Porter stated; “for an airline to succeed in the marketplace, it must have a sustainable competitive advantage” (Porter M. E., 2008). The airline industry is the highest competitive industry, and I believe a sustainable completive advantage is essential to succeed in the future of the aviation industry. The competitive advantages that an airline embrace, needs to be based on the airlines strategy and differentiation to competitors. Emirates displays how it has a strategy and how the airline gets ahead of its competitors through how unique it is. A sustainable competitive advantage is making your company have a unique value position, in a competitive environment, while defending the supported proposition. These advantages need to be constantly updated in order that the competitors remain on the back foot. Unable to keep abreast of the shifting advantages and the difficulty to imitate or implement changes that take place. Such properties of sustainable competitive advantages that can be changed, include; • Customer interaction • Knowledge • Fleet efficiency • Turnaround times • Contracted flight paths with government • Time and price elasticity • Airport grandfather rights and airport-airline relationship • Service contracts • Brand awareness • Social media • Advertising • Loyalty programmes/Alliances • Short term influence on customer behaviour • Airline hub model • Fuel costs • Technology enhancements • Safety record • Cooperate culture in relation to wages, loyalty and productivity • Load factors • Expansion with class of population When an airline does not have a sustainable competitive advantage, it does not have any properties of differences from there competitor and turns to a dangerous price war. The sustainable ... ... middle of paper ... ...M. E. (2008). Competitive advantage: Creating and sustaining superior performance. New York: Simon and Schuster. Porter, M. E. (2008). The five competitive forces that shape strategy. Harvard business review, 25-40. Porter, M. E. (2008, January). The Five Competitive Forces That Shape Strategy. Retrieved from harvard Business Review: http://hbr.org/2008/01/the-five-competitive-forces-that-shape-strategy/ SkyTrax. (2013). Emirates is the World's Best Airline for 2013. Retrieved from SkyTrax: http://www.worldairlineawards.com/Awards_2013/Airline2013.htm Wharton Unicersity of Pennsylvania. (2007, December 12). Maurice Flanagan’s Emirates Airline: Flying High and Treating Customers like Sheikhs. Retrieved from Wharton Unicersity of Pennsylvania: http://knowledge.wharton.upenn.edu/article/maurice-flanagans-emirates-airline-flying-high-and-treating-customers-like-sheikhs/
The following value chain, which focuses on Spirit Airlines, is representative of most of the firms in the Ultra Low-Cost Airline industry. Spirit is the industry leader in many areas such as operational efficiencies/cost structure, aircraft fleet management, brand/network and growth. The firm, however, trails industry foes in areas such as customer service and operational reliability and recoverability. While most in this segment pursue the cost-leader competitive strategy, Spirit has demonstrated the most effective model to date – whether the model is the most sustainable remains to be seen.
1. Hitt, Ireland and Hoskisson (2005), Strategic Management : Competitiveness and Globalisation, 6th Edition, Thompson & South-Western.
...leader. Certainly, it has to take into account the implications of completion from both the direct and the indirect competitors. That is why EasyJet centers on the cost management strategy and the differentiation strategy (Hanlon, 2007). Through an analysis of EasyJet Airplane company strategies and performance, it is clear that they are ambitious and strive for the best. They not only survive in an industry that is intensely competitive, as shown through the analysis by Porter's Five Forces, but also succeed in terms of offering their customers the best that they have to offer in terms of value for money. The advantage this airline gains over its oligopolistic competitors stems from flexible ticketing and complete access to all primary routes. However, in keeping airline industry, there is room for improvement and growth as the analysis using Ansoff Matrix reveals.
Before to select the proper alternative, three alternatives were analysed and evaluated under four decisions criteria: customer experience, cost, growth rate / market penetration and ease to implementation (See Exhibit 2: Factor Analysis). Between all the alternatives, it was suggested that Southwest Airlines enters to New York City by bidding the slots and gates at the LGA (See Exhibit 3: Alternatives Analysis). This alternative sustains the challenge of changing the customer experience which means adding more flights from and to the East; furthermore, entering to new markets will reinforce “the power of the network” through LGA. At the same time, this decision will allow signing more code-sharing agreements with other airlines flying to international destinations and offer new products and services to LUV customers as loyalty rewards, in-flight internet, onboard duty-free purchases, etc.; as a result of this, it will increase passenger’s insights and experiences by flying with Southwest Airlines. Nevertheless, there is potential risk by selecting this alternative, in the recent years the energy prices has had a huge increase affecting costs, fares and even capacity needed, however Southwest Airlines has been able to hedge fuel for decad...
Pearce II, J. A., & Robinson, R. B. (2011). Strategic Management 12th Ed. New York: McGraw-Hill/Irwin.
Arthur, A., Thompson, Margaret, A., Peteraf, John, E. Gamble, A., J., Strickland III. (2014). Crafting & Executing Strategy: The Quest for Competitive Advantage 19e: Concepts & Cases. C6-C25.
Porter, M. E. (2008). The five competitive forces that shape strategy. Harvard business review, 86(1), 25-40.
Magretta, J. (2012). Understanding Michael Porter: The Essential Guide to Competition and Strategy. Harvard Business Press. Retrieved from http://common.books24x7.com.ezp-01.lirn.net/toc.aspx?bookid=45565
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AirAsia Berhad (AirAsia) is a leading Low-Cost Carrier in the Association of Southeast Asian Nations (ASEAN) region. AirAsia focuses on providing high-frequency services on short-haul domestic and international routes. The main goal of this paper is to analyse the business strategy of AirAsia as a low-cost airline. This paper aims to apply the management process of strategy and analyse the three levels of strategy by which AirAsia is able to maintain its reputation as the top Low-Cost Carrier (LCC) in Asia. This paper will then show how innovation is a key aspect in AirAsia’s strategy, and will finally consider the external environment framework in which AirAsia is succeeding.
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Hendersern and Stern 2000, ‘Untangling the origins of competitive advantage’,Strategic Management Journal, Vol. 21, pp. 1123-1145.
When a business aims to be as successful as possible in selling its products and services, it must examine in detail whether or not the products will be attractive and necessary; if the price is optimal; if the product is being distributed in the best locations; and finally, how interest and awareness can be created for the products. In order for a business to target all of these elements to the right people at the right time, it must employ the right type of marketing mix: Product, Price, Place and Promotion. In a dysfunctional time for the airline industry, most airlines, especially major carriers, are adapting the concept of "doing less with more." One low-cost carrier, JetBlue, is changing the domestic aviation landscape in this regard and is defying the odds. Here is a company that has examined each marketing mix elements carefully, has adapted them to its customer’s needs, and is succeeding because of this approach.
On December 17, 1903, two men changed the way of travel forever. No, I am not talking about cars or trains. I am talking about one of the greatest inventions of the twentieth century. Wilbur and Orville Wright invented flight. (Grolier, 1999) This invention sparked a concept of traveling in the air. This kind of travel would allow people to get from one place to another quickly. It would save time and money. If a person could travel for Los Angles to New York in one day, it would be a something that was never heard of. A person could even travel across the ocean to other countries. During that age, flight was very exciting and important. It was a new concept for the world. It was an important concept that they did not realize at that time. They did not understand that the dream that they had would someday revolutionize the way that we travel.