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Porter’s Five Forces Industry Analysis For British Airways - Papers

Porter’s Five Forces Industry Analysis For British Airways

1.Intensity of Rivalry (High +++)

The rising oil prices and the financial crisis have pushed the airlines companies to combine with each other to solve these issues, which has raised the competition in the whole industry, For example BMI and Brussels Airlines. (Investopedia, 2011)

Restricted number of airlines and high fares charged mean lower international competition for British Airways. However, competition remains high and intensive within Europe. (Investopedia, 2011)

British Airways is facing a strong short-term market competition from smaller businesses such as (easy Jet, Ryanair). In addition to train operators such as Eurostar and this is due to the infrastructure ...

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than Gatwick (EUROPA, 2010).

Existing barriers to exit as aircrafts are specialized assets. (EUROPA, 2010).

3.Threat of substitutes (Low ---)

There are a few direct short run substitutes, for example West Coast Mainline, Which are in-country routes. Moreover there is Eurostar, which is a train links between London-Paris-Brussels, In addition to ferries and cars. (Investopedia, 2011)

There are no remarkable long run substitutes due to the company’s global leadership status with extensive network of destinations and flight slots. (Investopedia, 2011)

However, this factor depends on the traveller preferences, money and time he has.

4. Bargaining power of suppliers (High +++)

Main suppliers within the airline industry are Airbus and Boeing, indicating their high bargaining power. This lack of suppliers undermines the ability of British Airways to apply their control and higher their profitability. (Investopedia, 2011)

The sole supplier of fuel to the airport ...

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PAPER DETAILS

Added: 4/1/2011 11:41:53 AM
Submitted By: mj2009
Category: Business
Type: Premium Paper
Words: 845
Pages: 4

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