Industry analysis
Industry analysis
For the success of any businesses it is necessary that we conduct industry analysis. In our analysis we actually see the market and customer behavior that what will be other alternatives that our customer can use instead of using our facility. In our analysis we see about the opportunity of entering new business and we also see our barging power with our customers and with our suppliers. Because it is very necessary that bargaining power of a business should be very strong if he wants to become strong player in the market. Following is the detail of our industry analysis in the framework of porter 5 force model (Palmer, 2000)
- Threat of entry
As Kuwait is now becoming famous for its tourism. There are opening of many new hotels in Kuwait and as well as there is opportunity for many other business men to provide online hotel booking facility. Therefore there is always chance that there will be new entrants in this business. There will be more competition and it will provide greater opportunity too many other companies to enter that will make change in market environment. As this business is flourishing in Kuwait so it will give other entrants cost advantages and distribution channels for them. If new entrant will make more costly packages than us then we will also have to change our pricing policy. This business is wholly depending upon the best service quality and minimum rates for booking in good hotels (Kotler & Keller, 2012)
- Bargaining power of supplier
Bargaining power of supplier means that with which affiance we will provide good services to our customer by negotiating prices with hotels. We have to manage good relationship with management of all hotels for which we are taking booking orders. If we succeed in getting good rates then we can serve our customers more efficiently (Kotler & Armstrong, 2004).
We have to manage good bargaining with our suppliers that are hotels. We will give them customers and in return we will charge our commission as well as we try to give best accommodation to our customers. Now Kuwait has become a hot spot for many new investors. Our clients may local and international. They always want hotels that provide good services so we have to choose hotels according to demand of our customer as well.
Switching cost from one suppliers to other is relatively large and it will have negative effect on our services as well therefore we will make such strong bargaining that hotels will also provide good quality services so that we have no complaints from our customers regarding hotel service quality.
- Bargaining power of customer
Bargaining power of customers actually means that how much customer put pressure on us for negotiating price. Our customer mostly will belong from international level therefore there is chance that they have good bargaining power. They can negotiate with us on pricing of our services. There is a chance that many customers will insist to only a specific list of hotels for their stay. If there will be large customers there will be concentration of large buyers. If there will be many options for online booking for hotels than there is a chance that our customers will switch towards our competitors. Things will not be a good thing for our business (David, 1998)
It is necessary for us that we will make good relationship with our customers. We will try to give good prices according to their status and try to give them many bonuses in term of points. Points mean opportunity of giving them a free night stay in hotel of a free dinner. If customers will not be satisfied with pour services then there will be a chance that people will shift towards the direct way of booking. It means they will directly contact with a hotel for their booking. Now this is era of internet customer can easily find a list of all hotels in Kuwait of may make direct online reservations.
- Threat of substitutes
As Kuwait is becoming an attractive place for many tourists as well as for many investors. There will be many other competitors in the market that will provide same facility. Therefore it is necessary that we will provide high quality service and we will make our customer loyal so that they cannot switch to our competitors. We will build close relationship with our customers like by giving them best incentives. This is possible only when we give our customers quick facility and give importance to their opinion as well. There are many people who always brand conscious and they love to stay only their proffered list of hotels. So it is necessary that we will listen our customers first that what will be their priority either they will want hotels near to city markets of near sea. And what rates they can afford. These will be their priority list that will make us enough compatible to give them best service.
If customer will not satisfy from our services then they definitely switch to other sources. If switching cost is low. And in the case of our business for customers switching cost will be low because there are many other options for online booking exist.
- Industry rivalry
There is no business that will not face problem of industry rivalry. It is necessary for us that we make product differentiation strategy. It means that we will offer something very unique to our customers that if they want to switch towards our competitors they cannot because of our unique facility. This facility in our case will be minimum hotel prices that we can take from our suppliers to customers. For our business it is very necessary that we will make such strategies for our business that from both sides will also make our profit as well. With the passage of time if there are many rivals in the market then we may shift our product category we can also provide transport facility from airports to their reserved hotels. In our case there is a big competition in our market and switching cost of customer is not very high therefore it is necessary that we provide good service quality. Industry rivalry actually tells about the competition among the existing player of same businesses. If there will be high competition then of course there will be low price that business will charge. When there is greater supply of something it an obvious fact that then prices will decline. Because we are starting our new business we will have to take care of our customers by giving them prices that are relatively low then our competitors so that many people will attract towards us (Hill, 1996)
References
David, A. (1998). Developing Business Strategies. John Wiley and Sons.
Hill, M. (1996). Marketing Management: Strategies and Programs. Guiltinan.
Kotler, P., & Armstrong, G. (2004). The Principles of Marketing. Pearson Education.
Kotler, P & Keller, L. (2012). Marketing Management. Pearson Education Limited.
Palmer, A. (2000). Principles of Marketing. Oxford: Oxford University Press.
