Essay on Airline Industry

Words: 1139
Pages: 5

Strategy, Balanced Scorecard and Strategic Profitability Analysis (Custom Pub. Chap15)

Based on the organisation that you have selected, you are required to describe the organisation’s mission, describe and classify the organisation’s strategy, and identify its‟ value proposition and core competencies. Using Porters Five Forces Framework illustrate these five forces for your organisation, and provide brief comments on how these forces they influence your organisation’s profit potential. Using the Balanced Scorecard as a contemporary performance measurement framework, evaluate the current financial and non-financial measures that your organisation uses. Based on your evaluation, indicate in your opinion, the extent to which the
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Bargaining power of suppliers

Low to High
Bargaining power of suppliers varies from supplier to supplier in an Airline Industry. The bargaining power of suppliers depends on supplier concentration, substitute supplies, switching costs, threat of forward integration and buyer information (, March 25, 2011). Suppliers vary from concentrated suppliers like Boeing and Airbus, to broad range of food provider on board and plane fuel provider. Boeing and Airbus hold high bargaining power in an airline industry being the main suppliers of planes itself (, March 25 2011). These supplier’s dominance in this industry undermines Jetstar’s and all other airlines to exercise control over suppliers and earn higher profits. As a result, these plane suppliers have upper hand in negotiating the aircraft prices.
However, other suppliers who work with the airlines such as providers of on board snacks do not have the same bargaining power as they are a large industry which allows Jetstar to have a choice over who they are purchasing from. Evidently, Jetstar will purchase their on board snacks from the supplier which is the most economic so that jetstar can make higher profits as their costs decrease. This indicates Low bargaining power of suppliers.