Five Forces of Competition Essay Example for Free

Five Forces of Competition Essay Air travel has changed the way people live and experience the world today. The airline industry is a strategic sector that plays a fundamental role in the globalization of other industries since it promotes tourism, world trade, foreign investment and, therefore, leads to economic growth. However, all airlines within the industry operate in a highly dynamic environment where various legal, social, technological and economic forces interact with each other, thus influencing their decisions and actions In the industry where airlines can face severe financial distress due to oil crisis, recessions and terrorist attacks, In order to survive, as well as succeed, the business needs to assess its competitive environment and identify key factors that may influence its actions (Porter, 1998, p. 5). The airline industry is very competitive and Michael Porter’s five-forces model can be used to analyse the intensity of the competition and the profitability of this industry. Porter’s five forces model is a business unit strategy tool which is used to make an analysis of the value of an industry structure (Hubbard, 2004, pg 35). The analysis is made by the identification of 5 fundamental competitive forces. These include: Threat of new entrants is high  One of the forces identified by this model is the threat of new entrants which refers to the possibility of new competitors entering the industry and undermining the profits of the established businesses. In the world today, the airline industry is so saturated that there is hardly space for a newcomer to enter the market. The biggest for this is the cost of entry. The airline industry is one of the most expensive industries, due to the cost of buying and leasing aircrafts, safety and security measures, customer service and manpower. Other barriers to entry which will recess new comers into the airline industry include Government restrictions and high capital costs to develop new airlines. However, the entry barriers for new airlines is lower today since the Australian domestic airline market was deregulated in 1990. This has produced far greater competition than before deregulation in most markets. The deregulation has allowed Jetstar and Tiger Airways enter the market and reduce the market share for Virgin Blue and with the added competition, together with pricing freedom, means that there is a major onstraint on profitability for the airline industry. Moreover if borrowing is cheap the likelihood of more airlines entering the industry is higher. Bargaining power of Buyers is high The bargaining power of buyers is another force that can affect the competitive position of a company (Porter, 1998, p. 48). This refers to the amount of pressure customers can place on a business, thus, affecting its prices, volume and profit potential (Porter, 1998, p. 45). The various airlines flying from the Gold Coast airport are competing for the same customer, which also results in strengthening the buyer power. Individuals wishing to travel to and from the Coolangatta airport are presented with various choices when selecting an airline but price is usually the most important factor, especially for students and families. Hence, the bargaining power of customers in the airline industry is very high since they are price sensitive and search for the best deals available. Virgin Blue attracts travellers that are price sensitive by offering them low fares and those that are convenience oriented by providing them with frequent flights. Qantas on the other hand has created a frequent flyer program to create switching costs which may be a significant factor to a traveller when choosing which airline to fly with. Bargaining Power of Suppliers is high Suppliers can also exercise considerable pressure on a company by increasing prices or lowering the quality of products offered which are mainly dominated by Boeing and Airbus. The bargaining power of suppliers depends on supplier concentration, substitute supplies, switching costs, threat of forward integration and buyer information. However, other suppliers who work with the airline such as the providers of on board snacks do not have the same bargaining power as they are a larger industry which allows for Virgin Blue to have a choice over who they are purchasing from. Virgin Blue will purchase their on board snacks from the supplier which is the most economic so Virgin Blue can make a higher profit margin from the goods when they are sold. Threat of Substitutes is low for international carriers/ little higher for short distance The availability and threat of substitutes is another factor that can affect competition within the airline industry. It refers to the likelihood that customers may switch to another product or service that performs similar functions (Stahl, M, Grigsby D 1997, pg 145). Substitutes for air travel include travelling by train, bus or car to the desired destination. The degree of this threat depends on various factors such as money, convenience, time and personal preference of travellers. The competition from substitutes is affected by the ease of with which buyers can change over to a substitute. A key consideration is usually the buyers switching costs, however due to their low fare non-stop flights, Virgin Blue, Jetstar and Tiger airways can lure both price sensitive and convenience oriented travellers away from these substitutes. Competitive Rivalry is high  Industries that are very competitive generally earn low profits and returns since the cost of competition is high. The airline industry is usually characterized by the cut-throat competition that exists among the rival airlines due to its low cost nature. Since the carriers are involved in a constant struggle to take away the market share from each other, industry growth is average and as it is easy for buyers to switch between the airline companies, depending on price, the rivalry is increased. Rivalry is also high in the airline industry due to high fixed costs, as much of the cost of a flight is fixed, there is a great opportunity for airlines to sell unsold seats cheaply, which resolve in pricing wars between the airlines (Hubbard, 2004, pg 38). The airlines are continually competing against each other in terms of prices, technology, in-flight entertainment, customer services and many more areas. The net result of this competition between companies is an overall slow market growth rate. In conclusion we can understand that the airline industry is very competitive and Michael Porters five-forces model can be used to explain why the potential for returns is so low in this industry. Firstly, the threat of new companies entering the industry is high and the entry barriers are low. Secondly, the bargaining power of customers is high since they are price sensitive and search for the best deals. The third force, bargaining position of suppliers, is strong since they are concentrated and this limits the control airlines have over suppliers to reduce prices and earn higher profits. The availability and threat of substitutes is another factor that can affect a company’s competitive position. However, the degree of this threat depends on various factors such as time, money, convenience and personal preferences of travellers. The final force in Porters model is competitive rivalry between the companies within an industry. Cut-throat competition exists among the airlines and since there is a constant struggle for market share, the over all profit potential of this industry is low.

