Porters

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PORTERS Five Forces Model

The porter’s five forces model argues that the more limited is the ability of the firm to raise the prices and earn greater profits. A competitive force plays an important threat in reducing the profit to the company.

Bargaining power of Suppliers
Suppliers always play vital role in any industry because the quality of the raw materials will influence the value of the finished goods that are delivered by that organization. If the supplier’s power is high it will increase the prices of the raw materials which decrease the profitability levels in the industry. Being a part of Tata’s, Taj hotels controls the suppliers in its domestic market but in the international market the power of the suppliers is higher because of the less number of properties in that particular market. So when entering a new market Taj always considers the availability of reliable suppliers and also the raw materials.

Bargaining power of Buyers
The consumers might have a significant negotiating power, when they come in contact with several alternative options and some costs are between or exchanged from one company to other company, even though a single buyer will not have the power to influence the organization, they collectively do have power the power to influence it. For a reputed brand like Taj hotels with high brand loyalty and image the bargaining power of the customers who use the services of Taj is very low and their influence will not affect the services of Taj.

Rivalry between the Existing Firms
It is nothing but the intensity of the competition from the organisations offering same products and services; they might be of same type and size. The Taj supports open markets which bring more competitors; it will always study the modifications that are carried out by its opponents to compete with them in terms of products and also the services to get up-to-date in providing the services to their customers which help them in introducing new products...
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