Strategic Management Essay Example | Topics and Well Written Essays - 2000 words - 35

Strategic Management - Essay Example Bargaining power of the buyers or customers is also considered as an important factor affecting the operations of the hotel. The customers of Aber Gardens include the Leisure and Business travelers along with guests and customers in need of organizational space settings to conducts events and conferences. The number of customers is high during peak season and at this time; the customers are identified to have high bargaining power. The availability of substitutes is medium to low in nature, as there are very few alternative to Aber Gardens available for the customers (Cheng, 2013). In case of premium segment, the hotel operates in a number of subsidiaries at different locations. Product differentiation is high, as services offered are differentiated from the services provided by competitors. In this respect, the hotel with differentiated products and brand value is able to retain premium customers. Customers exhibit low switching costs and high requirement of capital for making investment in staff development and infrastructural facilities. Respectively, barriers to entry are low for other hotels operating in the area (DÃ ¤lken, 2014). Threat of substitutes is medium, as competitors that include Kimps Hotel Group and Turnover hotels are engaged with similar services that include room service, leisure accommodation and corporate guestrooms. The switching costs are low and the value of substitutes is low, as there are chances of high informal accommodation during peak season (Amrollahi & Akhgar, 2013; Bardis, 2012). Finally, an important factor that can affect the business environment of Aber Gardens is the ‘Degree of rivalry’. The number of competitors is less as Aber Gardens falls in a premium segment, but the attractiveness is high, as Aber Gardens attracts customers based on discounts and quality services.