Assignment on Porter’s Five Forces Analysis of Qantas Airways
Based in Australia, Qantas Airways is the flagship airline organization and provides air traveling services to its consumers. In both international as well as domestic markets, operations have been maintained by the organization and within the airline industry of Australia; a significant market share has been occupied by the company. Currently, sixty-five percent of the market shares are captured by the company which makes it the market leader. Also, with different airlines across global boundaries, strategic alliances have been maintained by the company. However, in the recent past, the low-performance level of the company has been shown due to the competitive situation across the industry. Both the performance of Qantas Airways and the airline industry are being affected by the five forces defined by Porter.
Concerning to threat of new entry, in setting up an airline organization, a huge amount of investment is required especially with respect to its infrastructure and it is also difficult to run an airline organization by new players, therefore, there is a low threat of new entrants in the industry. Concerning to rivalry among existing firms, since currently there is a direct competition between the Virgin and Qantas Airline within the domestic market, therefore, rivalry among existing organizations is critical in terms of the airline industry of Australia. Also, huge losses with respect to operations are being suffered by these two airline organizations due to severe competition between them.
Concerning to threat of substitutes, since one of the fastest methods of using traveling services is air traveling mode, therefore, there is a low threat of substitute in the airline industry. Concerning to bargaining power of suppliers, as similar types of services are being offered by huge numbers of suppliers in the airline industry, therefore, the supplier’s bargaining power is low. Due to the other huge airline organization within the industry, for example, Virgin Airlines, there is the low bargaining power of suppliers with respect to Qantas Airways. Concerning to bargaining power of buyers, since a huge number of choices are present for customers to choose from low-cost air traveling services, premium class air traveling services, and others more, therefore, within the airline industry, there is higher bargaining power of buyers. These similar services are provided by different other service providers in the market and this leads to increasing purchasing power of the buyer.