Buyer power is moderately high; the product / service offered by the different airlines is relatively
undifferentiated and switching costs are low.
Alternate travel (car or train): can be a significant threat, especially for regional airlines.
Information technology alternative (e.g. videoconferencing): more threat for long distance, slows down
Rivalry is high; there are many similarly situated airlines that tend to compete aggressively on price.
Fixed costs are high and industry growth is relatively low
While there are some significant entry costs, these can be overcome (e.g., via leasing rather than
Overall, this industry is not particularly attractive
10-5 Smartphone Market
The smartphone market has been dominated by Apple, but recently the Droid has been able to leverage
s information services into market gains while Blackberry, known for its secure business-oriented
network, has attempted to become more attractive with a
interface. At the same time, a
number of less capable fringe firms are emerging. How do these features fit into an industrial organization
(IO) view of the market versus a resource-based view (RBV)?
10-6 Salons and Teeth Whitening
Salon owners have recently started offering teeth whitening services to clients in addition to their more
standard services. In a number of states, regulators have ordered the salon owners to stop, claiming that
this service constitutes the practice of illegal dentistry. What group would you expect to be behind the
s efforts to ban salons from providing teeth whitening services? Why?