Air France Klm Case Study

1336 Words 6 Pages
Register to read the introduction… New Entrants: The barrier for new entrants is high due to high competition, government regulations, high fixed and start-up costs; complicated exit strategy due to unionized work force. Substitutes: A number of large and discounted airlines are available for passengers to choose. Other transport options are available; however, airlines provide the fastest way of long and medium distance travel. They are usually substituted by the alternatives for short distances. Cargo services, warehouses, training and maintenance programs are also core businesses for airlines in addition to carrying passengers.
Industry Rivalry: in 2007, 249 airlines were registered globally, with 100 airlines spread between 30 European countries. This creates a high rivalry between the airlines.

Analysis Summary: Aviation industry is highly regulated with strong and increasing buyer power. The barrier for new entrants is high. The supplier power is strong but weakening as AirFrance-KLM benefit from the economy of scale and strong bargaining power. The company protects oil prices by purchasing cost fixing insurance. There are substitutes available but
…show more content…
Hubbard, G 1996, “Analysing a case’, in Cases in Strategic Management: Australia and New
Zealand, G. Lewis, A. Morkel, G. Hubard, G. Stockport, and S.Davenport (eds), 2nd ed., pp viiixvi. Prentice Hall, Sydney.
Business Review, 86, 1, pp. 78-93, Business Source Complete, EBSCOhost, viewed 16 March

Som A. 2009, Air France-KLM : Changing the rules of the game. In: Strategy - Process, content, context - An International Perspective. Hampshire (United Kingdom): Cengage
Learning EMEA, 2010, p. 823-836
Spinetta J 2006, Cross - Border Mergers & Acquisitions The AIR FRANCE KLM Story Speech by Jean-Cyril Spinetta at the Nyenrode European Business Forum on 23 February 2006, viewed
17 March 2014,

Yüksel I. 2012, Developing a multi-criteria decision making model for PESTEL analysis.
International Journal of Business and Management, 7(24), 52-66, viewed 16 March 2014,

BUSM3922 Case Study:
Air France – KLM: Changing the Rules of the Game

Related Documents