Five Forces Model Of The Airline Industry Tourism Essay

Five Forces Model Of The Airline Industry Tourism Essay 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 f lyer program to create switching costs which may be a significant factor to a traveller when choosing which airline to fly with. In addition to buyers, suppliers can also exercise considerable pressure on a company by increasing prices or lowering the quality of products offered. The bargaining power of suppliers depends on supplier concentration, substitute supplies, switching costs, threat of forward integration and buyer information (http://www.unisanet.unisa.edu.au, 14 April 2008) Suppliers within the airline industry are concentrated since Boeing and Airbus are the main suppliers (http://www.unisanet.unisa.edu.au, 14 April 2008) As the supplier industry is dominated by Boeing and Airbus the concentration undermines the ability of airlines such as Virgin Blue to exercise control over suppliers and earn higher profits. Since Virgin Blue has a fleet of 53 Boeing 737 aircraft its supplier has a high bargaining power over Virgin Blue (http://www.virginblue.com.au/AboutUs/index.htm, April 12, 2008). 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. 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. Virgin Blue has actually joined forces with its substitutes, such as car rentals and hotel and tour packages as they believe that these complement the Airli ne Industry by helping its growth and popularity. No other travel industry has such incentives and these really help the airline industry to a large extent. The final force in Porterà ¢Ã¢â€š ¬Ã¢â€ž ¢s model is competitive rivalry that describes the intensity of competition between established firms in an industry (Stahl, M, Grigsby D 1997, pg 148). Industries that are very competitive generally earn low profits and returns since the cost of competition is high (Stahl, M, Grigsby D 1997, pg 148). 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 airl ines 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 companyà ¢Ã¢â€š ¬Ã¢â€ž ¢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.

The Economic Future in the Year 2000 :: essays papers

The Economic Future in the Year 2000 The economy has performed exceptionally well for the past several years, combining rapid growth and very low unemployment with declining inflation. â€Å"Not only has the expansion achieved record length, but it has done so with far stronger growth than expected,† stated Federal Reserve Chairman Alan Greenspan in his remarks to the National Community Reinvestment Coalition annual conference in Washington (Business Week, The McGraw-Hill Companies, Economic Outlook, March 6,2000). Figures show that since 1996, the growth of GDP has averaged more than 4 percent, compared with an average of about 3 percent since 1973. Because of those four years of rapid growth, the unemployment rate has fallen to 4.1 percent, its lowest level since January 1970. Consumer Price Index (CPI) inflation, excluding food and energy prices, had been vacillating at about 3 percent per year earlier in the decade but was roughly 2 percent over the past year (Bank of America, Economic in Brief, November 1, 1999). Much of the auspicious recent economic developments can be attributed to a surge in productivity growth. Alan Greenspan noted in his statement that output per hour in the non-financial corporate sector had increased since 1995 at nearly double the average pace of the preceding 25 years (First Union, Monthly Economic Outlook, March 7, 2000). This rapid productivity growth allowed the economy to grow at a faster pace without raising the rate of inflation. However, the growth of consumer demand is exceeding the increase of productivity—boosting employment, tightening labor markets, and raising concerns that recent growth rates may not be sustainable without sparking a rise in inflation. After spending the past several years, extolling the virtues of improved productivity in allowing higher growth with less inflation, the Federal Reserve Chairman, seemed to turn the tables in his Humphrey Hawkins testimony, stating that the spurt in productivity has produced expectation of hi gher profit growth, which, in turn, have resulted in higher equity valuations. That surge in equity prices is seen as the primary driver of the â€Å"wealth effect†, which he believes has created an â€Å"imbalance† between demand and supply, raising inflation pressures (Business Week, The McGraw-Hill Companies, Economic Outlook, March 6,2000). Speculations of this occurrence may over the long term indicate that the higher the trend growth of productivity, the lower the inflation rate—due to the restraint of labor costs.

