CREATING BLUE OCEAN STRATEGY FOR AIR INDUS (PVT) Ltd.
CREATING... NOT COMPETING
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PREFACE
This project is done to accomplish the requirement for completion of my practicum for final semester of BS (Aviation Management) at University of Management & Technology. After screening out on ample of subject matters, I ultimately decided to go with topic "Creating a Blue Ocean Strategy for Air Indus (PVT) Ltd." as my study compels me to think that there is a strong need of incorporating Blue Ocean Strategy in Aviation industry in Pakistan. The topic was appreciated by my supervisor & I started to work on it with keen determination & hard work.
I was bestowed with abundant of information through different sources that included reading & research material.
Due to time constraints & mental & academic limitations, much is yet to be explored as I only did a small effort to put forward this maiden project done for aviation industry of Pakistan with respect to topic of Blue Ocean Strategy in airlines.
I'm hopeful & positively looking forward for more contributions to this piece of work.
I hope this incessant utilization of time & continuous efforts would turn into a continuous marathon of improvement until it reaches to summit of its perfect successions In sha Allah.
Sobia Fayyaz ID: 12003001-030
Final Project, Bs Aviation Management, 2012-2016 Department of Aviation University of Management & Technology, Lahore. Dated 30 May, 2016
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Creating Blue Ocean Strategy for Air Indus (PVT) Ltd.
A Project By Sobia Fayyaz 12003001-030
Supervisor: Capt. Saqib Mehmood Sheikh
A Research Project Submitted to the Aviation Department In Partial Fulfilment of the Requirement of the Bachelor of Science in Aviation Management Degree
University of Management & Technology Year 2012-2016
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SUPERVISOR
Flt Lt (r) Saqib Mehmood sheikh
Aviation Faculty & Industry Trainer
Current : University of Management and Technology Consultancy
Previous : Pakistan Air Force
Education: PAF College, Sargodha
Saqib M. Sheikh is an Ex-Pakistan Air Force fighter pilot who enjoys 15+ years experience of working on both theoretical & practical aspects of managing safety & quality in organizations.
Summary
Flying Career
He is holder of best pilot trophy in Operational Conversion Unit, PAF & was selected for Fighter Conversion Training in USA. Moreover, he was also selected for Basic Flying Training in Saudi Arabia.
Achievements in Academic Career
'Gold Medalist' in MBA (HR) 'Gold Medalist' in Bachelors 'Top in Academics' in Fighter Conversion Unit (FCU), PAF 'Top’ in Academics' in Operational Conversion Unit (OCU), PAF 'Sword of Honour' (Runner up) - PAF Academy Risalpur
Teaching Experience
He is serving as senior instructor in UMT since 2012, teaching Managing Human Resources in Aviation, Airline Management, Aviation Safety Management, Human Factors in Aviation, & Air Traffic Management.
Consultancy
As a qualified ISO 9001:2008 & OHSAS 18001:2007 Auditor and Safety Management Systems Professor, he also offers consultancy for implementation & auditing of Quality, Health & Safety Management Systems across Aviation organizations.
Trainer
He is a CAA certified DGR Instructor & Trainer in areas of Ramp Safety, Human Factors, Safety Management Systems & Aviation Security.
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Volunteer Experience
He is a qualified Parachutist, Special Services Group (PTS) & also certified in courses that include Sea Survival Course, Jungle & Mountain Survival Course & Arabic Language Course, PAF
Experience
He has provided his services in many institutions. His experiences are as follows:
Senior Faculty, Department of Aviation University of Management and Technology 2012 – Present (4 years) Department of Aviation
Aviation Trainer - Ramp Safety, SMS & Human Factors Consultancy January 2015 – Present (1 year 6 months) Lahore, Pakistan
ISO 9001:2008 & OHSAS 18001:2007 And ISAGO Consultancy February 2015 – Present (1 year 5 months) Lahore, Pakistan
GD (Pilot) Pakistan Air Force June 1998 – October 2008 (10 years 5 months)
Education
He completed his FSc. (Pre-Engineering) from PAF College Sargodha. He then did his BSc. (Double Maths & Physics) from University of Peshawar & then completed his MBA (HR) from UMT. His MS (Management Sciences) is in progress from UMT.
Certifications
Diploma in American (Aviation) Language, San Antonio- Texas United States Department of Defense Starting May 2003
Certified Trainer (CWO) Qatar Airways
ISO 9001:2015 Transition Course PIQC Institute of Quality Starting 2016
Safety Management Systems Civil Aviation Authority of Pakistan
Certified DGR Instructor Civil Aviation Authority of Pakistan
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RESEARCHER
Sobia fayyaz
Student (Aviation Management)
Current : University of Management and Technology Student
Education: BSc. (Aviation Management)
Sobia is a confident, judicious & a creative student. She is in a continuous mode of struggle to impart her role through knowledge & dedication for cause of human development as individuals & organizational development on whole in all the concerning areas of respective field.
Summary
Achievements in Academia
She has been a bright & energetic student attaining many achievements. In order to commend her academic progress in all semesters, she has been awarded 7 Rector's & Dean's merit awards by Office of Controller Examinations, UMT based on her results.
Experience
She has been working as a Traffic Assistant for Gerry's Dnata at Allama Iqbal International Airport, Lahore during the course of her studies.
Education
She completed her Matriculation (Computer Science) from Kips School, Lahore & did her Intermediate (Commerce) from Punjab Group of Colleges, Lahore. Further, she enrolled in BSc. (Aviation Management) at UMT.
She has always shown keen interest in subjects of Management, Marketing, Accounting & many other Aviation related subjects such as General & Corporate Aviation, Aviation Weather, Air Traffic Management, Human Factors in Aviation, Airport Planning & Management etc, a few of which she scored highest in.
Extra Courses
Flight Operations Officer Course Star Aviation Starting April 2013
Passenger & Cargo Handling Services Courses Gerry's Dnata May 2014 - August 2014
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ACKNOWLEDGEMENTS
All the Praises for Allah Almighty, the Lord of the Worlds, The Most Gracious & Ever Merciful.
