Industry analysis is an important aspect in any organization; it entails a review of an organization’s economic, political and market forces that influence the manner in which an industry grows over time. Industry analysis serves as an important tool of market assessment that aims to help the organization realize the complexities encompassing a specific industry. The tourism industry is very dynamic and thrives in a very competitive environment due to the constantly changing needs, tastes, and preferences of the customers. An ability to adapt to these changes in the industry requires flexibility in order to ensure customer satisfaction and provision of quality beyond the customer’s expectations (Porter, 1980).
Generally, the tourism industry environment mainly focuses on the provision of a safe, secure, and enjoyable atmosphere for the customers or tourists. The industry’s major sectors include accommodation, travels services, recreational and entertainment services, and food and beverage. These areas are diverse and they all determine the tourist experience, which is the core in this industry (Nagle, 1999). The forces influencing the tourism industry such as competitive forces are key in the identification of future opportunities as well as threats observed in the external environment (Kotler, 1997). In the next three years, the tourism industry is likely to adapt in order to accommodate the changes emanating from such competitive forces to make sure the tourist experience is better while at the same time improve efficiency. For instance, technology use in the different sectors of the industry is likely to change and improve the ways in which the travel, accommodation, and other services are provided. The creation of customer relationship management systems is likely to permeate most areas of the industry.
In conclusion, the tourism industry is mainly service oriented and therefore the customer experience is the focus. The relationships developed to ensure the industry thrives in its constantly changing and competitive environment are important in ensuring competitive advantage. The forces experienced in the industry are a determinant of how well the industry adapts and competes in the global market.