Human history Essay

Human history has witnessed numerous examples of wars. Our history has taught us that wars are unique by nature. Different philosophers at different times were trying to generate solid philosophical understandings of what war and strategy were. As a result, we possess sufficient theoretical basis for discussing the philosophical foundations of war, yet we have not been able to predict our military failures. After the end of WWII the world has finally taken a deep breath, and people were confident that violence would never enter their lives again. However, we are still surrounded by constant risks of war, and continue witnessing the acts of violence, and murders. Certainly, contemporary wars are completely different from those at the beginning of the 20th century: the development of the new weaponry types and communication technologies, have turned the simplest military actions into highly sophisticated acts. The war in Iraq has critically impacted the military balance in the world, and it is interesting to see, how Iraqi war would be explained through the prism of various philosophic works. Clausewitz: On War Carl von Clausewitz has written a well grounded research on the philosophy of war. His theoretical assumptions make it possible to distinguish philosophic implications of military actions. Having evaluated what war is, Clausewitz was able to create a general structure of war, and I think that his ideas are easily applied to the issues of the war in Iraq. â€Å"War is nothing but a duel on an extreme scale. If we would conceive as a unit the countless number of duels which make up a war, we shall do so best by supposing to ourselves two wrestlers. Each strives by physical force to compel the other to submit his will to his will: each endeavours to throw his adversary, and thus render him incapable of further resistance† (Clausewitz 1989, p. 4). Although, this Clausewitz’ definition is very objective, grounded, and universally applicable (any war implies the fight of several opponents for power), there are some amendments which should be made in terms of war in Iraq. It is difficult to admit, but it is true, that the war in Iraq is nothing more than the fight for power: Clausewitz does not distinguish whether this might be economic, social, or military power, or some other different aspect of political superiority. Clausewitz risks applying limited perspectives to discussing what war is. In the fight between the two wrestlers, only one of them initially seeks superiority. As a result, at the initial stage of war, only one of the opponents fights for power and superiority. Clausewitz supports this line stating that â€Å"two motives lead men to war: instinctive hostility and hostile intention. In our definition of war, we have chosen as its characteristic the latter of these elements, because it is the most general†. Has the U. S. started the war in Iraq with hostile intentions? Probably, it has. Many of us argue the fact that the U. S. military actions in Iraq were primarily aimed at promoting democracy in the country. To be objective, hardly any democracy can survive in the whirl of blood, murders, terrorist acts and violence caused by military actions. However, in the fight between Iraq and the U. S. Clausewitz seems to have neglected one essential stage of developing military actions: the first stage is the military intervention, and it hardly looks as the fight of the two wrestlers. On the contrary, its image is similar to unexpected blow on the side of the opponent to which another wrestler cannot stand and falls. The situation described by Clausewitz is actually the next stage of war. Iraq required certain period of time to gather it strength and to enter the war as an equal. At the stage when we started to receive the reports on murders and terrorist acts against American soldiers, one could suggest that the war has turned into the discussed fight. However, in this fight one of the opponents was trying to prove his superiority, while the other tried his best to defend the integrity of his physical territory and peace in the country. We cannot but agree with Clausewitz that war is never an isolated act, and it is never a separated single military blow. â€Å"War does not spring up suddenly, it does not spread to the full in a moment; each of the two opponents can, therefore, form an opinion of the other, in a great measure, from what he is and what he does, instead of judging of him according to what he, strictly speaking, should be or should do† (Clausewitz 1989, 5) The war in Iraq had long prehistory. The United States were continuously trying to defend their position in this military conflict. It was evident that the war was inevitable. As a result it is difficult to argue the position of Clausewitz. Actually, the work of Clausewitz seems to be very close to what we currently witness in Iraq. Of course, we do not know much as none of us has fortunately participated in this campaign. All we have at our disposal are news reports and other secondary information, but this secondary information allows analyzing the events in Iraq from the viewpoints of several philosophers. Clausewitz creates a philosophic picture of war. He implies that war does not change its face, and the structure of military actions and interactions remains unchanged, no matter at what historical period of our development a war may occur. This does not really matter, whether we use nuclear weapons or fight in the open sea – the war is always the utmost use