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Analysis of Industry and Competitors. Business & Marketing Essay
Essay Instructions:
Entrepreneurial Finance
Analysis of Industry and Competitors
The objective of this assignment is to assess the industry and competitors for your new venture. Therefore, you are to:
Identify the industry of your new venture;
Perform an analysis of the industry that your new venture competes at both the macro and regional level. This should include competitive analysis (e.g., Porter Framework) and financial analysis (BizMiner, Mergent Online);
Identify the three major competitors of your new venture (PrivCo, ABI/Inform, Business Source Complete);
Perform a financial analysis of each of these competitors (PrivCo, EDGAR, Mergent Online);
Summarize and present your findings.
Due Date: October 17
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Analysis of Industry and Competitors
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Analysis of Industry and Competitors
My new venture is a tourism company. This company would operate in two cities in China. These are Beijing and Chengdu. Therefore, this venture operates in the tourism industry. In China, this is one of the biggest industries accounting for millions of jobs. This paper performs an analysis of the tourism industry and describes the three main competitors for my new venture. A financial analysis of each of the three competitors is also performed.
The tourism industry in China is very competitive. There are many established companies and numerous small businesses. One tool that be used to analyze the industry is Porter’s 5 Forces Model. The analysis is as follows:
Threat of New Entrants: Moderate
There are low exit and entry barriers. This means that new companies can enter this industry. However, the slightly high capital requirement moderates the low entry barriers.
Bargaining Power of Customers: High
Buyers have a high bargaining power owing to low switching costs. Brand loyalty is low. Tour operators usually buy large volumes of hotel accommodation at very low prices. If hoteliers do not lower their prices, tour operators can easily take their customers somewhere else. Holidaymakers often choose different destinations every time. Their decisions are also based upon lowest price and high quality.
Bargaining Power of Suppliers: Low
Suppliers in this industry are fragmented. The cost of switching suppliers is not significant. When bargaining, the suppliers typically vary the quality and prices of their services.
Competitive Rivalry: High
The tourism industry in China is highly fragmented and rivalry among the competing firms is intense although not cut throat. There is intense rivalry owing to low product differentiation levels, and low switching costs. Established competitors barely have 15-20% market share.
Threat of Substitution: Low
In the Chinese tourism industry, travelling for holidays is not likely to be substituted by anything else as recreation occupies nearly 10% share of people spending in the country. In essence, travelling is usually on the list of household spending priorities.
My new venture competes with many businesses. Three notable competitors are as fol...
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