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THE OPERATING ENVIROMENT - Coggle Diagram

- - - - larger number of firms in the market
      - number and relative size of competitors within the industry
      - slow market growth
      - high fixed costs
      - low switching costs
      - low levels of product differntiation
      - high exit barriers
    - - Bargaining power belongs to suppliers if several of whom offer differentiated products
      - If the destination can be easily substituted for an alternative one, suppliers have less power
    - - The power is dependent on the number of customers and the volume of their purchases
      - Operators are reliant on retailers to promote and sell their products in form of vertical integrated model or non-integrated model (offer commission and other incentives instead)
      - Large operators could purchasing in large numbers to achieve very competitive rates, which may not be in the suppliers's best interest
    - - If the market has little brand awareness, loyalty and is one where distribution channels are easy to access, there is greater likelihood that new rivals may enter the market
      - As a result of the ease of entrance, tour operating companies need to grow or specialize to maintain their market share by horizontal integration or vertical integration.
      - Achieving economies of scale, brand awareness, customer loyalty wwill have an advantage over new entrants
      - replaceing one destination/country for another
      - independent travel instead of a package
      - all-inclusive instead of self-catering
      - adventure holidays instead of beach holidays
      - short breaks instead of longer holidays
      - one company's product for another