2.3 Porter's 5 Forces
Threats of New Entrants
The new entrants in any industry face some threats from existing companies because new company offer more attractive product with low cost etc. In airline industry threats are low as comparatively barriers are high. Some challenges under below due to new entrants..
Capital Requirements. We need huge capital for this industry for purchasing new crafts and also for starting new projects and also need for attractive to customers.
Brand name & Customer loyalty: Airlines companies with excellent goodwill and strong image in market will easily compete with new threats at the time of entry. #
Bargaining Power of Supplier's
Suppliers can easily change market trend through their high demand and control on prices and quality of their products & services. Boeing and Airbus are globally suppliers of the airline industry.
Bargaining Power of Buyers
Buyers are also can change the industry trend due to their demands for high quality ,demand for low prices and also have skill I reduction of the cost. Buyers are more powerful due to huge amount of passengers in market and approximately 1.8 billion yearly. (ITAT).
Threat of a Substitute Products or Services
Another big threat of substitute product due to availability of substitute in the market for any product. For example people use theirs cars and use trains and buses within the same area or country.
Rivalry amongst existing firms
He trend of rivalry in airline industry is very famous and high due to availability of large numbers of airlines in the market which also offering best services, best cost etc. For example a lot companies want to increase their share price and want to increase their image want to gain best goodwill among the customers only due to offer best services, cost and also others lot of promotions to attract and attain the customers. (Thompson & Strickland, 1995)