Threat of New Entrants The airline industry has a number of barriers to entry and exit which may constrain the potential for new competition. The high capital requirements may be partly overcome by the easy aviablety of lease aircraft, but the limited availability of take off and landing slots at peak times at the popular airports and the bureaucratic requirements for licenses reduce the potential threat of new entrants (Belobaba, Odoni, & Bamhart, 2009)
The founders; Rollin King and Herb Kelleher, developed the idea of a low cost carrier and the airline airlines gained the first mover advantage when the inaugural flight took place in 1971. The airline has been very successful and following the acquisition of AirTran in 2011, the company is now the largest domestic carrier and the world's largest low cost carrier (Southwest Airlines, 2014)
The high capital requirements may be partly overcome by the easy aviablety of lease aircraft, but the limited availability of take off and landing slots at peak times at the popular airports and the bureaucratic requirements for licenses reduce the potential threat of new entrants (Belobaba, Odoni, & Bamhart, 2009). With the industry having a reputation for high overheads and low profits, it may also be argued to be an unattractive industry (The Economist, 2014)
airline industry had an average load factor of 84.1%, carrying a total of 649 million passengers (Transtats, 2014)
The industry also includes the maternity wear and line of women misses. Since 1990, the structure of the women clothing stores in the United States has changed significantly because of the transition from the "production-driven market to a consumer-driven market" (Baye, 2010 p 8), and the consumer in the United States spent approximately $36
Because the store is not engaged in anything that would be an issue politically for either side, there is really no fear there. The only issue that could relate to discount department stores politically could have to do with where the products are made (Chant, 1997; Hunter & Green, 1995)
The only issue that could relate to discount department stores politically could have to do with where the products are made (Chant, 1997; Hunter & Green, 1995). If there are tariffs or other brewing problems, getting products from a particular country and stocking the shelves with them could be a legitimate cause for concern (Lea, 1988; Lee, 1987)
This strategy has worked relatively well, but many people are still going to the discount stores and shopping around much more carefully than they did in the past, when economic times were much easier. The discount department stores are in a huge growth cycle at the moment, because of the economy (Liston, 1986)
Socio-cultural forces are often tied to economic forces, especially for a discount department store. The reason behind this tie-in has to do with the fact that these kinds of stores are typically utilized by people who either (a) do not have much money, or (b) are very frugal (Lockwood, Loomis, & DeLacy, 1993)
This would, however, be unusual. Economic forces are much more of interest to a discount department store, because these kinds of forces are the main ones at play when people shop at a store where things cost them less (Nickols, 2000; Rugman & Collinson, 2009)
Porter's Five Forces With Porter's Five Forces, there are several issues that have to be considered. These are: The threat of substitute products The intensity of competitive rivalry in the industry among current competitors The threat of new entrants The power of buyers The power of suppliers (Porter, 2002)
Industry's Dominant Features The dominant feature of the discount department store industry is the pricing structure. it's the area in which most discount stores come out ahead when it comes to the competition of the bigger retailers (Rugman & Collinson, 2009)
Most airline buyers are price sensitive, not only in choosing between airlines but also in choosing between airlines and substitutes. There is evidence that price sensitivity of airline passengers, including business passengers, has increased significantly in recent years (Shane, 2004)
5-3.5% (Denstadtli, 2004), airlines often run flights where the profitability margin is only a few passengers, so at uptick in any substitution form could compromise profitability in the industry
Airlines are heavily regulated, both for safety reasons and for strategic reasons. Many national carriers are subsidized or owned by governments and this assistance at times has a direct impact on industry competition, such has been suggested of the Gulf-based carriers such as Emirates, which was financed by Dubai's royal family (Pae, 2008)
Air travel is strongly correlated to the global economy. As a consequence, the industry has faced a significant decline in demand since the outset of the economic downturn (Freeman, 2009)
While some developments are in the form of new airplane technology, for airlines the more important developments are those that reduce back-end costs. For example, the use of online reservation and check-in has been a core strategy for discount airlines to reduce costs (Starmer-Smith & Alleyne, 2009)
, increases in security costs since 2001 have run at an estimated $5.6 billion annually (Grossman, 2007)
The airline industry has been able to dodge the major threats in most of its environments, with the notable exception of the economy, to which the fate of the industry is inextricably tied. Resource-Based View The resource-based view is a means of analyzing a firm in the context of the resources or tools it has at its disposal (Wernerfelt, 1984)
These algorithms both help the airline forecast demand and set prices. The result is that they should deliver to the airline the optimal combination of ticket sales and ticket prices to maximize revenue (Knapp, 2003)