Question

The topic is Southwest Airlines so the industry would be airlines

Team Members: Alexis Alex, and Ayoub Chapter 3 Worksheet (External Analysis) The purpose of the external analysis is to identify opportunities and threats for the industry you are analyzing. Do not focus on the company under analysis. Focus on the industry in which the company competes. Make sure your analysis of the facts leads to a logical determination of specific opportunities and threats associated with the criterion you are analyzing. Consider each criterion from a strategic perspective. Use the scientific method (data, analysis of the data, conclusions based on the analysis) In other words, does your analysis lead you to conclude how or in which ways the criterion under analysis create opportunities or threats for the industry or specific companies in the mdustry? Being clear in this regard will strengthen your analysis and help you with your subsequent SWOT analyss. The concepts im this worksheet correspond with the text and what we discuss in class. If you do not understand the concept or need to refresh your memory, please ask me 1. Macro-environment forces Facts What does this mean? Criteria Unemployment rate: 4.0% (June 2018) Opportunity The Economic Environment |Hain'd high showing which rate and high show the Address the economic conditions during the timeframe of the case.) is great a for high-tech o deselop

Answer 1

Answer (2) : The answers to the blanks are provided in their ascending order :

                     Answer to first blank (Facts) : Among the Airline competitors in the United States, American Airlines, Dela Airlines and United Airlines are among the Airlines with the largest market share and controlling about 50% of the total American Airline business. There are about 14-15 more airline operators, but they are not as big as these three.

                     Answer to first blank (What does this mean): This means that the rivalry is weak , as only 2 or 3 out of nearly 17-18 airline companies control the whole airline business of the country. This will push out the remaining of the airlines out of competition and these three airlines will rule the governing process.

                     Answer to Second blank (Facts) : The Top Airline companies with highest sales are American Airlines, Delta Airlines , Southwest Airlines and United Airlines. In the year 2018, these four largest companies have together fare nearly 4.3 billion consumers and have accounted for nearly 43.8% of the total sale share of the Airline industry.

                     Answer to Second blank (What does this mean): This again means that the rivalry is weak, as only 4 out of nearly 17-18 airline companies control the whole airline sales of the country. This will push out the remaining of the airlines out of price competition and these four airlines will rule the total market sales.

                     Answer to Third blank (Facts) : The product or service demand growth has been ever rising in this industry, owing to more and more consumers now earning better , and with the advancement of the other means of transportation, the cost of airlines have had to be dropped considerably. Therefore, airline travel has become comparatively cheaper leading to an increase in the overall service demand in the industry.

                     Answer to Third blank (What does this mean): This is one area which is positive for the airline industry, as the more the demand from the consumer side is, the better the opportunity will be for these industries to sustain in the market. However, the constant price reduction has been a concern for the airlines to watch out. In spite of the fares being controlled, growing demand can make up for the loss of these airlines.

                     Answer to Fourth blank (Facts) : The growth rate of these airlines have been terrific. Each one of the airlines have increased their profit share by huge margins owing to the ever-increasing demand. Some of the airlines have even made a 200% profit. The financial years 2011 to 2017 have been the most productive for many of the airlines.

                     Answer to Fourth blank (What does this mean): This is another area which is positive for the airline industry, as the more the demand from the consumer side is, the better the opportunity will be for these industries to earn more profit and gain better growth rate in the market. Some of the airlines have also run out of competition during the same phase of years during to not being able to compete in the market.
                     Answer to Fifth blank (Facts) : The rivals of the airline companies are using many industry integrated measures such as better service quality, timely arrival and departure, better customer addressable, and the most important factor being trying to reduce the price per ticket as much as possible to sustain in the market.

                     Answer to Fifth blank (What does this mean): There is a very strong competition among the rivals in this area, as it is a fight for their survival. In this fight, the consumers are the ultimate gainers, as they are getting better and better facilities at lower and lower costs.

                    Answer to Sixth blank (Facts) : To some extent, the customers can be considered as a prime factor behind the low costs of the airlines. With the increase in the customer base and increasing demand from the consumer side, the airlines are forced to preset the least price for the tickets. This has resulted in to low cost airlines being the most profitable ones.

                     Answer to Sixth blank (What does this mean): This is a weak sign, as better and airlines with plush and good service will slowly disappear from the market, as it is consistently becoming tougher for them to survive in this market with cheaper and cheaper cost.