Case Study Planes Wreck: Airline Indusrty

 Case Study Airplane Wreck: Air travel Indusrty Dissertation

North To the south University


BBA Program

Early spring, 2013 MGT 489 STRATEGIC MANAGEMENT (Section-1)

Case about " Plane Wreck: The Airline Market in 2001-2004”

Submitted to:

Dr . Abdur Rab Mentor School of Business

Submitted by simply:

Name ID

Shah M. Jakaria 081-317-530

Md. Sayed Hasan 081-223-030

Safayet Gaznabi 081-407-030

Jannati warda manal 081-597-030

Submission Date: March 31, 2013 Exec summary:

The airline sector has several factors that affect this which include the inflation rates of interest, income, cost elasticity, wage inequality and fuel price. All of these factors have a role in the way the airline sector operates. Source and demand also can affect the airline market. After the September attacks the airline market has suffered individuals no longer trusted the air travel to be safe. Persons stopped touring by aircraft causing the airline sector to lose business even go bankrupt. Inflation, fuel rates, increasing rates of interest, and oil demand also have affected the industry simply because rely on energy and a far more steady economic climate to run all their business. Air carriers compete more for business since the economy is within a downfall, so they will decrease deals to attract clients and add providers at cut costs to attract people into using their air carriers.

Q1. Utilize competitive forces model to investigate the composition of the flight industry during 2001-2004. How well performs this analysis make clear low success of the industry? Answer:

The competitive forces unit focuses on five forces that shape competition within an market. These five forces are: the risk of entrance by potential competitors, the intensity of rivalry between established businesses within an market, the negotiating power of customers, the negotiating power of suppliers, and the closeness of substitutes to an industry's products.

The first aspect, risk of entry by potential competitors, was obviously a major element for air carriers during 2001-2004. The aircarrier industry got a big strike when oil prices went up as well as the want to fly due to 9/11 had gone down seriously. Airlines required to stay ahead of their competition to survive and several companies found themselves processing for phase 11 bankruptcy protection, and so forth to keep themselves established. If perhaps new competitors were to are available in at this time the main airline companies could walk out business because the demand to fly was down and costs were skyrocketing for olive oil. This points out the low success of the market by demonstrating how potential competitors will bring down the profits of the other corporations in the industry considering that the demand for traveling by air was low at the time. However in this situation the chance of new traders is low because in this economic state one really wants to start just like expensive firm even which not lucrative or even battling loses.

The second factor, the intensity of rivalry between established corporations within an industry, Companies were challenging the other person by selling price instead of top quality. Consumers were now more concerned with low cost tickets then your quality of their seat because oil prices went up therefore ticket prices went up. This affected the companies whose primary focus was quality because they had to improve into the marketplace of price and started to become competitive while using airlines that were already dedicated to price. This explains the lower profitability with the industry as it shows how each organization was struggling over price so they were all cutting down their prices and trying to remain equal with one another and not much of the companies had been gaining money.

The third element, the bargaining...

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