Connect Domestic Violence Global Terrorism

Economic

In current days, the economy all around the world has remained weak even after three consecutive years of obtuse recovery from its bottom in the year 2009. The unemployment rate in Australia has remained high and the customers are mentioned to be both prudent and cautious in their purchasing and spending habits (Bishop et al. 2013). Similarly, in the short term, since the economy view has remained gloomy, there is high change of people cutting down their spending and travelling less for their tourism purpose. This has the potential to reduce the demands of air flights. Apparently, in the environment where economy suffers, people tend to switch towards cheaper costing airline operators.

Socio-cultural

The living standards of the people are significantly increasing around the globe. Customers have become more demanding than ever. With the same, consumers’ level of expectations is also growingly increasing on the level of services that a business provides to them. They are become more conscious about their rights and they understand that they have the most influence in the profitability of the business. It is also to note that people now-a-days do not buy products based on the features that they possess, in fact, the current generation is entering into an emotional economy. Furthermore, globalisation has also increased the tourism activities in the countries and people today are very interested in experiencing a new culture and lifestyle that are different from their own (Crystal 2013).

Technological

Increase in the popularity of the electronic commerce and internet services is growing around the world. This is affecting the industry in positive ways. Internet is enabling the company to reach large number of audience and provide them services in lesser cost (Porter and Heppelmann 2014). Also, the travellers today cold also compare the airways fares sitting their home alone. Also, through social media the company could spread awareness of it’s among the people throughout the world. It has also enabled the customers to access high speed internet service and this could also strengthen the competitive position of Virgin Australia’s airline operators.

Porter’s Five Forces

The Porter’s five forces are mainly used in this context to analyse the attractiveness and competiveness of the airline industry in which the Virgin Australia operates. The analysis of porter’s five forces consists of five key competitive forces-

Threats of new entrants-

The airline industry of Australia has an average threat of entrants into the business market environment and this is because of the presence of different barriers of entry which prevents many companies from entering into the market or any industry (Borchert, Gootiiz and Mattoo 2013). Few of these barriers include increased taxations on the aviation fuels, increase in start-up costs andleasing out of most of the existing terminals to major airlines.

Bargaining power of the buyers-

The bargaining power of the buyers is also moderate in the Australian region and this is because of the fact that a large part of the sales of the local airline tickets online or from th airport are for incoming tourists, the corporate sector and the local tourists (Sun 2014). With the same, introduction of less costly alternatives into the airline market like in Virgin Australian Airlines has enabled the customers to have more number of options of the prices and products (Virginaustralia.com, 2018)

Bargaining power of the suppliers-

The bargaining power of the suppliers in the Australian airline industry is also very moderate. It is due to the reason that the airline supply business is controlled by few companies that have less competition among the suppliers (Porter and Heppelmann 2014). It is doubled by the lesser possibility of the suppliers in integrating vertically because the material inputs of theirs into the industry do not belong to the nature of commodity. The major factors that discern the bargaining power of the suppliers comprise of the substitute suppliers, switching costs supplier concentration, forward integration and threat of the backward.

Threats of the substitutes-

The main alternatives to the substitutes of the airline services are the rise in the popularity of the local tourism along with the development of the entertainment services that are complement to the rail, car and airline industry means (Sharpley and Telfer 2015). Cars and rails are still the popular mean of transport in Australia so the decision of shifting to the costly airline services must be restorative (Ustun, Zayegh and Ozansoy 2013). Hence, the main aim of the airline service providers is convincing the consumers for choosing the air transportation.

Internal rivalry-

The present situation suggests that Virgin Australia is competing directly with the Qantas and Tiger airways in the local or domestic market and the completion is so serious that these airlines are undergoing a huge loss in their respective operations (Bamber et al. 2013). Two of its major competitors is the Deutsche Lufthansa and British airways a well and hence, it can be said that it is undergoing international competition from all the major airline operators. Such a severe rivalry has resulted in the increase in competition cost and has slowed down the market growth as well. With the same, it has also resulted in lower profit margin for the company.

References:

Bamber, G.J., Gittell, J.H., Kochan, T.A. and Von Nordenflycht, A., 2013. Up in the air: How airlines can improve performance by engaging their employees. Cornell University Press.

Bishop, J., Kent, C., Plumb, M. and Rayner, V., 2013. The resources boom and the Australian economy: a sectoral analysis. RBA Bulletin, pp.39-50.

Borchert, I., Gootiiz, B. and Mattoo, A., 2013. Policy barriers to international trade in services: evidence from a new database. The World Bank Economic Review, 28(1), pp.162-188.

Crystal, D., 2013. A global language. In English in the World(pp. 163-208).

Pain, R., 2014. Everyday terrorism: Connecting domestic violence and global terrorism. Progress in Human Geography, 38(4), pp.531-550.

Porter, M.E. and Heppelmann, J.E., 2014. How smart, connected products are transforming competition. Harvard Business Review, 92(11), pp.64-88.

Sharpley, R. and Telfer, D.J., 2015. Tourism and development in the developing world.

Sun, Y.Y., 2014. A framework to accounting for the tourism carbon footprint at island destinations. Tourism Management, 45, pp.16-27.

Ustun, T.S., Zayegh, A. and Ozansoy, C., 2013. Electric vehicle potential in Australia: Its impact on smartgrids. IEEE Industrial Electronics Magazine, 7(4), pp.15-25.

Virginaustralia.com. (2018). [online] Available at: https://www.virginaustralia.com/cs/groups/internetcontent/@wc/documents/webcontent/~edisp/2016-annual-report.pdf [Accessed 9 May 2018].