Question

Consider the assumptions that framed the analysis. Removing a hotel from the secondary competition and add it to the primary competition. What effect does taking out a Hotel from secondary competition has on the overall analysis? On Demand Base , changes in overall penetrations, changes in the market segment penetrations for the individual hotels, market segment mix for the entire market, and demand.

Answer 1

Before discussing the relevant view points, lets understand the meaning of primary and secondary market. Primary competition is the competition where your competitors are your primary rivals which are dealing and targeting the same audience as you are, providing the same products and services. Thus creating a primary rivalry. On the other hand, secondary competition is the type in which you have competitors but they are selling similar products either to different markets or different segments using different strategies. Thus, primary rivalry is not maintained.

The effect of taking out a hotel from a secondary competition would have huge changes on the overall analysis of the firm and market segments now. Initially you have been conducting your own research without fearing about any rivalry or primary competitors who can affect your business, but now changing the scenario you are in a market where you have several rivals who are targeting the same audience as you are and providing very similar products and services as yours. This would create a huge difference on the demand as it could eventually increase and decrease anytime saying the no. of competitors increased and made your demand more elastic.

Thus, to overcome all the demand and segmentation problems, you have to appoint such strategic management and techniques in your organisation that would eventually lead to provide you with the competitive advantages of having an upper edge over the other primary rivals and thus would provide you with a brand image and equity that will help you to earn more profits and sustainability in the market.