I would have never been able to complete this practicum without the help of Allah (SWT) first, & then with assistance of all my mentors as their kindness & motivation has always kept my spirits high. I feel proud being a part of this prestigious department of Aviation at UMT growing under the leadership of guru Sir Capt. Imran Saeed who is no less than a beacon light to all. It is due to encouragement of my teachers that my focus was keenly dedicated & determined towards this work of mines. Everything I learned here would help me lead to paths of success forever In sha Allah.
Next, I’d like to articulate my gratefulness to my Supervisor Capt. Saqib Mehmood Sheikh to whom I'm very thankful for supervising my work. His guidance throughout the project was inestimable.
I’d like to thank few interviewees who shared their knowledge with me & gave me a great insight while in my surveys & questionnaires.
At last, I’d like to extend thanks to my family & friends for their continuous support.
Dated: 14-04-2016
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CONTENTS
Preface Acknowledgements Executive Summary
PART - 1
General Perspectives
Chapter 1: Introduction 1.1 Purpose of Study...... 19 1.2 Research Object...... 19 1.3 Limitations...... 19-20
Chapter 2: Research Methodology 2.1 Research Questions...... 22 2.2 Research Methodology...... 22 2.2.1 Primary Data...... 22 2.2.2 Secondary Data...... 22 2.3 Literature Review...... 23
Chapter 3: Theoretical Perspective 3.1 Blue Ocean Strategy...... 25 3.1.1 History & Background...... 25 3.1.2 Definitions...... 25 3.1.3 Why Blue Ocean Strategy in Brief...... 27 3.1.4 Eight Points of Blue Ocean Strategy...... 27 3.1.5 The Rising Imperative of Creating Blue Oceans...... 28-31 3.1.6 Analytical Tools & Frameworks...... 32-36
3.2 Formulation & Application of Blue Ocean Strategy...... 37 3.2.1 Reconstruct Market Boundaries...... 37-38 3.2.2 Focus on Big Picture...... 39-42 3.2.3 Reach Beyond Existing Demand...... 42-44 3.2.4 Get Strategic Sequence Right...... 45-51
3.3 Executing a Blue Ocean Strategy...... 52-53 3.3.1 Overcome Key Organizational Hurdles...... 54-55 3.3.2 Build Execution into Strategy...... 56-58 3.3.3 Conclusion: The Sustainability & Renewal of Blue Ocean...... 59 Strategy
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Chapter 4: Research Findings 4.1 Companies using Blue Ocean Strategy...... 61-67
4.2 W. Chan Kim & Renee Mauborgne - Interviews...... 68-69
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PART - 2
SOUTWEST AIRLINES
Chapter 5: Blue Ocean Strategy & Southwest Airline
5.1 Blue Ocean in Airlines 5.1.1 Business Competition in Airlines Today...... 73
5.2 Southwest Airlines & Blue Ocean Strategy 5.2.1 Introduction to Southwest Airlines...... 74 5.2.2 Inception of Southwest Airlines...... 75 5.2.3 Years Profile...... 75 5.2.4 Initial Situation...... 75 5.2.5 Target Market...... 76 5.2.6 The Southwest Model...... 76 5.2.7 Competitive Environment...... 77 5.2.8 Southwest Competitive Advantage...... 77-100 5.2.9 SWOT Analysis...... 101 5.2.10 Fitting Southwest Strategy Into Blue Ocean Strategy...... 102-109
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PART - 3
Air Indus (PVT) Ltd. & Blue ocean strategy
Chapter 6: Air Indus (PVT) Ltd.
6.1 Air Indus In Brief...... 113 6.1.1 Introduction & Scope...... 113-114 6.1.2 Mission Statement...... 116 6.1.3 Vision...... 116 6.1.4 Fleet...... 117
6.2 Where they Fly 6.2.1 Routes...... 117 6.2.2 Schedules...... 119
6.3 Products & Services 6.3.1 On Ground Services...... 119 6.3.2 In-flight Experience...... 122-123 6.3.3 Cargo...... 125 6.3.4 Catering...... 126 6.3.5 Charters...... 128 6.3.6 Indus Miles...... 128
6.4 Planning Travel with Air Indus 6.4.1 Online booking...... 129
6.5 Contact...... 131
Chapter 7: Pakistani Aviation Industry
7.1 Industry in Brief 7.1.1 Then & Now...... 133 7.1.2 IATA Reports...... 133 7.1.3 National Aviation Policy (NAP 2015)...... 134 7.1.4 Old Carriers; New Strategy...... 134
7.2 Why Air Indus? 7.2.1 With Reference to External Factors...... 135 7.2.2 With Reference to Internal Factors...... 135-137
7.3 Blue Ocean Strategy in Pakistani Aviation Industry Success or Failure?...... 137 7.3.1 IATA Global Passenger Surveys & Pakistani Context...... 137-148
7.4 Public Pole...... 149-150
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Chapter 8: Recommendations
8.1 Air Indus - The Present Environment 8.1.1 Air Indus SWOT Analysis...... 152-158
8.2 Air Indus - The Future...... 158 8.2.1 The Corporate Governance...... 158-159 8.2.2 SWOT Analysis After the New Strategy...... 159-162 8.2.3 More Simplified...... 162-163 8.2.4 Corporate Resources...... 164 8.2.5 Strategic Objectives & Goals...... 165-166 8.2.6 Still Advantageous...... 166-167
Chapter 9: Conclusion 9.1 In a Nutshell...... 169
9.2 Further Research...... 170
References References...... 171-182
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EXECUTIVE SUMMARY
This project deals with general concept & perspectives of Blue Ocean Strategy, its implementation & affects on Pakistani Airline Industry where airlines can be able to create their Blue Ocean Strategy & generate huge profits by fulfilling customer needs & wants with value innovation process.
Due to advancements in technology & continuous research prospects, global milieu has become much vibrant & crowded. Everyday changes, both in internal & external environment, have given a boost to higher rivalry & companies are searching for such strategies in which projections for handsome profit & augmentation are offered.
