A study of the competitive strategy of boutique hotels in Singapore.

The purpose of our research is to study the competitive strategy of the boutique hotels in Singapore, using the Michael Porter’s theoretical framework of two analytical tools – Porter’s five forces model and generic competitive positions. The industry forces which are more important to boutique hotels are bargaining power of buyers, threat of substitutes and threat of new market entries. Our analysis determined the overall attractiveness of the boutique hotel industry in Singapore to be of low attractiveness. However, Porter’s five forces model alone is insufficient to conclude that the boutique hotel business is unprofitable. A further analysis of the boutique hotels in Singapore was done using Porter’s generic competitive positions model. This analysis revealed that boutique hotels which chose the cost focus strategy or differentiation focus strategy are more sustainable than the rest of the boutique hotels who are without a clear competitive position. Our report concluded that although the boutique hotel industry in Singapore is of low attractiveness, being in an advantageous competitive position is critical for them to achieve competitive advantage. With rising affluence and changing lifestyles, boutique hotels are becoming more popular in Singapore and will become more prevalent in Singapore in the near future