Competitive Analysis of W Hotels

The company’s industry

A customer-centered perspective is an approach of doing and operating a business in a manner where the focus is on creating a positive experience for the clients. This is done by directing all available resources towards customer satisfaction.

W Hotels, operated under the leadership of the Ritz Carlton chain, are a trendy fashion boutique hotel. Being a part of the competitive hospitality industry, they must always innovate, in order to be unique and stand out. The hotel has a special modern touch and is always one step ahead of all the luxury brands in terms of technology.

W Hotels is targeted at both leisure and business customers who demand high-quality service, upscale enjoyment and chasse fashionable life. This is the reason why it is hard to accurately analyse and determine the company’s direct competition, if any.

The indirect competition of W Hotels consists of AirBnb and Vrbo(Vacation Rental by Owners), although not as well-known as AirBnb, it has over a million properties on their website and have been operating for 12 years longer.

Porter Five Forces Model

The Porter’s Five Forces are forces that identify and analyse five different competitive forces that help to determine the strengths and weaknesses of the industry. This analysis refers to the method to measure a company´s competitive environment in the study of marketing

It analyses the threat of new entrants; therivalry among existing competitors; the threat of substitute products; the bargaining power of suppliers and the bargaining power of buyers.

New entrants in an industry refers to any new possible competitors in the marker. The higher the barriers to entry, the smaller is the threat for existing players. Since W Hotels has a unique creative brand design, there are not any obvious threats to the industry in terms of new entrants. Furthermore, it can be considered that existing players have built up a large base of experience over the years to cut costs and hence the threat in this scenario is low.

The bargaining power of suppliers analyses how much power and control a company’s supplier has over the potential to raise its prices or to reduce the quality of purchased products. For example, “Booking.com” or “TripAdvisor” and other online travel agencies in the case of W Hotels. Although these suppliers do not have a large effect in the industry, many hotels including W, are dependent on their sales through online websites. They therefore have substantial bargaining power.

Threat of substitute products refers to the existence of products outside of the realm of the common product boundaries, which increases the propensity of customers to switch to alternatives. One must look further than the direct competition and towards every product that serves a similar need for customers should be taken into account.

Rivalry among existing competitors, the last force of the Porter’s Five Forces examines how intense the current competition is in the marketplace, which is determined by the number of existing competitors and what each competitor is capable of doing. Thomspon Hotels is one ofW’s rival in terms of infrastructure, contemporary decor, and grownbreaking design. Their modern luxury at the refined edge of travel

Competitive Advantage

Nowadays, the hospitality industry has become one of the most fast-growing and competitive industries. The number of hotel accommodation which include local and independent hotels is continually increasing. Therefore, it is important for W Hotels to develop and maintain its sustainable competitive advantages.

Porter’s analysis guides the company to pursue competitive advantage in the chosen market. W Hotels chooses differentiation among four generic strategies. With a differentiation strategy, a company is likely to be unique in its industry to achieve a competitive advantage. W hotels breaks the norms of traditional luxury with a distinctive concept, products and service in the luxury hotel chain. W Hotels bring the best of Fashion, Music, Design and Fuel in various ways to different destinations around the world, and people would like to pay for them with premium prices. For example, the long term competitive advantage of W hotels, WAKE UP CALL is their signature music festival series that combines the brand’s longstanding passion for music with its signature Whatever/Whenever® philosophy. WAKE UP CALL takes the festival experience off the field and onto fabulous hotel grounds. The trend toward lifestyle attributes such as music festivals helps W hotels to compete against small boutique hotels whose target market is more individualistic type of customers. As the target market of most of existing luxury hotels is not the young generation, it is difficult for them to launch music events in hotel ground because of noises and customer preference. In our opinion, this distinctive music festival is a sustainable competitive advantage in the hotel industry, and many young people would be well attracted.