Porter+5+Forces(Final)

During the last several decades’ tourism has emerged as one of the major industries in the world economy. Tourism revenues have grown to the third largest industry after oil and automobiles. Malaysia has some of the most attractive holiday destinations in the world. Tourism in Malaysia has contributed significantly to nation’s economy. The tourism industry in Malaysia is an important foreign exchange earner, contributing to economic growth, attracting investments and providing employment. As with other countries in the world, tourism industry can be claimed as an important sector for the Malaysian economy. Malaysian Tourism Industry Forecast to 2012”, international tourist arrivals in Malaysia will grow at a CAGR of around 8% during the forecast period (2011-2013) and tourism receipts from overseas tourists are expected to rise at a CAGR of around 8% during the same period, thereby, surpassing RM 70 Billion (over US$ 22.4 Billion) by 2013. Apart from the ASEAN countries, it is anticipated that tourist arrivals from China, India, and the Middle East will strongly grow during the forecast period (2011-2013). Malaysian tourism industry will continue to grow rapidly in coming years, on the back of increasing promotional activities by the government and growing reputation of the country as a shopping hub.
 * Tourism Destinations **

As per Malaysia’s official tourism website, following are some of the destinations considered to be tourist attraction spots:

Penang: It is a popular beach spot in Malaysia, lined up with a string of International-standard resorts. Wind surfing, canoeing, and parasailing are some of the activities that can be enjoyed here. Also, Penang is a favorite spot among medical tourists. Portuguese colonization here from 1511 to 1641. Malacca, is another city well-known among tourists for medical procedures. beaches, world-class infrastructure, rich flora and fauna, and duty-free shopping make this place a haven for travelers. Langkawi beach is a well known place among tourists.
 * Kuala Lumpur: The 88-storey PETRONAS Twin Towers is the main attraction in this capital city.
 * Malacca: This place is famous from historic point of view due to the
 * Kedah: A cluster of 99 islands with the best of many worlds, beautiful

Over the years Malaysia tourism industry had been expanded .The Malaysia tourist promotion board(MTPB) vision is to make the tourism industry a prime contributor to the socio-economic development of the nation, and aims to market Malaysia as a premier destination of excellence in the region. In 1999, Malaysia launched a worldwide marketing campaign called “Malaysia, Truly Asia” which was largely successful in bringing in over 7.4 million tourists. and got some awards in marketing and also became afamouse advertising brand for Malaysia tourist industry. Regarding to the MALAYSIA TOURIST ARRIVALS 2010
 * MALAYSIA TOURISM INDUSTRY ANALYSIS **

Regarding to the star-news ,Malaysia has been ranked ninth in the United Nations World Tourism Organization’s (UNWTO) list of 10 most visited countries, with 24.6 million international tourist arrivals in 2010.

As Malaysian ambassador to the Philippines Datuk Seri Ibrahim said regarding to Malaysia tourism ranking and governors plans on tourism industry that "The Tourism Ministry should consider refining its promotion strategies as current campaigns mostly feature islands and beaches". However there is threat of new entrants it means that the other eastern asia countries are preparing them selves to increase their tourist industry facilities.as Dr Ng said "2011 had been a tough year for the national tourism industry, which was affected by the tsunami in Japan, floods in Thailand, the European economic crisis and the opening of a casino in Singapore" She hoped that with the ministry's new plans for 2012, the industry would thrive again.

Our ongoing analysis found that, the Malaysian government is continuously making efforts to establish its tourist industry at the global front and has somehow succeeded after getting top position among the top 10 tourist destinations in the world. Besides, the government included tourism industry in the five year plan and regards it as a major part of the economy. The country’s tourism promotion board is also coming up with new promotional packages to attract tourist from various destinations. Besides, authorities. are pouring huge amount of investments to develop tourist industry, thus creating employment to thousand numbers of people in the country.

In our research conducted, the structure of the analysis is according to each of the five forces of Porter’s model, “Porter’s 5 forces analysis”. The 5 components inside this model which includes 3 forces from ‘horizontal’ competition (rivals, new entrants, and substitute products) and 2 forces from ‘vertical’ competition (bargaining power of supplier and buyer). As one of our research objectives is to determine the factors that allow Malaysia to gain more revenue from its tourism industry, Porter’s 5 forces analysis was significant. This model is applicable to our research topic because we need to analyse all the five components in order for Malaysia to gain more revenue from its tourism industry. According to Harvard professor Michael Porter, the five industry forces determine an industry’s overall attractiveness and potential for long-term profitability.


 * The competitive environment **


 * ** The threat of entrants ** : The competition in an industry will be the higher; the easier it is for other companies to enter this industry. In such a situation, new entrants could change major determinants of the market environment (e.g. market shares, prices, customer loyalty) at any time. There is always a latent pressure for reaction and adjustment for existing players in this industry.One of the major entrant of tourism industry in Malaysia is Singapore. Some tourists they choose Singapore for their destination.
 * ** The power of suppliers : ** The term 'suppliers' comprises all sources for inputs that are needed in order to provide goods or services. The power of suppliers in Malaysia tourism industry is refer to airlines, hotels, transportations, travel agency and all organizations that can give services to Malaysia tourism. The bargaining power of suppliers in Redang beach resort is depends on the products which is supplied by supplier but it is low.
 * ** The power of consumers : ** Similarly, the bargaining power of customers determines how much customers can impose pressure on margins and volumes. The bargaining of consumers in redang beach resort is depends on switching cost. The power of consumers here is high because redang beach resort has competitors and when other resorts have good services and facilities customers can choose other resorts.
 * ** The threat of substitutes : ** A threat from substitutes exists if there are alternative products with lower prices of better performance parameters for the same purpose. They could potentially attract significant proportion of market volume and hence reduce the potential sales volume for existing players. This category also relates to complementary products.The switching cost in thereat of substitutes is high and easy because if other resorts in redang, langkawi and pangkor provide same services in lower price than redang beach resort, customers can choose other options.
 * ** Competitive rivalry : ** This force describes the intensity of competition between existing players(companies) in an industry. High competitive pressure results in pressure on prices, margins, and hence, on profitability for every single company in the industry. The major competitor of redang beach resort is other place that tourists can choose to go in Malaysia like genting highland, Cameron highland, freezer hills, and other destination in Malaysia.


 * Conclusions **

Porter 5 forces is the strategy for analysis and planning in business. This strategy help organizations and industries to make long term planning. In this paper we are discussed that how tourism industry can know their external environment and make the good strategic for their industry.