Case Study Plane Wreck: Airline Indusrty
North South University
SCHOOL OF BUSINESS
BBA Program Spring, 2013
MGT 489 STRATEGIC MANAGEMENT (Section-1) Case on “Plane Wreck: The Airline Industry in 2001-2004”
Submitted to:
Dr. Abdur Rab
Professor
School of Business
Submitted by:
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
Executive summary:
The airline industry has several factors that affect it which include the inflation interest rates, income, price elasticity, wage inequality and fuel price. All of these factors have a role in how the airline industry operates. Supply and demand also can affect the airline industry. After the September attacks the airline industry has suffered because people no longer trusted the airline to be safe. People stopped traveling by plane causing the airline industry to lose business even go bankrupt. Inflation, fuel prices, increasing interest rates, and oil demand have also affected the industry since they rely on fuel and a more steady economy to run their business. Airlines compete more for business because the economy is in a downfall, so they decrease fares to attract customers and add services at lower costs to lure people into using their airlines.
Q1. Use the competitive forces model to analyze the structure of the airline industry during 2001-2004. How well does this analysis explain low profitability of the industry?
Answer:
The competitive forces model focuses on five forces that shape competition within an industry. These five forces are: the risk of entry by potential competitors,
SCHOOL OF BUSINESS
BBA Program Spring, 2013
MGT 489 STRATEGIC MANAGEMENT (Section-1) Case on “Plane Wreck: The Airline Industry in 2001-2004”
Submitted to:
Dr. Abdur Rab
Professor
School of Business
Submitted by:
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
Executive summary:
The airline industry has several factors that affect it which include the inflation interest rates, income, price elasticity, wage inequality and fuel price. All of these factors have a role in how the airline industry operates. Supply and demand also can affect the airline industry. After the September attacks the airline industry has suffered because people no longer trusted the airline to be safe. People stopped traveling by plane causing the airline industry to lose business even go bankrupt. Inflation, fuel prices, increasing interest rates, and oil demand have also affected the industry since they rely on fuel and a more steady economy to run their business. Airlines compete more for business because the economy is in a downfall, so they decrease fares to attract customers and add services at lower costs to lure people into using their airlines.
Q1. Use the competitive forces model to analyze the structure of the airline industry during 2001-2004. How well does this analysis explain low profitability of the industry?
Answer:
The competitive forces model focuses on five forces that shape competition within an industry. These five forces are: the risk of entry by potential competitors,