Reference no: EM133100210

PART 1: Using the Porters 5 Forces Model, How would you determine the level of competitive intensity in the airline industry? What are the forces driving industry competition in the airline industry? (The answer to this question can be found in Figure 4.2 in Chapter 4.) 

PART 2: Use Porter's five forces analysis to analyze Retail Marketing in which you might like to work in the future. Discuss the implications your results may have on the salary potential of jobs in that industry and how that could impact your career plans.

Reference: The Porters 4 Forces Model from Chapter 4.

Michael Porter, an authority on competitive strategy, contends that a corporation is most concerned with the intensity of competition within its industry. The level of this intensity is determined by basic competitive forces, as depicted in Figure 4-2. "The collective strength of these forces," he contends, "determines the ultimate profit potential in the industry, where profit potential is measured in terms of long-run return on invested capital."59 In carefully scanning its industry, a corporation must assess the importance to its success of each of six forces: threat of new entrants, rivalry among existing firms, threat of substitute products or services, bargaining power of buyers, bargaining power of suppliers, and relative power of other stakeholders.60 The stronger each of these forces is, the more limited companies are in their ability to raise prices and earn greater profits. Although Porter mentions only five forces, a sixth-other stakeholders-is added here to reflect the power that governments, local communities, and other groups from the task environment wield over industry activities. Using the model in Figure 4-2, a high force can be regarded as a threat because it is likely to reduce profits. A low force, in contrast, can be viewed as an opportunity because it may allow the company to earn greater profits. In the short run, these forces act as constraints on a company's activities. In the long run, however, it may be possible for a company, through its choice of strategy, to change the strength of one or more of the forces to the company's advantage.