Economic – Article Example
Executive Summary According to Porter’s five forces mode, industries are affected by such factors as competitive rivalry, supplier power, threat of substitutes, buyer power, and threat of entry. Based on the analysis of these forces, it is noted that Australia’s hotel hospitality industry is greatly dynamic with new well established players posing a great threat to new players and vice versa. Yet again, back packing has seen many players in the country’s tourism players lose a significant number of potential customers.
Furthermore, there is ever growing rivalry between hotels as they take various measurers to compete for customers. Customers’ bargaining power as they seek to fulfil their needs as tourists in Australia is heightened by the fact that there are numerous hotels. Tourists therefore have many options to choose from and can easily compare the different offers that service providers present to them to make the best choices. Suppliers within the industry, in spite of playing a significant role in ensuring that customers’ needs are fulfilled, have rarely joined forces to enjoy a better bargaining power. Bigger suppliers have however enjoyed greater bargaining power for their better prices compared to their smaller counterparts.
Australia has had a flourishing tourism industry for a long time with visitors coming from various parts of the globe. The country’s tourism industry has seen both good and bad times as tourist visits have always fluctuated depending on various factors. The following sections of this paper are dedicated to the analysis of the industry based on Porter’s model with an aim of establishing its attractiveness.
From Porters five forces model as presented in the preceding sections of this paper, it is worth noting that Australia’s tourism and hospitality industry is still very attractive given that only about 11% of potential customers go for cheaper alternatives, and there is normally a steady flow of customer and supply of industry needs.