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37 airlines fly from and to Dubai. Rate of industry growth: - Middle East showed the strongest growth at 11 percent in the last decade. Bargaining power of customers - between tickets of budget and luxury flights for same destination.
37 airlines fly from and to Dubai. Rate of industry growth: - Middle East showed the strongest growth at 11 percent in the last decade. Bargaining power of customers - between tickets of budget and luxury flights for same destination.
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37 airlines fly from and to Dubai. Rate of industry growth: - Middle East showed the strongest growth at 11 percent in the last decade. Bargaining power of customers - between tickets of budget and luxury flights for same destination.
Drepturi de autor:
Attribution Non-Commercial (BY-NC)
Formate disponibile
Descărcați ca DOCX, PDF, TXT sau citiți online pe Scribd
• the existence of barriers to entry (patents, rights, etc.):- national carrier(hence enjoying many benefits) • brand equity:- renowned player, markets heavily, old in industry, very high brand value • switching costs or sunk costs:- not very high to switch to suppliers as very high supplier base( except aircraft providers) • Capital requirements: - part of emirates group, so capital is not an issue. • Access to distribution: - very accessible, has its own terminal & direct metro & busses. • Customer loyalty to established brands: has a program like skywards & frequent flyer miles. • absolute cost advantages: in terms of fuel & flight caterings • Government policies: - very flexible due to national carriers & monarchy. The intensity of competitive rivalry
1. The intensity of competitive rivalry
• Number of competitors:- 37 airlines fly from & to Dubai • Rate of industry growth: - Middle East showed the strongest growth at 11 percent in the last decade. • exit barriers :- fuel & capital costs • diversity of competitors: international flyers, domestic flyers & global flyers • fixed cost allocation per value added:- additional cost for services like meal choices for 1’s class flyers • level of advertising expense:- really high (up to 10% of total revenues for airlines like jazeera) • Sustainable competitive advantage through improvisation:- new services like onboard Spas, fully reclining seats, live TV. 1. The bargaining power of customers • Bargaining leverage: - between tickets of budget & luxury flights for same destination. • Buyer volume: - no of people flying to a destination, (more passengers to India then Nepal). • Buyer switching costs relative to firm switching costs: easier to switch between airlines as people might find competitive schemes & offers or cheaper tickets or better services with other service providers. • Ability to backward integrate: - emirates has its own emirates flight kitchen, catering food to its flights. • Availability of existing substitute products: - no. of flights to a particular destination, e.g. only emirates operates direct flights to San Francisco from Dubai, hence has competitive edge. As no other carrier has a direct flight on this route. • Buyer price sensitivity: - difficult to compete with competitive prices of budget carriers, but emirates compensates it by offering world class food, services, comfort & in-flight entertainment. • Differential advantage (uniqueness) of industry products: - A380 aircrafts, world class service, choices of menu for elite class, its own private terminal, non-stop direct flights to various routes some of them world’s longest non-stop direct flights.
1. The bargaining power of suppliers
• Supplier switching costs relative to firm switching costs: - very high (only 2 suppliers) • Presence of substitute inputs: - a lot of substitutes are present for suppliers as there are over a hundred airlines currently operating & most of them are planning for expansions. • Supplier concentration to firm concentration ratio: - very high (two suppliers) many airlines. • Employee solidarity (e.g. labor unions):- UAE does not allow any employee unions so there are no such concerns.
1. The threat of substitute products
• Buyer propensity to substitute: - very high as there are two types of players in market, budget & luxury. This leads to a huge price difference. So a lot of people prefer going for cheaper tickets for short distance flights. Hence emirates looses business. • Relative price performance of substitutes:- Huge price differences due to services offered, but in luxury segments Emirates leads the market. • perceived level of product differentiation:- in case of emirates the perceived value is fairly good due to new aircrafts, courteous crew which provides personalized services, gourmet food with at least 4 meal choices for business class & above, its own world class new private terminal to fly from, fleet of new latest technology aircrafts.