Essay on Porters 5 Forces Model

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Essay on Porters 5 Forces Model

 

Political

 

·

Economical

·          Low economic  can benefit Ourplane because they can capitalize on the cheap auto planes,

·          Some economical affect on them however, they are still in good conditions as majority of their consumers are wealthy individuals and companies, additional to their 5 year contracts

Social

 

·          Growing social trends by consumers to put pressure for companies to “go-green” , major companies having environmental campaigns

·          Trends of consumers show they want CSR

Technological

·           Technological advances for carbon emissions that cater for environmental concise individuals

·          The autoplan industry is always innovative with new technologies that affect the demand of consumers

·

 

Essay on Porters 5 Forces Model

SWOT Analysis:

SWOT Analysis Opportunities: Threats:
  ·         Double their exciting fleet by purchasing from their suppliers at low prices

·         They can benefit for low economies, if they wish to expand this is the time

·         Threat of competition stealing customer

·         Critical economical conditions

Strengths: SO: Leverage ST: Vulnerabilities
 

·          Price competitive company

·         offer a verity of options for their customers

·         fixable services

·         Operating hours

·         The company is innovative, as they try to expand always

·         Cater to the wealthy market

·         Cater for their customers needs for green and social impact

·         Take advantage of low-economies and purchase plans at incredibly low prices

·         Double their product, expand business

Support their growth strategy

Weaknesses: WO: Constraints WT: Problems
·         Only flying local

·         Small jets do not allow them to take up many customers or fly internationally

·         Not able to offer extensive customer service as other companies

·         No personalized strategy

·      

·          Low economic state, 90% of their customers and business is in US

·         Company needs to raise capital during bad economies (not time to invest in plans with unsure demand ?)

·         Incurring debt and demand unknown

·         Threat of losing money on investment

 

Essay on Porters 5 Forces Model

 

Competitions rivalry –

OurPlane caters for small to medium plans and does only flight in the US and Canada. Main competition is Netjet company which is one of largest companies in the industry and considered as industry leader, as they are the first to hold fractional aircraft ownership so they innovative in that area, they industry is competitive of fractional aircraft, not due to the number of competition however, due to the number of limited consumers

 

Threats of new entrants

Threat of new entrants is high, as the industry has high expenses and required legislations and licenses,

Essay on Porters 5 Forces Model

Threat of substitutes

 

They are substitutes for flying services people can use such as via ocean or land. Also, since Ourplane are offering flights only locally and Canada, it is easy to substitute them, not like international flight were it’s a little hard to substitute.

 

Bargaining power of buyers

 

Barging power of buyer is high, as OurPlane are not in a monopoly, thus customers can substitute them for other companies that can offer the same services for cheaper or at more convenience.

 

Bargaining power of supplier

 

Suppliers do not hold that much bargaining power as there are many other airlines for customers to book on, however they is still some power if customers do not have any other option for flights at convenience. Also, OurPlan offer flights at low prices so it is very convenient for customer looking for that and it’s going to be hard for them

Essay on Porters 5 Forces Model

  • OurPlane is considering growth strategies for their upcoming, the company has a competitive advantage over their direct competitors because of their product mix was that it offered smaller planes as well as jets and competitive pricing, main issues there are going through is trying to come up with growth strategy while induring the economic recession they are going through, as you know of their opportunity to purchase plans for their supplier at incredibly low prices and doubling their existing fleet, however, I believe the company should seek out shareholders first be before purchasing the plans, so through effective marketing strategy to reach and gain their customers, determine how much they need, whats their demand and then purchase from their supplier accordingly, otherwise if they double their exsiting fleet and don’t have the customers its just going to be an exp for the company. They will need initial investment of 12,000 per aviation marketing consultant, the ROI will be 53% Hire a marketing consultant for aviation marketing, that will work public relations raising brand awareness through public relations and digital media through press paper, events and articals that appeal to C-manager marketing efforts will be and based on their historical data they acquire 4 platinum

 

 

Notes:

  • fractional aircraft ownership industry is fairly competitive, that is not only due to the number of competitors but due to the limited number of customers

