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You are in the Bed and Breakfast business in Texas. You have used Porter’s Generic Model of Competition (1985) to pick a box. Who needs a bed and why? 

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Diagram  Description automatically generated

For Students Using Readers

This lesson starts with a multi-piece diagram. I will cover more details of Michael Porter’s Generic Model of Competition in the lesson that follows. I can’t use the exact image due to copyright laws. Let me describe my adapted model above. Barrowed from the “Twilight Zone,” imagine if you will.

The model is anchored with a long slender rectangle in the middle of the page. The rectangle recognizes the importance of the end user and measuring the customer’s value proposition. On each side of the rectangle are two smaller boxes for a total of four boxes. Coming from each box is an arrow facing the slender rectangle. The boxes represent arenas where firms can compete. Arena one is located in the top right-hand side and represents the Ford Automobile position of broad market and low cost. I designate arena one as one dollar sign. Located in the top left-hand corner, arena two is a box representing the Mercedes position or broad market differentiated. Arena two is characterized by two dollar signs. 

Moving over to the bottom right-hand corner, arena three is a box that represents the Ferrari position of narrow market and special. Keep in mind that this product or service is expensive. Arena three is characterized by three dollar signs. If we look to the bottom left-hand side of the page we see arena four. Here we very high-end products and services such as the Bugatti Chiron position of an extremely narrow high-end market. Pricing is afforded by only a few high net worth individuals. Four dollar signs. 


The purpose of this assignment is to examine if you can actually make money in this business. Imagine that you have identified a location priced at $300k (or more). Now you need to figure out how to compete against all the other B&Bs in the area. It is possible to have higher profit margins than the Industry average. My question to you “Is how?” The answer is to find a demographic group that likes what you have to offer and will pay for it. You can create any B&B you wish, even one for bikers, cat people, Vegans, AARP, etc. Each of these groups spend money on something. Be sure to look at the library demographic resources located at  https://guides.library.unt.edu/mgmt3850/4100 (Links to an external site.) 


I have  a friend from Michigan who holds a MBA. His family purchased a Motel and cabins on a mountain top property in Costa Rica. The property is surrounded by an eight foot tall fence and they employ an armed guard at the front gate. The marketing plan describes baby boomers and Gen X with money to spend and want to feel secure. The advertising is directed at snow birds in the USA and Canada. They do not advertise in Costa Rica except in vacation trade magazines. The people in Costa Rica already have a bed.  


Start by reading chapter 11 and pages 88 – 92 of the textbook . Look at the lesson module material and Industry report. (Please submit assignment as Lastname.Firstname.Product.docx.) Everyone is in the B&B business in Texas. You pick the city.  This is where your understanding of the Industry comes in. You have seen holes in service not covered by the other players. Use Porter’s Generic Model of Competition (1985) and pick your box. Keep in mind that each box has different customers, costs, pricing, expectations of quality and services, etc. This is the perspective you will have for the four remaining assignments.


Your written report should be key boarded, utilize the American Psychological Association (APA) citation format, and be 4 pages in length (including exhibits, tables and appendices). Use 12 point Ariel font, 1/4 inch indentions, headings, use page numbers, and single line and character spacing. I am expecting a professional report that (a) demonstrates a command and understanding of the topic, (b) uses sound presentation logic and well thought through justifications, and (c) displays use of appropriate graphs, charts, and tables. Turn in your Microsoft Word files to Canvas for submission to  www.turnitin.com (Links to an external site.) . Do not send me assignments in PDF, HTML, Pages®, Word Perfect®, linked to Microsoft 365®, linked to Sharepoint.com®, or linked to Google Docs®. All submissions will be graded as to following instructions, content, punctuation, grammar, citations, and sentence structure. Late submissions will not be accepted (unless covered by University policy). Please view the videos below and answer the following questions in paragraph form. 

 Product/ Service Feasibility Analysis (level one heading)

Level two headings follow. 

Target Market

Problem to be solved or benefit to be offered.

Demographic profile.

Other significant customer characteristics.

Customer’s Motivation To Buy

Market Size And Trends How large is the market? Is it growing or shrinking? How fast?

Personal Selling Efforts – Who? Sales force size (wait staff), recruitment, and training Sales force compensation (if any) Number of sales per hour Amount of average sale

Advertising And Promotion Media used (reader, viewer, listener profiles) Media costs Frequency of usage Plans for generating publicity (free-of-charge)

Pricing Cost structure Desired image in market Comparison against competitor’s prices Discounts (coupons at initial introduction?) Gross profit margin

Distribution Strategy (if applicable) Channels of distribution used (table service, front counter, take away, delivery service) Sales techniques and incentives for intermediaries (if any)

Test Market Results Survey(s) (copy of blank survey) Use Survey Monkey and send the link to friends. Summarize results.  Customer feedback on prototypes or survey(s) (Summary of results)  Focus groups (if any). Here is where I would sample goods to a small group for feedback on quality and taste. Just tell me you intend to do this. 

Conclusion. Is it possible? 


Students coring less than 80% will receive a detailed rubric. Students scoring 80% and above will receive comments in Speed Grader located in Canvas. Otherwise, choose your grade from the attached menu. 

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