What Is The Pest Analysis Of The Airline Industry
Competitive Strategy Report
For Professor
Group A-F1
Table Of Content
Five Forces Analysis
Strong Competitive Rivalry
Low threat Of New Entrants
Strong Power Of Buyers & Suppliers But Low Threat of Substitutes
PEST Analysis
Political Analysis
Economical Analysis
Technological Analysis & Socio-cultural Analysis
Global Airline Industry Summary
Overview Of Southeast Asian Airline Industry
Overview Of Malaysian Airlines
Aircraft losses: Flight 370 and Flight 17
Malaysian Airlines’ Sources Of Competitive Advantage & Threat
Mission, Vision, & Objectives
SWOT Analysis
Value Chain Analysis
Strategic Issues, Impact, And Decision
Strategic Decision
Potential And Current Alternatives
Recommendations
Conclusion
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The industry characteristically has seen prices consistently drop, throughout time and the average industry profit margin is between 2-3%. Utilizing porter’s five forces framework will help reflect the particularities regarding the airline industry dynamics, attractiveness, and profitability.
Strong Competitive Rivalry The large number of players in the market naturally intensifies competition, which provides an indication for low profit margins. Also, air travel is largely undifferentiated in the sense that airlines face difficulty in differentiating themselves in the market where the service they offer is perceived as a commodity, which leads to intense price competition.
Low threat Of New Entrants The industry is saturated and operates at operational efficiency; moreover uncontrollable political, economical, and other external factors pose significant entry barriers. Therefore, it is very difficult for new players to enter the market, which is mirrored by the reduction in the number of players over time. Industry dynamics create huge barriers to entry.
Strong Power Of Buyers & Suppliers But Low Threat of
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Ultimately, the complexity and interdependence between internal resources and external factors provides an important case study for managerial insights that may be applied to other industries and functions, which is why this report is equally important.
PEST Analysis
Porter’s five forces suggest that the airline industry is complex and subject to many uncontrollable external factors, therefore to best understand the industry it is crucial to explore the magnitude that some external factors influence the industry; and to that end, a PEST analysis provides a good framework for examining the relevant macro-environmental factors.
Political Analysis
Passenger safety is paramount therefore governments have heavily regulated the industry as to ensure minimum safety protocol is preserved. This is one reason why air travel is considered to be one of the safest modes of transport as reflected by famous adage that “you are more likely to get into an accident on the way to the airport than from flying” however diminished profitability is also a consequence of heavy
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