Preview

Porter 5 Force on Travel Industry

Good Essays
Open Document
Open Document
683 Words
Grammar
Grammar
Plagiarism
Plagiarism
Writing
Writing
Score
Score
Porter 5 Force on Travel Industry
Porter’s Five Forces: Travel Agency :
Industry Rivalry : Highly Fragmented Industry with Intense Rivalry Highly Fragmented Industry. Organized players would barely have 15-20% of the marketplace Most of organized players are present in metros & mini-metros Large disposable incomes in towns like Lucknow, Jaipur, Coimbatore etc. serviced by family run unorganized players Industry rivalry is intense but not cutthroat Rivalry Intense because of low switching costs, low levels of product differentiation, perishability of products diversity of rivals Rivalry is not cut throat since exit barriers are not high, fixed costs are not high, market growth is good Porter’s Five Forces: Travel Agency

Porter’s Five Forces: Travel Agency :
Threat of Substitutes: Low Threat of Substitutes, as travel moves up the list of household priorities Lot of Possible Substitutes , Threat of Substitution Low India is witnessing a growth of discretionary spend as % of income from 30% in 2005 to around 70% by 2025. Travel , being a discretionary spend poised to gain. Travel has moved up the list of household spending priorities Unlikely to be substituted by a durable purchase or investments Education & Recreation will occupy 9% share of wallet in 2025 as compared to 5% now. Travel Industry currently at $16 billion, is expected to touch $26 billion by 2010 Porter’s Five Forces: Travel Agency

Porter’s Five Forces : Travel Agency :
Buyer Power: While buyers are fragmented, their diminishing brand loyalty and ability to switch (for most products) gives them reasonable buying power Buyers are fragmented Diverse retail buyer and corporate buyer profiles Switching costs for buyers is not high as brand loyalty is low/diminishing Credible threat of backward integration Buyers can directly buy from suppliers (hotels, airlines etc) Luxury segment is brand conscious to and willing to pay a premium for great experience and service quality Porter’s Five Forces : Travel Agency

Porter’s

You May Also Find These Documents Helpful

  • Powerful Essays

    1. Score each competitive force in the airline industry and provide a brief rationale for your assessment.…

    • 2740 Words
    • 11 Pages
    Powerful Essays
  • Satisfactory Essays

    - Leisure travelers who are not sensitive with the price and most of them are loyalty to the particular industry that offer the best service and offer the best flying experience.…

    • 448 Words
    • 3 Pages
    Satisfactory Essays
  • Powerful Essays

    Intensity of Rivalry: the intensity of competition in this industry is high. As we can…

    • 3331 Words
    • 14 Pages
    Powerful Essays
  • Good Essays

    Despite operating in one of the most unattractive industries, Southwest Airlines has being very successful in its operations. Its operational success can be attributed to the use of a single aircraft type by the airlines targeted at minimizing the maintenance as well as the operational costs (Jackson et al., 2011). The airline also targets the smaller as well as the less congested airports to minimize delays as well as schedule disruptions. The aircrafts are easily turned around easily minimizing the time spend on air and this is accomplished by minimizing meal services as well as the seating assignments. However, although these are attributed to e the primary reasons behind the aircraft’s success, initiatives by other aircrafts to copy the…

    • 793 Words
    • 4 Pages
    Good Essays
  • Good Essays

    Rivalry is the competitive struggle between companies in an industry to gain market share from each other. A more intense rivalry usually means that there are lower prices and more spending on non-price-competitive weapons. These would be things such as in-flight complimentary items like drinks and snacks. A more intense rivalry will lower prices and raise costs. This means that this makes the window for profitability smaller. If the rivalry is less intense, the company can raise its prices and spend less money on non-price-competitive weapons. This would mean an increase in industry profits. There are four main factors that deal with the intensity of rivalry among competitors in an industry: industry competitive structure, demand conditions, cost conditions, and exit barriers.…

