Pestle
Political
The civilian airline industry welcomed the imposition of uniform safety regulations, primarily because they were convinced that their industry would never reach its full economic potential unless the public was convinced that it was safe to fly. They were unable to impose uniform safety regulations on their own, primarily because adding safety features increased costs, and, in a very competitive environment, both within the aviation industry and with other transportation modes, few airline operators were willing to take the risk of adding safety features that could price them out of the market. As a result, the aviation industry looked to the national government to do the job for them (Dilger 2003). The airport industry is affected by any change or situation in the government. If the government is in ruins, it could affect the performance and operations of the airport industry. The government can also impose some changes that will affect the airport industry.
Economic
Commercial air-transport movements (ATMs) tell one relatively little about an airport’s revenue or profit potential since much of both the revenue and the costs are generated from handling passengers and freight. Thus one should also evaluate airport output in terms of passengers or freight (Doganis 1992). For the airport industry to provide services to clients it needs finances and various sources of funds. The economic condition of the industry and the country it operates in affects the performance of the airport industry. A slumbering or non performing economy means lower number of passenger and it means lesser profits and source of funds for the industry to cover its expenses.
Social
The society affects the processes and technologies used by the airport industry. Any demand for changes in processes creates the need for changes in the airport industry.
Technological
The airport industry must make sure that its technologies would be up to current standards. It cannot afford to have technologies that are considered to be obsolete. Technology affects the performance of the airport industry. Technology also alters the image of the airport industry.
Legal
The airport industry is affected by the laws in a country. Any new law on security or safety may mean additional expenses for the industry since they will have to comply with the requirements of the law.
Environmental
The airport industry has to make sure that they respect the environment and procedures created to protect the environment. The airport industry is affected by the changes in the use of environmentally friendly products.
Five Forces
Threat of new entrants
New entrants would have high influence over the Airport industry since this would mean more competitors for the company. New entrants might be able to provide newer software and technology to the clients. New entrants might create alternative technologies that can outdo the software used by the Airport industry. This might cause the loss of some clients.
Competitive rivalry
Competitive rivalry would have high influence over the Airport industry since the industry must make sure that the strategies they use will help them survive competition. Competitive rivalry can either push the airport industry to succeed or make the industry lose against competitors.
The bargaining power of suppliers
The airport industry’s suppliers include the companies who provide them the system and technologies to provide services to their clients. The bargaining power of suppliers highly influences the airport industry since the loss of support from suppliers would mean that they cannot provide excellent services. Suppliers can dictate the prices of the technologies and systems used by the airport industry.
The bargaining power of customers
The bargaining power of customers highly influences the airport industry since the industry needs to give in to the demands and needs of the clients. The customers dictate what services need to be provided and what characteristics should a service have. The number of customers availing of the airport industry’s services affects the pricing for their products.
Threat of substitutes
Substitutes highly influence the airport industry. Substitutes could be in the form of train service, shipping services or the like. New services, processes or technologies that would help transporting clients would be a threat to the industry. Substitute services or technologies may make the airport industry lose its clients or may initiate sudden changes to its services.
References
Dilger, J 2003, American transportation policy, Praeger,
Westport, CT.
Doganis, R 1992, The airport business, Routledge, New York.
Credit:ivythesis.typepad.com
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