*Rich man’s Taxi service *

  • Customers of Ourplane are 90% American, marketing should be focused towards US market. As US market is much bigger than Canada (greater potential)
  • Find growth strategy that suits OurPlane
  • Acquiring more plans and then promoting for them can be an expense the company, especially during economic crisis demand is uncertain. However they are promoting the
  • One option for growth strategy other than marketing plan is “ going green “ can help the company for sustainable growth, the company should stay put “status quo” and focus its efforts on marketing or going green. It is not the time to invest or spend money during economic crisis
  • fractional aircraft ownership industry is fairly competitive, that is not only due to the number of competitors but due to the limited number of customers
  • Biggest competitor is NetJet who controls the industry they are known to be first to introduce fractional ownership, they offer customer personalized services cater for international flights and are engaged in aggressive market
  • In order for Ourplane to have growth they should invest in aggressive marketing to leverage their low-affordable prices, local flights,
  • Other competitors of the company include AirSprint, AirShares and Executive AirShares. These companies are similar in terms of size of OurPlane and these companies are in direct competition with OurPlane
  • The major advantage of OurPlane over other competitors while AirSprint, AirShares Elite and Executive AirShares offered either smaller plane. This in turn limits the customer options and customer base of the company.
  • Marketing competitive prices of Our plane

 

 

  • Fuel costs increasing during economic recession
  • OurPlane want to are worried about current growth phase in most markets, coupled with evolving technology and customer preferences, offers a real opportunity

Essay on Porters 5 Forces Model

Their efforts should be focused towards branding, customer value and building reputation, which is why starting green initiatives will aid their growth and sustainability, for example working towards improving fuel efficiency, reduced noise pollution, efficient use of various materials, all to ensure a sustainable aviation sector

 

Understanding target market and how to reach them, the C-level managers are the people in their 40s or early 50s who weren’t raised with computer technology, but are now very comfort­able using it and rely on it to get caught up with what’s going on in the world and in their professions.  These are the people who follow several media chan­nels, or read the blogs about their indus­try. They are smart enough to know that you can’t run a company without a good understanding of technology. Rarely does one media venue work effectively on its own. Direct, whether it be through digi­tal, e-mail, cover-wraps or brochures, is only one part of a successfully, well-integrated campaign that has a focused, strategic message based on a core insight

 

 

For example wall street journals, golf club.

  • The company should invest in marketing efforts, they lack online presence that will increase their brand recognition and exposure, Sales people engage in social activates that has their target market. Direct their marketing towards two things price competitiveness, environmental friendly efforts such as airlines accomplished this through continual investments in fuel-saving aircraft and engines, innovative technologies like winglets (which improve aerodynamics) and cutting-edge route optimization software. That’s why data from the Environmental Protection Agency confirm that our industry represents just 2 percent of all GHG emissions in the United States

 

Essay on Porters 5 Forces Model

Product mix

Various service offerings that are a leasing service, fractional share ownership and VLJ managed that is a jet management service.

Issues with marketing strategy:

Finding an appropriate place to advertise for their planes, marketing strategy that suite selling the Eclips fleet or marketing for fractional aircraft ownership- which is more profitable ? by **? They should focus their efforts on promoting for fractional ownership as its their largest margin of sales

 

 

Definition of Success & Critical Issues-

Casson wants to insure OurPlane’s success through developing an effective marketing strategy that will maintain current customers and build sales growth, while addressing the following issues:

 

  • Develop a marketing strategy that would increase brand exposure to target market featuring OurPlane’s competitive advantage
  • How to address effect of economical downturn and environmental movements on sales growth

 

 

Decision Criteria –

  • Insure a 10% ROI by 2009

 

 

Recommendations-

 

I recommend OurPlane to seek shareholders first, and then purchase the planes of the anticipated demand at a discounted price from their suppliers, where they could acquire a %53 ROI and net profit of $1,710,375.62 per Eclipse 500jet plane. The company can do so by implementing an aggressive marketing strategy to target segment C-level managers, OurPlane can do so by hiring an Aviation marketing consultant who specialize in raising brand awareness through public relations, digital media, press paper and events that appeal to this segment. Marketing efforts has an initial cost of $12,000, marketing for Ourplane’s will be directed towards their competitive pricing, variety of product mix at an and their environmentally friendly activities.