Industry Analysis: Competition Between Criniti's and Hugos

This report analyzes the competition between Criniti's and Hugos in the hotel industry, specifically in the pizza market. It discusses their competitive strategies, pricing, and non-pricing strategies, as well as their growth strategies. Criniti's has a competitive advantage in terms of pricing and product offerings, while Hugos should consider offering pizzas of varying sizes to cater to different customer preferences. The report also highlights the market structure and level of competition in the hotel industry.

INDUSTRY ANALYIS 1
INDUSTRY ANALYSIS: THE COMPETITION BETWEEN CRINITI’S AND HUGOS
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INDUSTRY ANALYSIS 2
Abstract
The report is an analysis of competition between Criniti’s and Hugos in Manly. Based on the
findings it was clear that Criniti’s has a competitive advantage in producing pizza as its pizzas
are cheaper compared to Hugos. Criniti’s also offers many pizza offerings compared to Hugos.
The two hotels are competing based on price and product offerings.

INDUSTRY ANALYSIS 3
Introduction
The report analyzes Criniti’s and Hugos operation, competitive strategies, pricing, and
non-pricing strategies. The methodology entailed the use of both primary data by visiting the
hotel premise and secondary data by using the internet. In the first part, the report discusses the
market structure and competitive strategies. Section 2 talks about pricing and non-pricing
strategies and in section 3 the report analyzes the growth strategies and lastly is the conclusion.
Criniti’s overview
Conventional Italian anticipate dining at Criniti’s, which has received numerous awards
as the winner of favorite Italian dishes in Australia. Criniti’s initially began its operations in 2003
and was situated in Parramatta. The hotel started as an inspiration from husband and wife. It is at
the age of 23 years that they got inspired and passionate for the need to deliver quality Italian
food. It is such hard-driven motivations that grew over the years that resulted in Criniti’s
becoming a popular go-to spot for the locals (Criniti's, 2019). In 2009, the hotel spread to the
east of Sydney and was located on a location that was deemed immaculate in the world only
Darling Harbour solidifying its position as the Harbour’s priority Italian. The breath-taking
panorama and great terrace seating make it the most compelling for both local and global guests.
Hugos located in Sydney accords its customers a fantastic experience regarding dining in
waterfront positions regarded as being spectacular.
Criniti’s is open for seven days a week and provides breakfast, lunch, and dinner.
Criniti’s allows its customers to explore and rejuvenate their senses through several crowd-
enticing dishes fully (Criniti's, 2019). The menus are inspired by the traditional Criniti generation
recipes that incorporate the conventional Southern Italian and contemporary Australian cuisine
blending a unique variety of flavors. Irrespective of the deeply embedded Southern Italian roots,

INDUSTRY ANALYSIS 4
Criniti’s offers a range of dietary requirements that entail vegetarian dishes and halal accredited
produce. The head chef is passionate about leading a team that is driven to establish culinary
experience (Criniti's, 2019). Criniti’s philosophy is to find the best ingredients that are provided
by like-minded suppliers incorporating consistency, sustainability, and quality at heart. Though
Criniti’s dishes emphasize the use of conventional Italian techniques, it is the constant innovation
and creativity that drives and stirs passion for excelling transcending the boundaries
Market structure and competitive strategies
Both the Australian tourism and hotel industry is segmented into two primary areas that
are the global and domestic experiences. Australian hotel industry provides services such as
accommodation and food. Based on a report by Deloitte focusing on the economic outlook at
2015, hotel accommodation and overnight staying had increased by 5% in 2014 from the -6.7%
in the previous years (Nadeem, 2016). NT and Victoria were identified as the areas that had
benefited most with regards to hotel overnight staying. The Australian hotel industry recorded
robust growth in both the occupancy and average daily rates which recorded growth by more
than 2% and 4% respectively (Ibisworld, 2019). In places such as Sydney and Melbourne, the
rate of occupancy was more than 90%. The hotel sector provides employment opportunities to
more than 270,000 people and an average Australian hotel; offers jobs close to 34.7 people
(Nadeem, 2016). It has been reported that the hotel sector spends more than AUD 15 million on
venue security annually. There are more than 6800 hotels in Australia that generate revenue of
about $14 billion.
The market structure is monopolistic as many producers are offering differentiated
products based on either quality or branding (Agarwal, 2019). In this case, Criniti’s pizza is
differentiated from those of Hugos through quality and branding.

