Essay about Airline Industry : The Airplane Industry

Essay about Airline Industry : The Airplane Industry

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Supplier Power- MODERATE The major suppliers within the airline industry are the airplane manufacturers. Other than the amenities an airline may choose to input, most of the equipment needed to build an airplane is standardized. Although most material is standardized, airlines cannot easily switch between suppliers. Many airline companies cannot switch manufacturing suppliers due to long term contracts. Since the manufacturing industry is pretty expensive to enter there are few suppliers on the market. As a result, the suppliers depend on the buyers (airline) for revenue. Buyer Power- WEAK Within the airline industry, there are a large number of buyers compared to the number of airlines. This is a low threat because there isn 't many options for customers to choose from. Customers choose flights depending on the destination, the cost, and the amenities available. Since each airline experience is unique, the buying power is relatively low. In order to reduce buying power, airlines participate in airline rewards programs. Loyalty programs such as Delta Skymiles, JetBlue TrueBlue, and Southwest Rapid Rewards make themselves competitive amongst other airlines to increase revenue. Due to the buyers’ different tastes and expectations these loyalty programs encourage buyers to fly with a specific airline that meets their satisfaction. For this reason, customers become reluctant to switch to another airline. Competitive Rivalry- STRONG The industry has many reasons for rivalry. Many airlines have established a consistent customer basis due to costs or amenities. JetBlue is known for their amenities where as Southwest is popular for their low ticket prices. To stay competitive, airlines may initiate new customs such as eco frie...

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... rapid pace, communication and data processing costs are at an all time low. For employees, this rapid impact can threaten or enhance opportunities within one’s career. If one is hesitant and uncertain when it comes to constructing a model for a potential system then they are likely to lose their job. Employees must be able to quickly adapt to changing technology. For example, a chair manufacturing company is loosing revenue due to its competitor’s fast processing advantage. In order to increase their revenue the company must be creative and develop strategic methods such as developing an information system that tracks all materials in its quantity to avoid over ordering in one period. Processing time and tracking cost is also an important task. Employees also must keep up with social advances in society. They must be keen to what consumers want and how they want it.

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