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1) Potential Entrants (Threat of new entrants) – In the hotel industry there are considered to be big hotel giants that are already in the market such as Marriott, Hilton, Hyatt, Accor, IHG etc. Therefore if a new hotel chain plans to enter such highly competitive market then they have to go through a lot as this industry is all about being up to date with technology. If a new entrant can adopt to technology in a unique way to sell its products or services, customers might be impressed with it and might switch in this case so there is always a threat to big chains from new entrants.
2) Power of Buyers – Consumers (guests) actually known as buyers hold the advantages as hotels cannot make money, profits until and unless their facilities (products and services) are used. There are considered to be millions of people that use the products/ services of Crowne Plaza Hotels and therefore if they don’t like the services/ product it will be very easy for them to switch brands resulting in losses, collapse for the organisation. In order to avoid it hotels need to be very careful in terms of their guest’s preferences, what they dislike. Preferences can be in terms of rooms, food and beverage, other services provided by the hotel.
3) Power of Suppliers – Crowne Plaza has different suppliers across the world. Suppliers hold an upper hand in terms of costs and prices being offered to a particular hotel. For example rivalry among hotels such as Marriott and Hilton will influence the suppliers to increase their rates on the products as well as services that are being supplied. This can therefore damage a hotel’s reputation if something goes wrong.
4) Competitive Rivalry – Rivalry can be classified as competition between the hotels in order to increase market share. In order to retain customers (guest’s) hotel offers different types of loyalty and membership programs to have an edge over their competitors. Hotels are seen these days doing mergers with other brands to obtain competitive advantage. An example can be seen where Accor Hotels have merged with Mantra Hotel Group to obtain competitive advantage. Therefore, Crowne Plaza an InterContinental Hotel Group Brand offer excellent services to its guests including business, corporate, leisure, families etc and is itself competitive.
5) Threat of Substitutes – An example can be seen where the hotel guests of Crowne Plaza pay quite a big amount for parking their cars in the hotel car-parking and when having breakfast, dinner in the hotel’s restaurant. This can be affected as if the travellers prefers to park somewhere else where it is free or where it is not expensive could be on the street. Similarly dining outside the hotel for dinner or breakfast instead of within the hotel to avoid expensive charges. There are many substitute products out in the market which can have a negative impact on the hotel’s performance.