Flyselskabet, der solgte danskerne solen
Sterling Airlines · Porter's Five Forces · Read the study: maxnoble.com/study/0005
For the class
1Name Porter's five forces. Which four were strong against Sterling?
2When did Sterling lose the protection it once had, and why did that matter?
3What happened in 2008 that grounded Sterling?
Answers · for the teacher
No. 0005 · Flyselskabet, der solgte danskerne solen
1Name Porter's five forces. Which four were strong against Sterling?
Rivalry, new entrants, suppliers, customers and substitutes. Rivalry, new entrants, suppliers and customers were all high; substitutes (train, car, ferry, video calls) were medium, because they press short routes but not the holiday to Málaga.
In the study: Screen: The analysis (Five forces, four against)
2When did Sterling lose the protection it once had, and why did that matter?
When the airline was split from the travel agency, Tjæreborg, in the late 1980s. As long as the travel agency owned the customer, the flight was just part of a holiday package and customer power was low. Once Sterling sold seats directly online, it stood alone on a screen, sorted by price, in the hardest price war in the world.
In the study: Screens: The background; The observation
3What happened in 2008 that grounded Sterling?
On 11 July 2008 oil hit a record 147 dollars a barrel and the wish to travel fell. The owner kept paying (DKK 444.5 million from July to September) until Iceland's financial system began to collapse in late September. Four weeks later, on 29 October 2008, the planes stayed on the ground: about 40,000 tickets became worthless and about 1,100 people lost their jobs. The verdict: Sterling lost not to one rival but to an industry where others set both its price and its costs.
In the study: Screens: The idea; The history (2008); Your verdict
Hand out page 1 after the reading. Page 2 holds the answers. Every answer is in the study; nothing new is added.