Propelling operations with only two aircrafts in 1985, Emirates Airline now flies the world’s greatest armadas of Airbus A380s and Boeing 777s, offering clients the solaces of the latest and most productive wide-body airplanes in the skies (The Emirates Group). Whereas, McDonald’s, with more than 34,000 restaurants worldwide and 1.8 million employees is the world’s biggest restaurant chain. Roughly three million customers are served in the 1,200 restaurants in the UK daily and about 97,000 individuals are employed with the investment of over £40million on development and training each year (McDonald’s, 2017). Emirates Airline and McDonald’s, two very different companies, in the oligopoly market structure and monopolistic market structure respectively both have their own unique way in running their businesses. In an oligopoly market like Emirates airlines, there are few enough firms to create barriers to be raised against the entry of new firms (Sloman, J. et al, 2010). Firms like Emirates Airline, Qatar Airways and British Airways are the few firms that dominate the market by providing flights domestically and internationally so it would be hard for new firms to enter the market as they would need a large amount of capital to be able to purchase new aircrafts and hire experienced pilots to bring up the name of the company. They may also collude to change prices of air tickets which makes them price makers. Emirates embraced the methodology of dynamic pricing which helps
What do you typically order when dining at McDonald’s or Wendy’s? When I am having a meal from either place, my favorite choice is a fried chicken sandwich with lettuce, tomato, bacon and extra mayo. Sometimes, I may make it a combo and enjoy the greasy, salty french fries and an ice cold soft drink. Most of their customers often purchase the unhealthiest options because they feel as if that is what fast food is all about, right? Fortunately, it does not have to be that way. Fast food can be convenient and nutritious. Wendy’s and McDonald’s are both fast food restaurants, so they are alike in many
McDonalds and Chick-fil-A offer similar menu items, such as chicken sandwiches, chicken wraps, and chicken nuggets. While McDonalds’ chicken McNuggets and Chick-fil-A’s nuggets both claim to be chicken they differ in various ways such as the appearance, the actual meat inside and, in price. The appearance of food is what draws the buyer’s attention. The chicken McNuggets are tan brown and all similar in shape, looking like a bell or a boot. Chick-fil-A’s chicken nuggets come in different shapes depending on how they are breaded, and they are fried until golden brown. While what the food looks like it important, it also matters what is inside of it. Biting into McDonalds’ McNuggets looks like mashed up chicken stuffed inside a tan brown shell.
When people have more disposable income it is very common for them to go out to eat more often to casual dining restaurants such as Olive Garden. Meanwhile when people have less money they prefer to eat at places such as McDonald’s because it is less expensive. Knowing this we can infer that McDonald’s is an inferior good and casual dining places like Olive Garden are normal goods. It is very true that the demand for normal goods decreases as income decreases also and it is very much true that when people have less money their demand for inferior goods increases.
The threat of new entry is high because there are no significant barriers of entry in the airline industry. For example, airplanes can be easily leased, defraying the large initial capital investment. Additionally, exit cost in the business is
Many larger organizations have already achieved a mature stage in their organizational lifecycles and some are even in decline as their business models fail to keep pace with changes in an increasingly globalized marketplace. One larger organization that continues to grow using its original business model, though, is easyJet, which is already one of the largest low-fare air carriers in Europe and current signs indicate that the company will continue to grow its market in the future. To determine how easyJet has succeeded where others have failed, this paper examines the company's efforts in meeting the challenges with its initial launch, the company's early growth and the lessons learned from these experiences, as well as the acquisitions and mergers that have helped the company achieve its organizational goals. An examination of easyJet's organizational maturation status and how the company has differentiated its services is followed by a summary of the research and important findings in the conclusion.
The food industry in the UK is a multi-billion pound industry that is mainly dominated by a few competitors such as McDonalds, Burger King, KFC and Subway. Most of the food sold in these fast food restaurants is unhealthy, which is becoming a huge concern as there are many people dying of obesity and other health related problems. This is one of the key social factors facing the fast food market at the moment.
McDonald’s has been a staple in the restaurant business for as long as most of us can remember. It has achieve around the globe, but not without overcoming a fair amount of challenges in its pursuit of the title “King of Fast Food”.
