Flight Centre Ltd. Case Study Singapore

Here, we shall be discussing the “Flight Centre Ltd. Case Study”. Flight centre is of Australia largest travel agencies. However, we shall be looking at its competitive advantage and what affects it. For we shall be conducting the Porter Five force analysis of the Flight Centre Ltd.

Thus, without further adieu:

Flight center Ltd. Overview

“Flight Centre Ltd.” or Flight center travel group limited is an Australian consumer service-based organization. One might also refer to it as a “travel agency”. In fact, it is one of the leading firms in its respective sector. Nevertheless, it was established in the year 1982.

Moreover, this organization is renowned for innovation and defining its sector time and time again. As such it also operates in other parts of the world. For instance Singapore, South Africa, Hong Kong, India, China, Singapore, United Arab Emirates, Mexico, and several others.

Moving on, we shall be conducting the Porter Five Force analysis on this travel firm. We shall be looking at the same in the next section of the case study.

Porter five forces analysis

The Porter Five force analysis observes the five forces that affect the business considerably. In addition to this, it also directly affects the organization’s profitability.

Moving on, these five forces are, as mentioned below:

• The threat of New Entrants
• Bargaining Power of Suppliers
• Bargaining Power of Buyers
• Threat from Substitute Products
• Rivalry among the existing players

Moreover, this analysis is considered to be a holistic strategy framework. It concerns how this travel firm can create a competitive advantage that is also sustainable. Therefore, management at the Flight Centre uses this method to establish a strategic position as well as finding new opportunities in the respective market.

Thus, without further adieu, we shall be starting with the first factor. It is, as mentioned below:

The threat of New Entrants

The term new entrants refer to the entry of new competitors in the industry. Therefore, new entrants bring new methods as well as innovative technologies.

Consequently, the Flight center is put under pressure. In addition, there are several other factors associated with new entrants. For instance pricing strategies, reduced costs, as well as better value for customers. Therefore, the Travel firm has to establish barriers to protect itself from new entrants.

Bargaining Power of Buyers

A buyer has high demands. One always wants to buy the best available option while paying the lowest price. As a result, it applies pressure to the organization’s long-term profitability.

Moreover, when the customer base is smaller it also holds more power of the marketer. Thus, they also have higher bargaining power as well as seek more and more discounts or offers.

Bargaining Power of Suppliers

We know that all the organizations in the consumer service industry or any industry for that matter, buy their raw materials from various suppliers. Thus, suppliers who hold the dominant position can affect earning margin of Flight Centre.

Moreover, Such suppliers use their position in negotiation to get a higher price from firms. Therefore, we can say that if the Flight center’s supplier holds more power, they can decrease the firm’s profitability.

Threat from Substitute Products

A new product or service that fulfills customer demand affects that market. As a result, the profitability of the market suffers. Thus, innovative products can affect the profitability of Flight center ltd. considerably.

Moreover,  there is also a threat from the substitutes or alternative products. If this counterpart offers better value it can also affect the profitability negatively.

Rivalry among the existing players

When there is high competition between two firms, it can bring the prices down. In addition to this, it can also affect the industry’s overall profitability.

Moreover, Flight Centre sits in a highly competitive market. Thus, the previous statement applies to it perfectly. In fact, in long run, the profitability of an organization takes a huge toll.

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