Chernobyl :: Ukraine Disaster History Essays

Chernobyl 1986 was a year of several meaningful worldwide events, some of which included the Voyager 2 got details and pictures of Uranus, the space shuttle Challenger exploded on takeoff, and Haley’s comet soared past Earth (infoplease.com). Perhaps the event that alarmed the world the most, however, was the major nuclear accident that occurred at the nuclear power plant Chernobyl. The nuclear disaster that occurred at Chernobyl in 1986 (Lecture 4/1/02), has forever changed the way that nuclear power plants are viewed by the world. Chernobyl is now an abandoned city in north Ukraine because at 1:23 am on April 26th (Chernobyl.com), during an â€Å"unauthorized test of one of the plant's four reactors, engineers initiated an uncontrolled chain reaction in the core of the reactor after disabling emergency backup systems† (infoplease.com). The type of reactor used at Chernobyl was a graphite-water reactor (Lecture 3/25/02). This means that the moderator of the reactor is graphite, and the coolant is water (Lecture 3/25/02). According to Chernobyl.com, technicians allowed the power level in the fourth reactor to fall to an extremely low level, causing a core meltdown. An explosion ripped the top off the containment building, expelling radioactive material into the atmosphere for over ten days (Chernobyl.com). More was then released in a fire that followed, due to a second explosion that allowed air to rush into the reactor (world-nuclear.org). It was only after Swedish instruments detected a problem from the explosion that Soviet authorities admitted that an accident had occurred (infoplease.com). The reactor core was sealed off by air-dropping a cement mixture which included 5,000 tons of boron, dolomite, sand, clay and lead, but not before eight tons of radioactive material had escaped into the atmosphere (infoplease.com). It is estimated that all of the xenon gas, about half of the iodine and caesium, and at least 5% of the remaining radioactive material in the Chernobyl reactor core was released in the accident (world-nuclear.org). Over twenty firefighters died instantly from overexposure to radioactivity, while hundreds suffered from severe radiation sickness (infoplease.

