Essay on Airline Industry

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Strategy, Balanced Scorecard and Strategic Profitability Analysis (Custom Pub. Chap15)

Based on the organisation that you have selected, you are required to describe the organisation’s mission, describe and classify the organisation’s strategy, and identify its‟ value proposition and core competencies. Using Porters Five Forces Framework illustrate these five forces for your organisation, and provide brief comments on how these forces they influence your organisation’s profit potential. Using the Balanced Scorecard as a contemporary performance measurement framework, evaluate the current financial and non-financial measures that your organisation uses. Based on your evaluation, indicate in your opinion, the extent to which the
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Tiger airlines introduction has inescapably threatened Jetstar’s future revenue, so much so that Qantas chief executive Alan Joyce said that "Jetstar was seeing that, so to be competitive at the leisure end we believed Jetstar needed to have direct Melbourne Tullamarine to Sydney services complementing its Avalon operations, assuring that profitable market stays with the group and it's not lost to our low-cost competitors´ (Creedy 2009).

Threat of New Entry

Low to Moderate
A new entrant means competitor undermining the profits (Aarons, Waalewijn, 1999, pg4) of Jetstar, which is an established business. Therefore, threat in the future for Jetstar is determined by present barriers to entry. The biggest factor that prevents a newcomer entry in this industry is the cost of entry. The airline industry is one of the most expensive industries, due to the cost of buying and leasing aircrafts, safety and security measures, customer service and manpower (http://www.investopedia.com/features/industryhandbook/airline.asp, March 25, 2011). Other factors include high capital cost and government restrictions. Deregulation of the Australian Domestic airline market and realisation of Virgin Blue taking over the Domestic Market helped the formation of Jetstar in 2004 which was followed by birth of Tiger Airways in 2007. Introduction of Jetstar as a Cost-

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