Question

The leading companies in the online travel agency industry are Expedia, Cheaptickets among others. Their biggest business is selling airline tickets, where they employ the services of computerized airline reservation systems such as Amadeus and Galileo Use Porter's five forces framework to predict the profitability of the online travel agency industry in the next 3-5 years.

Answer 1

Porter's five forces framework is a strategic methodology to assess the level of competition for a business entity in a particular industry. Porter's five forces framework:- Online Travel Agency Industry

Forces	Level of Competition
Bargaining power of ticket buyers	High/Aggresive
Threat of substitutes/replacement	High
Bargaining power of suppliers	Low/Weak
Threat of New Entrants	Medium
Intensity of competition	High

Online ticket Industry is a very competitive industry which is highly fragmented as several small players eat the business share of bigger established names. With the advent of technology in each hand through mobile internet online travel industry has gained manifold pace. One has plathora of options to purchase cheap airline tickets werein the ticketing agency is furnishing its own coprorate/discount offers apart from the airline's offers. However in this particular case nature of market for the industry i.e developed country or developing country has not been mentioned. Thus whether it is a new market, growing market or stagnant market the profitability prediction could havd been concise and appropriate.