Forces Analysis free essay sample

The dominant characteristics of the U. S. regional airline industry are they are mostly controlled by larger airlines or have a contract with them to secure flights. . Most regional airlines are there for smaller communities to access a flight to the major hubs. Most of the regional airlines service to major airports, so they are connected or part of a servicing contract with national airlines, who in turn are part of the operations of the global airline industry. Smaller aircraft and retired aircraft from the national and global airline industry are used for regional flights. 3. Post- 9/11 fear of flying, rising fuel costs, seasonal fluctuations, and increased competitive pressures from low-cost carriers are causing change in the regional airline industry. Mergers and consolidations are more likely, and regional airline industry could continue to lose income. Regional airlines have to face fierce competition to be able to acquire contracts with the majors, so there are more unrealistic requirements that are expected from them. We will write a custom essay sample on Forces Analysis or any similar topic specifically for you Do Not WasteYour Time HIRE WRITER Only 13.90 / page . The key factors that determine success for the companies in regional airline industry are securing a partnership with a major airline, expansion of partnerships to include new routes and additional departures, and increasing its range. 5. SkyWest is employing a focused differentiation strategy and has been seeking to fulfill customer satisfaction through valuable and reliable flights. It is trying to achieve greater levels of customer satisfaction than its competition. 6. SkyWest’s competitively important resources include its service contracts with major airlines, its more efficient operation strategy from two formerly separate companies, and high rankings of customer satisfaction. It is capable of larger reach than other regional airlines. Its weaknesses in the external environment are rising fuel costs and pressure from the major airlines. It has liabilities to both customers and the major airlines as outlined in its contracts. It has the opportunity for expansion through mergers and to consolidate its operations as one entity to reduce operating expenditures. As major airlines go bankrupt, opportunities to take over the flights and collect on that revenue that was going to the majors can be realized for Sky West. It can go global. External threats include rising fuel costs, and limited domestic opportunities. 7. The company’s future is promising. Revenues are increasing and its load factor is improving. Operating expenses are decreasing and compared to other regional airlines, SkyWest offers better benefits and compensation packages. It is performing efficiently; more so as each year passes. . SkyWest, Inc. must seek global markets to enter that allow joint ventures and potential for growth to strengthen the company’s competitive position. I would recommend the management stay on top of technological advances in aircraft and purchase fuel efficient jets to lower fuel costs. Also, a plan to consolidate ASA offices with the offices of SkyWest would cut down operating costs. The threat of substitute products is not strong because the differentiation of the substitute product if available is relatively low in comparison and the rate of improvement in price-performance relationship of substitute products are low. Intensity of Competitive Rivalry. The regional airline industry has a very low number of competitors, and domestically there is little room for growth which allows SkyWest to enjoy low to moderate levels of competitive rivalry. Industry growth rate is high, but only in developing countries. Fixed and storage costs are high and exit barriers are high too making rivalry more fierce in the industry.