Bargaining Power of
the customers
The
Bargaining power of the customers refers to how much power the customer has to
bargain with set prices. At the Sheraton Hotel, the bargaining power of the
customer is at a medium force when it comes to the customer’s power over prices
and service. Of course, customers have a say over price, but they know that their
clientele typically is willing to pay for the elegance, and high-class service the
hotel provides them with each stay.
Threats of
substitutions
The Threats
of substitutions refers to alternate services that may exist. In the hotel
industry this is a medium force. Though travelers have other options than
staying at the Sheraton Hotel, the Sheraton is not overly worried about other
substitutions, such as AirBnB. This is a medium threat to the Sheraton, because
they offer so many other amenities to their customers, and their rooms have many
features that a bed and breakfast simply cannot offer.
Bargaining Power of
Suppliers
The Bargaining
power of Suppliers refers to the amount of control the suppliers have over the
services. This is a medium force, when it comes to the Sheraton Hotel, because they
ensure that customers are provided with high quality accommodations. The
Sheraton is willing to spend more to suit their customers’ needs.
Threat of New
Entrants
Threat
of new entrants refers to how vulnerable the Sheraton's service is to new competition
entering the industry. When it comes to hotels this is a very low force for
various reasons. For example, entering
the hotel business requires high amounts of capital. Another reason that this is a low force is
that it would be extremely difficult for a new entrant to compete with the
Sheraton Hotel because they already have a well-known and established name; a
name people trust because of their reputation over many years of providing exceptional
customer service.
Rivalry
Rivalry
refers to how other chains or businesses, providing the same service, would
affect your company. Rivalry among the hotel business is an extremely high
force. There are many other hotels that rival the Sheraton Hotel. However, the Sheraton has a strategy for
continuous differentiation from other businesses in the industry. This strategy is recognized by their customers
and allows them to be set apart from other well-known hotels.
Competitive Strategy
Industry-Wide
Differentiation
The
Sheraton Hotel exercises the Competitive Strategy of Industry-wide
Differentiation, which means that they want better products and services across
the industry. The focus is to provide guests with high-end service and high quality
accommodations. The Sheraton wants their
customers to feel the elegance and ambiance of the hotel. A part of the strategy is to be efficient and
clean. They want it to be known that they
are the best choice for any traveler in need of accommodations. The Sheraton is
a large competitor in the hotel industry and achieves continuous growth year
after year. The Sheraton just became a
part of the biggest hotel chains by merging with Marriott hotels, thus becoming
an even bigger competitor than they were before.
Value
Chain
Sheraton
Hotel Value Chain
The
value chain for The Sheraton Hotel is a network of value-creating activities. Inbound logistics is an un-cleaned room after a
guest’s stay. Operations are the housekeepers coming in and cleaning the room.
They do this by stripping the beds of sheets, pillows, comforters and other
items. This is followed by moving on to cleaning the room by dusting and wiping
down the furniture and replacing all of the used items with clean and fresh
products. The Outbound logistics is the now clean and fresh room. Once the room
is clean it is able to be marketed and sold at the front desk to willing guests
who want to stay. The service refers to ensuring
that the guests have everything they need in order to have an enjoyable stay at
the Sheraton Hotel.
Business
Process
Sheraton
Hotel Business Process
The
business process of The Sheraton Hotel is a network of activities that generate
value by transforming inputs into outputs. This process typically starts with a
guest making a reservation either online or over the phone. Then their request
proceeds after they submit it and is approved by a superior; then their request
is sent to the finance department for validation. Once validated, they are put in for their
stay at the hotel. Through this process they are also able to cancel or change their
booking. After this process they move on to checking-in and getting the room that
they reserved.
Competitive Advantage
Sheraton
Hotel Competitive Advantages
Sheraton’s
competitive advantage is their reputation for great service and high-end
quality rooms. The Sheraton is the place to go when you want a classy stay. The Sheraton Hotel’s existing information
Systems are well ahead of their competition. For example, their information systems
alert the housekeeping staff when a room needs cleaning because the previous
occupant has checked out. Their systems
keep their operations running efficiently.
Communication in a hotel is of extreme importance because it keeps all
parts of the hotel working smoothly and soundly.
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