Case Study on Us Airline Industry

Topics: Bank, Barriers to entry, Banking Pages: 10 (2187 words) Published: March 29, 2011
Table of Contents

S.No.| Topic|
1.| General Environmental Analysis |
2.| Industry’s Dominant Traits|
3.| Based on Porter’s Five Forces Model Attractiveness Industry | 4.| Strategic Group in Industry|
5.| Industry Dynamics within the Dominant Strategic Group (Porter Five Forces Model)| 6.| Drivers of Change and their implication on the industry| 7.| Key Success Factors|
8.| Competitive Profile Matrix (CPM)|
10.| External Factor Evaluation (EFE)|
11.| Internal Factor Evaluation (IFE)|
12.| Strategic Groups|
13.| SPACE Matrix|
14.| Strategic Factors Analysis Summary (SFAS)|


| | |
1| Market Size and Growth Rate| Market growth rate of deposits was 12% from 2002 in U.S. And Bank with over 10 million in assets had experienced growth in deposits from 2000- 2002| 2| Scope of Competitive Rivalry| Competition of the industry is Domestic.| 3| Number of Rivals| Maximum 3 major Competitors, Bank of America, Citigroup, and J.P.Morgan Chase. and Wachovia| 4| Buyers Needs and Requirements| Safety, Efficiency, time saving, customer satisfaction, and availability| 6| Pace of Technological Change| Technological change is effecting rapidly as new features are introduced. Like Internet Banking, Phone Banking, Wireless Banking, Call Centres, and ATM’s.| 7| Degree of Product Differentiation| The degree of differentiation is high in the banking industry. The first product differentiation took place in the 80’s when debit card was introduced which brought a new differentiation in the plastic money. | 8| Product Innovation| Transfer from paper to plastic money.Along with that transfer from brick and mortar bank to internet barrier.| 9| Economies of Scale| To become cost effective they must shift their call centres in countries which has cheap labour. Because in 2003 survey by the business intelligence firm cutting edge information found that less then 10% of banking institutions realize profit from operating call centres and 55-70% of bank operated at a loss.|

Porter’s Five Forces:

S # | FACTORS|  | HUFA| MUFA| Neutral| MFA| HFA|  | COMMENTS|  |  |  | 1| 2| 3| 4| 5|  |  |
1| Economies of scale| Low| | | | * | | High| Deposits are the main source of bank income. Higher the deposits higher the Economies of Scales | 2| Capital Requirement| Low| | | | | * | High| Capital requirement was very high which is the main threat for the new entrants| 3| Differentiation| Low| | | | * | | High| Differentiation requires very high technology. Serving Niche market like Nexity | 4| Government Actions| Low| | * | | | | High| In 80s the laws were strict regarding opening branches in different states, which was blocking new entrants to expand and survive in that states and also because of intense competition from big banks. In 20TH century this restriction were taken off which helped banks in expanding operation.| 5| Experience Curve| Insignif.| | | | * | | Significant| Because many large banks now were started in the early 19th century So they had the experience and competencies in satisfying needs in better way and they were also flexible in adopting new technology | 6| Brand Loyalty| Low| | | | * | | High| Brand loyalty is the major entry barrier because of major banks such as citi bank, J.P Morgan chase, Wachovia and bank of America.| The above score is 3.83 which means

“Moderately Favourable”

Factors|  | HUA| MUA| Neutral| MFA| HFA| | Comments| Specialized Assets| HIGH| | * | | | | LOW| Exit barriers are high because of the large investments in call centers, ATM machines and good will. | Fixed Cost of Exit| HIGH| * | | | | | LOW| There is much high cost in assets...
Continue Reading

Please join StudyMode to read the full document

You May Also Find These Documents Helpful

  • Case Analysis Us Airline Essay
  • Airline Industry Case Study Essay
  • The Us Airline Industry in 2007 Essay
  • US Airline Industry Case Analysis Final Essay
  • Case Study on Comair Airline Industry Essay
  • Southwest Airlines Case Study Essay
  • Porter Airline Case Study Essay
  • Essay about Industry Analysis of Airlines Industry

Become a StudyMode Member

Sign Up - It's Free