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  • Tune Hotel Porter's Five Forces Analysis

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    AZUbius
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    1) For new hotel entrants, the main barriers would be establishing a cost advantage and strategic locations like Tune Hotels has done. 2) Tune has reduced supplier bargaining power by advertising for them in hotels and naming hotel floors after suppliers. 3) As a budget hotel chain, Tune's business model relies on large volumes of customers, with prices increasing during peak seasons.

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    An analysis of Tune Hotel's competitiveness using Michael Porter's Five Competitive Forces model.

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    1) For new hotel entrants, the main barriers would be establishing a cost advantage and strategic locations like Tune Hotels has done. 2) Tune has reduced supplier bargaining power by advertising for them in hotels and naming hotel floors after suppliers. 3) As a budget hotel chain, Tune's business model relies on large volumes of customers, with prices increasing during peak seasons.

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    Attribution Non-Commercial (BY-NC)
    Download as PPTX, PDF, TXT or read online from Scribd
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    392 views22 pages

    Tune Hotel Porter's Five Forces Analysis

    Uploaded by

    AZUbius
    1) For new hotel entrants, the main barriers would be establishing a cost advantage and strategic locations like Tune Hotels has done. 2) Tune has reduced supplier bargaining power by advertising for them in hotels and naming hotel floors after suppliers. 3) As a budget hotel chain, Tune's business model relies on large volumes of customers, with prices increasing during peak seasons.

    Copyright:

    Attribution Non-Commercial (BY-NC)
    Download as PPTX, PDF, TXT or read online from Scribd
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    of 22

    Porters 5 and Tune Hotels, how can?!

    Question: How easy/difficult is it for new entrants any barriers? Consider: Switching costs Brand loyalty

    Switching Costs & Brand Loyalty


    Not a likely barrier budget business means consumers go where needs are satisfied Consumers consider whatever is cheapest and still has the services needed ie
    Consumers know to expect lower standards therefore biggest hurdle would be the cost advantage that [hotel] has established

    New entrants would merely need to: Pick convenient locale ie city centre or near airports to be in position of strategy Establish good marketing strategy - like kulula in SA did with airline Tune does not even have most of its hotels in these "strategic" places - only KLCC and KLIA, but key is their affiliation with AIR ASIA

    Question: How strong is position of sellers are there any potential suppliers? Suppliers in this case: Pensonic, King Koil, Nippon Paint, Johnson Suisse

    Tune has managed to overcome the bargaining power of suppliers by making longterm deals with their suppliers: They do in-hotel advertizing for their suppliers They have named the floors of their hotels after their suppliers

    Question: How strong is position of buyers can they work together to order large volumes? Tune already has market cost advantage meaning customers dont have any competitors to threaten them with

    Large volumes is actually the business model of budget businesses: On days of expected high bookings (peak seasons), prices go up (this could be point of consumer empowerment / concern)

    Question: Does strong competition exist- is one more powerful, or is there balance? Market research revealed: Most "low end" budget hotels charge around RM20 for rooms; meaning Tune has established and although market sharing may increase, they are still a leader

    Question: what will define competition for Tune?

    Consider: Market growth rate Dimensions of competition

    Market growth rate


    Fact that its likely to be low ie growth of any competition likely to be at detriment to Tune and other firms because of specific target market (low budgeters)

    Dimensions of competition
    Likely that Tune focuses competing on price dimension, rather in marketing / location etc Gives competitors chance to take advantage of other dimensions

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