Air India 5
2012
Flying Too Low: Air India 2009 & Beyond
External Environment Analysis
Group 10
Strategy analysis begins with an analysis of the forces that shape the competition in the industry in which a company is based. An important factor of the analysis is External environment analysis. The essential purpose of this analysis is to identify the opportunities and threats in the organization operating environment that will affect how it pursues its mission. Analysis the industry environment requires an assessment of the competitive structure of the company’s industry. It also requires analysis of the nature, stage, dynamics and history of the industry.
Here, while analyzing the external environment of Air India according to the information presented in the case, we will concentrate on Porter Five Forces Model, PEST Analysis of the Air India, opportunity and threats to Air India. Finally, we will quantify all our analysis factors to come to a conclusion.
Porter’s 5 forces model:
Porter's five forces analysis is a framework for industry analysis and business strategy development formed by Michael E. Porter of Harvard Business School in 1979. It draws upon industrial organization (IO) economics to derive five forces that determine the competitive intensity and therefore attractiveness of a market. Attractiveness in this context refers to the overall industry profitability. An "unattractive" industry is one in which the combination of these five forces acts to drive down overall profitability. Three of Porter's five forces refer to competition from external sources. The remainders are internal threats.
Porter referred to these forces as the micro environment, to contrast it with the more general term macro environment. They consist of those forces close to a company that affect its ability to serve its customers and make a profit. A clear example of this is the airline industry. As an industry, profitability is low and yet individual
Flying Too Low: Air India 2009 & Beyond
External Environment Analysis
Group 10
Strategy analysis begins with an analysis of the forces that shape the competition in the industry in which a company is based. An important factor of the analysis is External environment analysis. The essential purpose of this analysis is to identify the opportunities and threats in the organization operating environment that will affect how it pursues its mission. Analysis the industry environment requires an assessment of the competitive structure of the company’s industry. It also requires analysis of the nature, stage, dynamics and history of the industry.
Here, while analyzing the external environment of Air India according to the information presented in the case, we will concentrate on Porter Five Forces Model, PEST Analysis of the Air India, opportunity and threats to Air India. Finally, we will quantify all our analysis factors to come to a conclusion.
Porter’s 5 forces model:
Porter's five forces analysis is a framework for industry analysis and business strategy development formed by Michael E. Porter of Harvard Business School in 1979. It draws upon industrial organization (IO) economics to derive five forces that determine the competitive intensity and therefore attractiveness of a market. Attractiveness in this context refers to the overall industry profitability. An "unattractive" industry is one in which the combination of these five forces acts to drive down overall profitability. Three of Porter's five forces refer to competition from external sources. The remainders are internal threats.
Porter referred to these forces as the micro environment, to contrast it with the more general term macro environment. They consist of those forces close to a company that affect its ability to serve its customers and make a profit. A clear example of this is the airline industry. As an industry, profitability is low and yet individual