Tiger Airlines

IntroductionTiger Airways is internationally recognised as ace of the Asia-Pacific?s lead story low f be carriers. The company had recognised that in this passing war-ridden market, any advantage gained by one flight path over others pass on be short-lived, and ideas that argon revolutionary will be take place commonplace in a matter of months. As such, Tiger Airways noted the importance of having to always gruntle at the forefront both in service and technology.

The intensity of competition in the airline exertion and its profit potential atomic number 18 a function of Michael Porter?s ?five promotes? modeling of competition: the treats posed by pertly entrants, the provide of suppliers, the billet of demoralizeers, return varys, and the intensity of contest among competitors.

Threats posed by new entrantsNew entrants to an pains typically bring to it new capacity, a proclivity to gain market sh are, and substantial resources (Wheelen and Hunger, 7th Ed, pg 61). The threat of new entrants king-sizely depends on the barriers to presentation - obstructions that make it difficult for a company to enter an industry (Wheelen and Hunger, 7th Ed, pg 62). High entry barriers exist in some industries (e.g. shipbuilding) whereas other industries are real easy to enter (e.g. estate agency, restaurants). Key barriers to entry accommodate the need to gain economies of scale quickly, the need to gain technology, large capital and investment requirements and potential saturation of the market.

Power of suppliersSuppliers are the businesses that supply materials & other products into the industry (Wheelen and Hunger, 7th Ed, pg 64). Suppliers arsehole discover an industry through their ability to raise prices or condense quantity of supply. The cost of items bought from suppliers (e.g. stark materials, components) can have a significant impact on a companys profitability. The dicker power of suppliers affects the intensity of competition in an industry especially when in that respect are a large numbers of suppliers, when there are only a few good substitute raw materials, or when the cost of switching raw materials is costly.

Power of buyersBuyers are the people or organisations that create demand in an industry (Wheelen and Hunger, 7th Ed, pg 64). When the buyers are concentrated or large, or buy in big volume, their bargaining power represents a force affecting the intensity of competition in an industry. Buyers affect an industry through their ability to force down prices, bargain for high quality or more services, and play competitors against each other. The bargaining power of buyers is higher when the products being purchased are standard or undifferentiated. Whenever the bargaining power of buyer is substantial, rival companies may offer extended warranties or special services to gain customers loyalty.

overlap substitutesSubstitutes are products that appear to be different but can satisfy the same need as another product (Wheelen and Hunger, 7th Ed, pg 63). In many industries, companies are in sloshed competition with producers of substitute products in other industries. The presence of substitute products lowers the industry attractiveness and profitability because of the limited price levels. The competitive strength of substitutes is best measured by the market voice those products obtain and those companies? plans for increased capacity and market penetration substitutes to aircrafts include sea and land transports which are much cheaper alternatives.

The intensity of rivalry among competitorsThere are many airline companies in the industry. As a result, impetuous rivalries are common. The companies are generally aware of competitors? actions, oftentimes choosing to respond to them.



What Tiger Airways can do to counter the intense rivalry is to take competitive actions and competitive responses in efforts to be successful. The most important thing is of course to differentiate itself from competitors? offerings in ways that travellers and transportation companies value and in which Tiger Airways has a competitive advantage.

ConclusionTiger Airways has to continuously improve itself in order to stay competitive in the airline industry. In fact, the company is doing that real well. It has been fast in reacting to the changes in the industry environment, as discernible from their current strategies of introducing a budget airline, cutting costs, focusing vigilance on business class travellers and implementing long haul flights. quest such moves, will Tiger Airways then be able to continue staying ahead of competitors and be ensured of its position as one of the world?s leading carriers for many years to come? The answer remains to be seen.

ReferencesCoulter, Mary and Stephens P. Robbins (2007) Management 6thEdition, apprentice mansion InternationalDavid, Fred R. (2005), strategical Management ? Concepts and Cases 8th Edition. assimilator Hall InternationalHill, Charles and Gareth R. Jones (2006) Strategic management : an integrated approach 2nd Edition, Houghton MifflinHunger, J. David and doubting Thomas L. Wheelen (2007) Essentials of strategic management, Prentice Hall InternationalKotler, Philip (2007) Marketing Management eleventh Edition, Prentice Hall InternationalWheelen, Thomas L. and J David Hunger (2006) Strategic Management and Business Policy 7th Edition Prentice Hall International

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