I chose this topic because due to globalization, business opportunities are more to be explored but in a non-traditional way by targeting markets & customers of every segment & different taste in one way or the other, keeping profit & growth prospects sustainable.
I've always been desirous to work for one such project where I can drive latest ideas in order to help industry boom & therefore, I have, by sources of primary & secondary data research & analysis & low-cost transport market study, have applied theory of Blue Oceans to airline industry taking in consideration example & pathway of one of the major incumbents of Blue Ocean Strategy in airline industry i.e. "Southwest Airlines."
The best part about project is that it's based on a new horizon of industry, a latest concept that just emerged a few years back & people today badly need to understand & implement it for good.
I came across many new things & my knowledge increased while I was working on project. I felt way too much motivated by end of the day. It has helped me enhance my critical thinking with analytical skills to the extent of possibility.
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PART - 1
GENERAL PERSPECTIVES
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CHAPTER 1: INTRODUCTION
Purpose of Study
Research Object
Limitations
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1.1 Purpose of Study
The economy of a country is immensely influenced by activities of transport sector as it's a dynamic multifaceted zone especially when it comes to aviation sector which is known to be engine of an economy due to the fact that it encompasses 3 major entities generating huge revenues; Airports Airlines Aircraft manufacturing companies. Air transportation & the infrastructure to shore up its activities, both aeronautical & non- aeronautical, are factors with considerable constructive fiscal & societal influences on areas where these respective activities, to accomplish tasks, are taking place. These impacts have gone beyond the straight impacts of airports own operations & brought more opportunities of remunerations to local business interests & consumers & enlarge their competitiveness in marketplace. The purpose of this writing is to discuss Blue Ocean Strategy with contrast to Airline Industry in Pakistan & suggest ways by which Air Indus can create its Blue Ocean with help of a brief study on what is Blue Ocean Strategy & examples of how some low cost airlines, round the globe have reaped giant profits only by fitting in Blue Ocean concept in their strategy.
1.2 Research Object
In order to let airline executives to realize ways of how to earn more profit in present competitive market, the aim of project is to make clear Blue Ocean Strategy in-depth. Strategy will be described & the factors of its success will be examined & analyzed specially for an Airline Industry. Furthermore, this will assist in understanding strategic management & competitive environment & hence increasing plane of efficient & effective understanding in Pakistani Airline Industry.
1.3 Limitations
I've done this project in partial fulfilment of requirement of my degree of Bachelors. There might exist some limitations in my work due to the fact of my academic competence being limited to scope of an outlook of a bachelor’s student & considering time hurdles that incurred. So, based on both theoretical & practical outlooks, this project will be more a framework to introduction & initiation of a new foundation of an existing strategy concept rather than a complete in-depth study, showcasing clear view of process, effects & success of strategy.
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Data is collected from authenticated sources such as books & official websites, so there is less room for doubt when it comes to legitimacy, validity & reliability of information. Next, I interviewed common public about what matters to them most when it comes to travelling by air. There were different opinions on this but conclusions were drawn using most frequent responses of all in order to confirm application of this strategy in airlines to bring both successes to aviation industry & satisfaction to customers. Ultimately, this project will be a first class foreword for future study & more awaiting hidden opportunities for airlines.
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CHAPTER 2: RESEARCH METHODOLOGY
Research Questions
Research Methodology
Primary Data
Secondary Data
Literature Review
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2.1 Research Questions
Competition in markets is getting tough day by day. Which strategy will benefit more in this time of need is a critical question for almost all industries. Questions that assisted me in understanding significance of Blue Ocean Strategy include: Do competitors in market well know about both approaches? Has the application of Blue Ocean Strategy always helped to gain competitive advantage? Are both strategies equally important? Is there much evidence available in Airline industry to justify that adaptation of Blue Ocean Strategy would help airlines to profitable growth? Is there any need for Pakistani Airlines to create Blue Ocean pool & if yes, then how considering situation of both industry as a whole & airline individually?
2.2 Research Methodology
2.2.1 Primary data The raw data gathered directly is known as primary data. It has not gone through any secondary processing & so this data is particular to my research. My personal observation & interviews with general public for purpose of obtaining primary data & getting an in depth understanding of different aspects of people gave me basis for need of adaptation of Blue Ocean Strategy by Pakistani Airlines.
2.2.2 Secondary data The type of data that has previously been collected by someone else & has gone through secondary processing is known as secondary data. Blend of secondary data I used is massive & includes websites books & articles case studies presentations information gathered through qualitative & qualitative techniques by others Because information has been taken from legitimate sources, much of it is dependable, carry out with my purpose, scope & nature of project.
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Essence The unified blend of both let me work for most part of project & helped me think on how airline can operate by adopting Blue Ocean Strategy. Data helped me draw a conclusion & thus answering all questions & addressing the need of time.
2.3 Literature Review
This refers to wordings used to reconsider key points of contemporary facts & procedural approaches on a specific subject. I used literature review to gather secondary information from books, articles, presentations & from over internet sources. Relevant sources were used in order to collect legitimate facts & figures fortifying legality of project.
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CHAPTER 3: THEORETICAL PERSPECTIVE Blue Ocean Strategy History & Background Definitions Why Blue Ocean Strategy in Brief Eight Points of Blue Ocean Strategy Rising Imperatives of Creating Blue Ocean Strategy Analytical Tools & Frameworks
Formulation of Blue Ocean Strategy Reconstruct Market Boundaries Focus on Big Picture Reach Beyond Existing Demand Get Strategic Sequence Right
Executing a Blue Ocean Strategy Overcome Key Organizational Hurdles Build Execution into Strategy Conclusion: The Sustainability & Renewal of BOS
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3.1 Blue Ocean Strategy
3.1.1 History & Background “Blue Ocean Strategy” was a new strategic approach created & proposed in 2005 by W. Chan Kim & Renee Mauborgne.
The scheme of concept was to escape competition in congested industries to generate & capture new demands simultaneous pursuit of low cost & differentiation
3.1.2 Definitions They categorized market into 2 parts
Red Oceans Represent all industries in existence today, known as Market Space, having defined rules, competitors, & market limitations.
