Sas Cargo Porter's Five Forces Analysis

1565 Words7 Pages
Services and SAS Cargo was to be discontinued and outsourced to third parties. SAS has a huge cost for staff compared to its competitors (see appendix xx). In By outsourcing the operations, SAS will be able to minimize the cost without compromising its core competencies. Porter's five forces compare with Barney Resource Based View theory The theory of five competitive forces by Michael E. Porter shapes the strategy of firms and the nature of competitive interaction within an industry. There is a widespread rivalry that results from all five forces (Porter, M.E. 2008). The model has been criticised due to the fact that innovation is not taken into account, since this model is cross-sectional and not longitudinal. That means that it only…show more content…
The oligopolistic market is highly concentrated, which means there are few market leaders within the same industry, providing the same services. In the airline industry, each company has a limited pricing power. As a result, whenever an airline follows the strategy of lowering prices, it is likely that the other companies will follow the same path. That is because, in the event of a company tries to raise its market share, the other existing competitive companies fight back to keep their customers and to remain competitive. However, as often found in oligopolies, the term of customers’ loyalty is encountered. Since SAS is a company that is now one of the oldest airline companies in the world, people may not be entirely affected when a competitor offers a lower…show more content…
Some organizations reach specific stages faster than others, even though they are operating in the same industry. SAS belongs to the airline industry. They segmented their service to meet their target group needs. The company is considered to be in the maturity phase of the life cycle model. That is the moment when slow growth is indicated by a flat lifecycle curve. It is the stage where the strategy of the firm must stress the unique features of the service and differentiate the firm’s offerings from industry competitors (McGahan, A.M., Argyres, N. and J.A.C. Baum, 2004). When it comes to innovation, firms in that stage continue to innovate, but those innovations cannot be as radical as before. That is why SAS remains competitive by offering existing and new products for their target market, the business and leisure travellers, through loyalty programmes. SAS’s latest differentiation strategies included updating their on-board service concept, implementing an extensive upgrade of EuroBonus, launching an improved app, increasing efficient self-service facilities and offering the possibility of a journey with SAS Lounges and Fast

More about Sas Cargo Porter's Five Forces Analysis

Open Document