Boeing Porter's Five Forces Industry analysis Assignment

Boeing Porter's Five Forces Industry analysis - Assignment Example This is mainly because they are highly entrenched in their airport hubs, making it difficult for new companies to find space in these air ports (Clougherty and Zhang, 2008). Furthermore, smaller airports do not have enough passing traffic that can make these new airlines companies to post some profits. High fuel prices are one of the most dominant barriers for new airline companies (Mouawad, 4). This is because it accounts for approximately 50% of the costs that these airline companies are able to incur (Peoples, 2012). The high number of mergers is also another reason that prevents new companies from entering the market. These companies manage to control a large segment of the market, making it hard for new entities to penetrate. Companies such as Hawaiian airlines, Allegiant Air, and Spirit Airlines managed to survive this competition by creating their own niche market, hence avoiding direct competition with these major airlines (Fojt, 2006). There is also a high level of research and development budget that is required for new entrants into this market. It is virtually impossible to compete in this industry, when the new company does not have information about its competitors, target market, etc (Williams, 2002). Acquiring this type of information requires a great deal of research, which is very expensive. Furthermore, the airline industry has loyal customers, who will only take the national carrier. Based on these facts, threats of new entrants to Boeing are low. The intensity of competition facing Boeing is very high. This is because the industry comprises of large airline companies offering the same services. The airline industry does not have any market leader, and their strategies are not different (Fojt, 2006). This is the reason why most airline companies are forming mergers for purposes of competing efficiently with their competitors (Grundy, 2012).