As a consequence, the firm can compete in price and can set any level of price that Nok Air prefers. Another key advantage that Nok Air has is the offering more weight of baggage. This is what Nok Air can offer better than its competitors. However, the disadvantage is the current Nok Air’s operating cannot generate enough profit. Since Nok Air positions itself as “premium low-cost airline”, the firm is now facing the high cost.
With the advancement in technology for many things travelling personally is not important as with the help of web conferencing and services like online counseling the need for travel is reduced. The customer can switch to modes which are reasonable in terms of fare as air travel to some extend is expensive as compared to other modes of travel. The factor which alone reduces the attractiveness of the substitutes in the minds of the travellers is the fastness and reliability of air travel. Barging Power of Buyers There is a very low product differentiation so to succeed providing either services at very low cost or give a five star experience so that customer pays the price for the superior services offered. In addition, the availability of information is really high and with the emergence of travel portals who guarantee that they can search for the lowest fares out of all the options available and book it for the client with just a click which even provides the ease of purchase, the bargaining power of the buyer is increasing Frequent flyer programme and online duty free purchase services can create customer loyalty and reduce the threat of customer switching over to other airlines to some extent.
Another factor is the amount of consumers that purchase airline tickets came from middle class income. Due to individual earning, they will tend to choose airlines that offer cheap and affordable ticket fees compared the one who sell it in expensive and indirectly it will lead to high bargaining power of buyers. Next, nowadays with the advancement of technology and social media make the consumers easily to access the current information regarding the tickets, package, promotion, discounts and others from airlines. They will keep getting the notification and will be alert regarding the airlines. Of course the power of buyer will be
Most airline companies try and avoid responsibilities associated with projecting costs for maintenance and equipment break down. They prefer service providers doing it and this is precisely what Rolls-Royce offered through ‘Power by the hour’. The program qualifies as an ‘order winner ‘ for multiple reasons, firstly, the risk is transferred from the customer to Rolls Royce, secondly, Rolls-Royce will strive for more preemptive maintenance and offer better designs and lastly, the customer receives an economic benefit by saving un-necessary costs. Hence, ‘Power by the hour’ gives Rolls-Royce one more competitive advantage. (Netessine, 2014) Another order winner is the ‘in service remote engine monitoring’, these are a set of integrated
The main supplier for airline industry is airplane manufacturers. The top two manufacturers in the world currently are Boeing and Airbus. It is hardly for airline industry to switch their supplier since suitable substitute products are not available and the switching costs is high. Most of the airline companies have long term contracts with their suppliers since aircraft are high capital products and airline companies probably have more favourable credit terms if they are not switching their supplier. Therefore, airline industry does not have bargaining power on their manufacturers as US airline companies must depend on these two companies for buying and leasing planes.
Furthermore, Executive Pod, International Business class, Economy class, North America economy class are some of the finest examples of services offered to different target market by Air Canada (Air Canada, 2018). Price: Air Canada assure the consumer 's that it 's price the best in the region as it states, "Stop searching far and wide. You’ll always find the lowest Air Canada prices right here on aircanada.com. Air Canada along the way has set itself as brand that is focused on its consumer 's affordability aspect. With its pricing guaranteed approach, the Airline can draw consumers to travel with airline with faith that they have spend their dollar in a smart
And Virgin is no different, which is clearly seen in the cost of running an airline where almost a third of the cost is fuel, so every bit of technology that can help improve the fuel consumption, improves profits. Quality expectation… this is a fundamental task for all companies ensuing they are delivery on their promise. For Apple they just simply known to be the best at it. Just having the best supply chain distribution and logistical model and process will mean nothing if the quality expectation is not met. This is no different for Virgin, whilst they could get away we some quality issues as a low cost airline, when they became a full service airline expectation, quality and the consistency of that quality was paramount.
The paper analysed the airline industry which resulted to be a very attractive industry to operate in. However, this does not mean that you cannot fail in this market. It depends also on the business’ performance, thus, if it follows a clear strategy and can gain from its competitive advantage. But due to the high profitability of the industry, it makes it a lot easier for businesses to be successful and to position
The cost effectiveness of buying a used crane should be looked into. This is to be decided not just on the basis of the cost of the used crane, but the life cycle, the model’s age and the present condition of the crane, apart from the crane being exactly suitable for our own industry needs. In short, a crane cannot be simply bought because it is cheaper than a new
For other travels, they will win miles on this card who will allow to have promotion on future travels). And make promotions when they explain that fly is a best transport than cars to reassure customers. 4. Positioning strategy For the value proposition, it depends on the target (c.f.appendix): “More for less” for Firefly because it’s the best service at a lower price compared to other low cost airline companies in Asia. “More for more” for Hibiscus Airline because it offer the best quality and service for a high price compared to other premium service in international market.