airline company. The threat of substitutes is also weak as cars, buses or trains cannot get you to a far destination as efficiently as flying. The force of buyers is strong due to the lack of brand loyalty in the industry and the ability for passengers to switch between airlines at no cost. The force of suppliers are strong because of the requirement of fuel, labour and airport facilities are compulsory. Finally, the force of competitive rivalry is very high as there is a great competition to gain the highest market share and become market leaders in addition to competitors constantly trying to lower prices to maximise capacity utilisation. A cost leadership approach, in this case, will help to gain bargaining power over suppliers and create more barriers to enter the industry. The advantages of using Porter’s five forces is that it is a well-known, commonly used model that provides an obvious picture of market forces. It firstly enables an organisation to see the attractiveness of an industry, making it easier to decide whether to enter or leave. It then allows
the assessment of each market force’s strength. From this, EasyJet can determine its competitive position and how it should be enhanced. The model is criticised for its static framework as a competitive environment is subject to dynamic changes. Faulkner and Campbell (2003) state that the industry structure continuously changes due to the competition between firms and new strategies adopted by companies. The five forces tool is a good beginning analysis of an industry’s environment, but that is all it is. It is able to fit into simple market structures but becomes complicated to analyse all five forces in a complex market (Recklies, 2001). Porter’s model does not have the same influence that it used to due to new economic laws and drivers transforming the market, but its validity remains intact and should be applied alongside a wider range of additional frameworks. I recommended that EasyJet’s continues its cost leadership strategy whilst also implementing new and innovative differentiation strategies to offer more customer value and stand out from the competition. A hybrid implementation of a low-cost base and reinvestment into low price and differentiation can carry the company forward to increase its market share. The group work process allowed for efficiency in completing the task. We decided on each completing two questions and meeting up to share our findings at a specific deadline. This gave me a sense of responsibility and accountability to complete my half of the work. When meeting again, teaching one another about what we researched helped develop my communication skills; being able to get my ideas across effectively whilst also being able to listen intently. This immediately allowed us to break down any barriers of tension or awkwardness in the group as we both aligned ourselves towards the end goal. Group activities also require a certain amount of trust in your partner. The mutual trust in our group developed naturally as a result of being honest and open with one another. This made it easier to provide constructive feedback for my
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- Fall '15