Analysis of factors impacting on the competition of Iran’s air transport industry based on Porter’s Five Forces Model

Abstract

Several factors play a role in an industry which may in turn involve threatening or survival of economical firms. Competition is one of the most important factors that its impact and role have been realized in industry management and economic firms. Under today’s competitive conditions, to maintain and expand the activities, economic firms are required to pay close attention to planning and strategic readiness.

One of the areas of industry in Iran which needs to be analyzed regarding effective factors on competition is air transport industry. Accordingly, the current research tries to analyze factors impacting on the industry using Porter's five forces model. According to this model, an industry is affected by five competitive forces and these forces determine the state of competitiveness and profitability of an industry: entry of new investors, threat of substitutes, bargaining power of buyers, bargaining power of suppliers, and rivalry among existing competitors. The strongest force or forces play a major role in the firm’s strategies.

In the current study, questionnaires, interviews, library studies and documents have been used for data collection. The statistical population of the research consists of managers (Senior, middle, executives), six airlines operating in domestic and international lines (Iran Air, Air Tour, Mahan Aseman, Kish Air and ATA). Analyses were carried out using Friedman test, t-test, exploratory factor analysis, and Kolmogorov-Smirnov test by means of SPSS.

The results show that the most effective force on competition in Ian’s air transport industry is the bargaining power of suppliers, and the least effective force is the threat of new entrants. Also, the effectiveness degree of other forces, from the second to the fourth is the competition between existing competitors in the industry, the bargaining power of buyers, and the threat of substitute services, respectively.

Keywords: Strategic Management, Competitive Strategy, Porter's Five Forces model, Air transport industry.