Analyse Britsh Airways using PORTERS FIVE FORCES 2018

Porters Five Forces is a popular business framework organizations used in assessing the attractiveness of an industry or sector as exerted on by the five forces. The five forces include threat of entry, threat of substitutes, power of buyers, power of suppliers and competitive rivalry among existing firms. According to Johnson et al (2008), if the five forces are very high, then the industry or sector will not be good to compete in as it will mean too much pressure and competition to allow reasonable profits.

Below is a competitive analysis of the UK airlines industry using Porters five forces. The report will examine the bargaining power of British Airways buyers and suppliers; the rivalry within the industry as the company tussles with low cost airlines such as EasyJet and Ryan Air for market share, threat of entry/barriers to entry and threat of substitutes.

1.0 Threat of entry

• According to Johnson et al. (2008), the ease with which any industry can be entered determines the degree of competition in the sector. This depends on the height of barriers to entry into the sector for instance legislation or government action. In the case of British Airways, the height of barriers is low mostly due to the EU laws which allow every airline by EU citizens to operate freely anywhere within the EU (Boffey 2017).This has increased competition in the UK airline industry with low cost carriers like Easy Jet dominating the market forcing premium airlines like British airways to reduce their prices and cut on their costs in order to compete in the market (The Economist 2017).
• The threat of entry can be evidenced by the successful entry of new low cost carriers such as Norwegian into the UK airline industry when it set up a base in London Gatwick in 2013 (Morris 2018). Over the last few years, air travel has increasingly become commoditized around low costs, made possible by aircraft