of force, which does not break out of sudden, and which is the means of proving one’s superiority. Jablonski: Roots of Strategy In his work, David Jablonski has evaluated the works of the four theorists, as applied to military actions and military strategies. It is surprising, that Jablonski was able to avoid bias in his discussion. It is even more surprising, that the works of philosophers written at the beginning of the 20th century seem to have predicted the exact course of events during the war in Iraq. This, on the one hand, continues the line found in the work of Clausewitz: the essence of military actions remains unchanged through the centuries. On the other hand, Jablonski’s selection helps us understand WHY the U. S. was involved into the war in Iraq, and has actually initiated it. â€Å"In the United States our people have been slow to realize the changed conditions. Isolated as we have been from possible enemies, the people could see little chance for aggression by others. Separated as we are from Europe by the Atlantic, and from Asia by the Pacific which form most certain and tremendously strong defensive barriers, we seemed to be protected by the design of the Almighty. [†¦] The vulnerability of the whole country to aircraft as distinguished from the old conditions that obtained when the frontiers or the coast had to be penetrated before an invasion of the country could be made, has greatly interested the people of the nation† (Jablonski 1999, 452) What facts do we have in the war against Iraq? First, the U. S. has for long been isolated from others’ aggression. Even during WWII the U. S. was not directly involved into military actions. The terrorist acts of 2001 have been a tremendous shocking therapy to the whole American nation. The continuous isolation from the direct aggression has made the U. S. senseless towards possible military and terrorist threats. The image of the almighty nation was rather exaggerated, and the events of 9/11 have proved this assumption. The terrorist attacks had to attract the attention of the U. S. to its vulnerability and to eliminate the discussed senselessness, but the country has misinterpreted these events. The senselessness has turned into aggression against the states which were suspected in promoting terrorism (Iraq is in the top list of such ‘promoters’). As far as the United States has not experienced any acts of continuous aggression, which it could not stand, it has not fully realized the continuous effects of military actions brought into Iraqi land. In the introduction to his book, David Jablonski puts emphases on the most critical elements of war. â€Å"Modern military forces normally work in an environment in which the major dilemma is that of properly matching continuity and change. [†¦] the core attribute to such thinking is to imagine the future as it may be when it becomes the past – a thing of complex continuity. † Thus, planning continuity and looking at military actions through the prism of the past is the crucial element in making this strategy reasonable and justified. What are continuous impacts that the U. S. has caused onto the Iraqi population? These are economic defeat, and the need to restore all social and political structures of the country. It is still unclear whether the U. S. was able to promote democratic ideals in Iraq, but it is evident that it has failed to apply the principles of â€Å"continuity through the past† to planning the Iraqi military strategy. Jablonski states that the significance of the theoretical works he discussed in his book is in that they are presented in a structured manner, and can be easily understood and applied in practice. It seems that both the U. S. in its war in Iraq, and the terrorists in their 9/11 attacks have applied the principles discussed by Jablonski: â€Å"sometimes implicitly, more often explicitly, they created images of how aerial destruction of ‘vital centers’, could bring a nation to its knees. After all, there were the examples of mass panic on the home fronts and mutiny in the trenches during the recent war. † Similar to Clausewitz, who creates parallels between military actions and wrestling, Jablonski also underlines the importance of the sudden effect. Consequentially, we come to understanding an interesting military controversy: military campaigns cannot be sudden, but the â€Å"sudden effect† of aerial or other destruction often determines the success of the planned military campaign. These two elements are integral to the U. S. intervention to Iraq, too. Liddell-Hart: Strategy There are the two crucial elements which make Liddell-Hart’s view applicable to the war in Iraq: first, the author extensively researches the historical implications of specific military actions, and second, he does not expand his research to broader notions, but is rather concentrated on the ‘cause-effect’ research. His book is in many instances similar to that of Clausewitz. This is why the author is initially biased. In both works the reader meets identical philosophical parallels: â€Å"To move along the line of natural expectation consolidates the opponent’s balance and thus increases his resisting power. In war, as in wrestling, the attempt to throw the opponent without loosening his foothold and upsetting the balance results in self-exhaustion, increasing in disproportionate ration to the effective strain upon him. Success by such method only becomes possible through an immense margin of superior strength in some form – and, even so, tends to lose