Strategic Management

 Group 5, Section C
Kanishka Jai (pgp25190)
Manali Bansal (pgp25193)
Prasanth Kumar (pgp25186)
Sneha Kawle (pgp25155)
Vibhor Singhal (pgp25162)
 CSF for airlines
Attracting ●
Attractiveness of airline service
Customers ●
Effectiveness of promos

●
Airplane utilization(in hours per day)
Managing fleet ●
Load factor relative to industry

●
Productivity(airline capacity/miles per employee
Managing people ●

●
Morale(lost bags/1000 passengers, complaints)
Strikes, etc.

Managing ●

●
Unit revenue
Unit Cost, unit margins
Finances ●
Debt-Assets ratio, capacity growth, funds availability
 Indian Airline industry- Comparison
Paramount
Jet Airways Jet Lite Air India Indian Airlines Kingfisher Indigo Spice Jet Airways
Passenger Load Factor%-Domestic 66.9 67.3 23.4 59 64 69.6 66.1 78
Passenger Load Factor%-International 68.2 73 63.8 65.7 59 NA NA NA
Operating Revenue/km 5.9 4.2 5.2 NA 6.6 3.7 3.5 10.4
Operating Expense/km 5.9 5.3 7.3 NA 9.3 3.7 4.5 9.6
Average Daily Revenue hours 10.6 9.4 11.3 9.3 10.2 11 9 9
Fleet 90 24 31 72 83 19 19 5
Employees 13078 1365 14338 14338 8258 2180 2190 614
Pax-km domestic(billion-km) 7 3.7 0.5 5.8 9.6 5 4.8 0.4
Pax-km international(billion-km) 14.6 0.1 20.5 5 0.6 NA NA NA
Miles/Employee- domestic 535.250038 2710.62271 34.8723671 404.5194588 1162.50908 2293.57798 2191.78082 651.465798
Miles/Employee- international 1116.37865 73.2600733 1429.76705 348.7236714 72.6568176 NA NA NA

Jet Airways is the best in most of the CSFs

Factors Needing improvement:

Overall revenue
Better utilization of work force
 International Strategy
Recommendations for expansion of network

Short term

Tokyo
South East Asia Japan Osaka
Fukuoka
Nagoya
Sapporo

Not so short term

North and South East Australia and Africa: Europe : North America:
Asia: New Zealand: Cairo Frankfurt Houston
Japan(Tokyo, Osaka) Melboure Cape Town Zurich Los Angeles
Vietnam(Hanoi, Ho Chi Sydney
Minh city) Auckland
China(Shanghai)

Major cities and those serviced by major international airlines are preferable
Japan hub locations

5 suggested hub locations

Japan hubs

Air India presence:

Narita Airport
Kansai Airport

Source: www.japan-guide.com
Determinants of Japan’s competitive advantage
Firm strategy, structure and rivalry:
• Two major airlines, JAL Group and
ANA Group and a host of smaller
airlines
• “Deregulated environment”-both
boon and bane
• Low barriers to entry implies
increase in competition
• Major international airlines like
Singapore Airlines have operations

Factor Conditions: Demand Conditions:

• Labor: Well educated and
highly skilled population
• Capital: Highly industrialized
country, easy availability of
capital
These conditions show • Rich population
• Emerging rich class and
that Japan is a favorable immigrants
destination • Improvement in trade relations
and globalization

Related and supporting industries:

• Companies to help people plan
their travel
• Maintenance service providers
• Major hotels and hospitality
companies
 Suggested Strategy for Jet Airways

Centralized
Production
High Global Strategy Transnational Strategy

Cost
Pressures
International Strategy
Jet Multi-domestic Strategy
Airways
Low

Decentralized Pressure for local

Production Low High
responsiveness
Standardized Product Customized Product
8
 How to expand network to Japan
• Through government licenses
• Code share agreements
With Japanese Airlines
• Strategic Alliances:
Three major alliances-Star Alliance, One World,
Sky Team
 Gain Access to right slots
• Major Hubs in India – Delhi
and Mumbai
• Suggested secondary hubs
– Chandigarh and Dehradun
– Pune
• Strategy
– Acquire parking space, peak
timings slots and terminal
space at these airports
• Advantages
– Cost rationalisation
– Feed passengers into
mainstream hubs
Charter Flights
 Online shopping sites
• Collaboration with shopping sites
• Can sell various items which are required for the travel
– International baggage suitcases
– Warm clothes specifically for the colder countries to which the passenger is travelling
– Cameras
– Snow overcoats
– Beach wears
– Travel Guides
• Benefits
– Convenient for customers
– Competitive advantage
– Diversification
• Can provide discounts while purchasing flight tickets
• The items to be sold should be selected whose specific target segment is people
travelling abroad
• Collaboration with Cab, tourist guide services, hotels, sigh scene packages can also
be considered through the same site
 Alliance with other courier services

• JA can use idle time of aircrafts for courier services.

• Benefits-
– Parking charges on airport will be saved
– Extra income from profits
– Risk mitigation due to diversification
• Implementation
– Collaboration from some big courier service provider to ensure continuous
volumes
– List down all flights’ idle hours
– Reschedule to increase the continuous idle hours without affecting profits
– Try to include courier flights within idle hours and check economic viability
Courier / Cargo services
 Other Recommendations
• Services – Private cabins, on-board spas
• Convenience to customers - Ticketless travel
• Suppliers - Collaborate with other suppliers
like British Aerospace, Dauphin, Dronier etc.
• Areas of operations – Untapped cargo market
• Forward integration - Hospitality
Thank You