...A COMPREHENSIVE ANALYSIS OF HYATT HOTELS CORPORATION AND HOW IT RELATES TO COMPETITION WITHIN THE HOTEL INDUSTRY Table of Contents EXECUTIVE SUMMARY 1 EXTERNAL ENVIRONMENT ANALYSIS 3 General Environment 3 Demographic Segment 3 Technology Segment 7 Economic Segment 11 Political / Legal Segment 14 Socio-cultural Segment 16 Nature Segment 18 Global Segment 19 Industry Environment 21 Intensity of rivalry 21 Supplier power 22 Buyer Power 22 Threat of substitutes 22 Threat of new entrants 23 Competitor Environment 23 Introduction 24 Future objective 25 Current strategy 26 Capability 28 Assumption 30 Driving Forces 31 Economic growth 31 Globalization 31 Technology 32 Room Service Remodeling 33 Go green 33 Key Success Factors 34 Multiskilled and flexible workforce 34 Franchising 34 Quickly adopt new technology 35 Strategic Group Map 35 INTERNAL ENVIRONMENT ANALYSIS 39 Resources 39 Tangible resources 39 Intangible resources 41 Capabilities 44 Core Competencies 45 Brand Development: 45 Golden Passport Membership 47 Making Meeting Easy 47 Distinctive Competencies / Four Criteria Test 48 Supply Chain 50 Inbound Logistics 50 Operations 52 Outbound Logistics 54 Marketing and Sales 56 After-Sales Service 58 Weighted Competitive Strength Assessment 59 Financial Report 63 Profitability Ratios 64 Liquidity Ratios 67 Leverage ratios 69 Efficiency Ratios 71 Revenue Per Available...
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...U.S. Motor Vehicles and Parts Industry Profitability Analysis (Using Porter’s Five Forces of Competition Framework) Introduction This paper will focus on the U.S. automotive industry and the low profitability it is currently experiencing. The U.S. auto industry can be considered an oligopoly with just three main players; General Motors (GM), Ford and Chrysler – known as the Big Three. From 1999 thru 2005, this segment recorded only 9.8% ROE, ranking it 36 out of the 50 industries (on page 68), resulting in the bottom 28th percentile. The industry’s profitability can be considered low, based on its ranking in this list of U.S. industries (against Japanese rivals, the Big Three made about $3800 less per car/truck and shrinking market share, 1996 - 74%, 2001 - 65%, 2006 - 57%). Working against the industry are high labor costs (labor costs for the Big Three are about 10% more per vehicle, or $1500 per vehicle, than Japanese), rising health care costs for an ageing workforce (Toyota competitive advantage is $900-$1400 per vehicle just on healthcare per vehicle costs), rising fuel and raw material costs, ever toughening competition from Japanese and Korean manufacturers, and the struggling U.S. dollar (yen advantage in current exchange rate). The following overview will use Porter’s Five Forces to show why the auto industry is experiencing such low profitability. The two Forces working against the industry (strong forces against profits) are (1) strong rivalry among competitors...
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...INDUSTRIAL ANALYSIS: THE FUNDAMENTALS Outline * The objectives of industry analysis * From environmental analysis to industry analysis * Porter’s Five Forces Framework * Applying industry analysis * Industry and market boundaries * Identifying Key Success Factors The objectives of Industrial Analysis * To understand how industry structure drives competition, which determines the level of industry profitability * To assess industry attractiveness * To use evidence on changes in industry structure to forecast future profitability * To formulate strategies to change industry structure to improve industry profitability * To identify Key Success Factors From Environmental Analysis to Industrial Analysis The Industry Environment lies at the core of the Macro environment The Macro Environment impacts the firm through its effect on the Industry Environment The Determinants of Industrial Profitability Three key influences: 1. The value of the product to customers 2. The intensity of competition 3. Relative bargaining power at different stages of the value chain The Spectrum of Industry Structures Porter´s Five Forces Competition Framework The Structural Determinant of Competition Threat of Substitutes Extent of competitive pressure from producers of substitutes depends on: * Buyer’s propensity to substitute * The price‐performance characteristics of substitutes Threat of New Entrants Entrants’ threat...