Blue Oceans Represent all industries NOT in existence today, known as Opportunity, having no defined rules, no competitors & no market limitations.
W. Chan Kim Renee Mauborgne Source: (w. chan kim and renée mauborgne - Google Search)
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Comparative of Red Ocean & Blue Ocean
Source: (red ocean strategy versus blue ocean strategy - Google Search, 2016)
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3.1.3 Why Blue Ocean Strategy in Brief In today's crowded markets with shrinking profit margins, building a blue ocean is a need. Factors such as prices, technology, innovation, globalization, & market shares are dynamics directing corporations to opt this Strategy. Generating a new demand & reaping all the good profit by escaping rivalry is what Blue Ocean Strategy aims to fulfil.
Source: (Mauborgne, 2005)
3.1.4 Eight Points of Blue Ocean Strategy Blue Ocean Strategy has been summarized in following 8 points, in order to show how is it different & why has it been so effective. 1. Grounded in Data Based on a decade-long study of 150+ strategic moves over a century in 30+ industries.
2. Pursues Low Cost & Differentiation Pursuits both low cost & differentiation simultaneously.
3. Empowers all the way through by Use of Tools & Frameworks Proposes systematic frameworks & tools to escape competition.
4. Generates an Uncontested Market Space Makes competition irrelevant by rebuilding market limitations.
5. Systematic Process Provides a clear four-step procedure so as to allow development of Blue Ocean Strategy.
6. Maximizes Opportunity; Minimizing Risk Commercial practicability of ideas is verified & refined by idea index thus maximizing chances of growth & minimizing risks.
7. Execution into Strategy Comprehensible concept which leads to effective path of constructing execution into strategy.
8. A Win-Win Outcome Helps aligns 3 strategy propositions namely value, profit & people in order guarantee win-win outcome for stakeholders, employees, company, & buyers.
Source: (Essence of Blue Ocean Strategy | 8 Key Points of Blue Ocean Strategy, 2016)
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3.1.5 Rising Imperative of Creating Blue Oceans Several driving forces lead to the need to creating Blue Oceans a few of which are Accelerated commoditization of products & services Brands becoming more alike Shrinking profit margins Norms & regulations Supply is exceeding demand in almost all industries which has intensified problems of global competition Globalization Increasing price wars Niche markets disappearance
Due to these factors, competition is getting tough & a new market with more demand is needed in order to survive & grow by earning good profit & the only way out for companies is creation of Blue Ocean in order to complement the need of demand.
Source: (Mauborgne, 2005)
THE IMPACT OF CREATING BLUE OCEANS
The Profit & Growth Consequences Of Creating Blue Oceans
Source: (the profit and growth consequences of creating blue oceans - Google Search, 2016)
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VALUE INNOVATION
Blue Ocean Strategy's focus is to make competition irrelevant by formation of a new uncontested market due to which it is known as 'Cornerstone' of Blue Ocean Strategy.
Value-innovation: The Cornerstone of Blue Ocean Strategy (Kim & Mauborgne, 2005)
Source: (Value-innovation - Google Search)
When a firm's price, utility & cost structures are aligned in best possible way only then Value innovation is achievable.
No trade-off is made between low-cost & differentiation in Blue Ocean unlike Red Ocean Strategy.
Source: (Mauborgne, 2005)
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RED OCEAN vs BLUE OCEAN STRATEGY
Red Ocean Vs Blue Ocean Source: (red ocean vs blue ocean - Google Search, 2016)
The distinct characteristics of competing in both oceans. is clearly shown in diagram above.
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THE SIX PRINCIPLES OF BLUE OCEAN STRATEGY Following figure depicts 6 principles & risk they attenuate that lead to victorious formulation & evaluation of new strategy.
The Six Principles of BOS
Source: (commercial viable blue ocea strategy - Google Search, 2016)
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3.1.6 Analytical Tools & Frameworks Blue Ocean Strategy should be on subject of risk minimization rather than risk taking in order to be effective.
Focus must be shifted from competitors to alternatives & from customers to non-customers in order to shift to Blue Ocean Strategy.
Next page & onwards are comprehensive analytic tools & frameworks, created by Kim & Mauborgne that can be applied by a company to create its blue ocean by bringing a structure to company's strategy.
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STRATEGY CANVAS
Kim & Mauborgne developed a fundamental analytic tool & an action framework known as Strategy Canvas that detains existing strategic landscape & further progress in a graphical representation for company.
Strategy Canvas
Source: (red ocean vs blue ocean - Google Search, 2016)
Competing factors are the ones that an industry fights on & invests in whereas offering level is degree to which buyers receive value.
It's used for 2 reasons
Helping users to observe dynamics on which rivalry is based on & where competition presently invests. To impel users to exploit their actions by readjusting their centre of attention from competitors& customers to alternatives & non-customers respectively.
Source: (Strategy Canvas | Blue Ocean Strategy Tools and Frameworks, 2016)
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FOUR ACTIONS FRAMEWORK
Four Actions Framework
Source: (red ocean vs blue ocean - Google Search, 2016)
This framework poses 4 questions to dare an industry's strategic logic & is used to rupture trade-off amid low cost & differentiation.
Factors: "Eliminate”: decrease costs used for competition. “Reduce”: limit the product & services to successful ones only. “Raise”: identify the standards of customers’. “Create”: discover what will generate a new demand. All above factors merged together direct to creation of Blue Ocean.
Sources: (Four Actions Framework | Blue Ocean Strategy Tools and Frameworks, 13 )
(Mauborgne, 2005)
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ERRC GRID
Kim & Mauborgne created the a simple matrix like tool named Eliminate-Reduce-Raise- Create (ERRC) Grid that steer businesses to concentrate concurrently on the following different factors given in the diagram during the creation of a new blue ocean.
