REPORT

TO : JAYNE STINES (LINE MANAGER) FROM : SWAPNIL TAMBE (PERSONNEL ASSISTANT) SUB : STRATEGY MANAGEMENT

DATE

TABLE OF CONTENTS INDEX

SR. NO. 1 CHAPTER 1 1.1 INTRODUCTION . 1.2 OVERVIEW OF COMPANY PROFILE 1.3 OVERVIEW CONCEPT OF MR. PORTER MODEL FIVE FORCE MODEL 1. INDUSTRY COMPETITOR 2. THREATS OF SUBSTITUTE PRODUCTS 3. THREATS OF NEW ENTRANTS 4. BARGAINING POWER OF BUYERS 5. BARGAINING POWER OF SUPPLIER PARTICULAR PAGE NO.

CHAPTER 1
1.1 INTRODUCTION
The term strategy proliferates in discussions of business. Scholars and consultants have provided myriad models and frameworks for analysing strategic choice (Hambrick and Fredrickson, 2001). John Kay (2000) argues that strategy is no longer about planning or visioning because we are deluded if we think we can predict or, worse, control the future it is about using careful analysis to understand and inuence a companys position in the market place

1.2

OVERVIEW OF COMPANY PROFILE HILTON

CEO Growth Vision Misson Values Profit Turnover 2.9b (2004: 2.7b) Pre-tax profit: 187.5m (2004: 159m) H ospitality I ntegrity L eadership T eamwork O wnership N ow Christopher J. Nassetta 1000 of property running, 100 of project in development To fill the earth with the light and warmth of hospitality. To be the preeminent hospitality company.

1.3

OVERVIEW CONCEPT OF MR. PORTER MODEL

Micheal porter was born in 1947, he completed his education at Princeton and done MBA (1971) and PHD (1973) from harved. The Strategic Management Society named Porter the most important living strategist in 1998, and Kevin Coyne of the consulting firm McKinsey and Co. called Porter "the single most important strategist working today, and maybe of all time." Porter developed a five force model in 1980 book, COMPETITIVE STRATERGY: porter five force model of competitive analysis is mostly used in many industry for developing stratergy. The strength of each force differentiate for industry to industry, then the forces considered together, It determine long terms profit within the specify industry sector. Five forces affect necessary investment for competitiveness, prices, market share, profit margin & potential profit. Key to the modal and successes of an industry, if anlyzing the change dynamics and conations flux within and between the five forces. Porters Modal if totally depend upon the concept of power within the relationship of the five forces. The focus of competition is higher in low return company as compare to high return company because of less requirement capital and product that requires minimum R&D and efforts for production.

FIVE FORCE MODEL

According to porter, the competitiveness in a given industry can be as a composite of five forces. 1. Industry competitors. 2. Threats of substitute product. 3. Threats of new entrants. 4. Bargaining power of buyers. 5. Bargaining power of suuplier.

INDUSTRY COMPETITOR
Rivalary mostly develop among the companies who are competing in the same market. Competitors use new product, attractive customer service, advertising and price to show their standing and market share in a specific industry According to porter, competition main factors are equals balanced companies, slow growth within industry, over capacity, price cutting and high risk of industry exits. Eg coca-cola v/s pepsi are competing by offering new beverages and by increasing

advertisement in the market.

2.

THREATS OF SUBSTITUTE PRODUCTS

Competition not only takes a place in a same industry, it cam be also in different industry. Company in other industry produce the products with similar features and function act as a substitute product. The threats of substitute product depend upon : Buyers willingness Price & performance Costs of switching

3.

THREATS OF NEW ENTRANTS:

New entrants in industry can increase the level of competition, reducing its attractiveness. Threats of new entrants depends on barrier to entry. There are high barrier entry exits in some industry (shipbuilding), where in other industry it is easy to enter (eg. Restaurant). Barrier to entry include:

Economy of scale Investment Industry distribution channel Customer switching cost

4.

BARGAINING POWER OF BUYERS

Buyer are the user of the product, performance of company is fully depend on the buyer. Bargaining power of buyer are more when they are in large number and when purchase in large quantity. Company offer discounts, service and warranty to switch consumer from one brand to another in the same industry. Company should monitor the competitor stratergy and also take care if like and dislike of consumer by monitoring a good relation. Eg hotel should ask their guest about the service and new ideas about the product of their desire.

5.

BARGAINING POWER OF SUPPLIER

Supplier plays an important role in product of service and good. Supplier supply materials and other product to the industry. Bargaining power of supplier effect the competition, when there are large number of supplier and less availability of raw materials and cost of raw materials is high. Eg manufacturer should make a relation with supplier to improve the quality and reduce the price of product by working together for improve in process and reduce time to market by implementing just in time inventory.