Airline industry analysis by Porters Five Forces Essay Example for Free

Airline industry analysis by Porters Five Forces Essay The Airline industry provides a very unique service to its customers. It transports people with a high level of convenience and efficiency that cannot not be provided by any other industry or substitute. Airline companies pride themselves on the way they treat their customer during the flight. They have things such as food, drinks, entertainment, and a welcoming staff. The service of transportation is provided in other industries but the airline surpasses all of them when it comes to timeliness. The geographic scope of the airline industry is at a global level. Some firms are able to fly their planes all over the world while others focus on smaller geographic areas. The five forces model is one way to answer the first basic question in strategic management; â€Å"Why are some industries more attractive than others?† This model shows the five forces that shape industry competition; threat of new entrants, bargaining power of buyers, threat of substitutes, bargaining power of suppliers, and competitors. In order to analyze the airline industry we have look at each of these forces. Bargaining power of Buyers The airline industry is made up of two groups of buyers. First, there are individual flyers. They buy plane tickets for a number of reasons that can be personal or business related. This group is extremely diverse; most people in developed countries have purchased a plane ticket. They can do this through the specific airline or through the second group of buyers; travel agencies and online portals. This buyer group works as a middle man between the airlines and the flyers. They work with multiple airline firms in order to give customers the best flight possible. Between these two groups there is definitely a large amount of buyers compared to the number of firms. There are low switching costs between firms because many people choose the flight based on where they are going and the cost at the time. This is some loyalty to firms but not enough for high switching costs. Each customer needs a lot of important information. They need to know the details of what  is provided during the flight. Buyers need to understand the timing of the flight and the safety aspects of flying in general. The service provided is unique. Each airline has a niche. Some airlines focus on cost, while others focus on having the best amenities, etc. Overall the bargaining power of buyers has an extremely low threat in this industry. Bargaining Power of Suppliers Next we look at the bargaining power of the suppliers. In this case the major suppliers are the airplane manufacturers. The top two manufacturers in the world currently are Boeing and Airbus(Odell,Mark). In this industry the inputs are extremely standardized. Airline companies only seem to differentiate with amenities. The planes are very similar. Currently some manufacturers are trying to make their plans more ecofriendly. Airline companies cannot easily switch suppliers. Most firms have long term contracts with their suppliers. Planes are such high capital products that firms probably make long term loan agreements and have more favorable credit terms when they don’t switch companies. It is difficult to enter into the plane manufacturing industry because of the capital needed to enter. The amount of money and expertise needed to make even one plane is around 200 million dollars. For this reason there are very few suppliers in the airline industry. Airline firms are the only source of income for these manufacturers so their business is extremely important. Based on these things the bargaining power of suppliers has a low threat as well. Threat of New Entrants Threat of new entrants is another major aspect of the five forces. This aspect has a low threat for the airline industry. There are two aspects that do however raise the threat level. First, there are extremely low switching costs. Second, there are no proprietary products or services involved. Even with these two aspects the industry still has a very low threat overall. Existing firms have a large cost advantage. This industry requires  a large amount of capital and without a strong customer base there will be little to no profit in the first few years. Existing firms can and will use their high capital to retaliate against newer firms with whatever means necessary such as lowering prices and taking a loss. Although there are low switching costs between brands, consumers tend to only chose well-known names. Airline tickets are expensive so people don’t want to give that money to firms they don’t trust. There is also a huge safety aspect involved and most consumers feel safer with firms that have been around for a long period of time. This industry requires plane and flying experience which also lowers the threat of entry. When firms decide to enter the market they first have to become licensed which can take about a year. After that they are constantly being regulated by several organizations such as the Federal Aviation Administration and the Department of Transportation. The time and money spend to solely open an airline company is enough to prevent most people from entering the industry. Threat of Substitutes After looking at the threat of entry it is important to also consider the threat of substitutes. This industry has a medium substitute risk level. There are substitutes in the airline industry. Consumers can choose other form of transportation such as a car, bus, train, or boat to get to their destination. There is however a cost to switch. Some means of transportation can be more costly than a plane ticket. The main cost is time. Planes are by far the fastest form of transportation available. Airlines surpass all other forms of transportation when it comes to cost, convenience, and sometimes service. Consumers do sometimes choose other methods for various reasons such as cost if they are not traveling very far which raises the risk. Rivalry among Existing Players The last area of the five forces is the rivalry among existing players. The rivalry in the airline industry is very intense for many reasons. The industry is currently very stagnant. It seems to be in the mature stage of the business cycle. The number of competitors stays the same in the long run  and it doesn’t seem to be under or over capacitated. The fixed costs are extremely high in this industry. This makes it hard to leave the industry because they are probably in long term loan agreements in order to stay in business. The products involved or the planes are highly complex which also heightens the competition. The competition is lessened by the brand identities of different firms. For example, Jetblue is known for its amenities and Southwest is known for its low prices. The market share seemed to be equally distributed because each company has its own part of the market and because switching costs are low none of the firms can really hold a large percentage of the market. The strongest forces in this industry are the competition of existing firms and the power of suppliers. The rivalry of existing players is high and will push out any firm that doesnt have enough capital. Suppliers are strong forces because planes are so costly to make. If the suppliers changed the credit terms by even a small amount it could mean a significant loss for the firm. On the other hand the other forces involved seem to have a weak threat. It is costly and time consuming to enter the market which lowers the risk of entry. Buyers have a weak force because of the low switching costs and substitutes are weak because they are usually too costly. The profit in this industry is high because for most people flying in necessary. It is not a trend which makes this industry profitable for the long term. Airlines that are more profitable are in a better position because they usually have more planes and a larger variety of flights which provides further convenience for the consumer. Recently there have been some changes in some of the forces. Some airplane manufacturers have been making ecofriendly planes, which is a change in the bargaining power of suppliers. This would differentiate the products, raising the threat of suppliers. Another recent change is the use of web portals such as Expedia to book flights. This positive change creates a whole new group of buyers and makes purchasing flights faster and easier. The increase in gas prices has also been a positive change for the industry  because it lessens the power of substitutes. People are more willing to fly to their destination if driving would be more expensive. After looking at the Five Forces Model firms should make dealing with the competition their main priority. The other areas in the model seem to have an overall low threat so existing firms don’t have to focus on those areas as much in their business strategy. Now that we have brought you through our Porters Five Force analysis, the last thing that is important to consider when exploring an industry, are the dominant economic features. The next section of our report will give you an overview of what features affect the airline industry most.