    • 733 Words
    • 3 Pages
    Good Essays
  • Powerful Essays

    Rivalry among established companies – The intensity of rivalry among established companies within the aviation industry is very high. Currently the only competitor or Airbus is Boeing. Both of these companies gain market share from each other using prices, product design, advertising, and direct selling efforts. Due to the intensity of the rivalry among Boeing and Airbus, the profits are squeezed.…

    • 1434 Words
    • 6 Pages
    Powerful Essays
  • Powerful Essays

    Case Study

    • 1964 Words
    • 8 Pages

    The Europe is renowned for its tourism sector and the attractions, accessibilities and facilities for the tourist destination in the Europe is in satisfactory level. But with the passage of time, the tour operators of Europe face the challenges of contemporary issues in Europe. The Fiscal crisis, unemployment rates and the political instability lead the tour operator of the Europe to have a slow growth in the tourism sector. The study aims to scrutinize the factors and reasons behind the rigorous competitions in the tourism industry and low growth of tour operators in the Europe.…

    • 1964 Words
    • 8 Pages
    Powerful Essays
  • Satisfactory Essays

    What is the likelihood that someone will drive or take a train to his or her destination? For regional airlines, the threat might be a little higher than international carriers. When determining this you should consider time, money, personal preference and convenience in the air travel industry.…

    • 342 Words
    • 2 Pages
    Satisfactory Essays
  • Satisfactory Essays

    ● Industry Rivalry: There are only 5 existing players in the market who have limited market penetration…

    • 293 Words
    • 2 Pages
    Satisfactory Essays
  • Good Essays

    Mini Case for Gucci Group

    • 708 Words
    • 3 Pages

    Industry structure of luxury goods industry should be analysis from Porter’s five forces model which are threat of entry, threat of substitute products, the power of suppliers, the power of buyers and rivalry among existing competitors.…

    • 708 Words
    • 3 Pages
    Good Essays
  • Good Essays

    Buyer Power

    • 306 Words
    • 2 Pages

    Buying power is known as the bargaining power of customers. There are two types of buyer power. The first is associated with the customer’s price sensitivity. If each brand of a product is similar to all the others, then the buyer will base the purchase decision mainly on price. This will increase the competitive rivalry, resulting in lower prices, and lower profitability. The other type of buyer power relates to negotiating power. Larger buyers tend to have more leverage with the firm, and can negotiate lower prices. When there are many small buyers of a product, all other things remaining equal, the company supplying the product will have higher prices and higher margins. Conversely, if a company sells to a few large buyers, those buyers will have significant leverage to negotiate better pricing.…

    • 306 Words
    • 2 Pages
    Good Essays
  • Good Essays

    Porter's 5 Forces

    • 746 Words
    • 3 Pages

    Porter’s five forces model is designed to show the profitability potential of a company. This is very important when designing ones international strategy. While this is not an all encompassing model, it is essential that these five forces be considered because they drive the profit margins of a product and before going global, a company must know if it even has a chance to succeed in that specific market. These forces are:…

    • 746 Words
    • 3 Pages
    Good Essays
  • Satisfactory Essays

    Huella Proposal

    • 443 Words
    • 2 Pages

    • To identify competition in Hong Kong travel agencies including brick-’n-mortar agents and online agents.…

    • 443 Words
    • 2 Pages
    Satisfactory Essays
  • Satisfactory Essays

    porters five forces

    • 882 Words
    • 4 Pages

    During 2011 significant industrial relation events took place in Australia. One significant event that was widely reported in the media and according to Catanzartiti and Kane (2012) “captured the interest of the mainstream press more than any other case during 2011”, was the Qantas Airways Limited (Qantas) dispute”.…

    • 882 Words
    • 4 Pages
    Satisfactory Essays
  • Good Essays

    Travel Agency

    • 1737 Words
    • 7 Pages

    When travel agencies are able to achieve or exceed the expectations of customer, they will be satisfied with the service. Therefore, globally competitive service…

    • 1737 Words
    • 7 Pages
    Good Essays