Documente Academic
Documente Profesional
Documente Cultură
Comair’s strategic marketing problem is the price fixing and world cup pricing
allegation that has affected the brands reputation and market share. Since Kulula is
the leading low cost carrier the effect that the allegations will have on its occupancy
rates is lowering them as the brand perception is tarnished. The customer loyalty will
be reduced as customers will feel like they are being ripped off.
Industry analysis
Porter(2008) has indentified five forces that are commonly used to assess the
structure of any industry and these forces are bargaining power of suppliers,
bargaining power of buyers, threat of new entrants, threat of substitutes and rivalry
among competitors. .
The bargaining power of buyers is all about how much negotiation power do the
buyers have, and it desribes the effect that consumers have on the productivity of
a business (Kurtz, MacKenzie, & Snow, 2009) . The airline industry is price
receptive, many customers search for cheaper transactions, leading to strong price
competition between industry . This price sensitivity provides to increase buyer
power, on the other hand the large number of customers act to reduce buyer power,
since airlines do not feel the impact of losing an individual customer (Datamonitor,
2009). Overall, buyer power is assessed as moderate.
Threat of substitutes
Rivalry among competitors is all about the intensity of competition. Rivalry between
airlines is strong, as customer loyalty in this industry is low (Datamonitor, 2009).
Competitor analysis
Financial analysis
Ratios
Liquidity measurement
ratios
Current ratio 0.87137
Quick ratio 0.860493
Cash ratio 0.410013
Profitability Indicator
Ratios
Liquidity measurement ratio attempts to measure a company's ability to pay off its
short-term debt obligations. The ratios must be higher than one to show that the
company is able to pay of its short term obligations. With Comair’s liquidity
measurement ratios from the above table are all below one and therefore conclude
that it’s not capable to pay of its short term debt obligations. Profit margin analysis
indicates what portion of sales contribute to the income of a company and 2.4%
means that for each dollar of sales that Comair generates it is contributing 2.4 cents
to its net income. Operating cash flow/sales ratio gives investors an idea of the
company's ability to turn sales into cash; Comair has approximately 12 cents of
operating cash flow in every sales dollar. The dividend payout ratio provides an idea
of the percentage of earnings paid to shareholders in dividends and Comair’s has
49.4% of earnings paid to shareholders in dividends. Lastly the sales/revenue per
employee for Comair is R1 710 877 in the year of 2009.
Comair has a difficult in obtaining tenders because there are no clear indications of
economic recovery in the local market for air travel
Competition is going to be intense in the low cost carriers as there are imitations of
Kulula’s services.
The recession has led to consumers to reprioritise and to focus on living more
financially sustainable lives therefore opting for cheaper airlines .
Bibliography
Bennett, R. (2003). Competitor analysis practices of British charities. Marketing
Intelligence & Planning , 21 (6), 335-345.
Euromonitor. (2009). South African Airways (PTY) Ltd -Travel and Tourism - South
Africa. Euromonitor International .
Lamb, C. W., Hair, J. F., & McDaniel, C. (2008). Essentials for Marketing (6 ed.).
Mason: Cengage Learning.