Risk Management and Strategic Planning Unit 5 The External Environment: Competition

Reading Book Ch Tribe, J, (2010) Strategy for Tourism, Goodfellow Publishers, Oxford. 5 Capon, C. (2008) Understanding Strategic Management, Prentice Hall: Hemel Hempstead. 2 Tribe, J. (2005) The Economics of Recreation, Leisure and Tourism, Butterworth Heinemann, Oxford. 8 Johnson, G., Scholes, K., and Whittington, R. (2008) Exploring Corporate Strategy, Prentice Hall: Hemel Hempstead.

Learning Outcomes After studying this chapter and related materials you should be able to understand: Porter’s five forces and critically evaluate, explain and apply the above concepts

Discussion Point On what basis do organisations compete with each other? What is competitive advantage? What is competitive risk?

The competitive environment In his book Competitive Strategy (1980), Porter proposes the following model (‘the five forces’) for investigating the competitive environment: 1 the threat of entrants 2 the power of suppliers 3 the power of consumers 4 the threat of substitutes 5 competitive rivalry

Porter’s Five Forces

The degree of competitive rivalry Competitive rivalry measures of the intensity of competition in an industry. It is is determined by the competitive conditions in the four forces analysed above and in addition: Degree of market leadership (dominant firm) Industry growth rate Perishability of products Marginal costs of sales High exit costs Cross subsidisation

Competitive Rivalry: Santorini, Greece

Conduct a C-PEST O/T analysis for a named tourism organisation Opportunities Threats

Risk Management and Strategic Planning Unit 5 The External Environment: Competition The End