This information is necessary to understand the size of the market, the level of competition and customer’s needs. The main aim of this process is to gain competitive advantage. The company should collect information relating to the size of the potential markets, the demographic factors of the customers from various markets so as to ascertain whether they can meet their needs. In addition, the airline should also collect information on the level of competitiveness of the various markets to ensure they employ the best entry strategies to get recognition as well as to remain relevant in the markets. FlyDubai undertakes its market research by inviting route proposals from airports that are within their areas of operations through its Route Exchange platform.
Looking at the respective case studies, SIA, EA and Lufthansa have shared similar challenges like striving for cost effectiveness and differentiation from competitors. Despite these similarities, SIA and EA seem to have survived throughout as an individual highly recognized brands while being involved in Star Alliance overshadows Lufthansa. As well, Lufthansa also operated with higher labor costs than low-cost players or emerging market competitors – years of union advocacy, pension fund obligations, and industry regulations forced these airlines to devote a larger share of revenues towards labor benefits. EA advantage mostly comes from government support and their self sufficient in fuel compared to the other two airlines. External factors like fuel prices or government factors may affect the airlines, but the root of sustaining competitive advantages still lies within the organization’s strategies and core values in order to gain
It is important to note that Porter’s ‘winning formula’ consists of selecting an industry to excel in, performing an analysis of its industry position, and maintaining this position to generate competitive advantage. The strategy here is to focus on the industry and outcompete rivals. The internal workings and assets of the firm is not of concern. As a response to Porter’s framework, the discipline of business strategy has developed a model concerned with matters internal to the firm. The resource-based model ignores the idea of the industry and focuses on how the unique capabilities and resources of a firm provide the basis for strategy.
Nok Air has two major hubs located in Don Mueang international airport, which is a central domestic airport, and in Chiang Mai. A key competitive advantage that leads Nok Air to be the top budget domestic airline and to gain higher market share is using the product differentiation. Nok Air differentiates itself from other competitors in terms of routes and periods. The firm offers a variety of routes and periods to passengers to enjoy with Nok Air compared to other competitors in the market of low-cost airline. Expanding flying route is one of the firm’s strategies to serve more passengers.
Despite the competition, JetBlue has had ambitious growth plans, focusing particularly on the needs of users who were not satisfied, such as itineraries, high fares and commuters when traveling, among others. JetBlue Vision Statement Actual JetBlue airways vision statement is as following: “We 're always up for good” (D&B Hoovers, 2018) JetBlue vision statement represented the company core values. It clearly identifies the firm operations and also the purpose of the product. It is a one single sentence, more like an attractive slogan that suggested the purpose of the company and were they are heading in the future. However, potential vision statement could be: “Born to Fly” This vision statement delivered a short phrase that is sharp and easy to remember of what the company is trying to convey to the consumers.
SWOT Analysis One strength of Southwest Airlines is the strong fleet base, which enhances the company ability to deliver services effectively. The airline has one of the biggest fleets of Boeing aircraft globally, with multiple models of the aircraft, which helps with the effectiveness of their services. Other strengths are the revenue-increase using point-to-point service strategy, and the low-price strategy, which helps to maintain the volume of the passengers. The point-to-point services save time in the form of direct flights and provides better asset utilization for the company. Southwest Airlines’ business model allows the lower priced flights by saving money on fuel at large hubs, and in short turnaround time.
Threat of New Entrants. In the airline industry, the arrival of a new airline can be disruptive, particularly since new carriers tend to focus on high-value route corridors and bill themselves as bargain carriers. On the other hand, the cost of entry into the market is fairly high, and that fact together with the industry’s reputation for lim-ited profitability makes such disruptions rather rare. The airline industry needs huge capital investment to enter and even when airlines have to exit the sector, they need to write down and absorb many losses. This means that the entry and exit barriers are high for the airline industry.
The huge amount of capital make reprisals against new entrants through a price drop. This is evident among existing companies. Despite low switching costs, customer loyalty prevails among certain carriers due to security, familiarity and customer experience. About two years ago, there was a joint partnership between Globe Telecom and Philippine Airlines. Globe 's mileage points achieved customer loyalty among Globe subscribers and Philippine Airline passengers.
In the airline industry the transformation process of the main service is the flight itself. Consequently, the passenger during the flight is in transformation process. Another pivotal input for an airline is information which when it collected and estimated it is in transformation process. 2.2.1 Mass Service Process As far as Ryanair is concerned the main objective is to expand passenger volume and capacity. The basic element that characterise the companies that utilise the mass service process is the high labour intensity combined with low level of interaction and customisation (Nickson,2007,p.12).
Competitiveness Airports operate in a highly competitive environment and therefore encourage developments which make the airport sector more responsive to the needs of their passenger and airline customers. Competition in the airline sector has been a driver of innovation and cost reduction and has delivered major benefits for consumers in terms of increased choice and value. Effective competition between airports is clearly something to be encouraged for the same reasons. “Within the aviation industry, MRO, ground handling, catering, CRS and freight forwarding created economic profits, but these were much more than offset by economic losses by airlines and airports. Airlines were responsible for the large USD17 billion of economic losses globally.