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Strategy and Case Analysis Assignment - DOC

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Added on  2020-05-16

Strategy and Case Analysis Assignment - DOC

   Added on 2020-05-16

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Running Head: Strategy and Case AnalysisUS AIRLINE STUDYStrategy and CaseAnalysisUS Airline Industry Analysis
Strategy and Case Analysis Assignment - DOC_1
Strategy and Case AnalysisP a g e | 1Table of ContentIntroduction.....................................................................................................................................2Overview of US Airline Industry........................................................................................................3Five Force Analysis of the US Airline Industry...................................................................................4Competitive Rivalry............................................................................................................................5Bargaining Power of Buyers...............................................................................................................5Bargaining Power of Suppliers...........................................................................................................5Threat of New Entrants.....................................................................................................................6Threat of Substitute Product.............................................................................................................6Porter Five Forces Model-Advantages and Disadvantages................................................................6Economic Performance of US Airline Industry..................................................................................8Strategies for Airline Profitability.....................................................................................................9Upselling services to the customers..................................................................................................9Going beyond the concept of Transporting Passengers....................................................................9Enhancing the Travel Experience.......................................................................................................9Discussion.........................................................................................................................................9Conclusion......................................................................................................................................10References......................................................................................................................................11
Strategy and Case Analysis Assignment - DOC_2
Strategy and Case AnalysisP a g e | 2IntroductionUS Airline industry has been struggling in the past to earn sizable revenue and book profits for itself. Over the year rise in the number of low cost airlines such as South west Airlines, Jet Blue, Air Tran Airways and Virgin America are causing big trouble to the industry heavyweights such as United, Delta & American Airlines (Goetz & Sutton, 2017). The new entrants are focussing on how to bring the prices down for the Passengers and in a bid to do so , a price war has already began in the US Airline industry, with every player reducing its fares to take a pie from the market. The new entrants are using non- union labour, flying only one kind of Aircraft and have been focussing on the most lucrative routes, which brings down its flying cost to minimum, thus passing on the benefit to the customers (Ciliberto, Cook & Williams, 2017). To add on the misery of large Aircraft flyers is the Internet, travel sites such as Expedia, Travelocity and Orbitz are making it easier for consumers to compare the price of all the Airlines and choose the most economic deal (Choi, Lee & Olson, 2015).
Strategy and Case Analysis Assignment - DOC_3
Strategy and Case AnalysisP a g e | 3The underlying purpose of the assignment here is to do a competitive analysis of the US Airline industry and find out the reasons for its low profitability, and the advantages and disadvantages of using the Porter 5 forces framework. It has been also observed in the case that the business of US Airlines is cyclical in nature; the reason for the same will be understood in the report. Towards the end, certain strategies have to be recommended to improve the chances of the airline to ensure profitability sustainability.Overview of US Airline IndustryThe US Airline industry is dominated by a number of players operating in the high price and economic zones. United Airline, Delta airline and American airline form the big boys club, whereas Southwest, Virgin, Jet Blue and Air Tran form the economic club. The situation presently in the US Airline industry is the sluggish growth rate and the rampant price war which is seriously damaging the profitability of the Airline industry (Tan, 2016).It has been pointed that the fuel prices are on surge and so are the labour cost, both of them together account for almost 58% of the cost, hence, the increase in the cost is significantly impactingthe profit sustainability of the industry. The era of 2000-2010 saw a number of mergers, viz,merger of Delta and Northwest airlines, merger of United and Continental airline and plan of South west airline to acquire AirTran, moreover a number of Airline have applied for Bankruptcy which can be seen as a fear gripping the US Airline industry(Rupp & Tan, 2017)The present scenario also has a silver lining attached to it, there has been considerable improvementin customer service, loosing fewer passengers and losing less baggage. The US Airline is on a mission to rejuvenate the sector and turn the tables and post solid profits in the coming financial year. Almost all the Airlines are on an improvement spree and special attention has to be put on time
Strategy and Case Analysis Assignment - DOC_4

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