Northwest Case Analysis

PorterÕs Five Forces Model
When relating the airline industry, or more specifically Northwest Airlines, to PorterÕs Five Forces Model there are five forces to be examined, hence the name. First off it is good to look at the risk of entry by potential competitors. With respect to this force there is a high barrier to entry due to the high cost of capital. To be a competitor in the airline industry you must first have and airplane. Airplanes are large investments that require high mechanical maintenance, and a high degree of employee competence. If you arenÕt operating efficiently you wonÕt be profiting enough to adequately maintain your aircraft and keep competent employees.

The second force of the five is rivalry among established companies already in the industry. In the airline industry this is always something that is relevant. Seeing that all airlines generally provide the same service of bringing people from one place to another it is important to differentiate. ...