UNIVERSITY OF ULSTER
FACULTY OF BUSINESS AND MANAGEMENT
School of Business Organisation and Management
Module: Corporate Strategy BMG580C1
29, October 2004

Corporate Analysis "Nebelhornbahn AG CS"

by: Ulrike Messbacher

Contents

1. Introduction 3

2. Major macro-environmental influences 4

2.1 Economic Influences 6
2.2 Political Influences 8
2.3 Sociocultural Influences  9
2.4 Ecology and natural changes  10
2.5 Technological Influences 11

3. Sources of Competition 12

3.1 Threat of New Entrants 13
3.2 The Power of Suppliers 13
3.3. Threat of substitutes 14
3.4 The Power of Buyers 15
3.5 Competitive Rivalry  16

4. SWOT Analysis 18

4.1 The Strengths  18
4.2 The Weaknesses  19
4.3 The Opportunities 20
4.4 The Threats 21

5. Recommendations22

References

Appendix
 

The Company

The Nebelhornbahn AG is a small domestic Public Limited Company. In cooperation with its business partner Fellhornbahn GmbH it serves the largest linked skiing area of Germany. It is situated in the Bavarian Alps and operates a cable car from the village Oberstdorf up to the peak of Nebelhorn mountain, 2224 meters above sea level. Besides it runs several towropes and chairlifts as well as restaurants and kiosks mainly catering for tourists. However, carryings represent the main part (85%) of its business and thereof winter sports have a share of 43%. When it was founded in 1927 it was the longest passenger carrying cableway in the world. Nowadays, it has an overall length of 5770 m. In three sections it climbs over a distance of 1385 m and has a carrying capacity of 560 persons per hour. With a permanent staff of 67 employees and an annual turnover of 5.9 million Euros it is one of the main cable car operators in the Oberallgaeu area. Overall there are 21 cable car companies and 4 in the village of Oberstdorf. The market of Nebelhornbahn AG is strongly connected with tourism in the Oberallgaeu region. The company’s customers are mainly tourists from Germany and Austria and about 16% of them come from foreign, mostly European, countries. Oberstdorf is a popular holiday resort with a long tradition and hence a lot of older regular customers. In addition there are plenty of daily visitors from the nearby cities and domestic costumers as well. The picturesque landscape and mountain scenery around Oberstdorf offers many leisure activities to athletes, families, health visitors, culture enthusiasts or those who simply seek relaxation.

2. Major macro-environmental influences

2.1 Economic Influences

The Nebelhornbahn AG belongs to in the tourism industry. By analysing the economic environment of the company the authors will give an overview of the economic conditions and economic trends for the next few years with a focus on the key figures which affect the tourism industry most. Since the bulk of the customers come from countries within the European Monetary Union, the exchange rate for the euro is a negligible factor. Tourism reacts very sensible to changes in the economic environment as people with less money do not spend much money on non-vital goods in uncertain times to spend. Kaspar in Haedrich/Kaspar/Klemm/Kreilkamp (Hrsg.) 1998, p. 22 The economy in Europe is slowly increasing. There has been a slight rise in GDP and private consumption over the last two years (Figure 1) and the experts from the German Institute for Economic Research are forecasting a growth of 1,6% in 2004 and 2% in 2005 which mainly resulting from the global economic upturn. The German economy is recovering but at a slower rate. German economic growth fell constantly from 2.9% in 2000 to -0.1% in 2003. For 2004 and 2005 economic growth Figure 2 of 1,5% is predicted (Figure 3). The disposable income has been stagnating over the last two years but is expected to rise due to some significant changes in taxation. As you can see in Figure 4, the overnight stays in Bavaria are strongly linked to the disposable income (correlation of 0,91) and is therefore a good indicator to forecast the branches development which is then expected to rise. The number of unemployed German people depends on the economic situation, but it also has a strong influence on the consumer and travel behaviour of the people. This number will stay almost the same (11,4%) over the next two years. The success of the Nebelhornbahn AG is directly linked to the success of the village Oberstdorf where it is situated and vice versa, as Oberstdorf is known as a famous skiing area. So figures about guest arrival and guest overnight stays are directly linked to the number of customers or at least potential customers. As you can see in figure 5, the number of guest arrival in Oberstdorf over the last years has increased, the number of overnight stays has fallen. This shows a trend to more travelling but with less overnight stays, on which the companies, as well as the village of Oberstdorf has to deal with in the next few years. Guest arrivals and overnight stays Oberstdorf

2.2 Political Influences

Environmental protection laws

[all figures only in downloadfiles]

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