Competitive Analysis of Low Cost Airline

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Management 231

Marketing - 2013

Tutorial 3

Analysing the competitive situation

| |Name |Surname |Student Number |Mark |Signature | | |Godfrey |Hlazo |3102961 | | |

Due Date :04 Mrch 2013

Lecturer :E Isaacs

Question 1
A new low-cost, “no- frills” airline has just announced that it will enter the South AFran airline industry. Conduct a competitor analysis for the new airline.

Answer:

The company must understand the current competitors, aspect to consider include size, growth and profitability, image and positioning strategy, competitor objectives and commitment, current and past strategies of competitors, competitive culture, cost structures, and exit barriers.

Size, Growth and Profitability
An understanding of current competitors should start with a thorough analysis and understanding of their broad-based business strategy. For example the airline has to offer low cost prices all the time not only certain times. The idea is that no matter what time of the day the customers will buy low cost tickets. The level and growth of sales and market share provides indicators of the success of the business strategy. Obviously the maintenance of a strong market position or the achievement of rapid growth usually reflects a strong competitor and a successful strategy. Besides size and growth, the profitability of competitors needs to be assessed. A business that has lost money over an extended time period or has experienced a recent sharp decrease in profitability may find it difficult to gain access to capital either externally or internally this means that the airline must always make sure with their low...
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