IUBAT-International University of Business

Agriculture & Technology

A Report On

“Analyse the Porter’s Five Forces Model of my own Hotel”

Prepared By-
Name-Safin Adnan
Id-19211015
Course Name - Strategic Management
Course Code- THM 405

Prepared For-
Md Yusuf Hossein Khan
Assistant Professor
CTHM- College of Tourism and Hospitality Management
IUBAT—International University of Business Agriculture and Technology

Total word Count-2626

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 Table Of Content
No. Content pages
01 Introduction 03
02 Company Overview 04
03 Briefly discussion on Porter Five 05-06
Forces Model
3.1 Threats of new entry 06
3.2 Threat of substitution 07-08
3.3 Bargaining power of suppliers 08-09
3.4 Bargaining power of buyers 09-10
3.5 Competitive rivalries 10-11
04 Analysis 12
05 Conclusion 13
06 References and bibliography 14
07 Appendix 15

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Introduction: This report is prepared for THM 405 course. This report is about analyse the
Porter’s Five Forces Model of my own Hotel “Le Méridien Dhaka
” under the Marriott International
and it is located in Dhaka .In this report I am going to discuss analyse the porters five forces
model at my own hotel.
Basically ,Porter's Five Forces is a business analysis model that helps to explain why various
industries are able to sustain different levels of profitability. The model was published in
Michael E. Porter's book, "Competitive Strategy: Techniques for Analyzing Industries and
Competitors" in 1980.
Porter's five forces help to identify where power lies in a business situation. This is useful both in
understanding the strength of an organization's current competitive position and industry's
weaknesses and strengths.
Actually I try to discuss relevant information about how this five forces will help any
organization and I hope this report will help others to know about porters five forces.

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Company Overview: J. Willard Marriott(September 17, 1900- August 13, 1985) is known as the father of
Marriott group. Marriott International, Inc. is an American multinational company that operates,
franchises, and licenses lodging including hotel, residential, and timeshare properties. It is
headquartered in Bethesda, Maryland. The company was founded by J. Willard Marriott and his
wife Alice Marriott; the executive chairman of the company is now their son, Bill Marriott and
the Marriott family retains majority ownership of the company. Marriott is the largest hotel chain
in the world by the number of available rooms. It has 30 brands with 7,642 properties containing
1,423,044 rooms in 131 countries and territories. Of these 7,642 properties, 2,149 are operated
by Marriott, and 5,493 are operated by others pursuant to franchise agreements. The company
also operates 20 hotel reservation centers.

Marriott International, Inc. was formed in 1993 when Marriott Corporation split into two
companies: Marriott International, Inc., which franchises and manages properties, and Host
Marriott Corporation (now Host Hotels & Resorts), which owns properties. Under the Marriot
group the name of my hotel is “Le Méridien Dhaka”. It will be one of the leading hotels in next
ten years. As Marriot is a one of the renowned groups in the world it has a name value so I
should try my best to make it a profitable project.

The target of my company is to give best support and service to the guest and provide them with
amenities. So as the participate in this project my main mission for the guest is to feel like they
are at their home when they are in my hotel. In one word, home outside home.For fulfill this
mission must have to care about some activity like porters five forces. This model can help to
identify where power lies in a business situation and industry's weaknesses and strengths.
( https://en.wikipedia.org/wiki/Marriott_International , 2021)

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Briefly discussion on Porter Five Forces Model: Porter's Five Forces is a model that identifies
and analyzes five competitive forces that shape every industry and helps determine an industry's
weaknesses and strengths. Five Forces analysis is frequently used to identify an industry's
structure to determine corporate strategy. The five forces model teaches us that competition has
multiple dimensions. It is important how many direct competitors we have, but it is also
important if clients can choose to use alternative products, or if new entrants are likely to enter
the market and increase current levels of competition. In addition, we shouldn’t forget that
clients and suppliers can have a very strong bargaining power, and dictate the terms if the
companies in an industry are unable to do anything about it.

