Porter 's Five Forces Of New Entrants

5 Porter’s Five Forces

5.1 Threat of New Entrants

The airline industry is a costly business to partake in especially due to the cost of fuel and technology needed to operate the airplane. With EasyJet internationalizing into Africa, it had the notion of facing new competitors, however, with the finances (see appendix) it possesses and the famous identity of its brand, made the threat of being a new entry within the Nigerian market low. However, a big threat would be if local Nigerian airlines were to reduce its prices then EasyJet might be at risk because the local airlines have the necessary equipment and knowledge to operate in its region.

5.2 Power of Suppliers

Airplane – With the only two main airplane suppliers in the industry, Boeing and Airbus, gives EasyJet a low bargaining power making the suppliers to have a high power at determining what price to sell its airplanes, however, EasyJet can increase its bargaining power if it looks to buy in bulk due to the fact that it is internationalizing into Nigeria so the demand for airplanes would be high.

Oil – it is inevitable for airplanes to fly with petrol, therefore giving petrol suppliers a high power. With the war in Iraq, petrol prices have increased significantly but by looking to purchase in Nigeria, where oil is a resource, would reduce the continental cost of buying from Iraq and makes it a recommendable country for EasyJet to operate in.

Airport – With the major airports in the European countries being too expensive for EasyJet to fly into, EasyJet will not face such problems in Nigeria due to currency exchange; it would be cheaper for EasyJet to fly into major airports in Nigeria. However, it is left to the airport to decide on whether it wants EasyJet to operate on...

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...ervices land transportations cannot offer, this will significantly boost the number of customers looking to fly and will increase the brand identity of EasyJet in Nigeria and Africa as a whole.

7 Conclusion

In conclusion, EasyJet has been doing exceptionally well since its establishment in 1995. However, EasyJet can no longer rely on its past success based on increasing number of competition and operating in a saturated market. Furthermore, with the continuation of the market evolving, globalization is needed in order for a company to be successful. Therefore, it is appropriate for EasyJet to implement the recommended strategy of internationalizing into an emerging country, Nigeria, especially when EasyJet’s main source of flying an airplane is a resource of the given market. This way, EasyJet will be able to maintain a competitive advantage over its competitors.