Effect of culture in business Essay

1. A growing number of Americans work for foreign-owned firms in the United States. Do you think that these American employees are being influenced by the foreign owner’s approach to management and the culture of the country of the owner? Because of globalization, businesses are open to do business in new markets and improving profits. Also because of globalization, companies are faced with different cultures, religion and norms. For a company to do business in another country, a manager needs to understand the differences associated with the host country. â€Å"Globalization is defined as this interdependency of transportation, distribution, communication, and economic networks across international borders† (Gibson, Ivancevich, Donnelly, & Konopaske, 2012, p 57). Each firm has their own organizational culture. According to Hellriegel, Slocum and Woodman (2001), organizational culture represents a complex pattern of beliefs, expectations, values and behaviors shared by organizational members. The knowledge of the culture in which an employee is working is crucial. â€Å"In a dynamic and fast changing environment the inter and intra organizational behavior changes the productivity and growth trends† (Chat urvedi, 2002). Because of the organizational culture most foreign-owned firms will tend to impose that culture on their employees. Just like U.S. companies settling abroad, foreign-owned companies will face some difficulties operating in a country with different culture. Based on Hofstede’s research, which studies how values in the workplace are influenced by culture, four dimensions have been â€Å"identified as explaining: Uncertainty avoidance: â€Å"degree to which people are comfortable with ambiguous situations and with the inability to predict future events with accuracy† (Gibson et al., 2012, p 69). Masculinity-Femininity: A culture that has a high masculinity orientation tends to emphasize on dominance, assertiveness, and interdependence. A culture with tendency of femininity orientation will emphasize more on interdependence, compassion, and emotional openness. Individualism-Collectivism: â€Å"Tendency of a culture’s norms and values to emphasize on satisfying individual needs or group needs† (Gibson et al., 2012, p 69). Power distance: â€Å"Degree to which members of a society accept differences in power and status among themselves† (Gibson et al., 2012, p 69) Because each culture fits differently in the four dimensions, a foreign-owned firm will keep its own culture as it will be easier to deal with than having different organizational cultures in each country it operates. Americans who work for those companies are indeed influenced by their approach of management. 2. Assume that you want to develop your global skills so that you can pursue international assignments with your company. Identify five skills that you would want to develop and describe how you would go about improving these skills. â€Å"Globalization is defined as this interdependency of transportation, distribution, communication, and economic networks across international borders† (Gibson, Ivancevich, Donnelly, & Konopaske, 2012, p 57). Managers are more and more in contact with different cultures. According to HRMagazine (2012), business skills, clture and customs skills, geographic, political and economic skills need to be developed. Based on Gibson, Ivancevich, Donnelly, & Konopaske (2012), the five main skills are: Global strategic skills: knowing how the economy (i.e. global financial markets), politics (i.e. foreign affairs, international law) are good ways for managers to know how to conduct business in another country. Team-building skills: Companies require more and more that their employees know how to work as part of a team. Team-building is a way to have more done more efficiently. A manager should know how to delegate work and know what each team members can or cannot do. Organization skills: It is important to know how employees react to certain management approach. McGregor’s motivational theory X and Y provides management approaches that can apply to motivate employees. Communication skills: Communication is essential when working abroad. It is imperative that a manager or employee be able to communicate with peers and superiors effectively. Transfer of knowledge skills: â€Å"Learning about a practice, technique, or approach in one country that can be transferred elsewhere is a skill that managers can apply on a regular basis† (Gibson et al., 2012, p 62). 3. Describe the attitudes a manager would need to be successful and effective in managing in India, China, and Saudi Arabia. A manager would need to have the same basic skills in order to a successful and effective manager in India, China, and Saudi Arabia. According to Gibson, Ivancevich, Donnelly, & Konopaske Strong technical skills Good language skills Strong desire to work overseas Knowledge of the culture Well-adjusted family situation Spouse support Behavioral flexibility Adaptability Good relational ability Stress management skills According Goodall and Warner (2007), a manager who wants to work in China would need to be: Open-minded to the culture shock. Desire to learn the language and culture. Good communication skills. Strong organizational commitment: â€Å"Think not what your company can do for you, but what you can do for your company† (Goodall et al., 2007, p 13). In China, it is hard to retain employees due to the competition of labor. China does not have enough skilled labors and is experiencing tremendous growth economically. To be an effective manager, one should be able to retain employees and adapt to the culture in order to not lose such precious asset. According to Bhuian, Al-shammari, & Jefri (2001), a manager needs have a strong organizational commitment, strong desire to work with foreign assignment, and especially good communication skills in order to work in Saudi Arabia. Trainings should be available to the expatriate manager. Gibson et al. identified three steps: â€Å"Predeparture†, which helps the manager prepare for the culture shock. Overseas Assignments, which is to help the manager ease into the culture. Having a mentor or a guide to introduce him or her to the culture. Repatriation, which is helping the manager adjusting back to his own culture when returning from assignment. References Assess-and improve-your global skills. (2012). _HRMagazine, 57_(8), 79. Retrieved from http://www.shrm. org/countryguides Bhuian, S. N., Al-shammari, E. S. and Jefri, O. A. (2001), Work-related attitudes and job characteristics of expatriates in Saudi Arabia. Thunderbird Int’l Bus Rev, 43: 21-32. doi: 10.1002/1520-6874(200101/02)43:13.0.CO;2-B Chaturvedi, A. (2002). Organizational behavior. _Finance India, 16_(4), 1482-1484. Retrieved from http://search.proquest.com.ezproxylocal.library.nova.edu/docview/224360708?accountid=6579 Gibson, J.G., Ivancevich, J.M., Donnelly, J.H., Konopaske, R. (2012). _Organizations: Behavior, structure, processes_ (14th ed.)_._ New York: McGraw-Hill. Goodall, K.L.N., Warner, M. (2007). Expatriate managers in China: The influence of Chinese culture on cross-cultural management. _Journal of General Management._ Retrieved from: http://www.jbs.cam.ac.uk/research/working_papers/2007/wp0701.pdf Hellriegel, Don, Slocum, John W. & Woodman, Richard W.; Organizational Behavior, South-Western Thomson Learney, 2001, pp 671.

Review Of Oedipus Rex - 1342 Words

Jake Gilman Modern Mythology Period 8 Fusaro Oedipus Rex Reading Questions What appears to be the function of the Chorus? - The chorus in Greek tragedies has a similar function to the narrator in various books and plays. It is an outside source that describes the actions of the characters, as well as their thoughts or feelings. Just like a narrator, the chorus can be used to foreshadow an upcoming event and provide more detail than what is said on stage. However, the most important function of the chorus is how it creates a bridge of understanding between the actors and the audience, allowing the whole plot to become clear to the audience. Explain how metaphorical blindness and literal blindness are demonstrating dramatic irony. - Sight is one element that is heavily stressed in the tragedy of Oedipus. In order to find the killer of king Laius, Oedipus had to ask the blind prophet of Apollo, Teiresias, for help. Throughout their discussion, Teiresias hints that Oedipus is actually the murderer of king Laius and that the prophecy came true. Even though Oedipus has perfect vision, he is blind not to see that the â€Å"robber† he killed on the way to Thebes was his father. Through this scene, the audience can see that Teiresias was only physically blind, and could see the prophecy the whole time. Metaphorically, Oedipus is blinded by his ignorance, making this scene ironic for a blind man to help a visual see. What does Teiresias imply when he refersShow MoreRelatedReview Of Oedipus Rex 1267 Words   |  6 Pageswhich means excessive pride toward or defiance of the gods. In Oedipus Rex by Sophocles, Oedipus and his biological parents, Laius and Jocasta, were overcome by hubris and attempted to outsmart the gods,using what little knowledge is available to us humans, in an effort to escape their own fate. Along with hubris, Oedipus posses hamartia. Hamartia is a tragic flaw. 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