Industry Analysis

Industry Analysis

Industry Analysis

The American Airline Group Inc is an airline company that was formed through a merger of American Airways/AMR and the US Airways in the year 2013 (Lawton, 2013). Before the merger, the company faced losses and deterioration, but the financial status improved tremendously making the American Airline Group Inc one of the largest America’s airline organizations globally. One of the merger’s fundamental objectives was to enhance the competitive edge of the company an objective it successfully achieved bearing the fact that a net profit of 1.5 USD was made in more than ten years.

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The power of substitutes is high if the company products can be replaced by other different products. In the US airline industry, substitutes’ power is very high. This is because there are very substitute to air travel which include road, train or even avoiding travelling. With the current technological advancement and emergence of video-conferencing, WebEx, Skype, business travelers may choose to avoid travelling as much as they used to (Sinha, Purnendu, Saini, Jain, & Raj, 2011).

References
Besanko, D. (2010). Economics of strategy. Retrieved from http://books.google.co.ke/books?id=UECFDuT99BQC&pg=PA328&dq=Five+Forces+Industry+Analysis&hl=en&sa=X&ei=ZyNDVJPgNsjmyQODzoJg&redir_esc=y#v=onepage&q=Five%20Forces%20Industry%20Analysis&f=false

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