Threat of Substitute Products Here the BPCS has to face severe competition as follows: * Firstly, it competes with other tourism companies (Private) offering similar products or services within Bangladesh. Secondly, it competes with other countries, which the tourists may choose to visit. The major competitive countries of Bangladesh include South Asian countries and the Eastern Mediterranean (Egypt, Turkey and Syria), are seen as a growing threat as per buyers standard of living. Therefore, in this arena the threat is comparatively moderate to high. Risk of Entry by Potential Competitors * In Bangladesh, the barriers of entry, in the form of capital required and issue of operational license, are low in some types of tourism businesses, such as travel agencies, small accommodation establishments and car rentals etc. This means that their number will continue to increase in the future. Likewise, although high capital investments are required for the construction of more large hotels, incentives provided by the government will increase the entry of new competitors. On the other hand, the high amounts required for the development of airline and shipping company means that the oligopolies situation will continue in the future. Rivalry among Established Tourism Firm * The rivalry among Bangladesh tourism businesses is high. * In fact, there are a large number of tourism enterprises and this number continues to increase.
For example, the supply of hotel beds in the Bangladesh hospitality industry increased from 8% to 12. 5% in last five years. * The increasing number of tourism businesses will lead to greater pressures at many regions and places and many types of tourism businesses. As far as air transport is concerned, although deregulation after the 1/1 1, has allowed the airlines, to operate domestic flights; the competition up to now is not severe. Finally, the passengers shipping (like Kerri) are going to enter the era of free competition soon.
Bargaining Power of Buyers * In Bangladesh, there are two major categories of clients, the independent tourists who make their own arrangements, and the inclusive tourists coming entrepreneurs, tour operators play an important role in tourism industry, mainly for packaging the various elements of the tourism product and distributing it to consumers. As result, intermediaries constitute a powerful group of buyers in the tourism industry. It is an indisputable fact that the average tourist entrepreneur is heavily dependent on the tourist package price which is strongly negotiated by the Tour Operators.
It is an “unhealthy” dependence as a result of the weak position of the tourist product. Because tour operators determine tourists’ choice through advertising and promotion and due to the trend toward inclusive tour packages, organized exclusively in origin countries, the problem is getting severe. * Therefore, as for a service industry like tourism, the bargaining power of buyer is low o moderate, depending on the situation. But the situation is expected to change with the growing demand of buyers. 3. What are the drivers of Change in the industry and what impact will they have?
Recent geopolitical events, climate change, information overflow, workforce issues and new segments are major forces of change shaping the travel and logistics sector today. Changes in Long Term Growth of the Industry: The first source of growth comes from developing the sector as a whole from top-down, as seen in how the regional economic integration, travel restrictions and the search for employment are being he indicators of long term growth. The advent of Low-Cost Carriers, growing market size, growing demand of buyers etc are also paced the race.
Targeting Specific Markets: Along with certain traditional tourism segments like holiday travelers, this industry is also encouraging different buyers as tourists or some other intermediaries. As standard of living is getting higher, more people are getting interest in tourism even inbound one. More so, it is also converting some one- stand travelers to a vacation one resulting a new category like university goers. Technological Changes: The communication improvement through World Wide Web and smart phones is expected to flourish this industry relating to communication.
Whereas, infrastructure development is also a momentous factor to be the driver of changes in this industry. * Changes in Cost and Efficiency: The history of tourism industry is not that much broad in Bangladesh. Thus it is expected to have more efficient workforce to be included in near future booming through learning experience which will increase the efficiency. More so, as per development of certain brand values of tour operators, more loyal tourists will be built up to force the sector to have cost efficiency for its win survival. * Improving Segment Attractiveness.
Traditional tourist growth strategies general awareness for these attractions. Successful players have however invested in developing distinctive brand awareness to help increase tourist consideration amid the growing clutter of information. To support this, countries then developed tourism niches such as by positioning themselves as medical, business, education, or sports hubs. Finally, successful players also work to ease entry barriers such as stringent visa controls, while increasing visitor expenditure with multiple price choices for various tourist segments.
Understanding Own Tourists. Companies are also investing in CRM (Customer Relationship Management) systems to investigate the origins, length of stay, average total expenditure, demographic segments, and even cryptographic drivers or their visitor base. Researching into the perceptions, concerns and decision drivers of niche segments has paved the way for the ‘bohemians” tourists. Similarly, demographic research has been shown that people from developing cities visit different center cities due to formal purposes like medial, office etc. Extending Tourist Stay. Players are also investing in their complete brand architecture, delighting visitors at each touch point to grow affinity, encourage a longer stay to stimulate domestic tourism. This requires heavy inter-agency coordination (e. G. More exchange programs at universities or work-study attachments), behavioral and perception modifications, yet targeting existing tourists has consistently shown to deliver higher returns on marketing investments than investing in attracting new tourists. Convincing Repeat Visits. Building trust with a consistent brand promise certainly helps to increase repeat visits, yet reward programs have also shown to be DOD complements to realize the actual potential in each tourist. Tour operators are learning from airlines in creating loyalty programs, yet shopping centers, restaurants and even countries have yet to fully exploit such tools to maximize their Tourist Lifetime Value. * Building Tourist ‘Referrals’.
