Starwood Hotels and ResortsPorter’s Five Forces Group 2: Alessandro Galeone, Anthony MacPhee, Donisha Young, Eric D’Eon, Jacquelyn Smith, Jordan Ellis
Appendix • Five Forces • Firm/Industry Analysis • Conclusions
Five Forces • Buyer Power: High Buyers include customers, travellers, and travel agents. Low switching costs for customers between firms. Third party travel websites reduce switching costs even further. • Competition: High No company over 40% market share. Main competitors are Hilton Hotels, Marriot International, and Hyatt Hotels.
Five Forces • Buyer Power: High Low differentiation across the industry and low switching costs cause buyer power to be high. Customer loyalty is the main combatant against this and online comparison sites making switching even easier. • Substitutes: Medium Alternatives include Rving, camping, friends and family, hostels, and sleep boxes make up a small part of a growing industry. Internet and video conferencing can be replacements as well.
Five Forces / Conclusion • Threat of New Entrants: Low A strong economy of scale within the industry and very high start-up costs greatly lower the threat. Geographical factors would also make it hard for an entering firm. • Conclusion: High competition between large well established firms. Low switching costs and some alternatives mean customer has much power. Low supplier power (own development firms)