decisiveness. † (Liddell-Hart 1991, 5) In this citation, we find many elements which have already been found in other philosophical works: loosening foothold may be paralleled to the sudden aerial attacks, while moving along the line of natural expectation is similar to complying with the principles of continuity and thorough planning. Simultaneously, it is difficult to apply this statement to the military actions in Iraq. If the U. S. used Liddell-Hart’s philosophical implications in developing its strategy in Iraq, it would never apply the means of sudden attack against the Iraqi nation. People in Iraq would not know what means being bombed. As a result, the U. S. would risk losing its powerful positions. The philosophic perspective created by Liddell-Hart is hardly applicable to the war in Iraq or to any other military campaign in contemporary world. In addition, when Liddell-Hart speaks about morale in war, he represents its too idealistic image: the violence of American soldiers against Iraqi people eliminates any possibility to link morale to the war in Iraq. Niccolo Machiavelli: The Prince â€Å"A prince ought to have no other aim or thought, nor select anything else for his study, than war and its rules and discipline; for this is the sole art that belongs to him who rules, and it is of such force that it not only upholds those who are born princes, but it often enables men to rise from a private station to that rank. † This is another aspect of the war in Iraq, described in the terms of Niccolo Machiavelli’s â€Å"The Prince†. As Hitler used the war to prove his superiority and to create the nation of Aryans, the U. S. seems to be in constant need to prove its superiority to other nations. Several recent decades have turned into the years of constant fight, in which the U. S. always positioned itself as the leading and powerful nation: Vietnam, Afghanistan, Kuwait, Yugoslavia, and finally, Iraq; who is going to be the next? Machiavelli makes special emphasis on the importance for the prince to understand and to possess the art of war: â€Å"a prince who does not understand the art of war, over and above other misfortunes already mentioned, cannot be respected by his soldiers, nor can he rely on them. † (Machiavelli, 2006) The best information and intelligence resources have been employed to develop a sound military strategy towards Iraq, yet the U. S. was not able to display a skilful approach towards Iraqi intervention. Numerous deaths of the American soldiers and their inability to find common language with the native population, whom they had to protect, suggest that the United States did not possess any sound military skills. Expectation of easy victory usually leads to easy failure. The war in Iraq has displayed the U. S. inability to analyze the world military history, about which Machiavelli speaks. The author refers to the importance for the prince to study the actions of illustrious men and to see how they behaved themselves during war. Being powerful does not mean being non-educated; being powerful means being skillful, reasonable, and objective. Military failures in Vietnam and Yugoslavia have not taught the U. S. any meaningful lessons. In distinction from Clausewitz, Liddell-Hart, and Jablonski, Machiavelli did not apply any historical perspectives to evaluating military strategies, but he was wise enough to emphasize the importance of historical lessons, and of the ability to properly evaluate these lessons. Peter Paret: Makers of Modern Strategy While Clausewitz applied the painting parallels to researching war, Paret has performed a profound research of several philosophic writings related to the topic of war. All authors he discussed in his book sought to answer several crucial questions: whether it was possible to evaluate war, whether it was a viable tool of foreign policy, and how ethical war was. Paret’s views are directly connected with the understanding of nuclear threats as applied to military strategies. Paret’s book is actually the selection of the major philosophic works and their evaluation. It seems that modern philosophers try to distance themselves from creating their own ideas about war, but prefer analyzing the ideas of others as applied to contemporary political and military environment. In the introduction to his book, Paret writes that â€Å"strategy is the use of armed force to achieve the military objectives and, by extension, the political purpose of the war. To those engaged in the direction and conduct of war, strategy has often appeared more simply, in Moltke’s phrase, as a system of expedients† Thus, war is initially the conjunction of political and military ideas. The war in Iraq is also the combination of political and military aims, but which of them prevails? In his book, Paret often cannot make a case. He states that Machiavelli lived during the time when warfare was unregulated and thus the relevance of his assumptions could decrease. However, who says that our warfare is regulated? Paret suggests that while Clausewitz supported the idea of war to be limited in time, goals, and strategies, there was no place to global military campaigns. Does this mean that local military conflicts similar to those in Iraq cannot expand beyond the geographical borders of the Iraqi nation? They can, and the conflict in Iraq has already stretched itself across the world. The war in Iraq has already turned into the political fight between the two opposing political camps, and the perspective of the global war has never been