Question

A popular low-cost airline, parson corp., has gone out of business. although the service and price provided by the airline was what customers wanted, the larger airlines were able to drive the low-cost airline out of business through an aggressive price war. which component of the competitive environment does this illustrate?

Answer 1

The component of the competitive environment that this illustrates is the threat of competitor rivalry. Though both airlines were offering low cost options to their consumers and everyone was happy with Parson Corp. The bigger airlines are usually able to offer something that the smaller airlines are not able to due to money. The larger airlines have more money and can compete at a higher rate with their competition. Since there was an agressive price war but the larger airline still won, the threat of competitior rivarly is the best example for the competitive environment that has happened here.