Business Jet Makers in China

Running head: BUSINESS JET MAKERS IN CHINA
BUSINESS JET MAKERS IN CHINA
Name of the Student
Name of the University
Author Note

1BUSINESS JET MAKERS IN CHINA
Table of Contents
Introduction........................................................................................................2
Porter’s five forces of Corporate Jet Industry in China......................................2
Discussion of unique resources and capabilities that competitors have to
compete........................................................................................................................3
Formal and informal institutions in China that accelerate or constrain growth of
Corporate Jet Industry..................................................................................................5
Analysis of US as a country in which Corporate Jet companies can expand...6
Conclusion.........................................................................................................8
References.........................................................................................................9

2BUSINESS JET MAKERS IN CHINA
Introduction
Business jets or corporate jets are the jet aircrafts that are designed for the
purpose of transporting small groups from one place to another. Business jets can
also be adopted for many different roles like the evacuation of casualties or the
express delivery of parcels. The earliest business jet that had started its flight was
the Lockhead JetStar that had a seating capacity of ten passengers and two crew
members. Around 204 aircrafts were produced from the 1957 to 1978 that were
powered by the various engines (Andrews, Linn and Yi 2017).
The report will be built on the study of the Corporate Jet Industry that has
been developed in China. The Porter’s five forces framework will be used in order to
analyse the variations that have taken place in the Jet Industry in China. Different
institutions that have an impact on the growth of the industry will also be discussed in
the report. The resources and capabilities that the competitors need to gain will also
be analysed with the help of details related to Corporate Jet Industry.
Porter’s five forces of Corporate Jet Industry in China
The Corporate Jet Industry of China is affected positively by the huge number
of business men who are a part of various industries in the country. The investments
that are provided by various foreign firms are able to provide support to the
improvement of business jet industry. Porter’s five forces framework can be
implemented in order to analyse the Corporate Jet Industry of China in a detailed
manner (Bereznoi 2015).
Bargaining power of the suppliers – The power that has been gained by
the suppliers in airlines is quite high. The suppliers of aircraft, labour and aviation
fuel are able to play a major role in deciding the prices of services that are provided

3BUSINESS JET MAKERS IN CHINA
to the customers. Corporate Jet Industry of China is also affected in a huge way by
the suppliers in country who are able to provide various raw materials.
Bargaining power of the consumers – The power of consumers in the
corporate or private jet industry in China is also quite high. Business travellers use
the jets based on their personal needs and the costs also depend on their budgets
(Bourjade, Huc and Muller-Vibes 2017).
Barriers to entry of new companies – The barriers that are mainly related to
entry of new firms in aviation industry are quite high. The requirement of capital is
considered to be a key aspect that has an impact on operations of various firms. The
entry in aviation industry is influenced negatively by the levels of capital
requirements (Budd and Goetz 2016).
Threats provided by the substitutes – The threats based on substitutes that
are faced by the organizations in business aviation industry are low. The time
requirement related to the usage of flights for private travel is low and this is a major
factor that cannot be substituted by any other mode of travel.
Intensity of the competitive rivalry – The intensity and levels of competitive
rivalry in the industry are not quite high due to the absence of similar services that
are offered by other organizations in Corporate Jet Industry of China (Eriksson and
Steenhuis 2015).
Discussion of unique resources and capabilities that competitors have to
compete
Unique capabilities that competitors have to face - The resources and
capabilities that are required by organizations in order to compete in the jet industry