover, effective branding enables established market players to command premium prices, further solidifying their position. New entrants, on the other hand, will have no visible brand, making it difficult for them to successes in the market. Distribution channels Distribution channels for hotels include direct channels, such as their own websites and reservation call centres, and indirect channels, such as online travel agencies (OTAs), global distribution systems (GDSs), and tour operators. Established hotel brands such as Marriott have well-established distribution channels.…Marriott Porter’s Five Forces Analysis
Friday, October 27, 2023
Research Methodology
Porter’s Five Forces analytical framework developed by Michael Porter (1979)[1] represents five individual forces that shape an overall extent of competition in the industry. These forces are illustrated in figure below: Porter’s Five Forces Threat of new entrants in Marriott Porter’s Five Forces Analysis The threat of new entrants into the global hotel industry is moderate. There are a number of factors that make it difficult for new entrants to enter the hotel industry. These include high capital requirements, the importance of brand recognition, lack of access to distribution channels and the importance of economies of scale. Capital requirements The hotel industry is highly capital-intensive. New entrants need to have a significant amount of capital to invest in building or acquiring hotels. According to data from hospitality consulting firm HVS, ground up construction of a full-service hotel typically costs USD 323,500 per room in the US.[2] The similar pattern is echoed in many other markets as well. Accordingly, capital requirements are a significant entry barrier for new players into the hotel industry. Brand recognition Established hotel brands such as Marriott, Hilton, IHG Hotels & Resorts, Hyatt and Wyndham Hotels & Resorts have a significant advantage over new entrants. These companies have been developing and promoting their brands for decades and accordingly, have a strong reputation and customer loyalty. Moreover, effective branding enables established market players to command premium prices, further solidifying their position. New entrants, on the other hand, will have no visible brand, making it difficult for them to successes in the market. Distribution channels Distribution channels for hotels include direct channels, such as their own websites and reservation call centres, and indirect channels, such as online travel agencies (OTAs), global distribution systems (GDSs), and tour operators. Established hotel brands such as Marriott have well-established distribution channels.…
0 Response to Marriott Porter’s Five Forces Analysis
Post a Comment