SIMULATION REPORT

Simulation Report

Simulation Report

Question 1

In this simulation you chose a sector to operate in (budget, mid-range or luxury). What have you learned about these sectors as a result of your experience in this simulation? What would you have done differently at the beginning of the simulation and why? What would you have done differently to be more successful during the simulation and why?

Answer 1

The chosen sector to be operated was budget airlines. The main purpose was to generate more revenue through less investment. The main focus of the company was on medium class people by offering comparatively less fare rate. For this purpose, more market research was conducted which helped in designing and implementing new and effective strategies. Product strategies were designed as these play the most significant role in the overall performance and the success of a business company. In market terms, product refers to something which is offered to the customers in order to fulfill their needs and demands. (Johnson, Scholes, Whittington, 2004).

Poster's Five Forces

In order to perform a better market analysis, Porter five forces is considered. Porters five forces is an efficient way to assess organizational profit (Porter, 1998).

Threat of Entry

At first it is important to measure the threats that may pose any hindrance in the market for the company's entrance. If a company needs to establish in a new market then it is the necessary step to get aware with the potential threats. It is also necessarily required to overcome the barriers by new entrants in order to achieve a complete satisfactory entry and further establishment of the business. While conducting the stimulation, there were several other airlines which chose for budget airlines and in this case, it is easy to predict that the entry would not be easy (Porter, 1998).

Threat of Substitute

Substitutes refer to the services or products that provide similar advantages to an organization's services or products by implementing several different processes. Railways are considered as the main substitutes of airline. As the main focus of this airline company is on domestic travels covering 600 miles so people can also prefer trains for short distances (Lindsay, 2010).

Bargaining Power of Buyers

For the success of any business, the most essential tool is the customer. The business of a company is much dependent on the bargaining power of the customers (Porter, 1998).

Bargaining Power of Suppliers

Suppliers refer to the people who supply different manufacturing elements to company which it needs to manufacture its products. These elements include raw, materials, equipments and fuels. Suppliers are then back bone of a company. Mostly the organizations have a number of suppliers and if their market power is high, then the company balances it by increasing its product prices and makes its profit (Morrell, 2011).

Intensity of Competitive Rivalry

Every organization has some fear of its competitors. Competitive rivalries are considered to be those companies that offer the same products and services to the market. This airline is focused on the budget flights to some specific areas. Thus a competition arises when the ...