Bargaining power of buyers in hotel industry

At the same time H1N1 epidemic Swine Flu hit the world and tourism deteriorated by various degrees. After suffering these blows, the hotel industry managed to gain back its footing on the economic map. Industry structure, which determines the profitability of the average competitor and sustainable competitive advantage which allows a company to outperform the average competitor.

Bargaining power of buyers in hotel industry

A short introduction into modern macroeconomics At a personal level macro economics can answer questions like should I switch jobs or ask for a raise, should I buy house now or wait until next year or should I get a variable or fixed rate mortgage? At a business and professional level, macroeconomics can also help answer questions like how much should I manufacture this month and how much inventory should I maintain?

What is Bargaining Power of Suppliers?

Should I invest in new plant and equipment, expand into foreign markets, or downsize my firm? Macroeconomics can help answer these questions because it arms us with a new way of thinking about the world we live and work in.

It helps us filter and sort and process all of the information we are bombarded with every day in the media: From the macroeconomic perspective, all of these seemingly unrelated bits of information reveal to us first patterns and trends, and ultimately courses of action.

A couple of stories about two fictional people in very real situations can demonstrate the use of macroeconomics. Jim Wells used to own a small high tech manufacturing business that made precision components for computer games.

Bargaining power of buyers in hotel industry

Every July, Jim had to decide how many components to produce for the upcoming holiday season, and every year he had simply doubled his production.

Since he never had any trouble moving the inventory, Jim decided to do the same thing again, even though it meant taking out a big short term loan to finance the expansion.

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So in making his decision, he missed some rather significant danger signs. For example, he had read in the Wall Street Journal that the Federal Reserve recently raised the bank discount rate, and sold bonds in the open market. Instead he just grumbled about the higher interest rate on his business loan.

Nor did Jim see the recessionary implications of several stories on CNN reporting a fall in consumer confidence and a slight uptick in the unemployment rate. This gave his Japanese competitors a big leg up.

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By October, the Japanese had taken over half of a market that was already shrinking fast from the onset of a recession. By Thanksgiving, Jim found himself sitting on a huge inventory. By December, he was unable to repay the huge loan. By June, he was bankrupt.

Today, Jim works as a consultant for one of his old Japanese competitors during the day, and studies macroeconomics in the evenings at a nearby college. He sits in the front row of class right next to Teresa Watson. Teresa is a single working mother whose big dream in life is to own her own home.

After talking it over with a mortgage banker, Teresa decided that the only way she could afford her dream home was to take out a variable rate mortgage. It was available at a full two percentage points below the fixed rate mortgage, and her monthly mortgage payment would be several hundred dollars less, but only if interest rate stayed low.

Sure, Teresa felt a little nervous about choosing the variable rate, but the mortgage banker told her not to worry. Teresa failed to see numerous warning signs of growing inflationary pressures.As male harassers and assaulters have been unmasked, the reckoning has largely been confined to the realm of the white-collar worker.

porter's five forces -Hotels Industry. No description by nojdar bb on 25 October Tweet. Comments (0) - Hotel Industry Bargaining Power of Suppliers Buyer Power is High/Strong if: • Buyers are more concentrated than sellers. Bargaining Power of Buyers Porter () mentioned that the buyers of goods and services from an industry may be powerful if they are more concentrated than the players in the industry and are able to force down prices as well as.

Feb 22,  · Whether a hotel or hotel chain is well established or brand new, the five underlying forces of competition which include: the threat of substitution, the bargaining power of buyers, the intensity of rivalry among competitors, the barriers to entry for new competitors, and the bargaining power of suppliers helps determine its profitability and.

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The Marketplace of Life: Porter’s Five Factor Model and the Hotel Industry: Level of service compared to others Added value perceptions Dynamics with other attributes Power of suppliers An industry that produces goods requires raw materials. This leads to buyer-supplier relationships between the industry and the firms that provide the raw materials.
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Bargaining power refers to the ability to set higher prices for goods and services, and restaurants face bargaining situations when buying food, paper goods, maintenance services, restaurant equipment and furnishings, and sanitary supplies. (2) Lack of major buyers across the industry with influence (3) Internet has changed the game and provides easy price comparisons The bargaining power of customers has to do with the end users and the outputs or products and services they purchase from industry players.

It is their ability to.

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