The Level of Corporate Social Responsibility Using the IBIS Hotel - Case Study Example

 Some of the tools include Porter’s Five Forces Model that will be discussed further in this report. The report aims at analyzing industrial competitiveness and the level of corporate social responsibility using the IBIS Hotel as an illustration

1.0 Industrial Competitiveness
Michael Porter developed the five forces model that comprises of five industrial forces that influence the organizational operations. These forces are supplier power, buyer power, market entry, substitute products and competition (Wetherly & Otter, p11). This report will focus on the rivalry component of the model as it analyses the competitiveness of the hospitality industry in the UK.

1.1 Entry and Exit Barriers
Enhanced industrial competitiveness exists where there are no entry or exit barriers for organizations willing to join the industry (Worthington & Britton, p33). This is a characteristic of the hospitality industry in the UK that comprises 127,000 commercial enterprises according to the British Hospitality Association. Due to the high number of organizations and homogeneity of the products, competition in the industry is based upon the quality of services and affordable rates to the organization’s clients. The exponential growth of the hospitality industry in the UK has been attributed to the increased civil security as well as the tourist attractions. Additionally, the business environment within the nation and its geographical location has increased the number of business visitors in the nation at any given time. Due to these factors, the majority of the investors in the nation have sought to meet the accommodation needs of these visitors and have therefore invested in the hospitality industry. Financial amounts invested in hospitality establishments are hefty and therefore the investors find it difficult to exit the industry and this spurs competition to a new level. These amounts are not only incurred during establishment but also during maintenance such as refurbishments, re-launches, and modernization (Woods, Para 1). As a result, the hospitality industry in the UK is highly competitive although it realizes increased growth annually. IBIS Hotel continues to increase the number of facilities across the UK to fend off competition brought about by the new market entrants and established organizations.

1.2 Industrial Growth
The boom being experienced by players in the hospitality industry has attracted additional organizations into the industry. As a result, the industry has experienced additional competition that is un-proportional to the increase in the number of visitors to the nation. Porter defines industrial attractiveness as the ability of organizations within a particular industry to earn above-normal profits, less competition, restricted industrial entry, and low supplier and purchaser powers (Wetherly & Otter, p78). Although such industries are categorized as monopolies, the organizations present in the UK’s hospitality industry have realized increased profits attributed to industrial growth. A survey conducted by the British Hospitality Association indicated that over 3 million pounds were invested in the UK hotel industry. On the other hand, the government has moved in to spur industrial growth by scrapping off the Hotel Buildings Allowance (Woods, Para. 4). This has reduced the operational costs incurred and hence increasing competitiveness. Additionally, the majority of the costs incurred in the industry are fixed costs that encourage competition due to the presence of unutilized resources. Resultantly, rival organizations have the capability to charge competitive prices for their services. To ensure efficient utilization of the fixed costs, IBIS Hotel has embarked on diversification whereby facilities within a locality operate as a single unit as opposed to independent units.