Answer To: MGT302A/BIZ303_Assessment 2 Brief_ Case Study Report Page 1 of 6 ASSESSMENT BRIEF Subject Code and...
Parul answered on Apr 18 2022
Jetstar airline
Jetstar airline
Assignment
Executive Summary
By the virtue of this assignment, I have performed extensive analysis on Jetstar Airlines, which is leading the Australian market for low-cost airline services. Jetstar Airways Private Limited popularly known as Jetstar for its economical offerings in Australian Airline organisation. Completely owned subsidiary Qantas, it was founded in 2003 and headquartered in Melbourne (Australia | Jetstar. Jetstar.com., 2017). Jetstar is fundamentally part of Qantas group and branded as minimum frills as well as low-cost domestic airline (Allen, R., & Helms, M., 2006).
Background about the Company - Jetstar
Jetstar is one of the pioneer airline companies that offers opportunity to the customers to select their booking of seats. Essentially, it is part of business strategy of providing Qantas Airways for premium full-services market on one hand while utilising Jetstar for low-cost market. Overall, Jetstar airways amounts to more than 9% of passengers’ flight that are travelling in and out of Australia. Jetstar operates exclusively on domestic networks along with offering regional as well as international services from its fundamental base at Melbourne Airport (Australia | Jetstar. Jetstar.com., 2017). It leverages a blend of fleet with the Boeing 787 Dreamliner as well as Airbus A320. Mr. Gareth Evans is the current CEO of Jetstar Airlines and targets middle class as well as upper middle class customer segments whom looking for economical options for the commutation. Mission of Jetstar Airline is to provide economical and low fare services to its customers such that they can cover more places with minimum expenses. It can carry more than 250 million passengers (Australia | Jetstar. Jetstar.com., 2017).
Application of Porter's Five Forces Model
Five-force model given by Michael Porter is one of the most well-known frameworks to comprehend the external environment in which the organisation is operating (Ghemawat, P., Cassiman, B., Collis, D., & Rivkin, J., 2016). Essentially, it deals with analysing the impact of different external forces like rivalry, threat of substitution, threat of new entrant, power of buyer and supplier with reference to Jetstar at centre (Porter, M., 1980).
Source - Competitive strategy by Porter, M. (1980).
Threat of New Entrant
The first force that we need to focus on Porter Five Force Model is threat of new entrants. For any new companies to enter in Airline industry they require high fixed capital for operations and establishing strong brand in the market. This makes it difficult for any company to jump into the market. Furthermore, for any company to functional in a specific geography they require to comply with government regulations and policies. Therefore, this force of new entrant is moderate with reference to all the existing players in the market.
Bargaining Power of Supplier
The second force in Porter's Five Force framework comprehends the bargaining power of suppliers. There is considerable dependencies on the suppliers since they have potential to affect the productivity of the company. Products utilised by Airline industry are very niche and here are handful number of suppliers in the market. Therefore, there is high bargaining power of supplier. There are handful of good manufactures like Airbus and Boeing. The inputs in the industry are extremely standardized and the only difference is with amenities. Hence, airline organisations can’t rapidly switch the suppliers. Normally the firms have long-term contract with the suppliers. Therefore, this force is pretty standard and less threat for the airline industry (Porter, M., 1980).
Threat from Substitutes available in the Market
Third force that needs to be taken in consideration is the threat from the substitutes that are available in the market. Especially in airline trains, car and bus can substitute industry that offers the platform to commute from place to another. Yet, even if people substitute there need to travel with the possibility of different vehicles it might offer them convenience of time. Hence, threat of substitutes is moderate. Overall threat of substitutes is relatively low in the Airline industry....