Tap Air Portugal Interium Report

Contents

1 Summary 4

2 The Airline Industry Analysis 5

2.1 The Industry Competitive Analysis 5

2.1.1 Potential New entrants 5

2.1.2 Power of buyers 5

2.1.3 Power of Suppliers 5

2.1.4 Substitutes 5

2.1.5 Rivalry 6

3 Strategic Groups 6

4 External Factors that can affect the industry 7

4.1 Political and Legal 7

4.2 Economical 7

4.3 Social 7

4.4 Technological 7

4.5 Environmental 8

5 Key Factors of success in the industry 8

6 Key drivers of change in the industry 8

7 TAP internal analysis 9

7.1 Core Competences 9

8 SWOT Analysis 10

8.1 Internal Analysis 10

8.1.1 Strengths 10

8.1.2 Weaknesses 10

8.2 External Analysis 11

8.2.1 Opportunities 11

8.2.2 Threats 11

9 Bibliography 12

List of figures

Figure 1: Airline industry Value of Chain adapted from Michael E. Porter, 12

1 Summary

In this report first at the environment level, a Five Forces analysis of the industry is conducted, illustrating the high levels of competitive rivalry in the industry. Next a PEST analysis of the Global Airline Industry is conducted, highlighting the in the social, economic, technological and political factors followed by the Key Factors o Success, the strategic groups threat’s and opportunities. Finally in the company level an analysis of the Core Competences is conducted in order to analyze the competitive advantage of the company in the industry and their strengths and weaknesses.

2 The Airline Industry Analysis

2.1 The Industry Competitive Analysis

Porter’s 5 forces framework aims to analyze the attractiveness of the industry through joint action of the factors that typically surround the industry.

2.1.1 Potential New entrants

Potential of new entries involving high barriers to entry due to:

• Need of initial capital, as it is necessary to purchase aircraft. Another cost to consider is the information system essential to decision-making;

• Difference in cost extra-wide because of the preference given by current competitors on the choice of slots, terminal boarding and other services. The very congested airports can function as a barrier to entry;

2.1.2 Power of buyers

Negotiating power of customers is characterized by being, in general terms low, a consequence of an abundant proliferation of various types of customers.

2.1.3 Power of Suppliers

Negotiating power of suppliers tends to be:

• High for workers and technical expertise as well as for airports, especially as regards the allocation of slots or terminal boarding;

• Low power of suppliers of cleaning and catering by offering products undifferentiated;

• Average power for suppliers of aircraft and maintenance services, due to the requirements of quality and the cost of change.

2.1.4 Substitutes

Substitutes can be other transports such as trains, ferries, and coaches. In the European market the high-speed train can compete directly with airlines for routes of short or medium range. The low-cost airline Buzz seeking to expand their routes in the French market, took account