so close since the end of WWII. This is why it is difficult to understand the aim of Paret’s analysis. For the aims of objective military research, one should rather read the original works of philosophers, than their subjective interpretations made by contemporary authors. Sun Tzu: The Art of War â€Å"Whoever is first in the field and awaits the coming of the enemy, will be fresh for the fight; whoever is second in the field and has to hasten to battle will arrive exhausted. Therefore the clever combatant imposes his will on the enemy, but does not allow the enemy’s will to be imposed on him. [†¦] If we do not wish to fight, we can prevent the enemy from engaging us even though the lines of our encampment be merely traced out on the ground. All we need do is to throw something odd and unaccountable in his way† (Sun Tzu 1971, 24) The ideas of war produced by Sun Tzu, partially seem as odd as the instruments he offers to use if one does not want to fight. On the one hand, being first to the field also implies using ‘sudden’ tactics. On the other hand, what odd instruments could Iraqi people use to openly claim their desire not to start war with the U. S.? One should not repeat its tactics which had been successful earlier, but it should be regulated according to the constantly changing military environments. Moreover, using the tactics which has already proved to be a failure is a guaranteed double failure. The U. S. has not taken into account numerous important elements of an effective military strategy: being sudden does not always mean being successful. Aerial attacks make people fall to their knees, but do not break them completely. The U. S. develops a sound strategy of removing its military from the Iraqi territory. The aim is to turn retreat into a victory, which is virtually impossible. Until the U. S. is able to re-evaluate its defeats and tactics in previous military campaigns, it will have to be prepared to new military failures. Conclusion I think that each of the analyzed philosophers has something to say about the war in Iraq. Each of them discussed interesting elements of military strategy which could be applied to Iraqi military campaigns. Although certain views are limited, some risk being biased, and some cannot make the case at all, all of them deserve attention at least for having researched the question which we will hardly ever answer: What is War? It is never stable, it is always changeable, it always has a different face, and sometimes we even fail to recognize it from the start. One thing is evident: no matter how difficult a war can be, no excuses can justify our inability to fight well. BIBLIOGRAPHY Clausewitz, C. On War. Princeton: Princeton University Press, 1989. Jablonski, D. Roots of Strategy. Book 4. Merchanicsburg: Stackpole Books, 1999. Liddel-Hart, Basil H. Strategy: Second Revised Edition. New York: Meridian Books, 1991. Machiavelli, N. The Prince. The Project Gutenberg, 2006. Available from http://www. gutenberg. org/files/1232/1232-h/1232-h. htm Paret, P. , G. A. Craig & F. Gilbert. Makers of Modern Strategy: From Machiavelli to the Nuclear Age. Princeton: Princeton University Press, 1986. Sun Tzu. The Art of War. Translated by Samueal B. Griffith. Oxford: Oxford University Press, 1971.

Outline the main similarities and differences between...

Outline the main similarities and differences between Piaget’s and Vygotsky’s explanations for cognitive development in children. Piaget and Vygotsky were both, looking into the same period of cognitive development in infants and children and sharing the same basic concerns. Piaget (1896-1980) developing his theory slightly earlier than Vygotsky (1896-1934) who worked to show that there were certain flaws in Piaget s theory of genetic epistemology. Vogotsky and his social-cultural theory of cognitive development might be seen as the Soviet counterpart to Piaget s western individualist perspective. Piaget focused on cognitive development as essentially egocentric, Vygotsky challenged this with the idea of the individual as being†¦show more content†¦Piagetian theory essentially views development in four fairly rigid stages, that although they shed a great deal of light on child development, do not allow for an understanding of child development as being enhance d by social and cultural factors as was shown by Vygotsky in his social cultural theory of child development . They do not contribute to our informed interaction with children, particularly with regard to education, where Voygotsky s ideas have been seminally valuable. In Thinking and Speech, Vygotsky, postulates that in Piaget s stages of development, each stage merely presents itself after the previous stage has run its course, it does not stem from it. (1982, p. 110) The four universal developmental stages of Piagetian theory are as follows: The sensorymotor stage which occurs between the ages of 1 and 2 years old. This is the period during which Piaget identified the child developing a general schema for movement and sensation. This is followed by the preoperational stage from 2-7 years where the child in his opinion has an inadequate ability to turn thought into action. The child is seen as Egocentric as is demonstrated in the three mountains test, where three differently decorated, sculpted mountains are placed before the child and she is asked to demonstrate an understanding of how the view might look from the perspective of another; she is unable to do so. (Martin et al. 2009 p. p63). This struggle continues into