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...3 Industry Analysis: The Fundamentals When a management with a reputation for brilliance tackles a business with a reputation for poor fundamental economics, it is the reputation of the business that remains intact. —Warren Buffett, Chairman, Berkshire Hathaway The reinsurance business has the defect of being too attractive-looking to new entrants for its own good and will therefore always tend to be the opposite of, say, the old business of gathering and rendering dead horses that always tended to contain few and prosperous participants. —Charles T. Munger, Chairman, Wesco Financial Corp. OUTLINE n n n n n INTRODUCTION AND OBJECTIVES FROM ENVIRONMENTAL ANALYSIS TO INDUSTRY ANALYSIS THE DETERMINANTS OF INDUSTRY PROFIT: DEMAND AND COMPETITION ANALYZING INDUSTRY ATTRACTIVENESS Porter’s Five Forces of Competition Framework Competition from Substitutes Threat of Entry Rivalry Between Established Competitors Bargaining Power of Buyers Bargaining Power of Suppliers APPLYING INDUSTRY ANALYSIS Describing Industry Structure Forecasting Industry Profitability Strategies to Alter Industry Structure 66 INTRODUCTION AND OBJECTIVES 67 n n n n DEFINING INDUSTRIES: WHERE TO DRAW THE BOUNDARIES Industries and Markets Defining Markets: Substitution in Demand and Supply FROM INDUSTRY ATTRACTIVENESS TO COMPETITIVE ADVANTAGE: IDENTIFYING KEY SUCCESS FACTORS SUMMARY NOTES INTRODUCTION AND OBJECTIVES In this chapter and the next we explore the external environment of...
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...3 Industry Analysis: The Fundamentals When a management with a reputation for brilliance tackles a business with a reputation for poor fundamental economics, it is the reputation of the business that remains intact. —Warren Buffett, Chairman, Berkshire Hathaway The reinsurance business has the defect of being too attractive-looking to new entrants for its own good and will therefore always tend to be the opposite of, say, the old business of gathering and rendering dead horses that always tended to contain few and prosperous participants. —Charles T. Munger, Chairman, Wesco Financial Corp. OUTLINE n n n n n INTRODUCTION AND OBJECTIVES FROM ENVIRONMENTAL ANALYSIS TO INDUSTRY ANALYSIS THE DETERMINANTS OF INDUSTRY PROFIT: DEMAND AND COMPETITION ANALYZING INDUSTRY ATTRACTIVENESS Porter’s Five Forces of Competition Framework Competition from Substitutes Threat of Entry Rivalry Between Established Competitors Bargaining Power of Buyers Bargaining Power of Suppliers APPLYING INDUSTRY ANALYSIS Describing Industry Structure Forecasting Industry Profitability Strategies to Alter Industry Structure 66 INTRODUCTION AND OBJECTIVES 67 n n n n DEFINING INDUSTRIES: WHERE TO DRAW THE BOUNDARIES Industries and Markets Defining Markets: Substitution in Demand and Supply FROM INDUSTRY ATTRACTIVENESS TO COMPETITIVE ADVANTAGE: IDENTIFYING KEY SUCCESS FACTORS SUMMARY NOTES INTRODUCTION AND OBJECTIVES In this chapter and the next we explore the external environment of...
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...Purpose of External Environmental Analysis Organizations are affected by conditions in the environment Managers need to be aware of these conditions in order to – Take advantage of opportunities that can lead to higher profits – Reduce the impact of threats that can harm the organization’s future The external environment is made up of: 1. Macro environment 2. Industry environment 3. Competitive environment So if a company wants to analyse its external environment it must analyse the macro, industry and competitive environment. MACRO ENVIRONMENT: Influence the industry and firms inside it. These factors indirectly affect the organization but cannot be controlled by it. There are a number of common approaches how the external factors can be identified and examined. One approach could be the PESTEL analysis. PESTEL stands for political, economic, social, technological, the environmental and legal factor. The segmentation of the macro environment according to the six presented factors of the PESTEL analysis is the starting point of the global environmental analysis. Political factors • Taxation Policy • Trade regulations • Governmental stability • Unemployment Policy etc. Economical factors • Inflation rate • Growth in spending power • Rate of people in a pensionable age • Recession or Boom • Customer liquidations Socio-cultural • age distribution. • education levels. • income level. • consumerism. • diet & nutrition. • population...
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...(including industry analysis, competitive strategy and resource and capability tools) and techniques to the formulation and analysis of value creation and capture at a strategic level. Porter 5 Force analysis Porter framework assumes: 1. industry structure drives competitive behaviour 2. Industry structure is (fairly) stable. [pic] Case: Airline Industry …. Porter’s 5 forces – purpose: Identifying the different stakeholders, or ‘forces’, which affect: • The level of competition in an industry. • The ability of a company to become powerful in that industry. Threat of New Entrants : • Company’s Point of view • Industry Point of view • Huge Capital Required • High Maintenance Cost • Brand Identity. • Govt. Policy Supplier’s Bargaining Power • Aircraft Manufacturers • Fuel Companies Buyer’s Bargaining Power • Travel Agents • Business Travelers Threat Of Substitute • Railway service • Bus service • Water Transport • Video conferences (for business flyers) Competitive Rivalry • Highly Competitive Industry. • Can work as growth driver for Industry. External Analysis: Porter’s Five Forces Threat of New Entrants HIGH Threat of Substitute Products MEDIUM Buyers’ Bargaining Power LOW Suppliers’ Bargaining Power LOW Industry Competitors Rivalry Among Existing Firms HIGH Dynamic Competition ...
