Essay BennettWeek2CaseAnalysis

1379 WordsFeb 14, 20156 Pages
Name: Jacqueline Bennett Assignment: Week 2 Business Case Analysis Date Submitted: 11/3/2013 Course (include the section number: MBA526 Excellent work Jacqueline. With the airline industry, we have to be really current with articles leading up to 2012 (time period of the case study). And the de-bundling effort isn’t all profit but revenue. The difference between carrier operating costs is pretty low, so how does a continuing sustainable advantage get built when most customers do not differentiate? – Professor Becraft Statement of Academic Integrity: I certify that: 1. I prepared this document specifically for this class; 2. I am the author of this document; 3. I am fully disclosing and giving proper credit to any outside assistance…show more content…
106). To survive and drive an overall industry profit, the legacy carriers must re-evaluate and address the competitive factors of their industry. Relevant Factual Information about the Problem or Decision the Organization Faced Five major passenger airlines dominate their industry by size (Grant, 2013, p. 479). But their size, legacy costs and hub and spoke business model created significant exit barriers (Grahm & Vowles, 2006, p. 108). New competitors not only started with no entry barriers but also few if any exit barriers. Legacy carriers had to identify new innovative strategies to augment their core business models to profitably compete. Explanation of Relevant Concepts, Theories and Applications Derived from Course Materials Porter’s five forces are competition from substitutes, from new entrants, from established rivals, the bargaining power of suppliers and bargaining power of buyers (Porter, 2008, p. 2). By its nature, flying to a destination faces few substitute competitors. The bargaining power of suppliers such as labor unions and fuel run high within the legacy carriers (Whitelegg, 2003, p. 247). The bargaining power of buyers, the people who purchase airline tickets, drives all carriers in the industry (Mertens & Vowles, 2012, p. 67). Competition from established rivals diminishes as mergers and alliances form (Porter, 2008, p. 13). The

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