The impact of industry role players on the competitiveness and profitability of an entity in a volatile environment

Abstract

In the face of numerous challenges that organisations encounter they cannot survive independently of the industry in which they operate. Constant interaction with industry role players and the ability to adapt and align organisational strategies to changes within the industry are instrumental to improved profitability. This study aimed to better understand the impact that industry role players have on their profitability and competitiveness in a volatile environment. Such an appreciation will assist organisations to continuously adapt their strategies to industry variations. The airline industry was selected because of its volatility that has seen a decline in the profitability of airlines operating worldwide; and Air Zimbabwe in particular because of the extreme macro and micro environmental forces under which it operates. Zimbabwean aviation industry employees‟ in current employ at Air Zimbabwe, employed by foreign airlines, travel agents, ground handling agents and aviation regulators were interviewed. The impact on competitiveness and profitability of six major industry role players (competitor airlines, suppliers, buyers, substitute products, new entrants and regulatory authorities) in the airline industry was analysed. There was general consensus among respondents that industry role players strongly impact on both the profitability and competitiveness.