The main thing is not too emphasize an old fashion; service should be of the highest current modern standard. The substitutes represent the competitors and if the substitutes will be more preferable or more accessible for customers than hotels, the hotel industry may have problems. However, not all the tourists have relatives and friends where they can stay. In a strong economy, consumers are more likely to purchase your product, and vice-versa. Techniques for Analyzing Industries and Competitors, (2004), Free Press, New York Beth holds a master's degree in integrated marketing communications, and has worked in journalism and marketing throughout her career. A new competitor maintains a threat for the market share of existing competitors. The macro environment is a collection of economic, social and technological factors that impact a firm that are beyond a firm's control. Such hotels nowadays already exist (for example South Cave Castle hotel in East Yorkshire, UK or Amberley Castle Hotel in West Sussex, UK); nevertheless, they are not common. Staying with friends or family members can be a hotel substitute as well. Hotel industry buyers are quite sensitive to price, because hotels are mostly identical and because tourism as well as hotel service is not product of first necessity. Textbook Facebook A definition of restructuring with examples. WhatsApp. Share this: The company have to convince the distribution channels to cooperate. Reddit courses that prepare you to earn Porter, E. M. Competitive Strategy. The main thing is not too emphasize an old fashion; service should be of the highest current modern standard. Reproduction of materials found on this site, in any form, without explicit permission is prohibited. Tourists, for example travelling from France to Spain, do not lose their money on foreign currency exchange. Techniques for Analyzing Industries and Competitors, (2004), Free Press, New York, 30 April 2001, BBC News, Schengen Agreement [online] Available on [Accessed 5 December 2009] The risk of entry of potential competitors. Staying with friends or family members can be a hotel substitute as well. WhatsApp, Economy of Scale Definition, The Biggest, Best Investing Glossary on the Web, [online] Available on [Accessed 5 January 2010] International Journal of Contemporary Hospitality Management, Emerald Group Publishing Limited, 16(1) [online] Available on [Accessed 8 January 2010] Hotel is just accommodation with additional services provided. This has been a guide to what is Macro Environment and its definition. The substitute like teleconferences using video equipment or phone exists for business travelers. Political-Legal Environment. The macro environment can be a tough topic to grasp, but hopefully you understand it better with these two examples. High supplier differentiation However, population doesn’t just refer to the number of people in a target area. Factors leading to greater bargaining power of buyers are: Byeong Yong Kim and Haemoon Oh have the same opinion, in their article they wrote: Although the lodging industry has high entry barriers such as huge amount of investment required to build a building and a need for a national service network.