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Plush is a medium-sized hotel which recently opened on the outskirts of a city which is popular with tourists. It has a sophisticated website which allows customers to pre-book rooms and additional items, such as meals in its restaurant and tickets for popular tourist attractions in the city.
Plush has listed its website on a popular hotel price comparison website, which allows customers to compare prices and facilities of hotels in the same area and this has resulted in over 60% of Plush's customer bookings so far.
Since listing on the price comparison website, the Sales Manager of Plush has noticed that the prices offered by its nearest competitors have reduced dramatically and their range of special offers have also increased.
Which TWO of Porter's Five Forces have been most affected by the use of the price comparison website by the hotels in the same area as Plush? (Choose two.)
Suggested Answer: B, E
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28 comments · newest first
MI
Micah
7 months ago
I lean towards A and E as well. Price comparison really boosts customer bargaining.
MI
Ming
7 months ago
I feel like A and B could work too. Substitutes are always a threat.
BE
Benedict
8 months ago
Agreed! A and E make sense. Customers have more power now.
MI
Minna
8 months ago
I thought D) Threat of new entrants would be more relevant here.
LI
Lizbeth
8 months ago
For sure E) Bargaining power of customers has increased!
MO
Monroe
9 months ago
Wait, how does this affect B) Threat of substitutes?
MA
Marica
9 months ago
I agree, A) Competitive rivalry is huge now.
CH
Chana
9 months ago
Definitely A) Competitive rivalry. Prices are dropping fast!
CE
Cecil
9 months ago
A and E, easy peasy. The price comparison website has turned this hotel industry into a cutthroat jungle.
LU
Lucia
9 months ago
A and E, no doubt. The price comparison website has made this hotel business a real race to the bottom.
GL
Gladys
9 months ago
A and E for sure. The price comparison website has turned this hotel industry into a real bloodbath!
AD
Adrianna
10 months ago
I agree with A and E. The price comparison website has increased competition and given customers more leverage to negotiate better deals.
VE
Venita
10 months ago
I’m a bit confused about the threat of substitutes; I thought that was more about alternative services rather than price competition. Could it be relevant here?
BE
Belen
10 months ago
I remember a practice question that mentioned how price comparison sites can intensify competition, so I’m leaning towards competitive rivalry and maybe bargaining power of customers as well.
LE
Lenna
10 months ago
I think A and E are the best choices. Competitive rivalry is intense now.
LE
Letha
10 months ago
A and E are the correct answers. The price comparison website has increased competitive rivalry and the bargaining power of customers.
TA
Tabetha
11 months ago
Definitely A and E. The price comparison website has made it easier for customers to shop around and put pressure on the hotels to lower their prices.
AL
Alba
11 months ago
I'm not so sure about the second force, but I feel like the bargaining power of customers might have increased because they can easily find better deals now.
JU
Judy
11 months ago
I think competitive rivalry is definitely one of the forces affected since the price comparison site has made it easier for customers to see how Plush stacks up against competitors.
XO
Xochitl
12 months ago
I'm pretty confident that Competitive Rivalry and Bargaining Power of Customers are the two forces most impacted here. The details about the competitors reducing prices and increasing special offers point to heightened rivalry, while the price comparison website gives customers more leverage.
MI
Micaela
12 months ago
Okay, let me see if I can figure this out. The price comparison website has led to increased competition and reduced prices, so I'd say Competitive Rivalry is definitely one of the forces affected. And with customers able to easily compare prices and offerings, their Bargaining Power has probably increased as well.
CA
Carmelina
12 months ago
I'm a bit confused by this question. There are a lot of details about the hotel and its website, but I'm not sure how that connects to Porter's Five Forces. I'll need to think this through carefully.
AN
Angelica
1 year ago
This looks like a straightforward question about Porter's Five Forces. I think the key is to identify which two forces have been most impacted by the use of the price comparison website.
CA
Carman
7 months ago
E is crucial too. Customers can easily find better deals now.
VE
Verona
7 months ago
I see A as a big factor. The rivalry is intense!
CH
Chandra
7 months ago
Agreed! The price comparison really boosts customer power.
MU
Murray
10 months ago
I think it's definitely A and E. The competition is fierce now.
GI
Gilberto
11 months ago
A and E make sense. Everyone's lowering prices to attract bookings.