As an industry dealing with services, Tune.com Hotel has its structure that shapes the competition within tourism industry in term of positioning the company to cope best with both the industry environment and to influence the environment in favor of the company (Pearce & Robinson, p. 95). There are 5 forces analysis in driving industry competition advocated by Michael E. Porter, they are some general principle that applicable for any type of business, particularly for Tune.com Hotel Company set up in Malaysia. This competitive forces shape Tune.com Hotel generic strategy in order to accomplish the company’s objective, that is to accommodate the guests with greater value. The five forces analyses on tourism industries service from Tune.com Hotel point of view are as follow.
1. The threat of new entrants.
A barrier to entry or threat of entry is high, because of the factors below. * Economies of scale
Promote better economy of scale. Mark Lankester said, ‘With the opening of more hotels, there has been a better economy of scale and the company has become more cost efficient, and hence the admin fee is no longer relevant and the savings can be passed to the guests,’ (Malaysia Reserve, p. 32). Tune has become more cost efficient as the hotel covers the central, northern southern, eastern and western part of Malaysia. As the results, Tune scraps the administrative fee for bookings. * Product differentiation and brand identity
Tune offers greater savings to guests through room charging with the option of special comfort package. It aims to provide convenience and comfort to tourists and holidaymakers as well as businessman. In addition Tune has been named among 20 most innovative brands. Advertisement and customer service develop its brand identification that consequently built customer loyalty. There have been more than two million guests of Tune. * Capital requirement
Tune hotel invests over RM907 million for new hotels indicates a need of large...
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