Essay on Porters Five Forces
2nd January 2011-
Markets and Strategy
Assignment Title- CW 1
Review of Srilanka tourism’s operating environment and Trends in Key economic variables within targeted countries.
1.0 Introduction 2
2.0 Five forces in tourism 2 3.1 Rivalry 3.2 Threat of new entrants 3.3 Threat of substitute 3.4 Bargaining power of buyers 3.5 Bargaining power of suppliers
3.0 Review of Trends in economic variables 5
3.1 operating countries and segments of …show more content…
Factor2- Capitol investment
Any country will need large investments to meet the demand such as hotels, roads, etc and it is a considerable barrier. For example Srilanka tourism needs over 3.5 billion U$D investment to build the required 40000 rooms to cater for 2.5 million tourists. Similarly new entrant will have to convince investors to invest and investors have to be comfortable with the economic and political stability in the country.
Factor3 -Access to Distribution channels
Most countries will need a strong distribution of their products via tour operators. With the mergers and acquisitions most of European tour operators ( eg- TUI taking over Thomson ) have consolidated and they are distributing only destinations which can be easily sold and which are in demand . While internet can assist to some extent still traditional distribution channels play a major role. (Conrady,R and Buck,M ,2008).
Factor 4- Government policy and Regulations
Travel advisories issued by countries will be a potential barrier to sell the country as a tourist destination. Further insurance companies do not offer cover for travelers for areas not recommended by respective countries. For example despite having large number of tourists attractions , Pakistan cannot be sold as