The University Office of Information Technology :: Education Data Information Essays

The University Office of Information Technology Introduction In this paper I report on the history, mission, organization, finances, evaluation strategies, and current issues of a university’s office of information technology. I will use the term â€Å"office of information technology† throughout the paper. This term needs to be defined here because it is very general and each university seems to have a unique definition for it. Within this paper, office of information technology will refer to those areas of the university whose primary mission is to serve the information technology needs of the institution. Information technology needs include â€Å"that collection of technologies that enables data and knowledge to be stored and exchanged, assessed, displayed and communicated, and in some cases, synthesized and created.† (Iowa State University, 2000, p. 2). In other words, the computer hardware and software, communications hardware (phone and network) and software, media-related instructional technologies, and the organization needed to support this information technology infrastructure. These services touch the entire university and all its faculty, staff, and students. As with any administrative unit on campus, the organization of that unit will depend on the context in which it is set. Another term that I will use loosely in regard to the office of information technology is the university. While all institutions of higher education rely on information technology as a basic service to provide products to their clientele, I will try to keep my discussion and analysis confined to the concept of Kerr’s â€Å"multiversity†, or research university satisfying multiple goals. This is not to diminish the role of the office of information technology at smaller universities and colleges but only to focus this discussion. One area within a university that is often lumped into the â€Å"information† infrastructure is the library. While my definition does not include the library within the office of information technology, the technology used for many of its services is included. Lastly, I would like to preface the ideas presented within this paper through the perspective of Weick’s (1976) theory of loosely coupled systems. As discussed throughout, the office of information technology is a unit on campus that is intertwined with all other areas in some manner. Thus it must go beyond the â€Å"niche† perspective of individual units and departments and engage itself directly in the politics of the university as a loosely coupled system. As the reader will see, this has affected the history, mission, and organization of the office of information technology and is embedded in many of its

