The UK No-Frills Airline Market Case Study Example | Topics and Well Written Essays - 3000 words

The UK No-Frills Airline Market - Case Study Example The entry of new companies in the market is one of the factors that greatly affect the competitiveness of companies in the sector since the new companies come with strategies to win customers into their company. Some other factors that affect the competition in the market are the bargaining power of the suppliers, the bargaining power of the consumers, the bargaining power of the competitors and the presence of substitutes in the market. This paper seeks to analyze competition in the no-frills airline market and also compare it with the condition that was there about forty or fifty years ago. The issue of price discrimination and outsourcing is also discussed in the paper. One of the factors that have brought great competition in the no-frills airline market is the entry of new competitors in the market (Krishna & Eric 2003: p.49). The moment new companies join a market; they have the intention of winning some customers so that they can have a share in the market. They also come with new capacities in the market thus challenging the companies which are already in the market. They also come with a desire to gain some substantial resources in the market. The companies are willing to do anything to meet their goals. However, these companies are likely to be affected by the barriers that are present where these barriers are usually high meaning that entry into the market would mean that the company has to sell at a higher price so as to recover its expenses. This gives the existing companies a competitive advantage over these new companies making it quite hard for these companies to survive in the environment. The reaction of the airline companies that are already in the market also matters a lot. If the present companies collude so as to eliminate a new company, it is very easy because these companies have been in the market for quite some time. Most of the companies will always be willing to eliminate these new companies and will do this by colluding with the other companies in the no-frills airline market.