Chapter 5

Analyzing Market Opportunities

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 Situation Analysis

A study of the marketing strengths,

weaknesses, opportunities, and threats
of an existing business or other type of
organization

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 Market Analysis

A study of the potential demand for a

new or expanding hospitality or travel
business or other organizational type.
It determines whether market demand
is large enough

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 Feasibility Analysis

A study of the potential demand for

and economic feasibility of a business
or other organizational type; it
includes a market analysis plus four
additional steps

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Figure 5.1 Relationship of market, feasibility, and situation analyses.

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Relationship of the Three Analyses

The relationship among these three

techniques is chronological (time)
The situation analysis should build upon the
findings of the market or feasibility analysis
Each situation analysis should build upon
the previous year’s situation analysis

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Difference between a Situation and a
Market or Feasibility Analysis

1. A situation analysis determines the

strengths and weaknesses of an existing
organization or business.
2. Situation and market analyses have the
same steps, but in a different order.

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 Difference between a Situation and a
Market or Feasibility Analysis (continued)
3. A market or feasibility analysis
investigates a proposed new business and
its market potential and economic
feasibility.
4. Market and feasibility analyses have the
same first six steps, but the feasibility
analysis involves four additional steps.

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Figure 5.2 Situation and market analyses steps.

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 Steps in a Situation Analysis
1. Marketing environment analysis
2. Location and community analysis
3. Primary competitor analysis
4. Market potential analysis
5. Services analysis
6. Marketing position and plan analysis

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 Steps in a Market Analysis

1. Marketing environment analysis

2. Market potential analysis
3. Primary competitor analysis
4. Location and community analysis
5. Services analysis
6. Marketing position and plan analysis

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Figure 5.3 The hospitality and travel marketing environment.

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 Four Additional Steps in a
Feasibility Analysis

Pricing analysis
Income and expense analysis
Development cost analysis
Analysis of return on investment and
economic feasibility

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Figure 5.14 Relationship of market and feasibility analyses.

Copyright 2010 Delmar, a part of Cengage Learning.

All Rights Reserved.