Non-Violence as the Bigger Statement Essay

In the documentary _Eyes on the Prize_, John Lewis- an attendee of the 1960 Nashville Lunch Counter Sit-In, regales the use of nonviolence in their fight for racial equality, saying â€Å"We took our seats in a very orderly, peaceful fashion†¦We just sit there, and we continue to sit all day long†¦ But for me, I’ll tell you; it was like being involved in a holy crusade. It became a badge of honor† (PBS). The Civil Rights Movement, which began in 1954, was so deeply impactful largely in part to the unusual nature of its participant’s actions against their opposition. Scarce physical tactics or retaliation was threatened against the white opposition on the black insurgent’s behalf in order to achieve what they sought. Instead, the African Americans took a stance of nonviolence as their weapon of choice, hoping to reach a middle ground of peace between all of the nation’s races. Some of the historical and structural causes at the core of this stance were the guidance of Martin Luther King Jr., the organized fight to dismantle long-standing norms of racial segregation within the white communities, and the effort to raise awareness to a blind political system. In introducing the concept of social insurgency, Doug McAdam says, â€Å"At the close of 1876-1930 period, the southern black population was only just beginning to develop the institutional strength so vital to the generation of social insurgency† (McAdam 94). Historically, black Southern Americans had experienced little to no sense of togetherness as a community; it would take someone or something with enough passion and commitment to bring them together. Obtaining a leader to push such idealistic views for the African American race is practically a requirement to incite immense social change. An organizer is the heart of the movement, because they diffuse centralized direction and coordination (McAdam 47). Having Martin Luther King Jr. as a guiding force behind the Civil Rights Movement was, arguably, the biggest motivation for non-violence as a directive in community institutions during this period. In his _Letter from Birmingham Jail_, often called the Call for Unity, Dr. King says, â€Å"In any nonviolent campaign there are four basic  steps: collection of the facts to determine whether injustices exist; negotiation; self-purification; and direct action† (Letter 2). Martin, born and raised in the church, came from humble beginnings; his father, a pastor, sermonized many ideals of a future of peace and the effectiveness of words over physicality. Dr. King went on to preach the ideals of a future based on equality, regardless of skin color or nationality, to his followers. His goals primarily focused on the rise of the nation as a whole- as one- rather than just the rise of the African American race. In his _Chicago Freedom Movement Rally Speech_, he stated, â€Å"The Negro needs the white man to free him from his fears. The white man needs the negro to free him from his guilt† (King). Dr. King was aware that for there to be peace and success for our country, we would have to learn to coexist as one community, instead of having one dominant race in any aspect. In another excerpt from the Chicago rally, he summarizes his intent with nonviolence, saying, â€Å"Nonviolence does not mean doing nothing. It does not mean passively accepting evil. It means standing up so strongly with your body and soul that you cannot stoop to the low places of violence and hatred. I am still convinced that nonviolence is a powerful and just weapon, it cuts without wounding† (King). In result, his practices flourished, inspiring others to come together and follow in his footsteps. Historically, it also aided that typically only violence had been used to fight battles and/or change things in the past, which had only gotten them to the point they found themselves at then. The typical day-to-day life of White Southerners consisted of structural norms within the economy, the government, and social customs. Breaking down the barriers of such an established arrangement would never be an easy feat. Blacks in the South knew this and therefore banned together, creating solid organizations such as CORE (Congress of Racial Equality), SCLC (Southern Christian Leadership Conference), and the SNCC (Student Nonviolent Coordinating Committee). These organizations were so vital to the cause and effect of the nonviolence movement, as â€Å"A conductive political environment only affords the aggrieved population the opportunity for successful insurgent action. It is the resources of the minority community that enable insurgent groups to exploit these opportunities† (McAdam 43). As could be expected, white oppositionists reacted extremely violently to the changes  that were being force-fed to them through the motions of the Civil Rights Movement. The way of life that they’d known for so long was being threatened and as human nature would have it, we are programmed much of the time to fear what we do not know. African American advocates in the South were brutally beaten, humiliated, and killed as a retaliation tactic. Thus, such actions sparked black insurgence to essentially stray away from â€Å"feeding the fire†, and instead choose to demonstrate the direction of race relations that they strived for. In order to achieve results, they had to ban together to strengthen their ideals within the community, thus creating strong indigenous organizations as a backbone for their fight. McAdams states, â€Å"†¦the same dynamic is evident in regard to the relationship between organizational strength and insurgency, with the pace, character, and outcome of collective protest shaping the availability of those organizational resources on which further movement activity depends† (McAdam 53). Thus, as the black insurgent groups gained the social stability, they were able to engrain their nonviolent tactics within a larger audience as they gained support. It was such growth of backing that allowed them to create cracks in the barriers that upheld the white Southerners’ traditions. It was also such groups that were the pillar to sustain an ongoing protest. The Political Process Model that McAdam lays out considers that â€Å"a structure cannot function without the routinized exercise of structural power, and any threat to structural power becomes a threat to that system itself. Thus†¦any system contains within itself the possibility of a power strong enough to alter it† (McAdam 37). Politically, much opportunity was to be gained for black insurgents through the use of non-violent action. W.E.B. DuBois issued an example of such a possible process of advancement, saying â€Å"We need sufficient income for health and home; to supplement our education and recreation; to fight our own crime problem; and above all to finance a continued, planned and intelligent agitation for political, civil, and social equality† (B., DuBois 197). Since the black population felt so absolutely undermined as a race by the government, it would do them no good to repeat the same actions as those before them when trying to change the way things worked. McAdam discourses that â€Å"the point is that any event or broad social process that serves to undermine the calculations and  assumptions on which the political establishment is structured occasions a shift in political opportunities† (McAdam 41). In other words, if someone is questioning the way the government works in the first place, already a shift has been sparked in the standards, just by drawing attention to it. To some degree, all changes involving social movement for the nation are going to imply some level of struggle to change and/or pull for institutionalized power (McAdam 36). Using this explanation in the cause of the non-violent tactics, once the aggrieved population shed light on the issues of political alignment through a peaceful approach, the movement only continued to gain attention and leverage over political opponents. McAdam sums it up when he synopsizes, â€Å"the contention is that, far from remaining constant, the organizational resources available to southern blacks increased simultaneously with the expansion in political opportunities† (McAdam 87). Like most ideals in life, the concept of nonviolence as a promising tactic for change started with one individual. Martin Luther King Jr. not only believed in what he preached, but practiced it in his own life. Through his consistent stand-by of nonviolence, the subsequent growth in support through organizational groups, and said group’s ability to power through the withstanding customs of white folk, nonviolence flourished. In his closing statements, McAdam reminds, â€Å"it must be remembered that the movement was able, in a matter of years, to dismantle a thoroughgoing system of caste restrictions that had remained impervious to change for some seventy-five years†¦These gains are hardly insignificant† (McAdam 232). Therefore, though near the end black insurgency took a turn for the worse, the influence that nonviolence caused on the nation absolutely left a lasting imprint on history. Work Cited B., Du Bois W. E. Dusk of Dawn. Millwood, NY: Kraus-Thomson Organization, 1975. Print. King, Martin Luther, Jr. â€Å"Chicago Freedom Movement Rally Speech.† Courtesy of the King Center. Atlanta, Georgia. African-American History Online. Facts On File, Inc. http://www.fofweb.com/activelink2.asp. September 24, 2014. King, Martin Luther. _Letter from Birmingham Jail_. Stamford, CT: Overbrook, 1968. Web. 24 Sept. 2014. McAdam, Doug. Political Process and the Development of Black Insurgency, 1930-1970. Chicago: U of Chicago, 1982. Print. PBS, prod. â€Å"Ain’t Scared of Your Jails.† _Eyes on the Prize_. PBS. N.d. _PBS_. Web. 23 Sept. 2014.

