Term
| The shrinking number of competitors in the industry should allow for continued capactity restraint and potential fare increases. the US airline industry has implemented more than 21 fare increases, more than half of which hae stuck. S and P expects to see additional attempts to raise airfn 2012 and 2013. Airlines have been doing much less discounting than in the past. What does this say about the threat of rivalry? |
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Definition
| Low threat of rivalry expected |
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Term
| The cost of fuel has beenat historically high levels over the last few years and airlines are inherently dependant upon energy to operate; therefore, , even a small change in market fuel prices can significantly affect profitability. costs to purchase aircraft and specialist machinery, hangar and other airfield space, as well as costs to attract skilled labor are high. What does this say about supplier power? |
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Definition
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Term
| The automobile is the airlines chief competitor. for short trips, airline travel is netiher practical nor economical. For long distances, however, travelers prefer flying to driving. What does this say about substitution? |
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Definition
| Cars pose a high threat of substitution on short trips, low threat of substitution on long trips |
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Term
| The weakened state of the US economy could continue for an extended period of time. Unfavorable US economic conditions have historically driven changes in travel patterns and have resulted in reduced spending for both leisure and business travel. costs to purchase aircraft and specialist machinery, hangar.... what does this say about the threat of entry? |
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Definition
| there is a low threat of entry |
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Term
| According to the S and P industry survey:Airlines, compared with the business traveler, the leisure traveler is highly price sensitive. to compare for business passengers, airlines must provide frequent flights, reliable on time performance, and top safety records. This means a valuable KSF is a price change |
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Definition
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Term
| What are the five forces? |
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Definition
| buyers, suplliers,entry, subs, rivalry |
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Term
| What is buyers ranked as in the car manufacturing industry? |
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Definition
| high power threat, paragraph 1 |
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Term
| What are the barriers to entry in the car manufacturing industry? |
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Definition
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Term
| What is rivalrey ranked as in the airline industry? |
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Definition
| High power threat, paragraph 3 |
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Term
| what are substitutes ranked as, in the car maufacturing industry? |
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Definition
| Low or moderate, paragraph 4 |
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Term
| What are suppliers ranked as? in the car industry? |
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Definition
| High power threat, paragraph 5 |
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Term
| for the car manufacturing industry, the expected profitability will be: |
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Definition
| moderate for low subs, low if moderate for subs |
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Term
| According to the case e and j gallo, which of the below is the likely reason that gallo winery resumed marketing its two lower end wines? |
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Definition
| the profitability ratios in the segment were relatively large |
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Term
| What are three of the five KSF for the wine industry? |
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Definition
| Economies of scale, efficient production, g star, inv turnover, scale |
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Term
| What is the economies of scale formula? |
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Definition
| COGS + operating expenses/ TA : Lower the better |
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Term
| What is the efficient production formula? |
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Definition
| cogs/ revenue lower the better |
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Term
| What is the G star formula? |
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Definition
| 1-div payout ratio * ROE higher the better |
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Term
| What is the inventory turnover ratio? |
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Definition
| COGS / Avg INV higher the better |
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Term
| What is the formula for scale? |
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Definition
| = Total assets higher the better |
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