Threat of new entrants
The threat is moderate; any disruptive idea might easily upstage us and its not a rocket science to build marketplace.
The amount of capital needed to launch the business is substantial because property listing must be updated in real time without any mistakes, this requires to have reliable database management solutions and overall investments on technology and marketing.
Bargaining Power of Customers
Customer’s bargaining power is relatively high. The cost of switching from an existing products in the market vs. PureStay is quite low.
In order to acquire new consumers, the incentives by way of offers, discounts and loyalty program via registration encourages adoption. The product will need to offer strategically personalized experience over time.
Bargaining power of suppliers
On the contrary, the owners of these houses do not actually have a lot of bargaining power because there aren't many alternatives to the kind of service that PureStay offers. The owner and the guest are connected through PureStay, it manages all transactions.
Threat of substitutes
PureStay is authenticity-oriented product. And most of the authentic properties that people want to rent out have already been listed. Since it has a wide reach because of its presence in other countries, the company has created a reputation for itself among its customers and that’s why, it is quite protected from other players in this industry. Speaking of which, the biggest problem is that the business has to compete with conventional hotels, motels, and bed-and-breakfasts. That’s why we need to set ourselves apart from them by providing exceptional customer service and precisely identifying customers’ pain points.
Rivalry among existing competitors
Differentiation strategy is to focus on authentic places and local experiences.