The United States And The Civil War - 1845 Words

During the first century of the United States as an organized country , it experienced an unprecedented amount of growth. It had a territory that stretched from the Pacific to the Atlantic; an industrial economy was slowly starting to form. Despite these accomplishments, the United States had one major problem standing in the way of it becoming a truly great country, the issue of slavery;slavery slowly drove the nation apart ever since the country was formed in 1776. Slavey clearly drew lines in the nation between the South which heavily relied on slavery for economics, and the North which opposed the institution of slavery as being immoral and clearly defining constitutional rights. The issue of slavery was heavily exacerbated by the idea of manifest destiny; manifest destiny was the idea that the United States should expand across North America since many believed it was their god given right. Slavery combined with the new territories acquired from manifest destiny ultimately cont ributed to the south’s secession of the union and the civil war because manifest destiny exacerbated the effects slavery had already had on the nation. Slavery had always caused tension between the North and South because slavery had always been an institution that the south full-heartedly swore by; despite the North’s unfavorable view of slavery, they couldn’t stop slavery since slavery was so engraved in the southern culture . Manifest destiny exacerbated these effects because politicians fromShow MoreRelatedThe Civil War : The United States1622 Words   |  7 PagesThe Civil War divided the United States with its’ origin in the struggle to preserve the Union from the Confederacy’s succession. A war to maintain the United States quickly progressed to battles fought because of the controversial beliefs on slavery in the North and South. 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