Case
- What is the good? Product segmentation w/ specific characteristics that differentiate what’s included and excluded (included 747 for cargo but not C130)
- Who demands and is it elastic or inelastic
- Inelastic is a very steep slope. If price changes, demand remains mostly constant b/c the demanders don’t have many price increase options.
- Commonly available substitutes will increase elasticity.
- The margins are helpful illustrations of what small changes would induce substitutes as compared to major shifts.
- The nuance of where substitutes are available as well. For shorter flights more substitutes but when you get into a specific segment of flights then you would have less.
- Rivalry - Strong, but why?
- Not much differentiation in plane types
- Lock-in could be stronger or weaker predictors of rivalry. Where does the lock-in live? Transaction or competition.
- when you’re locked in and you’re not looking for transaction by transaction basis
- Lock-in can strengthen rivalry form transaction to transaction to competition for the client.