CASE STUDY In the not-too distant future, technology has advanced and space travel has become increasingly popular. Humans have colonised Mars and, to a lesser extent, the moon, driving not only the desire for tourism, but the necessity of travel and delivery services between these three major destinations. Sam Osland has recently taken on the role of CEO of “Voyager”, an interplanetary airline owned by the Moon Government and offering flights between the three aforementioned destinations. In this role, Sam has been given information and is attempting to analyse Voyager’s current position to determine what strategy is being pursued and how best to position Voyager against their major competitors; SpaceX, Virgin Galactic and Blue Origin. Voyager operates out of a single hub on the moon. While competitors operate to and from multiple spaceports (airports for spacecraft), Voyager continues to base its operations on the moon, with a single spaceport on Mars and another on Earth, strategically located to make it central to India, China and Russia, which are home to a large portion of Earth’s population. Spacecraft Voyager’s spacecraft are sourced from a single manufacturer- Deep Space 9 (DS9). Their fleet consists of 142 spacecraft and only two models- the larger Enterprise model, and the Discovery. Each aircraft is designed in consultation with DS9 to offer premium, plush seating that converts into beds. In addition to this, Voyager’s spacecrafts offer amenities that other carriers do not, such as inflight gravity systems to allow passengers to walk rather than float, spacious showers and a dedicated ‘entertainment deck’ where passengers can shop, exercise, and experience live performances. Passengers are willing to pay a premium for these amenities, and the additional revenue earned through shopping and ticket sales offsets the potential for lost revenue from the space not being used for seats. Additionally, this allows Voyager to avoid competition with other low-cost carriers based on price. Spaceports Voyager benefits from several advantages having the moon as a hub. The moon is a ‘stop-off’ location between the Earth and Mars for travel between the two destinations, as well as having its own population to serve. In addition to this, the relatively stable environmental conditions mean that Voyager experiences less delays and cancellations due to poor weather. Of primary concern for competitors are the significant tax advantages and subsidies offered by the Moon Government, which some see as anti-competitive. By having its primary hub located on the Moon, Voyager does not pay tax on its profits, and receives subsidised fuel. Despite this being of concern to the competition, Voyager is acting within the current law and cannot be prosecuted for this. Crew and Customer Service Voyager’s employees consist of over 300 pilots and 1800 flight attendants from a variety of countries and planets. These highly trained individuals are all relocated to the moon upon commencing employment. Labour costs are lower on the moon, as cost of living is lower, and Voyager does not need to pay for superannuation or other retirement funds. To offset this, however, employees benefit from tax-free incomes and free housing during their employment. Crew members are required to speak at least two languages, and schedules are created to ensure that every passenger has at least one crew member who can speak their native language on board. This serves not only as a safety measure so that instructions can be communicated, but also makes passengers feel welcome and comfortable- a distinct bonus for interplanetary travel given it is still a new and somewhat daunting experience for many passengers. Recently Voyager has implemented the ‘Star Club’- a customer relationship management system that tracks the preferences of its frequent flyers and ensures they are catered to. Food and beverage choices can be entered into this system, allowing crew to greet passengers with their preferred drinks, and ensuring that meals are to the customers’ tastes. Crew can also enter personal notes on passengers as reminders, improving customer service and loyalty by allowing them to refer to previous conversations and enquire about things that the passenger has mentioned. If, for example, a crew member on a flight to Mars speaks to a passenger who is flying to attend a wedding, they can make note of this and ask about the wedding if the same crew member meets the passenger on the return flight. The database prompts crew members with reminders of passengers who will be on a scheduled flight and have flown with them before, as well as providing a profile for passengers who are members of the Star Club. Do you think Voyager’s strategy is best described as one of Porter’s Generic Strategies, as ‘Stuck in the Middle’, or as an example of Blue Ocean Strategy? Consider each option in writing and provide evidence from the case regarding why each is, or is not, being pursued.
