17.05.2010 Public by Dozilkree

Comapring porters 5 forces for the airline industry essay

Abstract Having conducted research on Porter’s Five Forces Model and the current business climate of the airline industry, I will be analyzing the industry using the Five Forces Model. Porter’s Five Forces model is a highly recognized framework for the analysis of business strategy. Five forces are derived from the model that attempts to determine the competitive intensity, competitive environment and overall attractiveness of an industry.

The customers can be broken down into two main segments: Because business travelers often book flights at the last minute and frequently have their organization pick up the tab, they tend to be relatively price-insensitive.

The frequent flier programs were originally targeted toward the business segment. We have recently seen a trend toward expanding the frequent flier programs to let members earn miles by conducting business with a variety of other organizations.

Airline industry and Porter’s five forces Sample Essay

This makes the frequent flier programs a powerful tool in the leisure market as well. An attractive frequent flier program will increase the power of the airlines in the customer relationship. In addition governmental and legal barriers are Photo essay civil rights movement most effective barriers to entry: On the other hand, for long distances, buyers may be more inclined to choose air travel to reach their destination.

In the last five-year period, less obvious substitutes to airline travel in the business segment include teleconferencing, enabling virtual meeting rooms where participants can sit in different geographic locations. Competition from established rival: Sometimes people switch to a different transportation mean because of the high cost they have to pay to airlines, although there are low cost means of transportation available as well.

But there are also reasons why people may not switch to another transportation system despite the low switching cost and this involves the convenience that the airlines provide as well as this transportation saves time. Thus the threat of substitutes for aviation industry can be declared on moderate level.

Porter’s Five Forces Analysis of the Airlines Industry in the United States

Bargaining Power of Buyers The buyers in aviation industry include various kinds of buyers. Some the choose aviation industry for individual traveling while others travel in groups. Some people travel for leisure while others travel for business purposes. The bargaining power of these customers are determined by the fact that what choices the buyers have when choosing the aviation industry. When people turn to travel agents for their tickets, they expect them to buy them a convenient Starting essay about myself well as industry Masters prepared nurse interview 2 essay of transport so in this essay the travel agents consider various airlines and the bargaining power is in their hands.

Similarly, when an individual is buying the ticket himself, he will also have the bargaining power as he will have various options to choose from and the porter for is also low.

So the bargaining force of the buyers Comapring high.

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Bargaining Power of Suppliers The suppliers in the aviation industry include airplane manufactures, fuel suppliers, and labor suppliers. For airplanes, the industry is dependent on two suppliers and they have to maintain good relationships with those suppliers in order to have long term contracts with them so their bargaining power is high.

Similarly, the fuel suppliers control the price as well as other negotiations as the aviation industry cannot function without them supplying the fuel on time.

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Comments:

18:02 Tojagore:
Established on 12 DecemberAirAsia has been such a big phenomenon in the Asian airline industry.

10:55 Dukasa:
Because business travelers often book flights at the last minute and frequently have their organization pick up the tab, they tend to be relatively price-insensitive.

19:45 Yozshutilar:
Bargaining Power of Suppliers The suppliers in the aviation industry include airplane manufactures, fuel suppliers, and labor suppliers. Sometimes people switch to a different transportation mean because of the high cost they have to pay to airlines, although there are low cost means of transportation available as well.

13:24 Kagagul:
Rivalry among competitors existing competitors Exit barriers-It is difficult to exit the industry because of heavy investment in planes that are specialized in nature. This transit will occur seamlessly, with passengers not being required to claim their baggage, similar to that of a full-service carrier. Thus the threat of substitutes for aviation industry can be declared on moderate level.

21:54 Mektilar:
An attractive frequent flier program will increase the power of the airlines in the customer relationship. Due to all these reasons, aviation industry has a very low threat of new entrants as there is a very little chance of new competition to enter in the market. In them you will understand what has caused low profitability.