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Location Case

Essay by   •  May 15, 2012  •  Essay  •  292 Words (2 Pages)  •  1,248 Views

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location is a place. there are a lot of diferent place in this world. This is important to a corporation's success, in not just the hospitality industry but any industry that is saturated with numerous competitors. This differentiation can happen in two ways, either on price or on quality. However, in this industry, the corporations that find the most success differentiate Due to the high level of competition in this industry, the threat of substitute products is high within the same differentiated niches such as differentiation of quality and cost. While in the cost niche, there are numerous and various different types of substitute products to choose from. In addition, there is also the possibility of camping and RV's serving as substitute products, though this is not a major threat to the quality niche of the hospitality industry. However, the threat of substitute products is inversely related to Customer relationship; the higher the repertoire with clientele, the less likely for them to find a substitute for a firm's product. This implies that as a hotel, in an industry, expands its operations, it actually begins to decrease it's per unit cost. In the hospitality industry, Economies of scale is realized especially among the Top 3. This is based on rising rates for hotel rooms that can be seen as an expansion of operations, such as profit growth, despite relative level costs of maintaining a particular room.

Location is a very important aspect of the Lodging industry. They maintain their rankings by differentiating themselves on quality rather than on price; an issue that is vital in an industry with numerous competitors. However, a firm in this industry cannot make any revenue on unused rooms, so often they do compromise on price to a degree



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