Porter's Five forces
Porter's five pushes tool can assist in analysing the competitive nature in the airline industry in order to assess the position of Flyafrica. This will enable FlyAfrica to make tactical decisions to be able to increase geographical presence and profitability. Entrance Barriers (Threat of new entrance)
Threat of recent Entrants
This aspect includes a low danger for the Zimbabwean flight industry because there are extremely low switching costs. Additionally , you will discover no exclusive products or services included.
The industry requires a large amount of capital and without a solid customer base it will have little to no earnings in the early years. Existing firms may use their high capital to retaliate against newer organizations with whatsoever means required such as reducing prices and taking a reduction.
As a result of low moving over costs between brands, buyers tend to only chose recognized brands. The protection aspect included make many consumers experience safer with firms which have been around for a long period of time. This industry requires plane and flying experience which likewise lowers the threat of entry. Flight companies are constantly being governed by a number of organisations such as the Civil Aviators Authority of Zimbabwe, Faa and the Section of Travel. Suppliers (Bargaining power of suppliers)
Determinants of Supplier Power
There are simply two suppliers of aeroplanes mainly Boeing and Airbus (Odell, Mark); therefore it means that the suppliers have excessive bargaining power such that the negotiating electric power is little. Airline cannot easily switch suppliers, therefore most firms have long term contracts using their suppliers. This therefore signifies that whenever we desire to purchase an extra plane, it would cost all of us and we include little space to make a deal the price down.
Additionally , it is difficult to enter into the plane manufacturing sector because of the capital needed to get into. The...