Commercial Airline Industry
Commercial Airline Industry
Industry Analysis
Porter’s Five Force
Threat of New Entrants: - Low
• Existing loyalty to major brands
• Incentives for using a particular buyer (such as frequent shopper programs)
• High fixed costs in R & D
• Scarcity of resources (technical )
• High costs of switching companies (maintenance cost)
• Government restrictions or legislation
Power of Suppliers: - Moderate to high
• There are very few suppliers of a particular product
• There are no substitutes
• Switching to another (competitive) product is very costly
• The product is extremely important to buyers - can't do without it
Power of Buyers: - low
• As there are only two suppliers
Threat of Substitutes: - Low
• No other way to fly
Competitive Rivalry: - High
• A mature industry with very little growth; companies can only grow by stealing customers away from competitors
• Only two players in the market
AIR BUS
Airbus S.A.S. is an aircraft manufacturing subsidiary of EADS, a European aerospace company. Based in Toulouse, France, and with significant activity across Europe, the company produces around half of the world's jet airliners. Airbus began as a consortium of aerospace manufacturers. Consolidation of European defense and aerospace companies around the turn of the century allowed the establishment of a simplified joint stock company in 2001, owned by EADS (80%) and BAE Systems (20%). After a protracted sales process BAE sold its shareholding to EADS on 13 October 2006.
Airbus employs around 57,000 people at sixteen sites in four European Union countries: Germany, France, the United Kingdom, and Spain. Final assembly production is at Toulouse (France), Hamburg (Germany), Seville (Spain) and Tianjin (China). Airbus has subsidiaries in the United States, Japan and China.
History
Airbus began as a consortium of European aviation firms to compete
Industry Analysis
Porter’s Five Force
Threat of New Entrants: - Low
• Existing loyalty to major brands
• Incentives for using a particular buyer (such as frequent shopper programs)
• High fixed costs in R & D
• Scarcity of resources (technical )
• High costs of switching companies (maintenance cost)
• Government restrictions or legislation
Power of Suppliers: - Moderate to high
• There are very few suppliers of a particular product
• There are no substitutes
• Switching to another (competitive) product is very costly
• The product is extremely important to buyers - can't do without it
Power of Buyers: - low
• As there are only two suppliers
Threat of Substitutes: - Low
• No other way to fly
Competitive Rivalry: - High
• A mature industry with very little growth; companies can only grow by stealing customers away from competitors
• Only two players in the market
AIR BUS
Airbus S.A.S. is an aircraft manufacturing subsidiary of EADS, a European aerospace company. Based in Toulouse, France, and with significant activity across Europe, the company produces around half of the world's jet airliners. Airbus began as a consortium of aerospace manufacturers. Consolidation of European defense and aerospace companies around the turn of the century allowed the establishment of a simplified joint stock company in 2001, owned by EADS (80%) and BAE Systems (20%). After a protracted sales process BAE sold its shareholding to EADS on 13 October 2006.
Airbus employs around 57,000 people at sixteen sites in four European Union countries: Germany, France, the United Kingdom, and Spain. Final assembly production is at Toulouse (France), Hamburg (Germany), Seville (Spain) and Tianjin (China). Airbus has subsidiaries in the United States, Japan and China.
History
Airbus began as a consortium of European aviation firms to compete