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Porters Five Forces Analysis for Hotel Industry: BARGAINING POWER Of SUPPLIERS
The term 'suppliers' comprises all sources for inputs that are needed in order to provide goods or services. The two key suppliers to the Hotel industry are:
-
Labour
-
Real estate
Over all the suppliers in this market are defined as property owners, developers and real estate companies, interior design and furnishings companies, architects, management and training service providers, marketing companies, industry consultants and ICT manufacturers. [1] 1. Number of Suppliers Moderate (3) - Significant number of real estate companies for a given locality
- Few reliable ICT providers to manage property - Small no. of quality training providers and skilled employees 2. Availability of substitutes High (4) - Substitutes for property
(real estate agents), designers, employees etc are available 3. Switching cost High (4) - Hotels have higher bargaining power and can easily switch between suppliers 4. Suppliers's threat of forward integration High (5) - Suppliers are highly unlikely to forward integrate into the hotel business 5. Industry's threat of High (4) - Hotels could backward
backward integration integrate to own their own real estate company
- They could have their own training wing 6. Contribution to quality High (4) - Property development and real estate companies add to the quality
- So does skilled labour and quality training 7. Contribution to cost Moderate (3) - Most suppliers are much smaller companies compared to hotel companies - Hence hotel companies have a much higher bargaining power
- Supplier contribution to cost is low 8. Industry's importance to supplier High
Upload a Document Search Documents
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Porters Five Forces Analysis for Hotel Industry: BARGAINING POWER Of SUPPLIERS
The term 'suppliers' comprises all sources for inputs that are needed in order to provide goods or services. The two key suppliers to the Hotel industry are:
-
Labour
-
Real estate
Over all the suppliers in this market are defined as property owners, developers and real estate companies, interior design and furnishings companies, architects, management and training service providers, marketing companies, industry consultants and ICT manufacturers. [1] 1. Number of Suppliers Moderate (3) - Significant number of real estate companies for a given locality
- Few reliable ICT providers to manage property - Small no. of quality training providers and skilled employees 2. Availability of substitutes High (4) - Substitutes for property
(real estate agents), designers, employees etc are available 3. Switching cost High (4) - Hotels have higher bargaining power and can easily switch between suppliers 4. Suppliers's threat of forward integration High (5) - Suppliers are highly unlikely to forward integrate into the hotel business 5. Industry's threat of High (4) - Hotels could backward
backward integration integrate to own their own real estate company
- They could have their own training wing 6. Contribution to quality High (4) - Property development and real estate companies add to the quality
- So does skilled labour and quality training 7. Contribution to cost Moderate (3) - Most suppliers are much smaller companies compared to hotel companies - Hence hotel companies have a much higher bargaining power
- Supplier contribution to cost is low 8. Industry's importance to supplier High