Focused Procedure: Methods for Dissecting Commercial Enterprises and Contenders by Michael E. Watchman

- Power of Customers: Customers have always had a lot of influence over the retail industry due to their price sensitiveness. Given the fact that websites and direct mailing are increasing, it gives a stronger power to the customer since they have the opportunity to compare prices, quality and have a large panel of the same products purposed.

In order to obtain more profound understanding of the Vueling position in the industry and to make a decision concerning company’s future strategy, it is important to conduct a Porter’s five forces analysis.

The Intensity of Rivalry among Competitors in an Industry (High): Equally balanced competitors exist within the industry such as BCF and KMD; these firms also face competition from retailers and wholesalers. The growth of the industry is relatively agile in both financial and technological aspects. The intensity or rivalry is further accentuated by relatively high storage and fixed rental costs, extensive product differentiation and minimal switching costs.

As pointed out by Schmitz (2012), how well an industry and the executives abilities to manage strategies, changes and challenges, will weigh heavy on and influence successes as well as failures, which are mapped out in Porter’s Five Forces and the very well known as “The Five P’s.”

At its core, Porter’s 5 forces describes a firms overall ability to compete in a market. We discuss our analysis of the 5 forces and how they affect SAS Corporation and its stakeholders. Please examine Figure 1.1 to view a diagram that depicts the 5 forces.

The Porter's Five Forces method is a simple for comprehending where power is within a business. This is helpful, because it helps you realise both the strength of your current competing situation, and the strength of a position you're debating moving to in the future.

Existing Competitors. Rivalry among competitors within an industry use price discounting, new products, marketing, and other techniques to be competitive. Profitability of an industry suffers from high rivalry. The intensity with which companies compete and the basis on which they compete determine to which degree rivalry brings down an industry’s profitability (Porter, 2008). Pure competition is considered by economists as a competition with a high

The market greatly depends on how powerful buyers are in terms of their willingness to pay certain prices. The following determines the bargaining power of buyers

Buyers have more power when they are large-volume buyers, the product is a significant aspect of the buyer's costs or purchases, the products are standard within an industry, there are few switching costs, the buyers earn low profits, potential for backward integration of the buyer group exists, the product is not essential to the buyer's product, and the buyer has full disclosure about supply, demand, prices, and

Due to its logical and practical nature it is a very common and effective tool used to analyse organisations by dividing it into four main categories: Strengths, Weaknesses, Opportunities, and Threats. This consolidates and simplifies the task of understanding what drives performance and or what is standing in its way.

The threat of substitutes is the availability of a product that the consumer can purchase instead of the industry’s product (Free management books, n,d ). A substitute product is a product that produced by other industry and offer similar benefits to the customer as the product produced by the firms within the industry. The threat of substitutes can affect the competitive environment for the firm in that industry and also influence the profitability of the industry. This threat affects profitability of the industry because the consumers can choose to purchase similar product from other industry to instead of the company’s product. Besides that, the more the close substitute product can make the industry more competitive and decrease the profit potential of the firm in the industry whereas the less the close substitute product can make the industry less competitive and

Porter’s five forces analysis not only provides the ideas to create the strategic plan but also assesses the attractiveness of an industry.

The threat of substitutes: where it refers to substitute product as those that are available in other industry which can also fulfil the need and want of the consumers. It can affect competition in an industry by placing an invisible ceiling on prices which companies within the industry can charge, due to the fact that if the cost of substitute is low then the consumers will tend to purchase substitutes, therefore limiting the prices that a company can place on certain items to gain maximum profit. For example, lemonade can be substituted for a soft drink. Generally, competitive pressures arising from substitute products increase as the relative price of substitute products declines and as consumer 's switching costs decrease.

This is probably the most overlooked, and therefore most damaging, element of strategic decision making. It's imperative that business owners (us) not only look

This is affected by the ability of the customers to find a different way or different substitute products in the market. If substitution is easy and is viable enough, it will certainly weaken our power. Therefore, we need to reach and get in touch with the customers faster than any