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The External Environment In The Airline Industry

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External Environment Industry Analysis The goal of the industry analysis is to recognize the external environmental factors which have potential impact on the industry. The first part gives an idea about the airline industry profile. Airline industry, in the last decade, has been growing strongly at 7% per year for both through tourism and businesses divisions and is one of the most competitive, globally, contributing to economic growth, trade, investment and tourism. Airline industry is affected by the economic growth, trade and political factors. The tense political situation like in the states Egypt, Cuba and the likes have affected tourism in the past and of course the most famous being on the 11th of September attacks which led to a drop …show more content…

Thus, the power of the suppliers is high, since the suppliers have a grip on the market due to the huge demand of their manufactured products. Moreover, suppliers can affect the industry through their capacities to raise prices or reduce the quality of purchased goods and services. Bargaining Power of Buyers The buyers in the airline industry are demanding more and better quality services .The bargaining power of buyers in the industry is high due strong as low switching costs and plethora of options in the market. Now, e-ticketing has improved the chance and flexibility to search for different airlines companies leading to down word cost pulls and upward services push. Furthermore, it eases of switching between different airlines companies. Therefore, for airlines they need to keep customers in the fold by providing air miles system to gain customers' attention and retain them. Threat of a Substitute Products or Services The threat of alternatives is comparatively low. However the how the service is used in different parts of the world is the driver of substitutes in the …show more content…

Qatar Airways Qatar Airways are its aggressive growth plan backed by the state that includes the construction and development of the new Doha international airport, which will include the world's largest aircrafts' hangers to be used for maintenance of Qatar Airways. Singapore Airlines Success factors of Singapore Airlines are: young and efficient fleets, educated staff, top ranked travel gateway and its low cost airlines known as "Tiger Airways", plus it's a membership of star alliance airline networks American Airlines Success factors of American Airlines are: largest airline in the world in terms of the total passengers transported, highest number of aircrafts, first to launch the loyalty program "frequent flyers". PEST Analysis Political factors The airline industry is affected by political situations, namely wars and terrorism. For instance, terrorists' activities in different areas globally, namely USA (11th Sep), UK, Lebanon and Qatar made the regions unattractive for tourists and business travelers and reduce the passenger's

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“In Porter’s five forces, supplier power refers to the pressure suppliers can exert on businesses by raising prices, lowering quality, or reducing availability of their products.” (Wilkinson). When it comes to the drug store industry, pharmaceutical companies dictate the prices causing there to be a high switching costs for Walgreens. According to Bell, 55.7 percent of suppliers feel they are not in an equally beneficial relationship, this is indicative of retail pharmacy buying power. (Bells).

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The consumer feels valued and thinks of the airlines as reliable. (Hongxia, 2014) “An efficient schedule saves you time and money.” Money and time is everything in our communist society, it’s precious to each and every one of us as consumers so when it’s advertised that we’ll be saving both, a sense of trust is built with the service. Consumers only look for business with companies they are able to trust, believing these companies will treat them fairly and honestly.

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Introduction On September 11, 2001 the world understood why the transportation system is considered a critical infrastructure, especially America, because the terrorist attack grounded every commercial and private flight in the country for days. This had never been seen at such a level. As word traveled about the four hijacked aircraft many airlines started rerouting flights for fear of other attempts to harm others and carry out more attacks. Airlines cancelled thousands of flights and it was felt around the world the deeply striking blow of fear created by Al Qaeda the Islamic terrorist group headed by then Osama Bin Laden.

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First, improving the preventions of terrorist travel will aid in curbing acts of terrorism within the States of America. Better policies and strategies of thwarting the terrorist travel should be established for as long as terrorism continues to exist. For example, security within various traveling points should be enhanced, and travelers that are suspicious should be subject to strict scrutiny. This will be an effective way of reducing the number of tourists that get into the country through different means, hence reducing

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Supplier Power The supplier bargaining power in the industry is low. Currently, the sourcing and supply chain management industries make larger orders which will increase their cost savings. This shows Cooper Tire and Rubber Company it can order from the same supplier as Goodyear and Michelin. Luckily, Cooper Tire realizes that they do not have the same level of bargaining power relative to Goodyear or Michelin stress the importance on maintaining a supplier relationship.

