Threat of Substitutes of the Aircraft Industry - Research Paper Example

trains and automobiles are more convenient as opposed to airplanes (Grimm, Lee & Smith, 2006, p. 98). This is because automobiles offer better services in terms of door-to-door deliveries. The aircraft industry faces this threat since delivery of both goods and people is restricted to the airports (Grimm, Lee & Smith, 2006, p. 101). Travelers however are opting to use more convenient and cheaper means.

            As such, aircraft like Bombardier Aerospace face the most significant substitutes as commercial airlines (Grimm, Lee & Smith, 2006, p. 55). This lies in the cost incurred since the cost of boarding a flight on an air taxi is approximated to be the same as the cost of a coach airline ticket (Grimm, Lee & Smith, 2006, p. 55). Based on this, it is noted that 8.12% of the first class commuters have shifted to private jets (Grimm, Lee & Smith, 2006, p. 87). This can be blamed partly on the post-9/11 disturbances of airline voyages, ineffective airfields, and profitable airlines as well as a contemporary emphasis on time and effectiveness (Grimm, Lee & Smith, 2006, p. 99). People value time and the efficiency with which the airlines are operating.         

1. Strength of the Southwest Airlines Company

            The strengths of the Southwest Airlines Company are inclined to the corporation’s growth as well as the internal environment (Lauer, 2010, p. 29). The company has a superior clientele service culture, operational strategy within the firm as well as the capacity to provide the lowest costs in terms of fare (Lauer, 2010, p. 29). These are some of the issues that have contributed to its fast development and survival during the 2009 recession in the aircraft industry (Lauer, 2010, p. 31). The company’s operational strategy gives room for the airline to measure the recession with the smallest loss possible (Lauer, 2010, p. 32).

            On the other hand, the company does not invest a huge amount of its revenue in unnecessary expenditures like most of the airlines in the US do (Lauer, 2010, p. 23). This enabled it to cut services and even offer them for a fee during the 2009 recession (Lauer, 2010, p. 23). Since the company does not provide clients with free extras like blankets, baggage checks, and snacks, the corporation was not forced to transform much in the way services are offered so that costs could be reduced (Lauer, 2010, p.41). This has helped the company to sustain its profitability and competition within the market of aircraft industry operations. As a result, the Southwest Airlines Company has maintained low-cost airfare that has acted as an enticement to clients (Lauer, 2010, p. 44).

            The company’s strong position in the maintenance of competitiveness has been boosted by good customer services offered (Lauer, 2010, p. 44). As such, during the recession, most airlines struggled to reduce their operational costs. However, Southwest Airlines Company focused on service models where the client still gets exceptional services and gains from the airline (Lauer, 2010, p. 52).