Environmental Analysis: Michael Porter's Five Forces: Porter's Five Forces Model is a powerful analytical tool for monitoring the overall business situation in an industry. As the name suggests, five competitive forces are assumed to exist: the threat of substitute products, the threat of entry of new competitors, the intensity of competitive rivalry, the bargaining power of customers and finally the bargaining power of suppliers. As suggested in the "threats" section above, the airline industry faces threats from various substitutes such as trains, car travel and, more recently, video conferencing. Airlines face even greater challenges as competition from substitute products grows season by season. In addition to high emulation and market saturation within the U.S. airline industry, there is a reasonable threat of new competitors. Although the airline business requires much more start-up capital than, for example, sandwich shop chains, the United States is still the fourth country in the world with easy accessibility to capital for entrepreneurs (Mikken Institute research, 2005). Additionally, with only 5-6 days required to legally start a business, the United States is truly “a country of opportunity.” Suppliers to the airline industry, as we know, maintain enormous influence, simply because they are few in number. Airlines rely heavily on Concorde, Airbus and a few other aircraft manufacturers, which means that airlines do not have a great choice and variety of commercial offerings. As suggested by Reich (2007), today the power is in the hands of consumers. It is difficult to imagine monopolistic airline routes within the United States: consumers are continually exposed to greater choice.PESTEL1. Political Factors Exploring the political environment within the country of the United States, which is currently governed by the Republican party, it is necessary to note that the upcoming presidential election in 2008 will mark certain outcomes for businesses depending on which party wins. Indeed, it is assumed that the Democratic government is likely to raise taxes to expand health insurance coverage, while the Republican government already cut taxes as recently as 2007. So Republicans in many ways favor business more, in addition to their particular emphasis on fight against terrorism-related issues. However, the war in Iraq and the crisis in Afghanistan cast doubt on voters' preferences, as does the growing popularity of Hillary Clinton (Democratic Party).2. Economic FactorsThe United States economy is well established and developed. For many years the United States has maintained substantial economic growth, stability, and relatively low inflation. However, economists warn that sooner or later the American economy will face a severe recession, which has already begun (America's Vulnerable Economy 2007, p..