Unit 5 The External

Environment: Competition

Risk Management and Strategic Planning

Reading

Book Ch

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

Learning Outcomes

After studying this chapter and related materials you should be able to understand:Porter’s five forces

and critically evaluate, explain and apply the above concepts

Discussion Point

On what basis do organisations compete with each other?

What is competitive advantage?What is competitive risk?

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 entrants2 the power of suppliers3 the power of consumers4 the threat of substitutes5 competitive rivalry

Porter’s Five Forces

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 ratePerishability of productsMarginal costs of salesHigh exit costsCross subsidisation

Competitive Rivalry: Santorini, Greece

Conduct a C-PEST O/T analysis for a named tourism organisation

Opportunities Threats

Unit 5 The External

Environment: Competition The End

Risk Management and Strategic Planning