Essay about The Supplier Of The Airline Industry

1561 Words Nov 30th, 2015 7 Pages
The Airline industry, which was regulated by the government, through a liberalisation policy. The airlines was supplied to the public, this was done to regulate competition and privatisation that occurred through the airline industry theses regulation however were lifted and the policies were more open.
The supplier concentration theory is one of Porters five forces in which it suggest that the supplier influence, refers to the the excessive demand that suppliers can exert on business. This can be by suppliers raising prices of services, minimising the quality of the services that they do provide, or through their reduction of the availability of services. Supplier concentration is one of the main drives in shaping the competitive structure in the airline industry. For example the bargaining influence of the supplier can have an impact on the competitive environment for the buyer and can significantly influence the ability of consumers to achieve profitability. (Krishna, G et al 2007)
Competitiveness comes from being able to attain a strong supplier as they provide the industry with a decrease in profit potential for the buyer although on the other hand having a weak supplier generates a less competitive industry however an increase in the profit potential for a buyer. Profits were not considered in the early stages of the commercial aviation as although their was a growth in the airline industry, airlines were very far from returning capital with even profit margins of…

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