Question

examining Porter's Five Forces as a tool for looking at the pressures on profits. Specifically, you will be looking at defining Porter's Five Forces and applying this tool to the market structures and pressures on profits of a chosen group of firms •Chose one of the following groups and use Porter's Five Forces to analyze the pressures on profits for your chosen group's firms. ◦Group 1: the accommodations industry (e.g., Hilton, Marriott Bonvoy, InterContintental Hotel Group). ◦Group 2: the wireless telecommunications industry (e.g., Verizon, AT&T, T-Mobile). •If you want to dig deeper into how one of the firms views the challenges it faces, you might want to look at the firm's investor page.

Answer 1

Porter's 5 force model describes five specific area to make analysis upon in any industry.

1.Potential threats from competitors.

2.Prudential of new entrance into industry.

3.Power of suppliers.

4.Power of buyers.

5.Threats of substitute product.

These porter's 5 forces are huge pressure on profit on any industry.

The accommodation industry also faces issues from these 5 forces.

Also the hotel industry (Hilton, Marriott Bonvoy, InterContintental Hotel Group), has consequences suffered a decline and had a bad affect on industry due to past economic recession.

1.threat from Competitor:  Rivalry amongst the hotel business is very intense because the cost of productive differentiation is comparatively low. This does affect the profit margin of the industry.

2. Potential threats from new entrants into the industry: Hotel industry is easy to enter and switching cost at also low. Hence people can easily enter so there is a potential threats from new entrance into the industry. This affect the profit from the industry

3.Power of suppliers: suppliers have a good bargaining power in the accommodation industry. They have a huge number of options to choose to sell their products to. Hence they can charge higher than what is expected from them.

4. Power of buyers: the concentration of buyers in accommodation industry is higher then the market players. This increases the power of buyers. Buyers can choose from different options and go for more efficient one. Hence that is high competition inside the industry to grab more buyer and this reduces profit margin.

5.Threat from Substitute products: There isn't much substitute present for accommodation industry to substitute with.  Issue arising from substitute product is low here. People what to go somewhere and want accommodation, they need to book a hotel for the same. There is not much substitute available for it.