SWOT analysis is a company’s environmental screening and analysis method that uses four factors as a basis for evaluation. The factors look into the strengths and weakness of the company as well as the opportunities and threats in the environment in order to determine its position in the market.
Strengths
Copa Airlines operation base is considered to be the hub of the Americas. Panama is located in a central position and is the preferred hub linking the North and South American continents. The company is in a position to make many flights in a day because it is the dominant airline company in the Tocumen airport. The cost of operation is lower which makes it possible for the company to charge lower. Copa airline have a strong brand name because
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There are a lot of companies in which they can travel. Copa Airlines have few options of flights. They are only in Latin America, and do not have all the destinations. By having competition they reduce prices, especially with the advent of internet ticket purchasing. The ability f the company to shift from new destination to another is also eminent. This is a reality that Copa airline have to accept before considering its intended plan of venturing into new markets.
Threat of New Entry
The likelihood of new competitor’s remains low due to the fairly high cost of entering the market. The cost of new airplanes represents the single biggest entry barrier. However, because some of Copa 's flights have few other options, it would take a moderate investment for a new competitor to compete on a small number of the flight paths. Cost, certification, securing space in airports as well as qualified staff make entry extremely difficult. Lead time involved in the procurement of a plane could take years which may be a lost business opportunity in the end. Certification involves many legal procedures and sometime involves battles. In America for instance, Copa airline may not be allowed to operate unless the ownership of the company is 75% owned and controlled by the American
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Copa has a few good choices for airplanes as they fly one model per airplane type (passenger capacity), 737s and smaller Embraer jets. They do not have any Airbus equivalents in the single-aisle 150-200 passenger area (737 vs. A320s). Boeing has Copa locked as a sole-source supplier unless Copa can sustain significant costs to change platforms and maintain several different brands of planes. This gives power to the supplier, even considering the broad airplane manufacturer duopoly. The only factor that affects the supplier is that there are very few suppliers of aircraft, and many are affected by the existing contracts which may affect the time of delivery for the airplanes. Copa also requires fuel of which they have no power to control. The cost of fuel is solely a factor determined by demand and supply and the strategy used by OPEC in pricing fuel. However, the company may enter into derivatives contracts for the supply of fuel. The danger with the strategy is that the price of fuel fluctuates and may happen to be expensive at the time it is
The U.S. airline industry experienced year-over-year growth in passenger revenues, in 2013, driven by strong demand for air travel.2 Additionally, on average, fuel costs were down in 2013 as compared to 2012.2 The U.S. airline industry is also a very competitive market. Due to government deregulation in 1978 there are few regulatory barriers to new entrants in the market, although there are other barriers to consider. Starting a new airline is very capital intensive. Purchasing a commercial airplane from Boeing can cost anywhere from $76million to over $300million.4 Another barrier to entry is risk in the industry. Airlines tend to experience volatile costs such as fuel prices, which can be difficult to predict in the long run. A regu...
A SWOT analysis is an acronym that stands for Strengths, Weaknesses, Opportunities, and Threats. SWOT is a planning evaluation used by businesses and organizations.
The Five forces in the airline industry can be easily broken down, firstly the threat of new entrants. Over the last 10 years there has been a huge influx of new low cost companies in Europe such as “Easyjet”, or “Ryan Air” as the low cost niche slowly becomes more full we are seeing less and less entrants since the market has become saturated. The better an airlines brand image, such as British Airways being a recognised name and the use of frequent flier or airmiles schemes the less likely a new entrant with lower prices will be able to break into the market. Next we have Supplier and buyer power in the industry. In terms of the suppliers of aircraft the main two are Airbus and Boeing and so it may seem that this few suppliers would have a lot of power over the airlines, but intact it tends to just increase the competition between the suppliers as they fight for major contracts with the big airlines. The bargaining power of customers in the
SWOT analysis is a necessary tool for business that allows corporations to analyze where their strengths, weaknesses, opportunities and threats lie. The SWOT tool contains paramount information about the industry and helps the executives of the business make decisions that are necessary for the business’s survival and success.
Boeing/Airbus Case Analysis Competition in the Commercial Aircraft Business. With only a few large companies across the globe (Boeing, MD, and Airbus), the commercial aircraft industry essentially exhibits the qualities of an oligopolistic competition with intense rivalry. Here is an analysis of competition in the commercial aircraft business using Porter’s Five Forces. Figure 1: Porter’s Five Forces Applied to Aircraft Industry. Barrier to entry: - High barriers to entry, to a certain extent, help understand the risks involved in operating in the aircraft industry.
A weakness of Southwest Airlines is having a small footprint within the global market. Though they acquired AirTran, which expanded
Global competition- As more companies are coming into this airline market so there can be a threat to Air Canada from these
Southwest Airlines strategy of focusing on short haul passenger and providing rates as low as one third of their competitors, they have seen tremendous growth in the last decade. Market share for top city pairs on Southwest's schedule has reached 80% to 85%. Maintaining the largest fleet of 737's in the world and utilizing point-to-point versus the hub-and-spoke method of connection philosophy allowed Southwest to provide their service to more people at a lower cost. By putting the employee first, Southwest has found the key to success in the airline business. A happy worker is a more productive one as well as a better service provider. Southwest will continue to reserve their growth in the future by entering select markets only after careful market research.
A SWOT analysis is a measure tool to summarize a company’s internal and external aspects. By measuring the company’s strengths, weaknesses, opportunities and threats and looking for improving solutions by using the strengths and opportunities to improve on the weaknesses and take the necessary actions concerning any threats a company can survive in today’s world market.
The low cost and no frills strategy is make travel affordable at low cost. The company only operates one type of aircraft which is Boeing 737 to help maintenance cost low. Southwest was the first airline to use E-ticketing in this way customer can reserve spot and buy ticket on their web and allow less expense in printing tickets. Medium measured airports which allowed them to produce better time performance and less fuel costs so plane do not have to wait in the line at the runway. The core value of the company of “LUV and fun” makes the company great place to work that gives customer with a great experience.
The airline industry is a costly business to partake in especially due to the cost of fuel and technology needed to operate the airplane. With EasyJet internationalizing into Africa, it had the notion of facing new competitors, however, with the finances (see appendix) it possesses and the famous identity of its brand, made the threat of being a new entry within the Nigerian market low. However, a big threat would be if local Nigerian airlines were to reduce its prices then EasyJet might be at risk because the local airlines have the necessary equipment and knowledge to operate in its region.
The perennial crisis in the airline industry: Deregulation and innovation. Order No. 3351230, Claremont Graduate University). ProQuest Dissertations and Theses,, 662-n/a. Retrieved from http://search.proquest.com/docview/304861508?accountid=8364.
...ompetitive as more firms entered the market. Recently, Embraer and Bombarfier are the dominant producer of regional jets, <90 seats (Harrison, 2011). Although, entry to the aircraft industry is never been an easy task, government sponsored firms proved the opposite. Firms subsidized by Russia, Brazil, China, Canada, and Japan are announcing to enter the small aircraft industry by 2016. Because small aircraft manufacturing accounts for more than 50% of the total commercial aircraft produced, it can be seen as a gate way to enter the large commercial aircraft industry, hence, compete with Boeing and Airbus (Harrison, 2011).
What is a SWOT analysis? This concept involves assisting businesses to identify their strengths, weaknesses, opportunities and threats. It is often used to analyze an organization and its environment. Businesses find the analysis useful in assisting them to improve their business, establish goals and objectives.
The SWOT analysis is used to gauge a company’s strengths and weaknesses. It also outlines opportunities for tapping and presents possible threats that could affect a company’s operations.