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Risk and Mitigation
Barriers to Entry
– The barriers to entry in the top end hospitality industry can be described as high.
High capital costs and ability to sustain the business are the biggest barriers to entering the industry
Mitigation
– The company will use a two pronged strategy to create a sustainable model. It will focus
all its resources into making its flagship lounge financially viable before embarking on any expansion
plans. Also, it will look at franchising as an expansion strategy in order to reduce its capital exposure.
Competition
– Competition is strong in the high end hospitality and lounge sector. There are a large
number of well established brands with a loyal and committed clientele.
Mitigation
– Blaze has identified its target audience, service offering and operational mode, which
it feels will help to differentiate its services from the rest. Customer membership programs will be
launched and will include reward programs including corporate leisure sessions at exotic resorts. In
addition, the founder will be using his contacts to get an initial foothold in the market.
Recent Industry Growth
– Recent industry trends have shown that there is a demand for high end
lounges in the US and globally.
Mitigation
– While industry trends are encouraging, the company is aware that to create a strong
foothold in the market its products and services need to be of high quality and customer
relationships at the top end of the market.
Interest Rates
– Interest rates globally has remain flat. Any increase in interest rates may impact the
financial model
