Case study Example | Topics and Well Written Essays - 1000 words - 35

Case Study Example In addition, only two main manufacturers supply all the aircraft used in the industry: Boeing and Airbus (Barney & Hesterly, 2014). This makes the airline industry one of the most favorable for aircraft manufacturers and robs carriers of vital bargaining power. Ultimately, carriers have little or no power over the prices and availability of aircraft, yet this is their core input. The bargaining power of suppliers is too slanted in favor of suppliers. Buyers in the airline industry have several aspects that give them an edge over competitors: variety, intense competition, price wars, government protection, and the entry of online ticketing and distribution services (Barney & Hesterly, 2014). These factors imply that buyers enjoy a moderate to high bargaining power, which is also not healthy for competitors. As such, competitors have been forced to relinquish power to flyers in the long term. This threat is very low because of the amount of capital and the risks involved in venturing into the US airline industry (Vasigh, Fleming, & Humphreys, 2014). Very few investors have the financial capability required to successfully compete in the industry, and those that do are reluctant to confront the demands and risks involved. In addition, successful entrance demands a lot of skill, knowledge and experience; that is why rivals like to â€Å"poach† employees from one another. This threat is very low because unlike in developing countries where travelers prefer water, rail and road travel because they are cheaper, the level of competition in the US has ensured that flying is very affordable (Vasigh, Fleming, & Humphreys, 2014). In addition, the US has a very strong culture of flying, which is similar to the popularity of road transport in developing countries. As such, it is extremely unlikely that any other transport mode can overtake flying. The US airline industry is extremely competitive. It is easy for competitors to be