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Furthermore, while it is true that American recently implemented a refund and $50 voucher guarantee for consumers who find a lower possible fare to their destination, also to keep up with pricing pressure from low-cost carriers, Continental had already implemented such a guarantee first. This may contribute to the industry perception that once-dominant American Airlines is merely playing catch-up with even major carrier rival in terms of consumer incentives and is not offering substantial product innovation and superior customer service. ("American Airlines struggling to hang on to price-shopper market" 2005, Reuters).
According to Michael Porter's Five Forces analysis of market behavior, the airline industry traditionally has had a low threat of entry -- there are numerous regulatory and financial blocks to easy entry and exit of major suppliers. It is harder, in other words, to open up an airline than a new pizza parlor down the block. However, with the accessibility of the Internet the power of buyers has increased dramatically in terms of shopping for fares, and the destinations of competitor airlines for international...
The increased flyer frustration with regulations regarding airline travel has decreased the power of suppliers in the airline industry. In terms of the threat of substitutes, while business travelers who must fly may seem to have fewer options other than air travelers, vacationers can choose to travel by car or by cruise ship, if they are averse to dealing with the hassles of air travel. Even businesses can make use of technology such as the Internet and video conferencing, to reduce costs incurred by the added hassles of flying. Finally, competitive rivalry from others in the industry has skyrocketed with increased fare competition ("Five Forces Analysis," 2000, Marketing Teacher Ltd.).
Works Cited
American Airlines struggling to hang on to price-shopper market." (1 Feb 2005). Provided by Reuters News Target Network. Retrieved 21 Apr 2007 at http://www.newstarget.com/004424.html
Five Forces Analysis." (2000). Marketing Teacher Ltd. 2000-2007. Retrieved 21 Apr 2007 at http://marketingteacher.com/Lessons/lesson_fivefoces.htm
Works Cited
American Airlines struggling to hang on to price-shopper market." (1 Feb 2005). Provided by Reuters News Target Network. Retrieved 21 Apr 2007 at http://www.newstarget.com/004424.html
Five Forces Analysis." (2000). Marketing Teacher Ltd. 2000-2007. Retrieved 21 Apr 2007 at http://marketingteacher.com/Lessons/lesson_fivefoces.htm
S. are seeing modest improvements in economic indicators. The social environment is favorable for air travel. The mode still holds tremendous cachet with consumers and is favored when consumers can afford it. There is some consideration that the airline business is a major contributor to greenhouse gases and therefore global warming, but as of yet the industry has not come under serious public pressure as it is generally viewed by the
Introduction A strategy is defined as a plan of action intended to accomplish a specific goal. Strategy encompasses attaining or at least attempting to attain to gain, a competitive advantage over rivals. According to Porter (1996), differentiation takes into account being different in the choice of a dissimilar mix of activities to provide a product or service. Furthermore, a strategy is a decision which will make a significant difference to the
Airline Industry Analysis This report aims to present a summary of findings for a research study regarding the airline industry. The objective of this project was to first, gain new experience in the analysis process of an entire industry from an economic and business perspective as well as an environmental and social viewpoint. Secondly, the research attempts to provide direction for potential employment opportunities within the various aspects of the direct
Airline Performance Review and Analysis TKL Air Lines will be an American Airline that will be operating in the multiple routes across North America in the United States, Canada and Mexico. TKL will provide the cargo and passenger services serving more than 30 destinations. The company will also be serving up to 10 million customers yearly, and more than 1,500 customers for the daily flight. TKL's major activities will include inbound
Annual reports are strong for the breadth of information discussed, but with respect to depth are better used for internal analysis. They provide an overview of external issues but that overview should be supplemented with other research. Trade magazines and academic journals often have very specific articles that may or may not be of relevance to an external analysis. When they are relevant, they tend to provide excellent detail.
U.S. Airways Company Background One of the major companies operating in the American airline industry is the U.S. Airways, which is owned by American Airlines Group. The airline company was founded in 1939 as All-American Airways that focused on delivering air-mail to the Ohio Valley and Western Pennsylvania through the use of a single engine Stinson Reliant aircraft. After its inception, the company rapidly developed into Allegheny Airlines, U.S. Air and