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8/3/2019 Ppt on Airlines Industry by Anup Kumar Ojha
1/12
Presented By
Anup Kumar Ojha
MBA IV
1/10/2012UMA KOLKATA 1
ANUP KUMAR OJHA
MBA IV
USHA MARTIN ACADEMY
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INTRODUCTION
Air Traffic: The Airport Authority of India (AAI)manages total 122 Airports in the country,
which include 11 International Airports, 94domestic airports and 28 civil enclaves.
Top 5 airports in the country handle 70% of thepassenger traffic of which Delhi and Mumbai
together alone account for 50%. Passenger and cargo traffic has growth at an
average of about 9% over the last 10 years.
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HISTORY
The first commercial flight in India was
made on February 18, 1911, when a French
pilot Monseigneur Piguet flew airmailsfrom Allahabad to Naini, covering a
distance of about 10 km in as many
minutes.
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Porter's five forces analysis is a framework for
industry analysis and business strategy development
formed by Michael E. Porter of Harvard BusinessSchool in 1979
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Five Forces
Threat of new competition:
Profitable markets that yield high returns will attract new firms. This results inmany new entrants, which eventually will decrease profitability for all firms inthe industry. Unless the entry of new firms can be blocked by incumbents, theabnormal profit rate will tend towards zero (perfect competition).
The existence ofbarriers to entry (patents
, rights
, etc.) The most attractivesegment is one in which entry barriers are high and exit barriers are low. Fewnew firms can enter and non-performing firms can exit easily.
Economies of product differences
Brand equity
Switching costs or sunk costs
Capital requirements
Access to distribution
Customer loyalty to established brands
Absolute cost
Industry profitability; the more profitable the industry the more attractive it willbe to new competitors
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Threat of substitute products
or services The existence of products outside of the realm of the
common product boundaries increases the propensity ofcustomers to switch to alternatives:
Buyer propensity to substitute
Relative price performance of substitute
Buyer switching costs
Perceived level ofproduct differentiation
Number of substitute products available in the market
Ease of substitution. Information-based products are moreprone to substitution, as online product can easily replacematerial product.
Substandard product
Quality depreciation
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Bargaining power of customers
(buyers) The bargaining power of customers is also described as the
market of outputs: the ability of customers to put the firm underpressure, which also affects the customer's sensitivity to pricechanges.
Buyer concentration to firm concentration ratio
Degree of dependency upon existing channels of distribution
Bargaining leverage, particularly in industries with high fixedcosts
Buyer volume
Buyer switching costs relative to firm switching costs Buyer information availability
Availability of existing substitute products
Buyer price sensitivity
Differential advantage (uniqueness) of industry products
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Bargaining power of suppliers
The bargaining power of suppliers is also described as themarket of inputs. Suppliers of raw materials, components,labor, and services (such as expertise) to the firm can be asource of power over the firm, when there are fewsubstitutes. Suppliers may refuse to work with the firm, or,
e.g., charge excessively high prices for unique resources
Supplier switching costs relative to firm switching costs
Degree of differentiation of inputs
Impact of inputs on cost or differentiation
Presence of substitute inputs
Strength of distribution channel
Supplier competition - ability to forward vertically integrateand cut out the BUYER
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Intensity of competitive
rivalry For most industries, the intensity of
competitive rivalry is the major determinant
of the competitiveness of the industry. Sustainable competitive
advantage through innovation.
Competition between online and offlinecompanies
Level of advertising expense
Powerful competitive stretegy
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?
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THANK [email protected]
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