SWOT Analysis: Copa Airlines

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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.
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
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