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United Airlines is the second largest air career in the world. It was established in 1927 from the merger of 4 companies. In this essay, Q1 will discuss marketing environment of UAL and how changes in the environment can impact it; Q2 will define segmentation, market segment, targeting and positioning and how UAL uses to segment its market in order to grow then in Q3 SWOT and its components will be defined and applied on UAL. Q (1.a): Marketing environment refers to “The actors and forces outside the marketing department that affect marketing management’s ability to build and maintain successful relationships with target customers” (Kotler, 2011). And it consists of Micro environment and Macro environment.

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A supplier with strong bargaining power has the advantage of charging their price higher or selling low quality of the product to them. The bargaining power of suppliers will be low as there are many suppliers in the market offers similar products and this allows courts to switch to other suppliers that offer lower cost. Intensity of rivalry within industry High Threat Competitors in the industries There are quite a number of businesses involve home furnishing and electrical appliance.

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GLOBAL AIRLINE ALLIANCES (GALs) ANALYSIS AND AIRLINES NETWORK DEVOLOPMENT ABSTRACT Since the mid of 1990s, worldwide airlines have been enrolling in one of the three current and largest global airline alliances (GALs), STAR ALLIANCE is the very first airline alliance founded in 1997, then it was followed by ONEWORLD alliance in 1999, and SKYTEAM in the year 2000, during the expansion of these GALs, airlines from different contents started belonging in to join, GALs provided transportation for over two-thirds of all international traffic. This research studies the reasons that cause airlines to join collaborative scheme as a way for network development and to increase profitability by connecting the international traffic.

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9. Environments Like any other Industry, the airline industry is also affected by changes in its external environment. King III (2009) highlights that leaders are not supposed to compromise the natural environment and the livelihood of future generations. Environmental Factors can also have a significant role to play in an airline industry; like in the case of Prof. McPherson we observe the bad weather reducing his time by 1 hour and thirty minutes. In light of the environmental factors that affect the airline industry this Study will focus on the traditional Political, Economic, Social, Technological, Environmental, and Legal Analysis, often referred to as the PESTEL Analysis.

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For worldwide airline industry, opportunities can emerge from new client expectations, items, business sector structures or regulatory

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3- Threats of substitute products 4- Bargaining power of customers 5- Bargaining power of suppliers Practical implementation of the Model:

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Suppliers in controlling position can reduce the margins of Vera Bradley, and the amount can receive in the market. Controlling suppliers use their control to obtain higher prices from the industry members, and limiting their opportunities to find better deals. As a result, the higher supplier bargaining power can cause lower the profitability of luggage and accessories industry. In

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Macro-environmental are uncontrollable factors that influence a business’ strategic planning, decision making and operations (Chartered Institute of Personnel and Development, 2015). However, by understanding its macro-environmental factors, the business could take advantage of these factors and maximize their opportunities, whilst minimizing their threats. The 6 factors of PESTEL analysis include: Political, Economic, Socio-cultural, Technological, Environmental and Legal factors. In this case, it highlights the contextual information of the civil aviation competition of uncertain environmental, political and economic anarchy for flight

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Shahbaz, Javed, Dar and Sattar (2013) study on the relationship between terrorist attacks and FDI in Pakistan. According to their findings, while there is a big increase in growth rate of foreign investment growth in 2000 which have the lowest attacks, there is a there is a big decrease in net foreign direct investment in 2007 which have the highest terrorist attack rate in Pakistan. This reduction is related terrorist activities due to the fact that terrorist activities decrease the foreign investor confidence. Other components that hinder economic growth are tourism, the number of firms and employment. Terrorism activities reduce tourism demand (Arana and Leo´n, 2007; Drakos and Kutan, 2003; Feridun, 2011).

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2.0 Inputs - Transformation Process - Outputs 2.1 Inputs Operations management concerns with the conversion of inputs into revenue-creating outputs through the transformation process (Mahadevan, 2010, p.5). Slack et al. (1995 cited in McMahon-Beattie and Yeoman 2004, p.30) mention that inputs are divided in transformed and transforming. Transformed are those that are transformed in some way and transforming inputs are those that are used to carry out the transforming process.

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