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...the world and its Japan's number one car manufacturer. Its brands include Lexus, Toyota and other series such as high low-end models. Toyota has an international presence in over 170 countries worldwide. Toyota Motor Corporation since 2008 and gradually began to replace General Motors as the world ranked number one car manufacturer. However, the company of the Toyota had a bad year in 2010. They had plenty of manufacturing problems in different countries around the world. So the company needs to recall lots of cars. The incident brought to Toyota big losses. Porter’s Five Forces Perspective and PEST analysis are from different area. Porter’s Five Forces Perspective is used for the analysis of competitive strategy, and can effectively analysis customs of the competitive environment. PEST analysis is a macro-environment analysis. Its’ macro-forces is refers to the impact on all industries and enterprises. Its’ macro-environment can be focus on various situations. The first part is focusing on these two theories that using I chosen the company of Toyota as an example to overview and critique these two theories. Then compare and contrast these two theories. At last, conclusion this report and given some advises for these two theories. 2. Overview and Critique of theory 1 2.1 Overview the Porter Five Forces Perspective Porter five forces perspective has also known as Porter’s five competitive model. This model was first used by Michael Porter (Porter) made. This model was published...
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...will provide discussion and analysis concerning various strategic options and opportunities as they relate to the FedEx Corporation (FDX) in their current industry market. Competition will be assessed to create an understanding of the current landscape of the industry from the perspective of traditional, potential, and oblique competitors in FDX’s current industry. FDX will then be analyzed utilizing the SWOT model that will be utilized to identify three strategic options in the current market that will foster corporate growth in the future. Once identified, each strategic option will be evaluated via three criteria based on three simple questions as follows: Is it big? Is it us? Is it time? After this evaluation is complete there will be one strategic option selected that best meets the selection criteria in totality. FedEx Corporation: The Competition Competition in the transportation market is intense both domestically and globally and is the heart of every organizations strategy within this industry. Freight and courier services are at a high demand throughout the world due to growing distribution channels, technology, and a marked increase in demand. Market volume and value are projected to achieve growth of over thirty three percent by 2017 and will further raise the level of competition, rivalry, and fragmentation in this industry (Marketline, 2013, p. 27). FDX, an industry leader, maintains a pointed...
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...SCENRIO ANALYISI Written by Cosmas Kisela TABLE OF CONTENTS: Introduction: 4 Scenario Analysis 5 Definition 5 Objectives 5 Benefits of Scenario Analysis 5 Scenario Construction and Analysis 6 1.0 Definition of Context 6 2.0 External Environmental Analysis 6 Political factors 6 Economic factors 7 Social factors 8 Technological factors 8 Environmental factors 9 Legal factors 9 MESO environment 9 MICRO environment 9 Threat of substitutes 10 3.0 Identification of key issues/ strategic agenda 11 4.0 Identification of key forces driving the strategic agenda 11 5.0 Identification of 5- 8 over- riding drivers 13 6.0 Root - cause analysis 13 7.0 Identification of 2 key drivers 13 8.0 Plot of two key drivers to determine possible scenario 14 Figure 1 Scenario Analysis 14 9.0 Four scenarios and description of key assumptions 14 Four Scenarios for 2018 14 Co-opetition, 15 Co-existence 15 Competition 15 Conflict 16 10. Testing of scenarios for consistency and reliability 16 Conclusion 17 Recommendation 17 Bibliography 19 Introduction: Tanzania is endowed with some of the world's greatest natural wonders. Following major reforms in its foreign tourism policies, tourism has increased to become the nation's second leading foreign exchange earner. There are many weaknesses at national level including poor infrastructure, lack of trained staff, and legal and regulatory framework. In this paper, a case study of Asilia Lodges...
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...thinking are not enough when it comes to brand analysis. Brand analysis involves sizing up a business situation and deciding on a strategy. Two major concerns of brand analysis are the industry and the existing competitive conditions. These assessments are necessary essentials of brand analysis. They ensure the availability of long-term direction, establishing appropriate objectives, and essentially crating an effective strategy. Brand analysis includes knowing what a specific industry’s dominant economic features are. Also, brand analysis examines what existing industry competition is like and how strong each of the industry’s competitive forces is. Effective brand analysis is achieved through an analytical sequence of strategic appraisals of a business’ external and internal environment, to establish issues, evaluate alternatives, and create a strategy. If these crucial assessments are not executed, a business may find that the brand it developed does not fit well with the environment of its intended industry and will not be capable of establishing and maintaining a competitive advantage for the business. Brand analysis requires a strategic evaluation of a business’ ecosystem. Any decisions should be based on sound analysis of a business’ external and internal structure. In order to successfully establish a business’ brand, an evaluation of dominant economic features in an industry must be carried out. Industry, in this context, refers to several businesses with...
