Yunnan Luck Air Case Study Essay

Business Strategy – BAD 4013 – SUMMER 1999 Case Study Southwest Airlines I. Strategic Profile and Case Analysis Purpose The mission of Southwest Airlines is dedication to the highest quality of customer service delivered with a sense of warmth, friendliness, individual pride, and company spirit. Twenty-seven years ago, Rolling King, owner of floundering commuter airline, and Herb Kelleher, King’s lawyer, got together and decided to start a different kind of airline that would provide a short-haul, low-fair, high-frequency, point-to-point service in the United States. The company began service on June 18, 1971 with flights between Dallas, Houston, and San Antonio (“The Golden Triangle” as Herb called it). Southwest Airlines is the fourth

This report will consider the appropriateness of the services offered in Jetstar for leisure travelers in its discussion, and will draw a conclusion on how certain concepts of these strategies can be utilized by managers at JS. Also, the interpretation of the different product strategies JS can implement. Lastly, the report will provide recommendations that could be implemented by JS for improvement to better understand the buyer’s characteristics.

If Mark and Todd choose this option, they could budget accordingly each month. If they are struggling they could forgo the additional principal payment during any given month. By choosing this option, S & S Air could save money and have flexibility in the mortgage payments.

The airline industry has long attempted to segment the air travel market in order to effectively target its constituents. The classic airline model consists of First Class, Business Class and Economy, and the demographics that make up the classes have both similarities and differences to the other classes. For instance there may be similarities between business class travellers on a particular flight, but they will not all be travelling for the same reason. An almost-universal characteristic of air travel is that customers do not fly for the sake of flying; the destination is the important element and the travel is a by-product, a means-to-an-end that involves the necessity of an aircraft that gets the customer from point A to point B.

Over 35 years ago, Rollin King and Herb Kelleher decided to create a different type of airline. They began with the simple notion: If you get your passengers to their destinations when they want to get there, on time and at the lowest possible fares, and make darn sure they have a good time doing it, people will fly your airline. They were right (Southwest Airlines, 2004)!

It began participating in online sales at the Basic Booking Request level, a level specifically designed for its own needs in 1995, largely to make life easier for travel agents in its home market of Dallas (Bremner, C. & Fiona, J., 2008). This method of distributing their “goods” has benefitted Southwest Airlines immensely. Lower ticket costs, higher sales volume and cutting out the middle man, offering a pseudo bulk break method for the airline shopper. Southwest could improve on this media through progressive marketing campaigns targeting the areas of air travelers they currently do not. The elderly, young college students and those with children; these untapped areas hold a great possibility for revenue if Southwest is willing to target and market to them.

Airlines are now able to expand their outreach directly to consumers through e-commerce. For example, airlines like Qantas are able to introduce ticketless travel through the use of technology (Thompson and Gamble, 2012).

Today’s on-line travel market is succeeding because the companies are using a more software-centric, online business model termed “E-commerce.” This has become the popular avenue for businesses as it mirrors the ideas of mobility. The sheer amount of data available, coupled with the advanced operating systems and social media platforms, have created new possibilities for E-commerce organizations. The infrastructure of E-commerce has expanded into platforms such as peer-to-peer networking, crowd-sourcing, social websites, and mobile devices and media. E-commerce trends are findings ways to incorporate every aspect of our daily lives into an online package associated with our everyday needs (Fishbein, 2013).

The SO category suggests three alternatives. The first alternative is to include airlines in India and China under the Sky Team alliance. By doing this, Delta can penetrate into untapped emerging markets and increase its presence. The reason we suggest India and China is because these countries were amongst the lowest to be affected by recession and Delta doesn’t have its prevalence in these regions (http://www.economist.com/node/15172941). Secondly, Delta can capitalize on creating its hubs in India strategically in the long run after gaining access to these markets. The airline will benefit from larger population in both the countries and the government in India encourages Foreign Direct Investment in comparison to China. The third strategy promote business traveler programs in the U.S. Business travelers spend more on their trips and are not as

Technology innovations and breakthroughs have forced businesses to adapt or risk losing customers to the more agile and flexible competitors. According to Dulipovici & Vieru (2015) new technologies are moving businesses into the virtual realm. Customers are able to use a smartphone to make a purchase with a credit card and have it shipped to a location anywhere in the world. Technology has allowed hotels and airlines to install do-it-yourself kiosks to expedite reservations. This has helped these two critical service industries to streamline operations while improving service to consumers.

The four cost components of the airline industry – fuel, landing fees, aircraft leasing and taxes - has made operating Lucky Air in a productive manner a constant challenge. Even though the company has a high competitive advantage being linked to Hainan Airlines, it still needed to upgrade its business strategy on a regular basis to ensure maintaining the lead they had over the other airlines. The company like all its counterparts face a myriad of restraints including heavily regulated governmental laws, limitation to price reduction, a low potential for rapid expansion due to government restrictions and heavy taxes.

There have been few inventions to change how people live and experience the world considerably as the creation of the airplane. Today, traveling by air has become the norm and it would be difficult to imagine life without it. Air travel has improved the way people are able to conduct business by shortening travel time and changing their thought of distance. The companies within the airline industry exist in a very competitive market. One of those companies, Southwest Airlines, features low-fare, no-frills air service with frequent flights of mostly short routes. Costs are kept down by the exclusive use of Boeing 737 aircraft, which allows for low maintenance costs and quicker turnaround times for flights, and by an emphasis on ticketless travel (Encyclopedia Britannica). This paper will address two segments of the general environment and how they affect Southwest and the airline industry; evaluate how Southwest has addressed two forces of competition; predict what Southwest might do to improve its ability to addresses these forces; assess the external threats affecting Southwest; discuss Southwest’s greatest strengths and most significant weaknesses; determine Southwest’s resources, capabilities, and core competencies; and analyze their value chain.

Since the late of last century, the business model of low cost airline represented by Southwest Airlines has been spreading all over the world, has influence and changed the framework and development of the world airline industry.

Lucky Air chose to follow the model of the Southwest Airlines in the United States. Lucky Air is a domestic airline located in China. Because it is a low-cost and high-efficiency airline it doubled the amount of passengers since 2007. E-commerce was a risk Luck Air decided to take on because other airlines were now offering low-cost high-efficiency flights. E-commerce by definition is commercial transactions conducted electronically on the internet. This is a good way to stay in competition with other airlines. E-commerce allows airlines to cut out the middle man such as sales agents and sales offices. Its downfall however is that because they cut out the middle man allowing their rates to be

Fast, user-friendly online reservation system by facilitating e-ticketing and reducing staffing requirements at telephone reservation centers and airport counters. (Kuzmicki, 2009)