The US Airline Industry

Dynamics of team work (at home)

• Work in teams (the same selected for project work)
• Teams work together by using tools for collaborative work (MS Teams,
Zoom, etc.) according to the following phases (after having read the
case individually):
– Phase 1. Assess Industry Performance (15-30 minutes)
• “Structure-Conduct-Performance”
– Structure: what has been the extent of competition? Spot relevant trends. How would you
measure it?
– Conduct: price? Benefit differentiation?
– Performance: spot relevant trends.
– Phase 2. Assess industry attractiveness according to the Five Forces (30 minutes)
– Phase 3: Develop a strategy for the future (15-30 minutes)
– Phase 4: Fill the matrix with the summary of the internal discussion and prepare
3 slides for its presentation
 Structure of class discussion
• Introduction: professor identifies the goals of the discussion (5 minutes)
• Discussion: two teams present their findings and discuss different views
in their analysis. Professor coordinates the discussion
– Phase 1. Assess Industry Performance (25 min)
• Voice to teams: 15 minutes
• Instructor’s Wrap-up. 10 minutes
• Phase 2. Assess Industry 5 Forces (30 min)
• Voice to teams: 20 minutes
• Instructor’s Wrap-up. 10 minutes
• Phase 3. Strategy for the future (30 min)
• Voice to teams: 20 minutes
• Instructor’s Wrap-up. 10 minutes
• Final wrap-up
Approach for Class Discussion

“In God we trust; all others must

bring data.“
(W.E. Deming)
PHASE 1. ASSESS INDUSTRY
PERFORMANCE
 Assignment for the teams
(matrix to be filled and shared during the discussion)
PHASE 2. THE 5 FORCES
 Team assignment- Fill the table
WHAT? WHY? HOW?
High, medium, low? Notes on relevant Describe of the
drivers that drivers act,
motivate your influence firms’
answer conduct and
performance
Industry Rivalry Cost structure
Extent of product
differentiation
….
Threats of Entry Barriers to entry
Barriers to exist
…
Threats of …
substitute products
Suppliers’ ….
Bargaining Power
Customers’ …
PHASE 3. STRATEGY FOR THE
FUTURE
 The outlook for 2021-2025
• Is the outlook positive? What factors will influence it?
– How to act on
• Differentiation from competitors (e.g. low cost carriers)?
• Costs?
• Product differentiation?
• Capacity ?
• Market power?
• How can airlines diminish customers’ bargaining power?
• How can airlines diminish suppliers’ bargaining power?
• …..any other relevant variable
– How Covid-19 is affecting the cost structure and the demand
of airlines?