The Airline industry provides a very unique service to its customers. It transports people with a high level of convenience and efficiency that cannot not be provided by any other industry or substitute. Airline companies pride themselves on the way they treat their customer during the flight.
The aviation industry of US is one of the most developed one in the whole world but it still needs some kind of revamping as it is reported to be going down in terms of passenger control as well as use of innovative technology.
Porter which analyses the industry on the basis of five forces acting on it. Threat of New Entrants When it comes to Aviation industry, the threat of new entrants is low and that is due to some reasons: Due to high investment, it is a risk to enter the aviation industry.
It is also difficult to develop customer base in this industry as customers have concerns of safety and trust only a few service providers.
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. Threat of Substitutes The aviation industry has a lot of substitutes; people can switch to train, bus, car, ship or any other transport.
The switching cost in the transport industry is low and people can have a lot of reasons to switch to a different means of transportation than airline.
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.
Bargaining Power of Buyers The buyers in aviation industry include various kinds of buyers. Some people 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 as well as cheap mode of transport so in this case the travel agents consider various options 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 switching cost is also low.
So the bargaining power of the buyers is high. 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.
Same is the case with the labor suppliers as the aviation industry depends on their supply of labor, thus giving them high bargaining power. Industry Rivalry There is intense rivalry among different companies existing in the airline industry and there are several reasons for it: Due to all these and many more reasons, the competition in the aviation industry keeps on growing and all the companies need to keep on growing in order to flourish in the industry.
Top airlines by revenue passenger kilometers. Retrieved September 10,from http: What companies are the major players in the airline supply business?Porter’s model was developed by Michael E. Porter which analyses the industry on the basis of five forces acting on it.
Threat of New Entrants When it comes to Aviation industry, the threat of new entrants is low and that is due to some reasons. Porter’s Five Forces Model (Porter Analysis) of Johnson and Johnson. by adamkasi | Sep 23, | Companies. Johnson and Johnson is an American multinational that works for manufacturing and selling of medical devices, health products, beauty products and pharmaceuticals.
Home Essays Porters Five Force Model. Porters Five Force Model.
Topics: Strategic management Porter’s Five Forces Analysis is based on the concept that the key objective for any organization should be to gain advantage over its competitors, it is not the industry that an organization is in that counts, but where it wants to compete in. Porter’s Five Forces Analysis of the Airlines Industry in the United States Five Forces Analysis Porter’s Five Forces analysis is a useful methodology and a tool to analyze the external environment in which any industry operates.
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The Indian flying division comprises of numerous players which are isolated into Low-cost and Full-benefit transporters.
Fly Airways, Kingfisher, Air India are a few examples of the full service carriers. Porter’s Five Forces Model of Air India. by adamkasi | May 8, Porter’s Five Forces Model (Porter Analysis) of Johnson and.