Critical Thinking—Evaluation and Deduction—Assignment Please take a moment to fa

Question

Critical Thinking—Evaluation and Deduction—Assignment Please take a moment to familiarize yourself with deduction and evaluation by watching the YouTube videos listed below and then answer the assignment questions: * Inductive & Deductive Reasoning at https://www.youtube.com/watch?v=RmxZTtn5tII (4:02) * Critical thinking - Evaluating logic at https://www.youtube.com/watch?v=Hreivuqs5ls (Part 1, 4:48), https://www.youtube.com/watch?v=VveEe49eAek (Part 2, 5:53), and https://www.youtube.com/watch?v=p9sabjrFegQ (Part 3, 3:47).

Assignment Questions: Conduct a Porter’s Five-Force analysis on the Airline industry. Evaluate each of the five forces. Determine relevant aspects of each force in the particular industry, and summarize with your evaluation of the strength of each force. Based on this analysis, determine the recommendations you would make for: --a firm already in the particular industry --a firm considering entering the particular industry

Explanation / Answer

Porter’s Five-Force analysis on the Airline industry :-

1. Threat of new entrants:-

a. existing player can give competition by reducing their fare.

   b. high cost of entry.

   c. saturated industry very less place for small players to enter.

   d. high maintenance cost of airlines also makes the entry difficult

2. Threat of Substitutes:-

    a. no perfect alternative in case of international carriers.

    b. Domestic airline can be substituted by local transport options (car, bus, train).

3. Bargaining Power of Suppliers:-

     a. Airline industry in dominated by two players Boeing &Airbus.

     b. aviation fuel is also important and have high bargaining power due to more number of players.

4. Bargaining power of Buyers:-

     a. large number of players competing for same set of customers.

     b. as bargaining power is high customers get attractive offers.

5. Rivalry among Existing Players:-

    a. rivalry is very high due to large number of players.

     b. intense pricing wars.

     c. The fixed costs are extremely high in this industry. This makes it hard to leave the industry.

Firm already in the particular industry:-

1. Firms already operating in this industry needs to reduce operational cost by implementing new ideas.

2. Training their employees can increase their efficiency & reduce the cost.

3. Firm should always try to create some uniqueness in their product so other players can’t match them.

4. Make good relations with suppliers so that firm can have high bargaining powers.

5. Focus on winning the customer faith in your airline.

A firm considering entering the particular industry:-

1. Try to make good collaboration with already operating small airline.

2. Offer something unique so that more customers get attracted towards your airline.

3. e.g. – Air Asia recently launched its operation in India as low cost airline. Their unique product was that they only charge for passenger ticket & for language they cost extra. So a person who is daily traveler doesn’t need to carry more language so they get ticket at low price.

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