ERRC Grid Source: (red ocean vs blue ocean - Google Search, 2016)
This grid loops together with Four Actions Framework by driving companies to address questions asked in Four Actions Framework in order to construct a new value curve. It benefits companies in 4 ways:
Drives to pursue low cost & differentiation simultaneously Invoking sky-scraping degree of engagement in its application by being easy & comprehensible by managers at all positions Helps companies find out all implied assumptions they unconsciously make in competing by steering them to scan each factor industry competes on
Source: (Eliminate-Reduce-Raise-Create Grid (ERRC Grid) | Blue Ocean Strategy Tools and Frameworks, 2016)
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Three Characteristics of a Good Strategy
The strategic profile or value curve is central part of canvas, in graphical form of company’s relative performance across factors of competition. A good strategy has 3 characteristics
Focus Companies who emphasize & focus only on a few main important factors of their company & exploit their core competence are able to achieve good profits & repute than their traditional competitors operating in red ocean strategy, who only invest in an industry’s competitive factors, making impossible for themselves to beat their competitors working in the Blue Ocean.
Divergence Similarities do exist between certain factors of companies working in both red & Blue Ocean Strategy. For that reason reactive strategists have a propensity to share same strategic profile on strategy canvas. By implementing four actions framework factors, they discriminate their profiles from industry’s typical profile.
Compelling Tagline Good strategies have a unambiguous & gripping tagline. It must convey an obvious message & also market an offering openly, or else consumers trust & interest would vanish. Indeed, an excellent approach to check strength & efficacy of a strategy is to see whether if it encloses a potential & valid tagline or not.
Source: (Mauborgne, 2005)
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3.2 Formulation of Blue Ocean Strategy To function a victorious Blue Ocean Strategy, some risks are to be reduced by adhering to a few principles. Each company can adapt numerous diverse Blue Ocean Strategy. It's due to this reason that target is to hit upon more personalized Blue Ocean Strategy. For identifying market substitutes & adapting best Blue Ocean Strategy, Kim & Mauborgne suggest companies to tag along 6 steps to reconstruct market boundaries.
3.2.1 Reconstruct Market Boundaries
In order to create blue oceans, the 1st principle is reconstruction of market boundaries where test is to discover all opportunities effectively that can help create a Blue Ocean. There are 6 basic approaches to remaking market boundaries for creating Blue Oceans. These paths challenge 6 basic suppositions that keep all those companies locked in competing in red oceans who have based their strategies on these 6 suppositions. Diagram on next page shows all those 6 assumptions that Red Ocean follows whereas on other hand all those approaches necessary to remaking market boundaries in a Blue Ocean.
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Six Paths Framework
Kim & Mauborgne developed Six Paths Framework, allowing managers to cope up with risks companies struggle & reconstruction of market boundaries permitting them to recognize chances of possibilities that exist.
Six Paths Framework Source: (red ocean vs blue ocean - Google Search, 2016)
Source: (Six Paths Framework | Reconstruct Industry Boundaries | Blue Ocean Strategy Tools and Frameworks, 2016)
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3.2.2 Focus on Big Picture
Drawing a strategy canvas: envisages up to date position of company in market lends company a hand to diagram its future strategy draws managers’ attention on big picture rather than becoming immersed in numbers
We now know that strategy canvas fulfils 3 goals: 1. with the help of factors that affect competition, the canvas demonstrates strategic profile of an industry 2. by identifying factors that rivals invest in, canvas depicts strategic profile of current & potential competitors 3. by depicting company how it invests or might invest in factors of competition, canvas depicts the strategic profile
We also know that strong strategy has 3 complementary qualities: focus divergence a compelling tagline.
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Visualizing Strategy
Kim & Mauborgne created a structured four-step process for visualizing strategy that aims people to push their strategy towards Blue Ocean Strategy.
Strategy Visualization Source: (red ocean vs blue ocean - Google Search, 2016)
Additionally, the shift of strategic finest practices across units is also promoted by this process. Moreover, this visualization can enlighten channel of communication between individual business units to a great extent ultimately transforming Red Ocean pool to Blue.
Source: (Four Steps of Visualizing Strategy | Blue Ocean Strategy Tools and Frameworks, 2016)
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Pioneer Migrator Settler Map
Pioneer Migrator Settler Map is a map that assists in visualizing, planning & predicting a company's growth & profit, developed by Kim & Mauborgne.
Pioneer Migrator Settler Map (Kim & Mauborgne 2005) Source: (red ocean vs blue ocean - Google Search, 2016)
Pioneers- business offering unmatched value & are potent sources of profitable growth. All pioneers are blue oceans.
Migrators- are in middle of pioneers & settlers offering enhanced but non-innovative value. Their offerings are just superior to most in marketplace.
Settlers- are badly stuck in Red Ocean with no contribution in future possible growth. Their value curves go with basic shape of industry.
The measures that help portray present position of a company include revenue, profitability, market share, & customer satisfaction. These measures can't figure out future of companies because changes in business environment are too abrupt & dynamic. How well a business has performed historically is today depicted by market share of company. The path to profitable growth is companies shift towards pioneers by balancing their future portfolio.
Source: (Pioneer-Migrator-Settler Map | Portfolio Mapping | Blue Ocean Strategy Tools and Frameworks, 2016)
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Overcoming the Limitations of Strategic Planning
Strategic planning ought to: be more spoken than solely written address on subject of building big picture have an ingenious element rather than being analysis-driven rigorously be motivational, invoking commitment
Source: (Mauborgne, 2005)
3.2.3 Reach Beyond Existing Demand
Augmenting the size of a new blue ocean is a matter of concern that gets us to 3rd principle of this Strategy: Reach beyond existing demand, an approach that attenuates risks allied with creation of a new market.
Companies must defy 2 conventional practices here. Fixating on current customers Driving for customized to serve different buyers all with different needs
To accomplish this principle, thinking about non-customers comes first than thinking about customers; commonalities are prior to differences; & de-segmentation before pursuing customized segmentation is essential.
Source: (Mauborgne, 2005)
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Three Tiers of Non-Customers
Companies struggle to expand their present customers in order to mature their market share which helps to better meet customer preferences due to finer segmentation & new offerings. Due to fulfilment of preferences of finer segmentation, companies most of the time end up generating narrower target markets.