CASE STUDY
In the not-too distant future, technology has advanced and space travel has become increasingly popular. Humans have colonised Mars and, to a lesser extent, the moon, driving not only the desire for tourism, but the necessity of travel and delivery services between these three major destinations.
Sam Osland has recently taken on the role of CEO of “Voyager”, an interplanetary airline owned by the Moon Government and offering flights between the three aforementioned destinations. In this role, Sam has been given information and is attempting to analyse Voyager’s current position to determine what strategy is being pursued and how best to position Voyager against their major competitors; SpaceX, Virgin Galactic and Blue Origin.
Voyager operates out of a single hub on the moon. While competitors operate to and from multiple spaceports (airports for spacecraft), Voyager continues to base its operations on the moon, with a single spaceport on Mars and another on Earth, strategically located to make it central to India, China and Russia, which are home to a large portion of Earth’s population.
Spacecraft
Voyager’s spacecraft are sourced from a single manufacturer- Deep Space 9 (DS9). Their fleet consists of 142 spacecraft and only two models- the larger Enterprise model, and the Discovery.
Each aircraft is designed in consultation with DS9 to offer premium, plush seating that converts into beds. In addition to this, Voyager’s spacecrafts offer amenities that other carriers do not, such as inflight gravity systems to allow passengers to walk rather than float, spacious showers and a dedicated ‘entertainment deck’ where passengers can shop, exercise, and experience live performances.
Passengers are willing to pay a premium for these amenities, and the additional revenue earned through shopping and ticket sales offsets the potential for lost revenue from the space not being used for seats. Additionally, this allows Voyager to avoid competition with other low-cost carriers based on price.
Spaceports
Voyager benefits from several advantages having the moon as a hub.
The moon is a ‘stop-off’ location between the Earth and Mars for travel between the two destinations, as well as having its own population to serve. In addition to this, the relatively stable environmental conditions mean that Voyager experiences less delays and cancellations due to poor weather.
Of primary concern for competitors are the significant tax advantages and subsidies offered by the Moon Government, which some see as anti-competitive. By having its primary hub located on the Moon, Voyager does not pay tax on its profits, and receives subsidised fuel. Despite this being of concern to the competition, Voyager is acting within the current law and cannot be prosecuted for this.
Crew and Customer Service
Voyager’s employees consist of over 300 pilots and 1800 flight attendants from a variety of countries and planets. These highly trained individuals are all relocated to the moon upon commencing employment. Labour costs are lower on the moon, as cost of living is lower, and Voyager does not need to pay for superannuation or other retirement funds. To offset this, however, employees benefit from tax-free incomes and free housing during their employment.
Crew members are required to speak at least two languages, and schedules are created to ensure that every passenger has at least one crew member who can speak their native language on board. This serves not only as a safety measure so that instructions can be communicated, but also makes passengers feel welcome and comfortable- a distinct bonus for interplanetary travel given it is still a new and somewhat daunting experience for many passengers.
Recently Voyager has implemented the ‘Star Club’- a customer relationship management system that tracks the preferences of its frequent flyers and ensures they are catered to. Food and beverage choices can be entered into this system, allowing crew to greet passengers with their preferred drinks, and ensuring that meals are to the customers’ tastes. Crew can also enter personal notes on passengers as reminders, improving customer service and loyalty by allowing them to refer to previous conversations and enquire about things that the passenger has mentioned. If, for example, a crew member on a flight to Mars speaks to a passenger who is flying to attend a wedding, they can make note of this and ask about the wedding if the same crew member meets the passenger on the return flight. The database prompts crew members with reminders of passengers who will be on a scheduled flight and have flown with them before, as well as providing a profile for passengers who are members of the Star Club.
Do you think Voyager’s strategy is best described as one of Porter’s Generic Strategies, as ‘Stuck in the Middle’, or as an example of Blue Ocean Strategy? Consider each option in writing and provide evidence from the case regarding why each is, or is not, being pursued.
Blue ocean strategy:
Voyager’s strategy is best described as one of Porter’s Generic Strategies, as ‘Blue Ocean strategy’.
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