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

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

2 Reading BookCh 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. 2

3 Learning Outcomes After studying this chapter and related materials you should be able to understand: Porters five forces and critically evaluate, explain and apply the above concepts

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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 Porters 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 OpportunitiesThreats

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


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