The airline business is an industry that is competitive and unique, focussing on consumer choice and the responsiveness of airlines to changes in the external business environment. For any airline, this environment can be very complex as it is ‘hard for them to fully understand and impossible for them to fully control’ (The Times, n.d. p1). Virgin Atlantic is an international airline that is based in the UK. It was started by the entrepreneur Richard Branson in 1982 and now flies to 30 destinations around the world (Virgin Atlantic Airways Ltd, 2011). By looking at
The risk of entry into the airline industry by potential competitors is low due to the “liberalization of market access, a result of globalization. According to the IATA (International Air Transport Association), about 1,300 new airlines were established in the last 40 years,” (Cederholm, 2016). The cost structure of businesses in an industry is a determinant of rivalry. In the Airlines Industry, fixed costs are high, because before the organization can make any sales, they must invest in air crafts, fuel and service employees. These items come attached with hefty price tags. Industries that require such enormous amounts of start-up capital as predicted by many analysts
Competitive rivalry: Airline industry can be characterized as imperfect oligopoly. There are several big airlines that dominate in long-distance flights and several smaller airlines compete for short-distance flights. The competition and price sensitive buyers lower the returns airlines receive. This market situation is favorable for a company like JetBlue, which differentiated itself by comfort at low price, but this can be easily duplicated by other companies.
If you have recently been planning a trip that involves flying then maybe you have already seen the newest seating class option depending on what airline you chose. Delta was the first major airline to introduce the class called “basic economy” which just means that you’re losing what little amenities you have left in economy class. The airlines are trying to compete with the budget airlines like Frontier and Spirit by taking out some of the basic options such as having the ability to choose and reserve your seat. American Airlines and United Airlines have versions of this new class that will be debuting later in the year. With these new changes some have insinuated that these airlines will assume that people would rather upgrade than have
Oligopoly Behavior in the Airline Industry. Case Analysis This case illustrates the pricing behavior of firms that are oligopoly whose market is characterized by the relative few participating firms offering differentiated or standardized products or services. Such firms in an oligopoly have market power derived from barriers of entry that wards off potential participants. As seen in the case, it is clear that because there are a small number of US Airlines firms competing with each other, their behavior is mutually interdependent – thus, the strategies and decisions by one airline management affect managements of the other airlines whose subsequent decisions then affect the first airline. In the airline industry, such oligopolistic
Barriers to Entry – High cost of entry and market domination limits entrants into the industry. The upfront cost for new airlines is capital intensive. In addition, it’s difficult for new airlines to obtain airport slots for takeoff and landing which are determined by the airports. Established airlines already hold the monopoly over slots at certain airports, making it harder for new airlines to infiltrate (Airlines Industry Profile, 2014). The industry is also dominated by five key airlines; American, United, Delta, Southwest and JetBlue which make it difficult for new airlines to gain market share. At 40 of the 100 largest U.S. airports, a single airline controls a majority of the market. At 93 of the top 100, one or two airlines control a majority of the seats (Koenig & Mayerowitz, 2015). In addition, with fuel being the number one cost for airlines, the volatile fuel prices make it hard for new airlines to make a profit. Domestic airlines in the U.S. spend a combined $2 to $5 billion on jet fuel every month. As a stat up airlines, the price paid for fuel is the same weather planes are full or empty which could stop new airlines from entering the industry. Lastly, the FAA has strict regulations which discourage new airlines from entering the industry. All new entrants must abide by Federal Aviation Authority regulations on airworthiness, pilot competence, and related issues (Airline Industry Profile, 2014). Overall, entry into the airline industry is high and there is
There are numerous Airlines that operate here in the UK, the largest of which is British Airways. Due to the Airline industry being one of the most profitable market places in the world, the rivalry is extremely competitive. The fierce competitive environment forces these Airlines to constantly react to their rivals marketing strategies and the public’s consumer needs, all in the hope of making themselves appeal over that of the
Emirates is one of the fastest-growing and most profitable airlines in the world. Yet the secret of its success is largely unknown outside the Arab world. Donald N. Sull, Sumantra Ghoshal and Felipe Monteiro unveil some of the mystery that shrouds a national carrier that enjoys no state handouts – and treats its employees as a giant family.