In order to exploit blue oceans, it's essential for companies to act on a reverse course. Rather than fixating their attention on customers & customer differences, they need to pay attention to non-customers & build buyer value on dominant customer commonalities instead of differences allowing them to reach beyond existing demand.
Three Tiers of Non-customers (Kim & Mauborgne 2005) Source: (red ocean vs blue ocean - Google Search, 2016)
Three tiers of non-customers that can be twisted into customers are:
“Soon-to-be” tier corresponds to future clients who are waiting for a better product. A blue ocean will be formed by focusing on what non-customers want as they'll confer superior advices than real customers using product or service. “Refusing” tier indicates non-customers to whom the product offered is either not reasonable or not according to wants. This problem should be fixed so that company may be able to enlarge market, bringing in many of new customers. “Unexplored” shows non-customers who didn't ever think concerning company's offerings because their requirements are being fulfilled by other markets.
Source: (Three Tiers of Noncustomers | Convert Noncustomers into Customers | Blue Ocean Strategy Tools and Frameworks, 2016)
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First-Tier Non-customers: What these non-customers feel like leaving your industry? Pay attention for commonalities across their responses & not on differences between them.
Second Tier Noncustomer What these non-customers reject using your industry's products or services? Pay attention for commonalities across their responses & not on differences between them.
Third Tier Noncustomer These non-customers have never been under attacked by any player for reason that their needs somehow have been assumed to belong to other markets for always.
Go for the Biggest Catchment
Companies should fixate on largest catchment. Companies should investigate across all tiers of non-customers to check whether if overlapping commonalities exist in between them or not in order to see if you can enlarge scope of hidden demand you can allow to run free. Reaching beyond existing demand should be amongst first steps when creating future strategies. Companies should be attentive when competitors do exceptionally well in pulling towards mass of non-customers to themselves with help of a value innovation as several of company's existing regulars may get attracted to competitors. Companies ought to profit in order to craft a sustainable win-win upshot.
Source: (Mauborgne, 2005)
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3.2.4 Get Strategic Sequence Right
The 4th principle: Get the strategic sequence right, is looked upon when challenge of building a strong business model comes in order to certify company that it makes a handsome profit. Strategic progression of authenticating blue ocean ideas, to make certain their commercial practicability valid, will be discussed in this section. Companies can reduce business model risks by understanding correct strategic sequence of ideas with their accurate assessment at each sequence stage.
Source: (Mauborgne, 2005)
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SEQUENCE OF BLUE OCEAN STRATEGY
Kim & Mauborgne suggest companies to design strategy in sequential order of buyer utility, price, cost & adoption in order to build a viable business model, mitigating risks by understanding idea clearly & ensuring profit for company. A deficiency in any point would result in zero blue ocean potential to carry on with next step.
Sequence of Blue Ocean Strategy
Source: (red ocean vs blue ocean - Google Search, 2016) Strategic price set must both appeal customers & also help retain them. Repute should to be earned from very first day & quickly multiply to its possible extends which is ultimately essential to steer clear of replications. Imitation is dejected when incomparable utility is pooled with strategic pricing. In order to secure profits, cost is extremely important. Cost structure should be such that it permits profitability & it is difficult for rivals to copy.
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BUYER UTILITY MAP
This assists managers to reflect from a demand-side viewpoint. It schemes all those levers that companies can tow to offer incomparable value; with numerous experiences a product or service give to buyers. It is then easy for managers to recognize all utility spaces that an offering can successfully fill up.
The Six Stages Of Buyer Experience Cycle
Source: (red ocean vs blue ocean - Google Search, 2016)
It has 2 dimensions:
Buyer Experience Cycle (BEC): Experience can be broken down into a cycle of 6 stages each including a broad range of different experiences.
Utility levers: Ways companies release utility for customers are referred to as utility levers. Customer productivity is most commonly used lever in unlocking utility.
o Simplicity o Risk o Convenience o Fun & Image
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Diagram below shows how companies can spot most persuasive hot spots to release exceptional utility.
Uncovering Blocks to Buyer Utility
Source: (uncovering blocks to buyer utility - Google Search, 2016)
Every new idea is located on different spaces of map to check how & whether if, new offering aims to generate a distinctive utility offer from existing offerings. Moreover, it helps in removing hurdles to utility that resist converting of non-customers into customers.
Source: (Buyer Utility Map | Buyer Experience Cycle | Blue Ocean Strategy Tools and Frameworks, 2016)
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PRICE CORRIDOR OF THE MASS
From Exceptional Utility to Strategic Pricing
Kim & Mauborgne created this for managers to unlock mass of target buyers by determining right price. When deciding price, managers ought to assess trade-offs that customers take into account while making buying decision plus the degree of legal & resource protection that will oppose competitors from replicating their idea.
The Price Corridor of the Mass Source: (red ocean vs blue ocean - Google Search, 2016)
Managers should consider & understand price sensitivities of buyers in order to determine strategic price as buyers will be comparing new offering with existing ones from different competitors.
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THE PROFIT MODEL OF BLUE OCEAN STRATEGY
From Strategic Pricing to Target Costing
In business model, target costing addresses the profit side. To maximize profit potential, actions should be started with Strategic Price, subsequently deducting profit margin from price to determine Target Cost & Pricing Innovation.
The Price Model of Blue Ocean Strategy
Source: (the profit model of blue ocean strategy - Google Search, 2016)
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From Utility, Price, & Cost to Adoption
Blue ocean idea terrorizes status quo & 3 main stakeholders of company resist change; company employees, business partners in & general public. Company must first educate them before moving forward with any idea.
Employees Companies should make a strenuous attempt to communicate to employees’ new idea that it has decided to go with so that employees should know that company well knew about threats caused by its execution. With coordination & support of employees, companies should search methods of neutralizing threats so that all & sundry wins.
Business Partners Partners who fear that company’s position will be threatened by new idea is especially more damaging than employee resistance. Partners should also be taken into trust when going with idea.
General Public New idea may seem threatening to general public in terms of conventional social or political practices. In order to avoid shattering resistance & effects, company should first educate public on different aspects of idea proposed. Public should be engaged in an open discussion about the need for adoption of new idea. Both merits & demerits should be explained.
