4 ANALYSING THE COMPETITIVE ENVIRONMENT 7

4.1 THE POTENTIAL THREAT OF NEW ENTRANT 8

4.3 THE BARGAINING POWER OF SUPPLIERS 9

4.4 THE POTENTIAL THREAT OF SUBSTITUTES 9

4.5 INTENSITY OF COMPETITIVE RIVALRY 10

The purpose of this paper is to analyse the European airline industry in terms of strategic issues. This is achieved both practically by investigating the environment of the industry and theoretically by studying some theoretical framework and models concerning strategic analysis.

There are three main sections in this report. The first section is about analysing the environment of the industry. It contains an analysis of the external factors affecting organisations operating within the industry. This will mainly help identify the opportunities and threats that might exist.

Suppliers are concentrated within the airline industry. Boeing and Airbus supply most commercial air carriers. Therefore supplier concentration makes it difficult for competitors to obtain lower prices or play one supplier against another. Supplier power further reduces the ability of competitors to earn high profits.

Some topics in this essay:
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