Business Policy (Section-B)

Mock Quiz-01 Time: 15 minutes

Student Name: Fakhar Imam Student ID: 18P00015

Question. How does a hypercompetitive environment in the airline industry change the strategic
approach for a low cost carrier airline?

Answer: Hyercompetition is when there is an intense and rapid competitive move where
competitors move quickly to build advantages that usually erode advantages created by the
rivals. Due to hypercompetitive environment in the airline industry the industry is saturated and
the offerings of each player start to appear same to the customer. Therefore such airlines cannot
simply just rely on being a low cost carrier to sustain in the market. POD’s can help such airlines
to stand out. For example Air Asia using advanced software to provide self-check ins while other
low cost carriers stayed on routine procedures is one way it can differentiate itself. Furthermore
partnerships and sponsorship help create intangible benefits of one airline from another.
Air Asia did partnership with Citibank and with hundreds of hotels/ shops where customers
could purchase products on discount and accumulate award points for free flights. Similarly by
doing sponsorship with leading brands like Manchester United, Formula it portrayed an image of
excellence thus communicating to its customers that it is more than just a low cost airline. The
airline focuses on intangible benefits associated with the brand which helps mold its low cost
strategy and focus on quality as well.
Hyper competition has also led airlines to use smart use of technology that can be copyrighted
and patented in order to provide more value to customer while standing out from the intense
competition faced by rivals.

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