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3.3 Executing a Blue Ocean Strategy After development of a good business model based on Blue Ocean, company must implement it but the challenge of execution exists. Blue Ocean intends to rupture status quo of company.
Knowing how to win over 4 hurdles while executing a strategy brings us to 5th principle of Blue Ocean: Overcome key organizational hurdles but to accomplish this, companies need to discard the supposed perception on effecting change.
Greater change requires greater resources & time in order to bring results. This is what conventional wisdom asserts. This perception is helped to change by 'tipping point leadership' that allows to triumph over 4 hurdles on fast pace keeping costs low while winning employees’ breaking status quo. Source: (Mauborgne, 2005)
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TIPPING POINT LEADERSHIP
Such a leadership is used in Blue Ocean to turn over conventional perception & triumph over 4 obstacles quickly & cost effectively while captivating employees’ breaking off status quo.
Source: (red ocean vs blue ocean - Google Search, 19)
It's centred on changing individuals, acts, & activities that practice a disproportionate influence on performance.
Source: (Tipping Point Leadership | Blue Ocean Strategy Tools and Frameworks, 2016)
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3.3.1 Overcome Key Organizational Hurdles
FOUR HURDLES TO STRATEGY EXECUTION
Next challenge of execution is more easily said than done especially for a strategy like Blue Ocean as it is different from traditional practices. There are 4 main types of hurdles in strategy execution:
Source: (red ocean vs blue ocean - Google Search, 2016)
Cognitive hurdle: Awakening employees by making them realize strong need for a strategic shift as change is usually resisted by people because they would not want risking everything.
Resource hurdle: Bigger change requires bigger investment of both resources & time for successful execution.
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Motivational hurdle: Motivation of key players in order to progress quickly & persistently to succeed a rupture from status quo.
Political hurdle: Powerful oppositions who tend to seek their interests only & before anyone could stand up, he is shot down.
To win over hurdles, companies ought to discard supposed perception about effecting change by focusing on Tipping Point Leadership that is explained in next topic.
Source: (Four Hurdles to Strategy Execution | Blue Ocean Strategy Tools and Frameworks, 2016)
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3.3.2 Build Execution into Strategy
Everyone in organization, from top managers to front line workers, must be aligned with strategy & support it. In order to fabricate commitment & trust; stimulating deliberate cooperation, company should construct execution into strategy from very start off & reach fair process in execution phase of strategy. Source: (Mauborgne, 2005)
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BUILD EXECUTION INTO STRATEGY BY FAIR PROCESS
Managerial expressions of procedural justice (Psychology of Justice) are referred to Fair Process in execution & let’s see why it matters.
Build Execution into Strategy by Fair Process Source: (the profit model of blue ocean strategy - Google Search, 2016)
The Power of Fair Process Intellectual & Emotional Recognition Theory: Feel of being recognized for intellectual worth inculcates will of sharing knowledge into employees. By using fair process, employees will engage in voluntary cooperation. Non-appreciated treatment towards employees would hinder them to share ideas. Employees may also begin to reject other’s intellect as well.
Practice of Fair Process in strategy-making builds individuals trust & inspires them to work in the best interest of company. Source: (Mauborgne, 2005)
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THE THREE E PRINCIPLES OF FAIR PROCESS
Fair process constructs execution into strategy by stimulating individuals’ deliberate will to cooperate & work for company.
There are 3 elements defining fair process: engagement, explanation, & clarity of expectation. Individuals’ at all levels in company search for three Ε principles of fair process given by Kim & Mauborgne.
Source: (red ocean vs blue ocean - Google Search, 2016)
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3.3.3 Conclusion: The Sustainability & Renewal of Blue Ocean Strategy
Creating Blue Oceans is a dynamic process. Once a company is successful in creating it, imitators start to appear. How soon or late will imitators emerge or how difficult is Blue Ocean Strategy to imitate? These kinds of questions are to be addressed here.
Barriers to Imitation This strategy has substantial barriers to imitation. Customarily, this strategy will go for 10-15 years with no challenges & the answer to question of this sustainability can be seen in following diagram.
Source: (barriers to imitation blue ocean - Google Search, 2016)
When to Value-Innovate Again Companies should examine value curves on strategy canvas & dominate Blue Ocean as long as possible. They should reach highest economies of scale & market coverage by strengthening operational improvements & geographic expansion. When their value curve begins to converge with those of competitors, they should try reaching for a new Blue Ocean.
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Chapter 4: Research Findings
Companies using Blue Ocean Strategy
W. Chan Kim & Renee Mauborgne - Interviews
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4.1 Companies using Blue Ocean Strategy
This strategy is founded after decade-long study of 150+ strategic moves over a century across 30+ industries. I'd now further explicate research conclusion by briefing companies which used Blue Ocean in order to earn huge profits & grow without competing. An unquestionable testimony of Blue Ocean success lies in box in diagram below:
The profit & growth consequences of creating Blue Oceans (Kim & Mauborgne, 2005)
Source: (commercial viable blue ocea strategy - Google Search, 2016)
Kim & Mauborgne sorted out common plus different factors that directed to Blue Ocean creation & separated the competitors of both oceans.
Let's see some companies who used Blue Ocean ideas in order escape competitive wars & be successful.
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Source: (Blue Ocean Strategic Moves | Examples & Case Studies | Blue Ocean Strategy, 2016) Delivers data, news, analysis, & videos, featuring stories from Businessweek & Bloomberg News through Bloomberg Terminal, its core revenue-generating product.
Source: (Bloomberg.com, 2016)
Source: (Blue Ocean Strategic Moves | Examples & Case Studies | Blue Ocean Strategy, 2016) Canon Inc. is a Japanese company specialized in making of imaging, optical products, & medical equipment.
Source: (Canon Inc., 2016)
Source: (Blue Ocean Strategic Moves | Examples & Case Studies | Blue Ocean Strategy, 2016) Cemex is 2nd largest building materials enterprise manufacturing & distributing cement, ready-mix concrete & aggregates worldwide.
