Porter Analysis of Victory Liner Inc

1 January 2017

Victory Liner Inc. is one of the largest bus transportation business groups in the Philippines the company was founded by Mr. Jose Hernandez and was passed to his sons and grandson. Today VLI servicing all key destinations in Northern Luzon as of today VLI deploys more than 1000 buses in its daily operations. During 80’s the company started purchasing real estate properties for use in operations such as terminals, maintenance stop, refueling stations and rest areas for passengers and crew. Boasting modern air conditions buses, victory liner fleet allows group to travel comfortably and in style.

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New development and products have been introduced by the company an online ticket ordering and delivery services is now available in the internet In 2007 Victory liner introduced a deluxe class available only in Baguio and Cagayan valley routes. In 2011 Victory liner initially equipped 50 air conditions buses w/ Sun broadband wireless Wi-Fi other wireless gadgets to log on to the internet making travel more productive and entertaining. Victory liner constantly conducts safety checks of its buses to ensure that every ride is smooth and as entertaining as possible.

This company valued their employees from managers to their staff and drivers. Because they believe that this person has a greater influence or impact w/ the different difficulties the Philippines economy is facing nowadays such as the volatile price of oil and natural calamities that cannot be foreseen. Victory Liner coaches are built by local bus body builders like Almazora Motors, Santarosa Philippines, Pilipinas Hino, and Del Monte Motorworks; as well as foreign coach builders like King Long and Yutong of China, and Kia and Hyundai of Korea. Victory Liner also has its own recapping plant.

Training and Insurance Cost. 9. Petrol Cost. Customers/ Passengers preferences are also a barrier for entrants. It is possible for the customers/passengers to get those familiar and trusted one rather than to the newly introduced company. Especially in terms of transportation where safety is highly emphasize, which forces the entrants to spend higher cost on advertisement to build big names in bus transportation industry, overcome passengers preferences and acquire patronage from them. A new industry plays also a need to have product differentiation among established firms in the industry.

Since bus transportation industry is a perfect monopolistic competition, entrants should have differentiation when it comes to services they offered. This also forces new entrants to spend much on innovating and improving their services. Improving and upgrading services offered by new entrant’s needs technological advancement which is another factors to decrease the threats of new entrants. It should have a specific and concrete marketing plan because established bus companies may have quality services, good business relationship w/ their supplier and passengers.

A threat of new entrants is weak due to these certain barriers that reduce the rate of entry of new firms, thus maintaining a level of profit for those already in the industry. Competitive Rivalry – Strong Factors increasing the rivalry among competitive: -Many competitors -The government policies minimize the effect of price base competition -Customer loyalty -Similar service offered -Level of product/services differentiation Factors decreasing the rivalry among competitive.

Other form of public transportation are more expensive Other form of public transportation have only limited geographical area A competitor gives strong impacts to the industry. High competitive industries generally earn low returns because the cause of competition is high. Bus transportation industry is a perfect monopolistic competition, due to similar services offered by firms. These services can be differentiated by implementing strategies to gain continuous customers loyalty. Government policies minimize the effect of price base competition. With this, price is not a big issue for customers to shift to other buses.

The ability of customers to substitute is very strong, forcing each company to innovate more not only in services they offered but also with their routes availability, terminals, technological advancements and professionalism with their employees. These will strongly affect customer’s preferences. Profile of competitors We identified 5 of the major competitors of VLI Green Star Express Inc. is one of the largest provincial bus companies plying the Southern Luzon Region. Once known in older times as Laguna Transportation Company Inc. before it changed into its new name, this ompany plies routes from Sta. Cruz, Laguna to Manila and vice versa.

This bus company is a sister of HM Transport Inc. , a Mercado-affiliated bus company. Philippine Rabbit Bus Lines, Inc. (PRBL) is considered one of the pioneering bus companies in the Philippines. It was founded in 1946. The company’s area of coverage extends from Metro Manila to northern provinces of Pampanga, Bataan, ZambalesTarlac, Pangasinan, La Union, Benguet, Quezon, Ilocos Sur, Ilocos Norte, and Abra. Its main terminal in Metro Manila. Philtranco is a Philippine transport company servicing Luzon, Visayas, and Mindanao routes.

The company provides ordinary non-aircon, airconditioned, and executive bus services. Philtranco is also positioning itself as a cargo or document-handler, forwarder and carrier to its existing transport routes and destinations. Philtranco is also one of the largest bus company in the Philippines together with Victory Liner in northern part and Philtranco in southern part of the country. JAC Liner Inc. is one of the largest bus companies in the Philippines serving the riding public en-route to Southern Tagalog provinces which includes key destinations in the provinces of Laguna, Batangas, Quezon, Marinduque and Northern Luzon.

JAC Liner Inc. presently renders ordinary and air conditioned bus transport, special and chartered services from and to Metro Manila to and from Lucena City and Marinduque. Recently, JAC Liner Inc. , Lucena Lines, Golden Dragon Express, and Solid North has equipped some of its buses Wi-fi access powered by PLDT. In short, passengers can surf the Internet while inside the bus equipped with Wi-fi. Buses equipped with Wi-fi Internet access are marked accordingly. Each bus has its unique password to gain access to Wi-fi. Vallacar Transit Incorporated is the largest land transport company in the Philippines.

It comprises Vallacar Transit, Inc. , established in 1968, Rural Transit of Mindanao Inc. This family-owned and managed business has grown from a lone 14-seater jeepney plying a single route, to a conglomerate of transportation companies with a combined number of operating units of a little almost 3000 transport vehicles as of January 2010, operating in nearly 80 percent of the bus routes in the Visayas and Mindanao regions as well as some part of Luzon in the Philippines. The company pioneered inter-modal services between Negros and Cebu, Mindanao and Leyte, and Panay and Luzon.

Today, the corporation presides over a transportation business with 7,500 direct and active employees, and 3,000 buses serving the island of Negros, Panay, Cebu, Samar-Leyte, Mindanao, and Batangas City. Bargaining Power of Suppliers – Moderate Factors increasing the bargaining power of supplier.

The quality of some of the products supplied can impact the quality of the services offered by Victory Liner -Uniqueness of services and product offered Factors decreasing the bargaining power of supplier: -Many supplier available -Able to substitute Moderate switching cost of supplier ( the ability of supplier to drive up the prices of your inputs) The power of suppliers to drive up the prices of inputs of VLI is not too strong. VLI have moderate no. of suppliers locally and internationally. Availability to change and substitute is quite easy. If VLI decided to switch suppliers it could be devastating to the previous suppliers business. As a result suppliers are susceptible to the demands and requirements of VLI and hold a little power over the company. VLI is already 67 years in the business, enough to gain credibility and reliability in the industry.

However, suppliers can have power over VLI when supplier’s product is an important input to them. Suppliers can exert power over the company by raising prices or reducing the quality of purchased goods and services so reducing profitability. This matter should not take for granted by the company and cope up with strategies to have continuous good relationship with their suppliers. Victory Liner’s fleet is composed of buses powered by engines built by leading brands.

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