Porter's Five Forces Analysis

As the owner of an identical bed and breakfast to Hotel California, Ms. Warren’s main priority, as in any business, is to maximize profit and provide a competitive edge to the Hotel Industry. As such, the Michael’s Porters “Five Forces” strategic model should be used to achieve the desired results. According to the article “Porter Five Forces” in Wikipedia, three of Porter’s forces are refer to competition from external sources and the two other forces are refer to internal threats. The five forces strategies that are demonstrated in the model are: the threat of substitute products or services, the threat of established rivals, and the threat of new entrants; and two forces from ‘internal threats’: the bargaining power of suppliers and the bargaining power of customers.
The threat of substitute products or services force represents the threat of limiting potential returns of an industry by placing a ceiling on the prices that firms in that industry can profitably charge without losing too many customers to substitute products. In addition, under the threat of substitute products or s...