1.0 INTRODUCTION
Hilton is a brand name known all over the world especially in the hospitality industry.
2.0 THREAT OF NEW ENTRANTS
The theory of threat of new entrants is dependent upon the extent to which the barriers of new entry are existent. This theory refers to how new companies can pose to be a threat to an existing firm in a specialized market. If the entry barriers are few it is simpler for these ne* entrants to become a part of the market. This in turn is a threat to already existent firms in the market. This is considered to be one of the forces that molds the structure of the company *here competitiveness is concerned. This force affects the competitive ability of the firms which are already present in the market and in turn aids the newly entered companies to come up with a high turnover in profitability. On the other hand though *hen the threat of n firms entering the market is low, the existent firms in the market can make a huge turnover here profitability is concerned. An example that e can give where this force can be seen in action is in the graphic design company. Here the barriers for entry turn out to be very low. (http://strategiccfo.com/wikicfo/threat-of-new-entrants-one-of-porters-five-forces/)
2.1Hilton and the threat of new entrants
High capital investment to start a new chain of hotels
Obstacles in finding perfect locations for set up
Lack of skilled employees in the country in relation to hospitality
Base of loyal customer to existing chains of hotels
Economies of scale, scope and learning curve can be a long and tiresome process
It is difficult to obtain Food and Drug Administration License and meet health standards on a constant basis.
It is not a profitable business throughout the year due to weather conditions and tourism.
Difficult to establish an adequate supply chain
3.0Bargaining power of buyers
The main buyers in the hotel industry are tourists, business Houses, co-operates, airlines, advertisers, media and event companies, wedding Planners and fashion establishments. When we talk about the bargaining power of suppliers a few conditions come into mind to effect ho* the supplying industry itself is powerful. Some of these conditions consist of:
These are thus some of the factors which show and prove that one particular chain of suppliers are dominant in the market. Suppliers as mentioned above are forward integrated and thus there *ill be involved a high s*itching price.
4.0 Bargaining Power of Supplier
The suppliers for the Hilton are recruitment and independent firms who provide services. Food and Beverage suppliers, car rentals, Interiors and Upholstery, IT systems, external maintenance, these are some of the suppliers that are involved in the hotel industry. There are many conditions which define and show us how one particular industry is an all powerful supplier in an industry. Some of the factors that influence the transactions taking place between the supplier and the buyer are:
If the supplier is dominated by a number of small industries and is thus denser in concentration *hen compared to the industry it is supplying to.
The product the company supplies, proves to be an important section of the company they are supplying to.
It poses a very prominent threat of future integration.
The products are different or re built up
When it does not have to contend with any substitute products present in the market.
When it is known that not only one industry is the most dignified and important customer of the supplier chain.
These are thus some of the factors which show and prove that one particular chain of suppliers is dominant in the market. Suppliers as mentioned above are forward integrated and thus there will be involved a high switching price if the industry chooses to side with an alternate supplier.