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...Case Analysis and Methodology Principles of Management (MGMT1120) Contents: 1. What is a business case? 2. Why use cases? 3. Is there an analysis framework to follow? 4. Case Analysis Model a. Problem Identification b. Environmental Analysis c. Creative/Practical Strategic Alternatives d. Decision Criteria e. Select Appropriate Alternative/New Strategy(s) f. Develop an implementation plan 5. Evaluate the results 1|P age 14 1. What is a business case? A business case is a “story” or “narrative” describing a problem or problems in an organization. The organization can be a profit, not-for-profit, or public sector organization. All organizations experience business problems which management must solve. Cases have been written on such organizations as Apple, Microsoft, Y.M.C.A and Royal Bank. Examples of cases are end of each chapter of your text. The “story” or “narrative” often contains additional information which gives insights into the causes of the problems. Sometimes, the case will actually propose possible alternative solutions to solving the problem. Many cases are written from the viewpoint of the manager/leader that recognizes the problem and is under pressure to find a solution. 2. Why use cases? At the JR Shaw School of Business, we take an applied approach to learning. As a student, you learn concepts/models and theories that are simplified representations of the “real world”. While it is not possible to illustrate real world issues...
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...An Investigation of Competition within the UK Food Retail Industry Abstract This dissertation set out to explore the nature of competition within the UK Food Retail Industry as well as to evaluate the competitive strategies undertaken by firms in the market. This task has been undertaken through a critical analysis of a range of literature focussed on establishing the current state of play in the UK supermarket industry, examining general theory on competition and competitive strategy, as well as a review of literature that specifically addresses competition between supermarkets in the UK. Looking first at the nature of competition in the UK food retail industry, it was clear from the literature review that while the industry has many characteristics of an oligopoly as it is dominated by a small number of major firms, it is undoubtedly highly competitive. The evaluation of the competitive strategies undertaken by firms in the industry showed that between the leading firms in the market that Tesco had the best balance between price and customer perceived value but there was clear evidence to suggest that the other leading firms were positioning themselves around Tesco in order to reduce its apparent competitive advantages. While the analysis showed similar competitive strategies for the big four, it revealed different strategies being adopted by other firms in the industry who look to operate in niche markets within the food retail industry, such as Lidl and Aldi, who compete...
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...Competition Bikes, Inc. is a publicly traded company whose main business is to manufacture and sell lightweight racer bikes. In recent years, the company has enjoyed steady growth due to the company's perceived product superiority among professional riders supported by a statistic that shows that sixty percent of all race winners had been riding a Competition Bikes, Inc bicycle. Although the company has marketed its products aggressively using this strength, it faces intense competition from Wheel Racing, Inc, which in addition to having a huge financial base makes equally good lightweight frame bicycles, as does Competition Bikes, Inc. This paper will carry out an analysis of the company's financials to identify the company's strengths and weaknesses. Financial Statement Analysis for Competition Bikes, Inc Financial statement analysis Liquidity ratios measure a company’s ability to meet its maturing short-term obligations. In other words, can a company quickly convert its assets to cash without a loss in value if necessary to meet its short-term obligations? Favorable liquidity ratios are critical to a company and its creditors within a business or industry that does not provide a steady and predictable cash flow. They are also a key predictor of a company’s ability to make timely payments to creditors and to continue to meet obligations to lenders when faced with an unforeseen event. Current Ratio Current Assets / Current Liabilities This ratio reflects the number of times...
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...JET2 Task 1 Horizontal Analysis Results Horizontal Analysis is defined as “a procedure in fundamental analysis in which an analyst compares ratios or line items in a company’s financial statements over a certain period of time. The analyst will use his or her discretion when choosing a particular timeline; however, the decision is often based on the investing time horizon under consideration.” (investopedia.com). This data is calculated in both dollars and percentages using data from the balance sheet and income statement. It is an extremely useful tool to evaluate trend situations. The Horizontal Analysis is used to determine Competition Bikes actual financial operating performance from years 6 through 8, with year 6 as the base year. When I looked at the analysis between years 6 and 7, I looked at the financial changes to see what the actual performance was by percentage. The net sales for years 6 and 7 showed a change of $1,495,000 which is a positive increase of 33%. This shows that sales have increased and leads the company to believe that the operating performance was also good and tha customers/dealers really like the product. There was a change of $1,048,000, an increase of 31%, for cost of goods sold. This shows that there is financial strength for the company and also shows that customers/dealers like the products. When looking at cost of goods sold, they should remain lower that the sales increase so that the company can control the cost...
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