Southwest

Topics: Airline, Aircraft, Southwest Airlines Pages: 2 (356 words) Published: August 28, 2013
Porter 5 competitive forces

Analysis of existing competitors

* The airline industry is marked with intense competition that is exclusively on price. Airlines struggle to find any service and product differentiation. A flight from Houston to Chicago by one airline renders the same result for the passenger as it would with another airline. Granted, there have been futile attempts to offer beverages, food, better seating, and many other amenities to passengers, but these marketing strategies only seem to drive operating cost instead of customer loyalty. Analysis of potential new entrants

* New airline companies are continuing to enter the market place, for example, Baltia Air Lines Inc. is one of the latest entries

Analysis of substitute products
* US Airways flight and Southwest’s flight are indistinguishable from each other. The end result is that the passenger arrives at their intended destination. This homogeneity only drives customers to substitute one airline for another exclusively on price. More notable is that consumers do have the option of traditional substitute products as automobile, bus, train, etc. However, these other modes of transport typically threaten regional airlines as opposed to the larger major carriers. Analysis of Suppliers

* The airline supply of airplanes are dominated by Boeing and Airbus, thus there is relatively no competition for prices on airplanes and parts. It also brings an additional threat in that this strong reliance on just two suppliers subjects the airlines to the internal health and direction of Boeing and Airbus. Any failure or disruption (even mild) for either organization would directly impact the airline industry. Analysis of Consumers

* The bargaining power of the buyers is indicated in the lack of loyalty. Airline passengers are fickle and price sensitive, yet demand less cancelations, fewer delays, and more amenities at no additional charge. Demands for better customer service by...
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