Chapter 7 - Business Model Canvas
7.6 Channels
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8.0 Company Internal SWOT Analysis:
First time developing in the market Low client base.
Opportunities:
Increasing amount of tourists arriving Panama
9.0 Competitors Analysis:
9.1 Main Competitors facing in the Industry
: The main competitors within the hospitality industry which offer a similar product towards a similar target market is Mama Llena Eco-lodge. Luckily, currently the Eco friendly hospitality industry with affordable prices is not well developed in Panama. Therefore in this case our main competitor will be Mama Llena Eco-lodge. Canopy branches could also be considered as competitors, however there target market and main customers differ from ours, therefore we will proceed to focus on Mama Llena Eco-lodge.9.2 Products and Services
: Mama Llena is located in la Laguna of San Carlos, about 1 hour and 30 minutes away from the city and offers Eco-friendly accommodation focused on developing a self-sustainable environment. They do this by growing its food with organic and developing new agricultural techniques. Within the products they offer are: Hillside Cabana, River Cabins, Private or Dorm Rooms. The dorm room prices are around 10$ per person, while the private rooms 40$ and the private side cabanas 50$.9.3 Main Competitors Strengths and Weaknesses:
They possess the market know how since they have been in business since January of 2016, and therefore acquired good reputation and customer client base. The location, is in within nature and foster an environment for relaxing and enjoying nature while offering really attractive rates. Also they have a solid management team which consists of: the owner of the lodge, a cocktail specialists, and two local assets that help with the administration and maintenance of the lodge. However we consider that they offer few activities, they don’t rely on renewable sources of energy, and are located far away from the city and other Eco-touristic attractions.‧
10.0 Sensitivity Analysis:
Accordingly, we will be analyzing the impact on 2020 total lodging revenue, by changing variables such as price and occupancy rate.
Table 10: Original Total Revenue Expected in 2020 Cabins expected to be $57,630.00. Following we will be making some adjustments on occupancy rate in order to analyze the impact in annual revenue.
Table 11: Impact on 2020 Expected Yearly Revenue by Increasing Occupancy Rate by 10%
Cabins
Accordingly, as it can be seen in Table 10, by increasing occupancy rate we will be increasing our expected yearly income by $7,890.00 which in our project period of 10 years could translate to over $78,000.00. It is important to analyze occupancy rate since it will be one of the main drivers of our revenue.
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Table 12: Impact on 2020 Expected Yearly Revenue by Decreasing Occupancy Rate by 10%
Consequently in Table 11, we have observed how the yearly total revenue has decreased by
$7,890.00 since we dropped the occupancy rate from 80% to 70% during high season and from 60% to 50% during low season. This is important to analyze since we also need to contemplate this possibilities during the development of our business plan. Even if our occupancy rate drops by 10% we will still be making profit at the end of year 10.
Table 13: Impact on 2020 Yearly Revenue by Decreasing Price by 20%
Cabins forced to drop our prices by 20%. Consequently our yearly total revenue still is higher than our yearly expenses which account for $20,400.00 of operating expenses and $22,000.00 for the lease of initial investment. Therefore we could still work and tightly manage to keep our business alive by reducing price by 20%.
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Table 13: Impact on 2020 Yearly Revenue by Increasing Price by 20% and Ocp. Rate by 10%
Following a bad scenario of having to sell 20% lower price, we also like to be optimistic, and we are looking forward on having excess customers and high demand for our services. If this is the case as it can be observed on Table 13, we could raise the price by 20% and our occupancy rate by 10%, accordingly our annual revenue will increase by $20,994.00, which seems to be an achievable forecast especially due to the lack of Eco-friendly cabins in our
11.0 Future Expansion:
In order to ensure the success of our Eco-friendly lodge concept, we have analyzed the possibility of incorporating new branches on several areas of Panama. Areas we are considering go from constructing Eco-friendly offices on the city in order to rent them to clients that want to develop their own businesses, up to expanding our Eco-friendly container hospitality concept to an area called Veracruz, which has views to the beautiful coast line of the Pacific side of Panama. Overall after our first 5 years of operations, we will evaluate all this possibilities, certainly always maintaining our core values of developing environmental friendly constructions and adding value through creating an experience that helps to connect with nature and reduces worldwide carbon footprint.
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Appendix
Table 12: Tourists that entered Panama through Tocumen International Airport
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Table 13: Countries that Visit Panama the Most in 2015
Source: Autoridad de Turismo de Panama
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Table 14: Expected Revenues, Expenses, and Income for duration of the project.
Table 14: Expected Revenue, Expenses, and Income 2019 - 2028
Year