0:00
Hello.
00:02
Okay, so for the five -force analysis here, while porter's five -force analysis is going to be a useful methodology and a tool to analyze the external environment in which any industry operates.
00:15
So we have the supplier power.
00:16
The power of the suppliers in the airline industry is going to be immense because of the fact that the three inputs that the airlines have in terms of fuel, aircraft, and labor are all going to be affected by the external environment.
00:30
And then we have the buyer power.
00:35
So with the proliferation of online ticketing and distribution systems, flyers no longer have to be at the mercy of the agents and the intermediaries as well, the airlines themselves for their ticketing needs.
00:50
So apart from the entry of low -cost carriers and the result in price wars has greatly benefited the flyers.
00:58
And then looking at the entry and exit barriers.
01:03
So the airline industry needs huge capital investment to enter.
01:09
And even when airlines have to exit the sector, they need to write down and absorb many losses.
01:15
So this means that the entry and exit barriers are high by the airline industry.
01:19
And as entry into the airline industry needs a high infusion of capital, not everybody can enter the industry, which in addition needs sophisticated knowledge...