INDUSTRY ANALYSIS 5
Level of competition
There is intense competition in the hotel industry just like in many parts across the globe,
and such competition is focused within some strategic groups that are attributed to growth in this
sector. With regards to 5star hotels healthy competition prevails between hotels such as Amora,
Hilton, and Sheraton among others.
Competitive strategies
Criniti’s and Hugo’s seem to be competing based on products offerings in the different pizzas
and the various ingredients used in preparing the pizzas.
For instance, Criniti’s has many types of pizza to cater to the needs of different clients
with regards to taste and preferences. For instance, in its product offering there the 4 seasons
pizza made of Napoli sauce, ham, mushroom, and oregano (Criniti's, 2019). The Azzurri pizza,
on the other hand, has the same ingredients as the 4 seasons as it has the Napoli sauce,
mushrooms, prosciutto, and oregano (Criniti's, 2019). The campagnola contains Napoli sauce,
goat cheese, zucchini flowers, and oregano. The Johnny ‘d’ sausage is made of bbq sauce,
mushrooms, pineapple, garlic, and Italian sausage. The cheeky b has Napoli sauce, crispy bacon,
and oregano. Margherita pizza is made of the Napoli sauce, bufala, crispy bacon, and basil. The
Little Mickie’s pizza contains Napoli sauce, mozzarella, crispy bacon, and garlic prawns.
Hugos also offers pizza, and for instance, the Garlic contains rosemary, olive oil, and
buffalo mozzarella (Hugos, 2019). The Margherita is made of Roma potato spiced with
bocconcini mozzarella, fresh oregano, and basil. Prawn is made of marinated chilli prawns,
Roma tomato and tomato base. The Pepperoni is made of Roma tomato and bocconcini
mozzarella. The pineapple pizza is made of caramelized pineapple spiced with smoked leg ham,
Roma tomato, and mozzarella.

INDUSTRY ANALYSIS 6
Business advice
Criniti’s pizza comes in different sizes based on consumer needs; thus, it caters for all
people in the market. Hugos’ pizza is standardized and therefore fails to accommodate for the
different tastes and preferences regarding size. Hugos should thus opt to offer pizzas of varying
size to take advantage of the diverse needs of different customers.
Barrier to entry
The Australian hotel industry is embedded in government support. Internationally, the
hotel sector mainly is substantially featured as an industry that incurs high initial costs and also a
high share of fixed costs compared to the total costs (Nadeem, 2016). Also, in a place such as
Sydney, there a significant economy of scale in local hotel sectors. The capital costs regarding
managing a hotel project are high to achieve cost effectiveness all types of resources need to be
appropriately utilized for instance costs associated with construction, furnishing a hotel, costs of
installing equipment and costs associated to pre-operation. It also considered that initial
investment in the hotel sector is an entry barrier though some barriers in the hotel industry are
getting decreased due to the proliferation of the internet as it moderates the initial marketing
costs. Another huge obstacle to the hotel industry is differentiation (Nadeem, 2016). For
instance, a hotel may have to differentiate due to location, service offers, availability of
particular amenities or other qualities that have the possibility of attracting and retaining its
potential clients. The additional barrier can be linked to expertise. It is unfortunate that employee
turnover exists in every industry internationally and is also the case with the hotel industry.
Employees are seen switching jobs where they leave one hotel and opt for another hoping to gain
from small benefits thus absorbing expertise. It is also imperative to note that expertise and

INDUSTRY ANALYSIS 7
differentiation are sectors that a hotel can use to develop and influence their client to increase
their profitability.
In areas such as Sydney which is a metropolitan, the establishment and development of a
new hotel may be limited due to unavailability of suitable locations as the place is crowded
(Nadeem, 2016). Many entry barriers characterize the hotel industry thus restricts the entry of
new entrants mainly due to the integrated aspects associated to economies of scale, the
substantial initial cost of capital for new entrants coupled with limited supply if appropriate and
suitable locations to establish a hotel or a restaurant.
Pricing and non-pricing strategies
Non-pricing strategies entail firms distinguishing their commodities from competing
goods based on characteristics such as design and artistry other than the price (Lumen, n.d.). The
company can also differentiate its product offering based on quality service, extensive
distribution networks, focusing on the customer and many other competitive advantages over
price.
Size of pizza
Criniti’s also offers different sizes for its pizzas which is imperative in business as
different clients will need different sizes depending on the occasion; for instance, the 0.5 m
serves one person. The 2 m will better serve two people for instance partners, and this pizza
better represents lovers (Criniti's, 2019). The 3m, on the other hand, will better serve a large
number of people, for instance, a family. The 3 m pizza has been customized to serve large
gatherings.
Looking at what the two hotels are offering there is one unique thing which is used as a
non-price strategy. For Criniti’s its pizza is characterized by Napoli sauce while Hugos’ most

