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

2. 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.

3. 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

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

6. 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

7. Porter’s Five Forces

8. 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

9. Competitive Rivalry: Santorini, Greece

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

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