Porter’s 5 Competitive Forces

	Force	Impact	Potential Use of IT
1.	Threat of New Entrants	New Capacity -         The target market becomes smaller since many hotel companies enter the market. -         Even it is a monopoly business at Genting Highland, however, there are several popular tourist destinations in Malaysia; i.e. Pulau Langkawi etc. that require Genting World to think on new strategy and to expand its business by adding more products and services.	Provide entry Barrier -         Since no competitors at Genting Highland, the use of information technology system like the Genting Website that allows consumers to book online can ensure that Genting World is a leading company that emphasizes more on IT in the hotel business in Malaysia and focusing its business through e-commerce.   Economic of Scale -         Since less cost used in the Sales and Marketing activities (conventional marketing technique like printing broachers etc., online marketing can help the company to expand its business by offering more rooms, food & beverage facilities and other activities.   Brand identity -         Genting World Bhd has build its own image through aggressive use of its web site   www.genting.com.my that helps in marketing promotion, advertisement and etc. Plus, they are focusing more on personalize customer service by allowing the users to personally choose any products they like and to independently book the rooms that they like through secure online reservations, eliminating the need of intermediaries (i.e. travel agents) -         Besides, the use of Genting World Card Member helps in getting more loyal members; rewarding them with valuable points and special privileges as long as they use the card for any Genting products and services.
2.	Buyer’s Bargaining Power	Prices forced down -         As the consumers nowadays are so smart and independent in searching and evaluating the best, valuable and quality product to buy, the company needs to give more discount on their products and services, offering lower prices for all products and provided more services to compete with other competitors. Examples could be on method of payment, online reservation, availability of rooms, booking concert and holiday packages etc	Product differentiation -         By having its own Website and other IT facilities like hotels Gambling machines etc., Genting World Bhd is able to expands its products and services and offering several new other products in order to differentiate its products based on different target market. E.g. First World Hotel is for mid market customers, Genting Highland Resorts for high-end markets and so on. Through its Website, customers may select what are the best products that suit their taste and budgets.   Switching cost (dedicated ordering system / free maintenance) -         Traditionally, the room price is high because of the intermediaries fees that the company need to pay for their commissions. However, by having IT systems and facilities (e.g. online booking system etc.) it saves lots of customer’s money by offering lower prices as well as saving customers’ time. -         Thus, having advanced IT systems like online booking system on its Website may help to reduce an expensive labor costs needed in its business operations. When IT can replace human power, it helps the company to focus on its business expansion rather than managing its own manpower costs.
3.	Supplier’s Bargaining Power	Price raised / reduced quality -         Suppliers are like customers, meaning that they will search and choose only the best buyer (business companies) that can offer high prices to sell or provide products and services to them. -         If the hotel company wanted to buy in lower price, they have to bear in getting lower quality of products because suppliers like travel agents wanted to sell their services in high prices to cover the costs implementing the IT systems in their business company,	Backward integration -         IT systems like the company’s online booking system and so on the company is no longer looking for travel agents if they can easily get access to the end users (customers) anytime. Meaning that, they can save more costs by selling the products and services directly to the consumers -         Thus, by using the intranet system, they can save costs on logistics etc., for activities involving external suppliers like procurement process.
4.	Treat of Substitutes	-         Rather than going to Genting Higland, people have other options to go for traveling which is easier and easy access like Penang Island etc. -         Plus, there are mushrooms of hotels and motels ranging from small, medium to high star hotels available in Malaysia, which can makes Genting World Bhd business becomes smaller and vulnerable. -         The case of new Singapore’s casino which is planned to open soon can become a big threat for Genting Casino demand.	Improve price -         In order to survive, the company needs to eagerly offer more and more goods and services for their customers. -         Plus, they have to compete with each other in the area of IT which focusing on providing more convenience and fast services to their consumers. -         With the use of Web-system and other several IT systems, they can now reduce the price through promotional packages, combination packages and etc.   Redefines product and services -         Genting World Card Member (privilege card) is one of the ways on how the company can redefined its product and services by accessing its loyal and potential customers through the customer’s database. From this, many marketing and other expansions plans can be discussed in meeting customers’ demands.
5.	Rivalry among firm	Competition on price, production and distribution -         Through web site, competitors can easily know what the prices of products and services that are being offered by the company, making the information to be more transparency in business market which can threaten the company’s business. -         This also goes to other management strategies and plan as well like the marketing promotions and future plan proposed by the company to their customers. This will make competitors become aware and actively promoting their products to stay in front.	Cost effectiveness, differentiation and innovation -         When competitors will try improve their products and services at all time, Genting World Bhd needs to really optimizing its resources and budgets through the cost effectiveness strategy. One of the methods is by replacing manpower with IT systems like the computers and so on. -         The company is also required to come out with many new innovations like more advance indoor and outdoor games machines that use expert systems and so on to be able to compete with other competitors.