INDUSTRY ANALYSIS 8
pizzas are characterized by Roma tomato. It is common that both Criniti’s and Hugos are sharing
some ingredients in making their pizzas; for instance, they both use oregano and mozzarella. The
Criniti’s Margherita pizza is made of Napoli sauce, crispy bacon, and basil while Hugo’s
Margherita pizza is made of Roma tomato, basil, and oregano (Criniti's, 2019). The Hugo’s
prawn pizza similar to little Mickie’s comes with Roma tomato, roasted capsicum, and Verde
while little Mickie’s is made of Napoli sauce and garlic prawns.
Pricing strategies
Comparing the prices of pizza at both the Criniti’s and Hugos will provide a clue on some
of the pricing strategies employed by both hotels. The Criniti’s Margherita pizza retails at $16
the pizzette presumed to be the standard while Hugos’ Margherita pizza retails at $25.The prawn
pizza at Hugos’ goes for $ 30 while Criniti’s little Mickie’s goes for $18.The two hotels are
competing on prices where Criniti’s standard pizza compared to Hugos are cheaper.
Business advice
Based on the above pricing and non-pricing strategies it seems that Hugos’ has a lot to
catch up regarding the type of pizza they offer. For instance, Hugos only offer the standard pizza
and fail to customize their pizza to cater for the different needs with regards to size, and a large
family would require the 3m pizza and not a standard a pizza. There is also a need to lower their
prices particularly the Hugos. Hugos’ pizza is expensive compared to Criniti’s, and this may
attribute to lower customer rate buying from them. Though the price may vary depending on the
hotel, and high prices may be attributed to the class of a hotel, Criniti’s appears to be classier, yet
their pizzas are priced low, and this may be due to the comparative advantage they enjoy
stemming from their expertise in preparing pizza.
Growth strategies

INDUSTRY ANALYSIS 9
Criniti’s has various branches across Australia for instance in Manly, Carlton, Chermside,
Castle Hill, and South Bank only to mention a few. However, for Hugos, it has not spread to
other regions and is just situated in Manly. Criniti’s expansion to the different areas has ensured
that it remains to offer the same pizzas and product offering in line with the company’s
objectives. Criniti’s has introduced the taste of Italy in Manly with the introduction of the Pizza
al Metro which is an ancient Italian custom that goes back to the early nineteenth century tracing
its birth to the city of Vico Equense next to the beautiful metropolitan of Sorrento. The idea of
Pizza al Metro spread across Italy and Europe. Pizza al Metro is one of its kind in Manly and is
prepared from the wood-fired crust that Criniti’s has become famous for in preparing its dishes.
The pizza comes in 0.5,1,2 or 3-meter lengths with a variety of up to 6 types to enjoy. The pizza
al Metro is for sharing and lover birds are invited by Criniti’s to have a taste of the one-metre
pizza in the Metro Mania challenge or evaluate friendships with their 2 Mates,2 metres pizza
competition in a bid to have an opportunity to eat free for one year at Criniti’s.
Business advice
However, Criniti’s needs to expand globally and spread the Italian culture through its
Italian customized pizzas. Such growth, however, will translate to understanding the culture of
the places whether the hotel will be established. Regarding this, Hugos will need to differentiate
itself in its products offerings as it has done in the Australian market. Offering pizzas baked and
prepared through Italian culture is one of the differentiation strategies and also pricing.
Compared to many hotels and restaurants, Criniti’s pizza is cheaper, and its quality is also
excellent with fresh ingredients.
Conclusion

INDUSTRY ANALYSIS 10
It is apparent that the Australian hotel industry is lucrative enough for Criniti’s which has
differentiated itself through product offerings. Criniti’s has received numerous awards in
Australia for providing the best Italian cuisine particularly its pizza and dishes. On the Other
hand, Hugos have tried to offer Italian products mainly through pizzas that are similar to those
by Criniti’s. However, Criniti’s pizzas seem to be having a comparative advantage as its pizzas
are far way cheaper compared to those by Hugos. Criniti’s also understands the Australian
market dynamics and offers different sizes of pizzas to cater for the needs and pockets of
different clients. Criniti’s also has excellent customer service and suitable locations of its hotels
providing a panoramic view that is breathtaking for its customers who are either locals or
international guests.

INDUSTRY ANALYSIS 11
References
Agarwal, P., 2019. Monopolistic Competition Market Structure. [Online]
Available at: https://www.intelligenteconomist.com/market-structure-monopolistic-competition/
[Accessed 20 April 2019].
Criniti's, 2019. Menu. [Online]
Available at: https://www.crinitis.com.au/menu
[Accessed 20 April 2019].
Criniti's, 2019. Welcome to Criniti's. [Online]
Available at: https://www.crinitis.com.au/about
[Accessed 20 April 2019].
Hugos, 2019. Hugos Manly. [Online]
Available at: https://www.hugos.com.au/
[Accessed 20 April 2019].
Ibisworld, 2019. Hotels and Resorts - Australia Market Research Report. [Online]
Available at: https://www.ibisworld.com.au/industry-trends/market-research-reports/
accommodation-food-services/hotels-resorts.html
[Accessed 20 April 2019].
Lumen, n.d. Competitive Dynamics and Pricing. [Online]
Available at: https://courses.lumenlearning.com/boundless-marketing/chapter/competitive-

INDUSTRY ANALYSIS 12
dynamics-and-pricing/
[Accessed 20 April 2019].
Nadeem, A., 2016. Tourism and hotel industry australia ppt. [Online]
Available at: https://www.slideshare.net/ambreenadeem/tourism-and-hotel-industry-australia-ppt
[Accessed 20 April 2019].