Discussion
As the target airport to analyze, Daytona Beach International Airport (DAB) was chosen. By applying Porter’s Five Forces model, one can note that this infrastructure is prone to competition issues. The industry rivalry is high, and, according to Park (2019), in 2019, DAB experienced a crisis and losses caused by low passenger numbers. Due to this, the threat of substitutes should be taken into account as a critical factor. Park (2019) states that small airports are often forced to give way to larger ones, which leads to insufficient consumer interest, and in the case of DAB, this problem is relevant. At the same time, the threat of new entrants is not severe for the airport. As Covey (2020) notes, DAB has an advantageous location, and its coastal position makes it attractive to the target audience, as the results of the end of 2020 show. A new airport will not be built at the same location, and this will keep target customers.
The threat of substitutes remains relevant due to the close proximity of larger airports in Florida. Despite its good location, DAB may lose profits; it is small (three runways), although it can accommodate both commercial and passenger flights (“The economic impact,” n.d.). The aspect of the bargaining power of buyers is critical since DAB’s profits are directly dependent on customers. The visitor spending impacts are reported to be $232,462,000, which indicates the continued need for airport services (“The economic impact,” n.d.). The power of suppliers, in turn, is not crucial since DAB does not depend on the supply of raw materials or other equipment more acutely than other airports. Thus, one can conclude that the threats of rivalry and substitution are the most crucial risks to take into account.
However, despite potential competitive challenges, DAB is carrying out the necessary marketing interventions to strengthen the airport’s position in its market segment. According to Covey (2020), the client share has increased by 81% since 2009 (para. 5). Despite the COVID-19 pandemic, DAB executives offered more flights to passengers at the end of 2020, which increased profits (Covey, 2020). The same measure has become a mechanism for increasing the competitive advantage, which is essential in the context of limited foreign flights and the increasing role of air transportation within the country. One of the approaches to enhance customer value is performing a renovation project, which is due in January 2021. $14 million was spent on upgrading the terminal and customer services (Covey, 2020, para. 6). These marketing steps are relevant in a highly competitive environment, and retaining the target audience is a logical development solution.
Responses to the Posts
Post 1
The assessment of the competitive position of Singapore Changi Airport by using Porter’s Five Forces model has been carried out successfully and comprehensively, which allows evaluating its sustainability, strengths, and weaknesses. The fact that this facility is the only commercial airport in Singapore is valuable. The analysis of the activities of airlines flying to this airport may help adapt the findings to specific development factors. For instance, Singapore Airlines is one of the country’s largest air carriers, and in its business, it manages to combine differentiation and cost leadership strategies through innovation and smart budgeting.
Post 2
The analysis of Toronto Pearson Airport through Porter’s Five Forces model is detailed, and using relevant terminology is valuable. Competitive factors are listed comprehensively, and the mentioning of marketing solutions allows obtaining maximum information about the internal policy of this facility and its interest in attracting and retaining the target audience. By bringing in an airline that flies to the given airport, for instance, Air Canada, one of the largest carriers in the country, one can look at distinctive competitive strategies. In particular, differentiation is the main Air Canada’s approach due to a large number of carriers and the need to continuously optimize the infrastructure to retain the target audience.
References
Covey, C. (2020). Business on the rise at Daytona Beach International Airport.Travel Pulse. Web.
The economic impact of Daytona Beach International Airport (DAB). (n.d.). Florida Department of Transportation. Web.
Park, C. (2019). Tourism visits are up, so why is Daytona airport’s traffic down? The Daytona Beach News Journal. Web.