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Essay on Porter's 5 Forces-Delta Airlines
Introduction:
Delta airlines, Inc. is an air carrier that provides scheduled air transportation for passengers and cargo throughout the United States and around the world. As of February 1, 2003, Delta, including its wholly owned subsidiaries Atlantic Southeast Airlines, Inc. (ASA) and Comair, Inc., served 219 domestic cities in 47 states, the District of Columbia, Puerto Rico and the United States Virgin Islands, as well as 48 cities in 32 countries. Delta owns 40% of WORLDSPAN, L.P., and a limited partnership that operates and markets a computer reservation system (CRS) and related systems for the travel industry. CRS services are used primarily by travel agents to book airline; hotel, car rental and other travel reservations and issue airline tickets. Delta also owns approximately 18% of Orbitz, LLC, and a limited liability company that operates an online travel agency that offers travel services to consumers and business customers via the Internet.
Industry analysis and generic competitive strategies by Porter:
Professor Michael porter at Harvard has suggested that strategy formulation requires an analysis of the industry (that is, of its attractiveness) and the company’s position within that industry. This analysis becomes the basis for the generic strategies.
Industry analysis:
In the analysis of the industry, Porter identified five forces: (1) the competition among companies, (2) the threat of new companies entering the market, (3) the possibility of using substitute products or services, (4) the bargaining power of suppliers, and (5) the bargaining power of the buyers or customers. On the basis of the industry analysis, a company may adopt generic strategies. These strategies are generic because they may be suitable on a broad level of different kinds of organizations. Any enterprise, however, may use more than one strategy.
Stock Analysis:
The major airlines have struggled recently with higher oil prices, weak revenue, high costs, and competition from smaller discount airlines....
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