Strategic Impact of Porters Five Forces

Question: Discuss about the Strategic Impact of Porters Five Forces. Answer: Introduction: Porters five forces is a management tool, which can be utilized in order to analyze business environment. There are five dimensions of this management tools such as threat of new entrance, competitive rivalry, bargaining power of customers, bargaining power of suppliers and threat of substitute (Rothaermel 2015). In case of airline industry, the business investment for the new entrance is very high. However, Emirates Airline can minimize the threat of new entrants by emphasizing on the economies of scale, which will help the company to minimize the cost level. Moreover, market leaders are already capitalizing their brand image. Therefore, it can be said that the threat of new entrance of this industry is very low (Rothaermel 2015). Moreover, the companies are providing value added services like, restaurant facility within the airport area and the transportation facility from the airport to the nearest railway station or bus stop. Therefore, it can be said that competitive rivalry for Emirates Airline is high. As the market competition is high, it is easy for the consumers to switch brands. However, Emirates Airlines provide direct flight to San Francisco, which reduce the bargaining power of the customers remarkably (Redpath, O'Connell and Warnock-Smith 2016). Overall, consumers bargaining power is high in this industry. The suppliers can stop to supply the materials and switch to other companies if they find any discomfort in business deal with a particular company. There are many airline companies dealing with same suppliers. Therefore, the bargaining power of the suppliers is high as well. In this industry, both luxury and budget services are present (Klophaus 2016). The consumers can choose the service as p er their convenience. Therefore, it can be said that the threat of substitute products is high in this industry. The overall analysis of Emirates Airline shows that the market is highly competitive and therefore, it is highly important to provide value added services to the consumers. Reference list Klophaus, R., 2016. Fifth freedom airline network expansion: the case of Emirates flying between Germany and the USA.International Journal of Aviation Management,3(2-3), pp.125-135 Redpath, N., O'Connell, J.F. and Warnock-Smith, D., 2016. The strategic impact of airline group diversification: The cases of Emirates and Lufthansa.Journal of Air Transport Management. Rothaermel, F.T., 2015.Strategic management. McGraw-Hill.