The airline sector has seen a tremendous change in the recent past following increased innovation in information technology. Indeed, IT is an aspect that cuts across all industries, and the airline industry is not immune to the dynamic nature of computerization. Technology constitutes to one of the major competition drivers that any given firm would employ. This paper will elucidate the effect technology, as an external factor, has on the competitiveness of the airline industry.
Since 2008, airliners have embarked on a tremendous investment in innovation with the sole intent of providing services more efficiently and effectively to consumers. For an average survey conducted before 2008, technology would have played an insignificant role in the competitiveness of any given firm. Before this year, all external factors other technology played a significant role in establishing how well a company can be at the top. It follows, therefore, that such surveys would show an insignificant contribution of technology on the performance of the airline sector.
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Indeed, the failure of the airline is factored by various reasons, most of which relate to the drastic changes in fuel prices. While small firms in the sector have fallen as targets, the airline giants are becoming stronger and more competitive. Large corporations have the advantage of economies of scale as well as the ability to adjust to severe market conditions such as hindrances resulting from economic growth. Thriving in the sector necessitates the adoption of modern technology in the systems, which may prove expensive at inception but profitable in the long-run.
In conclusion, Porter’s argument is only valid in a scenario where technology is constant. However, technology is exceedingly dynamic and any venture desiring to be at the top should consider this aspect. The growth of the airline industry is dependent on information technology, and the competitiveness of the constituent companies is based, chiefly, on the adoption of modern technology.
References
Mouawad, J. (2012). Start-Up Airlines Face Big Obstacles. Retrieved from https://www.nytimes.com/2012/05/26/business/start-up-airlines-face-big- obstacles.html