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Threats of new entry: When new competitors enter into market and offering the same products
or services, a company's competitive position will be at risk. New entrants in an industry bring
new capacity and the desire to gain market share. The seriousness of the threat depends on the
barriers to enter a certain industry. The higher these barriers to entry, the smaller the threat for
existing players. Those who are the new in the market that type of industry how mush create
problem that must need to indentify. My project is about Hotel industry. so , if new hotels comes
same to my positioning hotel that time my straggle will increase. In that situation need to price
will be lower than before. But, if organization is established that time no need to decrease price
Because of public demand. If industry have good quality that time customer don’t try another
product. Common barriers to entry include special tax benefits to existing firms, patent
protections, strong brand identity, customer loyalty, and high customer switching costs. Other
barriers include the need for new companies to obtain licenses or regulatory clearance before

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operation. (https://www.business-to-you.com/porters-five-forces , 2021)

Threat of substitution: The threat of substitution in an industry affects the competitive

environment for the firms in that industry and influences those firms’ ability to
achieve profitability. The availability of a substitution threat effects the profitability of an
industry because consumers can choose to purchase the substitute instead of the
industry’s product. Each and every business sectors has more substitutes if we consider Air lines
business .In Bangladesh some local airlines like Novo Air, Regent, US Bangla, Biman etc. In
this sectors substitutes is low .On the other hand If we consider Hotel industry. Now a days is
very challenging industry. Hotel industry is growing day by day.so we can see in this sector
threat of substitute is more than air lines sector.For any organization its helpful when substitute

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no is low or threat of substitute no is low, Because its greater chance for consume products from
the company. So I need to careful about the threat of substitution of my own company “The
Classio Hotel”. Although it’s a positive side for Hotel industry Because, for establish this
industry need more money than other industry. Another thing,cost is nothing for switching to a
substitute product and in the market there are many substitute product also available .So, its not a
difficult thing for switching to a substitute product.now I give one example for clear this topic,
Think of what the electronic lock did to the lock market. The electronic lock used new
technology to fulfill the same need that the manual lock policy filled for years—giving
customers satisfaction also security. Price isn’t always the reason that customers switch to a
substitute product. After all, the electronic lock was much more expensive than a manual lock
system, but people were willing to pay a higher price for electronic lock .
(https://strategiccfo.com/threat-of-substitutes-one-of-porters-five-forces , 2021)

Bargaining power of suppliers: Porter (1980) emphasized that suppliers to an industry may be
powerful if they are more concentrated than their customers and their customers do not command
a significant share of their business because their customers do not represent a potential long-
term or major relationship. If the product has an important input in the industry success that time
Suppliers have more bargaining power .Supplier always wants they delivery less but earn more
money. i’m running one business that is hotel business so I must be need supplier for running the
business. Supplier supply all necessary items that must be need for all kinds of business. Like for
hotel business need to housekeeping products , many products for kitchen section. maintainance
dept. also need some products. This type of all products supplier supply. So, in this part supplier

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and businessman completely in opposite site. Supplier always wants more money but,
businessman wants paid less money.So, in this section if supplier power is less and my power is
high on that time I will be influences supplier and getting more products by low cost.So , its
more helpful and profitable for me if supplier power is low.
Now I share seven tips that can use to build  bargaining power:
 At first Set the stage for getting to yes.
 Take copious notes of what is being said and what has been agreed to.
 Dress appropriately.
 Have support.
 Bring back-up material.
 Say less, not more.
 Be ready to walk away.
(https://corporatefinanceinstitute.com ,2021)

Bargaining power of buyers: Buyer power actually indicates customer's ability to reduce
prices, improve quality, or generally play industry participants off one another. Buyer always
wants that , they pay less but they wants more product.Pay less and get more.Supposed I’m
running one company in that case what I want?? I must want opposite thing .Like, I must want
more money from buyer and less thing provide for the buyer.So, in this part also buyer and
company completely in opposite site. Buyer wants more product but businessman wants give
less product.so, in this time if my power is more than buyer that time I can influence buyer and
get more money.so, its more profitable for me if buyer power is less. Because , if buyer power is
less that time we can influence customer or buyer.

generally, the bargaining power of your buyers is higher if ,There are not many buyers in the
market or if they represent an important portion of your company’s sales.The buyer has multiple

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alternatives to source the solution, or if your product is not critical to their business. For
example, if they can get what you offer from ten other businesses under similar terms, they will
have the final word on who they choose.

Now I discuss how mitigating buyer burgaining power.some ways like, Offering differentiated
value, Increasing switching costs, Increasing the social costs of using other solutions,
Personalizing customers’ experience etc.This is important in order to maintain a sale and
prevent the customer from leaving. It also builds trust, creates added value for the customer, and
ensures customer satisfaction. Overall, knowing your products and services is a vital component
of successful sales and customer service.

