Porter's Five Forces Of The Airline Industry Essay

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The Porter’s Five Forces analysis for the airline industry showed that four forces are very attractive for airline providers although market players face a highly intense competition. High entry barriers prevent potential market newcomers to fight for market share and the risk of being substituted is relatively low due to the time savings and convenience by traveling by planes. The power of buyers and suppliers is also low caused by their number and dependency on airlines. Looking at the results, it can be concluded that the airline industry is a highly profitable and attractive industry for well-established airlines.
Since not all airlines are successful although the paper has just examined the attractiveness and profitability of the airline industry, there need to be another factor influencing a firm’s success. A successful performance and strategy of a business plays additionally a large role in reaching over-average profits. A firm need to develop a unique value proposition such as they differentiate themselves from other companies, become a cost leader in a specific industry, or focus on a specific niche
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The model does not include all of the forces influencing an industry such as, for example, the government or any complements to the product. These factors can play quite an interesting role. If market participants are operating in the industry due to non-economic reasons, as for example government owned enterprises, their actions are more unpredictable. This case would not be covered in the Porter’s Five Forces but would still have an impact on your business. In the case of the airline industry, the tourism industry would be such a complement. If the tourist industry is booming, it would have a positive impact on the airline industry and vice

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