I am doing a project on my future business plan, the business idea is a small lo
ID: 347523 • Letter: I
Question
I am doing a project on my future business plan, the business idea is a small lodging establishment which offers overnight accommodation and breakfast, yea some what similar to Airbnb but the whole idea is to give customers a memorable experience during their stay where they could interact with other guests during the morning breakfast time and socialize and have a little play area for kids (It's somewhere between a motel and a resort). For such a business what is the Target Market? And what strategies should be implemented to capture Target Market?
Explanation / Answer
To analyze such scenarios Porter has given a model named Porter’s Five Forces Model. You can implement is to knoe all about the asked details. It shows the attractiveness of any firm or any industry. You can know how much profitable firm or industry is going to be and what should be the challenges and strengths.
In the given case you want an establishment somewhere between motel and a resort. You can apply Five Forces Model here. Pl take a look.
Five forces are
Bargaining power of suppliers- You will found many suppliers for your establishment. Hence you can negotiate with them and get the perfect deal. Hence these suppliers will have know bargaining power against you. The suppliers will be interior designer, landscaped designer, IT, Grocery suppliers etc.
Bargaining power of buyers- There are many options available for the customers. Especially with the entrance of Airrbnb. So you have to be specific Hence customers have many options to choose from, that is why you have to be unique, special, and different than others, superb service quality.
The other forces that may help you out are location of the business, supply and demand gap, economic trend and availability of skilled work force.
Industry rivalry- Rivalry in this industry is very competitive. With the entrants of Airbnb there are many investors are erady to fund the business hence there are many companies hence this industry has become very competitive.
You have to look that what the competitors are offering, You have to fill the gap which competitors are not offering. It may be price, quality, offering, convenience etc.
Threat from substitutes-There are many substitutes available for staying such as rent, hotels, motels, camping areas, renting caravans etc. But this model Motel + Resort which is also known as Mozart will be unique. This is more convenient for the customers hence they will choose Mozart than any other alternatives. Hence this is a very strong force with you.
Threat of new entrants- Airbnb provides individual houses and offering play house and open breakfast or dining areas will sure increase the cost for such company.
But there are people who can invest to copy your model. Setting a Mozart is not very difficult and there is no any government barrier as well. Hence there is always a threat of new entrants.
Hence from above analysis it is clear that this industry seems to be profitable but there is competition as well. You have to be unique and position your brand in consumers mind in order to generate the revenue.
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