Existing tourists – including expatriate workers, foreign students, business visitors, or medical tourists (may be local) – may be encouraged to bring their family and friends to visit. Viral marketing or targeting the thought leaders of new cryptographic tribes’ is also considered to be successful in obtaining referrals for other workers, students, or patients to pay visit. 4. Which companies are in the strongest/ weakest competitive position? * Here in the following map two aspects have been considered; type of destination and number of tourists.
This map is more considering the local competition. * Here Guide Tours Ltd. And Tiger Tours BAD has been the potential competitor of BPCS with gradually 45% and 20% market share. Though BPCS is competing in Middle to High class cluster, but the competition threat from it is low. * Tiger Tour is being on the high range customers. The position of the competitors along with the companies can be shown by the following Strategic Map: * BPCS is covering the middle to high class range with 15% market share; therefore competition is intense in these two clusters.
Other significant amounts of operators are operating in low segment leaving it a considerable cluster. * Therefore, intense competition in middle to high class target leaving the low range (individual economy travelers may get included) in a safer position for other to enjoy the business. 5. Who’s going to make what competitive moves next? Assessing the upcoming moves of competitors will let BPCS to stand with a major advantage. Hence it can plan its strategy being a “Question mark” in BCC matrix, accordingly.
Following is a chart of tactical moves of competitors along with BPCS itself where the assumption is for five (5) years: yr I Guide Tours Ltd I Tiger Tours IBID BPCS I I Niche differentiation: it is following this strategy as in the segment of middle to high range customers, it is proved to be the market leader by following this strategy I Niche differentiation: this is also following this strategy though it is not a market leader but it is in second position by following this strategy applying on the I Niche Cost Strategy: In current tenure, BPCS is following this same segment. Theater by focusing on middle to high range customers with comparatively cheap cost. | 2. | Broad differentiation: As it is already skimming the profitability of market share as a leader, it has the advantage of established brand name and thus a move towards this segment is profitable for this company. I Niche cost strategy: while the others will be moving towards Broad differentiation, this company will move towards this niche cost segment as BPCS in this arena is expected to be a little relaxed in this sector as it is focusing on broad differentiation by then.
I Broad differentiation: this segment is still a bit UN revealed by BPCS therefore having the potential chance to explore this segment while providing the quality service to a broader segment of people. | 3. | Vertical integration: As an established brand, during this tenure, this organization will move to vertical integration as by following the backward integration in aspects of transportation, restaurant etc to grab a diversified business prospect.
I Related diversification: this is the time for this follower company to adopt related diversification in aspect of transportation, inbound facilities and footing facilities. For this, acquisition may be the safest idea to anchor in a regional level. I Overall low-cost: Now it is the time for BPCS to focus on the lower segment of people. As by being a government agency, it is much easier for it to follow this strategy while taking the advantage of potential procurement system and economies of scale. | 4. New market development: Now is the time for the leader to concentrate to grab a new market segment like converted buyer of the industry through providing technological innovative services like easy access to the online guiding system. As by adding this criteria, it will be able to attract the ill use the opportunity of service innovation while adding value services in regard of technological aspect. Like traveling with the easy installment opportunity with credit card, will make it a bit successful comparing to others in the industry.
I Market penetration: now this is the demand of the time that BPCS follows this strategy with severe promotion while adopting technological advancement and new market | 5. | Fortify and defensive strategy : As for market leader, it is the segment. Time that the company play defensive to hold on in market share by doing extensive campaign, winning customer loyalty etc. I Offensive strategy: Here as runner up, the company may play offensive through being specialist in a left out niche, acquiring other companies etc.
I Offensive strategy: During this period, BPCS may go playing offensive by ruling on distinctive-image strategy and content follower strategy. Even if it doesn’t work, it may go for turnaround while reviewing their strategy, pushing effort to increase revenue through promotion, adopting cost reduction etc. What key factors will determine competitive success or failure? 6. The competitive success factor for BPCS in relating to the industry should be covering the sustainable competitive advantage.
Thus the organization will achieve sustainable competitive advantage through confirming the success factors are properly being monitored; otherwise failure will become incorrigible to survive in the industry. 7. How attractive is the industry in terms of its prospect for above average reparability? By the above discussion through all those six aspects of industry and competitive analysis, it has been cleared that: * As per Business Strength Matrix, the comparison variables are two; industry attractiveness and business strength.
Thus for BPCS, having the low business strength and high industry attractiveness, should be focusing on selectivity. * The industry is growing with almost 14% rate which is a great potential for an emerging industry like tourism in Bangladesh though the rate should be higher to sustain. * If we go through most recent situation of the tourism industry in Bangladesh, the political instability is drawing this industry downward.
Still this situational crisis can not hinder the profitability of this industry considering both inbound and outbound tourism. * As standing in the 3rd position, BPCS is now following Question mark strategy that is low market share with a promising growth rate. Therefore, it has a chance to become star with the time and has noteworthy growth potential though starting from 1973 it was supposed to do better. * It has the strong potential of being a government agency to bit the competition by using proper strategy, innovation and resources.
As the company is not in a good shape right now, therefore, the Skiffs do not match profoundly to the BPCS but through further implication of strategies and maintaining forces of success it can be establish as a prominent player in the industry. * Where concerning the risk and uncertainty, the company has to deal with political volatility in every 5 years, environmental hazards are there, decreasing the value of BET (Bangladesh take), inadequate infrastructure etc to become a successful tourism company. Therefore the industry is having above average profitability with the impending options except some external concerns.
