Strategy and Competition of Swissair Essay Example | Topics and Well Written Essays - 1500 words

Strategy and Competition of Swissair - Essay Example The rapid expansion which was supposed to bring Swissair out of its financial worries only served to make the situation worse eventually leading to liquidity problems for the company. Further, the manner in which Swissair spent money and made investments clearly shows that the management often had other interests in mind rather than the best interests of the company. Â  The SWOT Analysis of the company shows that while the strengths of the business were exploited, the weaknesses and were not accounted for and those weaknesses eventually led to the threats to the company becoming realities. The SWOT analysis created with the information presented in the case study shows the elements as follows. Â  Porter’s 5 Forces shows an interesting picture for the airline industry and it is clear that it is not easy to be a new entrant into a market which is dominated by heavy competition and rising costs. Profit margins for many airlines are becoming thinner as fuel costs and taxes are increased internationally which means the only determinant of new entrants is how easy or difficult it is for them to secure significant lines of capital. Even with price competition, an airline which has a strong brand name might be able to charge a premium for the same services as other airlines. Getting that brand name, however, requires continued service quality and a long history of excellence. The power of suppliers is also quite high since Boeing and Airbus dominate the supply side while the power of the buyers is quite low with regard to them simply needing planes if they are to call themselves as an airline. The threat of substitutes becomes low when we consider international travel but it remains quite high when local and regional travel is considered.