Porter's Five Forces Analysis of the Commercial Airline Industry
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Questions and Answers

What is the main reason why air transportation is preferred for international or transcontinental travel?

  • Convenience, speed, and accessibility (correct)
  • Lower cost compared to other transportation modes
  • Reduced impact on the environment
  • Availability of frequent flyer programs
  • Why do new entrants in the airline industry face challenges?

  • A lack of competition among existing airlines
  • High barriers to entry including capital requirements and strict regulations (correct)
  • Unlimited access to available routes
  • Guaranteed brand loyalty from customers
  • What strategy do airlines primarily focus on to attract and retain customers?

  • Lowering ticket prices without considering service quality
  • Avoiding frequent flyer programs
  • Relying solely on route networks
  • Customer service, amenities, and differentiation strategies (correct)
  • Why is capacity management crucial for airlines?

    <p>To balance supply with demand for profitability</p> Signup and view all the answers

    Which factor contributes to the intense competition in the airline industry?

    <p>Competitive pricing strategies</p> Signup and view all the answers

    What makes it challenging for new entrants to attract customers in the airline industry?

    <p>Established airlines' brand loyalty and network effects</p> Signup and view all the answers

    What factor contributes to the high buyer power in the commercial airline industry?

    <p>Numerous airline options for passengers</p> Signup and view all the answers

    Why does the duopoly of Airbus and Boeing contribute to high supplier power in the airline industry?

    <p>These suppliers possess specialized knowledge and technology</p> Signup and view all the answers

    How do alternatives like high-speed rail and carpooling impact the threat of substitute products/services in the commercial airline industry?

    <p>Their substitution threat is limited for long-distance travel</p> Signup and view all the answers

    Why do high switching costs contribute to high supplier power in the commercial airline industry?

    <p>They make it difficult for airlines to switch to other suppliers</p> Signup and view all the answers

    What role do online travel platforms play in increasing buyer power in the commercial airline industry?

    <p>Providing passengers with easy access to compare prices and offers</p> Signup and view all the answers

    How does the commoditized nature of air travel impact buyer power in the commercial airline industry?

    <p>It increases buyer power as airlines offer a relatively homogeneous service</p> Signup and view all the answers

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