Assigned Company: Alibaba
For companies in multiple industries, identify the industry your paper focuses on.
Defining the industry can be trickier than it appears. You have to adjust the narrowness or expansiveness of the definition to include the natural competitors and exclude those that aren’t.
Transportation? No, that’s too broad. BART and the New York subway system are in the transportation business too, but a customer wouldn’t make a purchase decision between JetBlue and Bart.
The US Discount Airline industry? While some might categorize it like that, I would argue that is too narrow. Southwest often competes with so-called legacy carriers like United for the same travellers. Years ago some considered Southwest a “no-frills” carrier and the legacy airlines “full-service” carriers, the market has changed so that Southwest often includes more services in its fare than the legacies. (e.g. baggage fees)
The US Airline Industry? This is probably the best definition. It includes competitors like United, Alaska, Spirit, etc. It excludes airlines that don’t compete with it like British Airways and Lufthansa, which have no overlap in routes.
Example: What industry is Southwest Airlines in?
Once you have an industry definition that makes sense, construct a Porter Competitive model (we will learn about what this is early in the quarter). Discuss each of the five forces, and explain why you believe that the force is strong or weak in the industry.
What is the industry and how does it provide value to its customers?
What is unique about your company’s history, evolution, and circumstances that make it offer distinctive (and/or lower cost) experiences and products to its customers?
Example: Southwest Airlines has a unique history as a startup in the 1970s. It focused on routes within Texas to avoid having its routes and other aspects of its business regulated by federal authorities, as other airlines were at the time. The legacies fought its creation and Southwest, in-turn, has always competed like an outsider — avoiding copying the practices of the legacies, which were always copying each other. (e.g. pricing models, change fees, assigned seating, fleet planning, bag fees, distribution by travel agencies and online travel agencies, etc.)
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