Porters 5 Force Analysis of the Airline Industry

Porters 5 Force Analysis of the Airline Industry

  • Submitted By: prescillyno
  • Date Submitted: 11/24/2008 9:22 AM
  • Category: Business
  • Words: 2450
  • Page: 10
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Helen Peck
This case was prepared from published sources by Helen Peck, Cranfield School of Management, as a basis for class discussion rather than to illustrate effective or ineffective handling of administrative situations. ( Helen Peck, 1995.

The case study covers the period from 1990 to 1995 which saw the spectacular decline of Fisons through a series of events triggered by the environmental impact of the peat digging activities of the company's smallest division (Horticultural). From a position of great strength in the late 1980s - when Fisons was generally regarded as very well managed - by 1995 the company was reduced to a pharmaceutical division turning in losses. The other two divisions had been sold and rumours of a takeover persisted. The case study illustrates the importance of understanding and managing stakeholder expectations and relationships.

During the early 1980s, John Kerridge, chairman and chief executive of Fisons, achieved one of the most remarkable business turnarounds in recent times. After selling off the company's loss-making core fertiliser business, he went on to create a highly profitable mini-conglomerate with three distinct areas of business. The Pharmaceutical Division, with its small portfolio of specialist asthma and anti-allergy drugs, was by far the most profitable part of the business. The Scientific Equipment Division was the largest non-American supplier of scientific equipment anywhere in the world. It occasionally outperformed Pharmaceuticals in terms of turnover, but never profits. The very nature of the Scientific Equipment business meant that it was vulnerable to recession. Then there was the tiny, reliable and modestly profitable Horticulture Division, specialising in lawn fertilisers and an array of value-added peat products.

By 1984, Kerridge's transformation of the business was complete. In January 1986, a poll conducted by stockbrokers James Capel had identified Fisons as the...

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