(https://www.business-to-you.com/porters-five-forces , 2021)

Competitive rivalries: Competitive rivalry is a measure of the extent of competition among

existing firms. Intense rivalry can limit profits and lead to competitive moves, including price
cutting, increased advertising expenditures, or spending on service/product improvements and
innovation. The threat of rivalry is when other businesses compete with you. Keep in mind that
the threat of rivalry can take many forms. This is actually, Competition among you and your
competitors. Rivalry takes a variety of forms along the value chain: marketing, product features,
new product introductions, customer service, pricing. If rivalry is fierce, then competitors are
trying to steal profit and market share from one another. ... For example, high intensity
of rivalry means competitors are aggressively targeting each other's markets and aggressively
pricing products. This represents potential costs to all competitors within the industry.
competitive actions or reactions influences the intensity of rivalry, even for direct competitors.

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Two important drivers of competitive actions and responses are market commonality and
resource similarity. Currently, the situation for e-commerce business finds itself under dense
competitiveness, given the high number of different stores that offer similar products. Right
before this huge rivalry stands the consumers, who tend to decide where to buy primary looking
after the price of a product. There may be other factors that influence their decision, but the price
is definitely one of the most critical aspects. It is essential to understand how the market you are
working in functions and changes. That will be useful when anticipating future competition’s
movements and adapting products’ prices to the same competitive level of the market. . Now I
indicates how to handle  industry competition. At first Identify a need in the industry and satisfy
it with a product or service. We can Improve on existing products or services. Always Highlight
your differences. Try to Clarify your brand and message. Always Focus on the needs of the
customers and Focus on the needs of employees. Do not focus on  competitors.
(https://www.netrivals.com/resources/guides/rivalry-between-competitors , 2021)

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porter's five forces analysis: Porter's Five Forces is a business analysis model that helps you to
explain why various industries are able to sustain different levels of profitability.  The five
forces are frequently used to measure competition intensity, attractiveness, and profitability of
an industry or market. Competition from within the financial industry is probably
the strongest of Porter's Five Forces. Porter's five forces model gives a systematic way for
anyone to figure out what's going on in their industry, and what to do next. It does this by getting
you to the ask the right questions .Often when you are in the thick of things, its difficult to see
the wood from the trees. The five forces model is a good tool to understand the degree of
competitiveness and the competitive dynamics in a specific market. Being a businessman, it
helps you to make or build your strategies by evaluating the circumstances in which you are
working. Competitiveness, suppliers and customer’s bargaining power, substitutes, they all help
you to realize how you are gonna work and what are the possible ways you can do something. It
basically shows you the opportunities or the threats if you use it the right way. So, for running
any business organization very soundly portars five forces is very helpful.

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Conclusion: In the current world there are lots of hotels around the world. People now know
about what is the real mean of hospitality. Those country who have lots of tourist spot and
beautiful places they are grow up their economy just improve their hospitality industry. Dubai,
Thailand, Malaysia, Canada, India etc. these are some example countries name who are really
understand of their nature beauty and use it to grow up their economic condition. And also, in the
current world for a student hospitality industry give then better future compare to another
corporation. Because of the improvement of this industry. That’s why as my word I would
definitely say that hospitality business is the most profitable, Smart business in the world.
Five forces analysis helps organisations to understand the factors affecting profitability in a
specific industry, and can help to inform decisions relating to: whether to enter a specific
industry; whether to increase capacity in a specific industry; and developing competitive
strategies. In conclusion, Porter’s Five Forces have huge impact of an industry because it can
stack out position of a firm in an industry and able to let the firm know their strength and
weakness in order to retaining customer. By understanding the industry forces that form industry
rivalry is the origin for evolving tactic (Porter, 2008). Therefore, the companies should clarify
the five industry forces to have a better understanding in order to begin develop its strategic use
for business. At the end of the last, the threat of new entrants has significant influence on
existing companies.

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Reference and Bibliography:

Company Overview: https://en.wikipedia.org/wiki/Marriott_International [Accessed on 21/03/2021]

Threats of new entry: https://www.business-to-you.com/porters-five-forces [Accessed on
21/03/2021]
Threat of substitution: https://strategiccfo.com/threat-of-substitutes-one-of-porters-five-forces
[Accessed on 25/03/2021]
Bargaining power of suppliers: https://corporatefinanceinstitute.com [Accessed on 25/03/2021]
Bargaining power of buyers: https://www.business-to-you.com/porters-five-forces [Accessed on
27/03/2021]
Competitive rivalries : https://www.netrivals.com/resources/guides/rivalry-between-competitors
[Accessed on 27/03/2021]

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Appendix:
Income growth differences between marriott international Worldwide and its competitors:

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