Source: (Cemex, 2016)
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Source: (Blue Ocean Strategic Moves | Examples & Case Studies | Blue Ocean Strategy, 2016) Canadian entertainment company & largest theatrical producer in world which fixated on adults instead of children & revolutionized circus industry by integrating components of both circus & theatre.
Source: (Cirque du Soleil, 2016)
Source: (Blue Ocean Strategic Moves | Examples & Case Studies | Blue Ocean Strategy, 2016)
Curves International fitness is a franchise with 10,000 locations globally having state of the art facilities for weight loosing.
Source: (Curves International, 2016)
Source: (red ocean vs blue ocean - Google Search, 2016) Apple Inc. is an American that designs, develops, & sells computer software, electronics, & online services.
Source: (Apple Inc., 2016)
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Source: (Blue Ocean Strategic Moves | Examples & Case Studies | Blue Ocean Strategy, 2016)
Ford Model T was 1st automobile produced by Ford Motor Company. It was put at half price in market as compared to its rivals.
Source: (Ford Model T, 2016)
Source: (Blue Ocean Strategic Moves | Examples & Case Studies | Blue Ocean Strategy, 2016) iTunes is a media player & library, online radio broadcaster, & mobile device management application.
Source: (iTunes, 2016)
Source: (Blue Ocean Strategic Moves | Examples & Case Studies | Blue Ocean Strategy, 2016) JCDecaux Group is largest outdoor advertising corporation in the world known.
Source: (JCDecaux, 2016)
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Source: (Blue Ocean Strategic Moves | Examples & Case Studies | Blue Ocean Strategy, 2016) NetJets was 1st private business jet charter & aircraft management company selling part ownership or shares of private business jets.
Source: (NetJets, 2016)
Source: (Blue Ocean Strategic Moves | Examples & Case Studies | Blue Ocean Strategy, 2016) Novo Nordisk is a pharmaceutical company with production facilities in 8 countries, & offices in 75 countries.
Source: (Novo Nordisk, 2016)
Source: (Blue Ocean Strategic Moves | Examples & Case Studies | Blue Ocean Strategy, 2016) New York City Police Department is largest municipal police force in US, having errands in law enforcement & investigation within 5 boroughs of NYC.
Source: (1 Police Plaza, 2016)
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Source: (Blue Ocean Strategic Moves | Examples & Case Studies | Blue Ocean Strategy, 2016) Private, non-profit 4 year college located in Pennsylvania, providing working adults with an affordable education with flexible classes & personal attention.
Source: (Peirce College, 2016)
Source: (Blue Ocean Strategic Moves | Examples & Case Studies | Blue Ocean Strategy, 2016) One of the largest electronics company focused in areas of healthcare, electronics & lighting.
Source: (Philips, 2016)
Source: (Blue Ocean Strategic Moves | Examples & Case Studies | Blue Ocean Strategy, 2016) Quicken is a personal finance management tool developed by Intuit, Inc.
Source: (Quicken, 2016)
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Source: (Blue Ocean Strategic Moves | Examples & Case Studies | Blue Ocean Strategy, 2016) American company which designs, markets & sells luxury apparel, accessories, fragrances & home furnishings.
Source: (Ralph Lauren Corporation, 2016)
Source: (Southwest Airlines, 2016) World's largest low-cost carrier based in US.
Source: (Southwest Airlines, 2016)
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4.2 w. chan kim & renee Mauborgne - interviews
While my research, I came across certain interviews of Kim & Mauborgne by various interviews. There were a few questions that I felt important to share in over here in this project in order to let audience know about this strategy by perspective of its originators.
When Kim was asked about the attributes business leaders should look for when selecting a market & how can one best identify a blue ocean, he answered that Blue Ocean can be formed in any industries. A new market space is created rather than selecting a market. He pointed out their series of methods, tools & frameworks, discussed above as identifier that can help companies locate opportunities.
Source: (Forbes Welcome, 2016)
In an answer to a question that what happens when a company is in a blue ocean but it becomes a red ocean after a few years, Kim said that blue ocean has considerable barriers to imitation that are hard to replicate for years & years. He explained that it's possible for Blue Ocean to turn into Red Ocean & this is the reason why Blue Ocean strategy demands companies to continuously examine their value curves & keep renewing their Blue Ocean offerings by taking successive strategic moves in time. It's not based on providing one-time solution. He concluded saying that creating Blue Oceans is a dynamic process rather than a static one.
Source: (Forbes Welcome, 2016)
Following questions are mostly related to top management in company, asked by another interviewer from authors.
Kim was asked about importance of embracing this idea by executives. He said that this strategy is about creating unchallenged market space. He said that there's little room for growth in bloody Red Ocean competition. Blue Ocean has limitless possibilities for gainful growth & so it's vital for leaders to adopt it in order to accomplish aim of the business - 'profit'.
When he was asked relating first steps that can aid executives to see light about this new strategy, he answered saying that majority thinks they are in Blue Ocean when they are essentially not so first important part is to help make them recognize that they are in Red Ocean. Next step he said is to divert people focus away from rivalry & fixate it on non-customers which he termed as one of the best ways that could help to get too many of Blue Ocean ideas.
Kim was asked to give suggestions for insuring organization-wide acceptance or buy-in for a blue ocean strategy, he said that eagerness should be invoked by helping people recognize limitations of Red Ocean & accepting Blue Ocean. Further he explained saying a goal should be set in order to generate Blue Ocean by showcasing
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examples of companies who have accomplished success by adopting this strategy. An inclusive dialogue plays best part according to authors. Being a part of company & having its ownership makes employees feel more committed towards successful execution of ideas.
Kim was asked the best examples of blue ocean company in any industry, he explained with example of an airline industry saying that airlines mostly collapse either due to bankruptcy or remain stagnant in Red Ocean but as far as Southwest Airlines is concerned, it has depicted an excellent example of Blue Ocean Strategy. He further explained that Southwest didn't focus on its competitors rather beat it alternatives e.g. it provides an air travel experience at cost of car travelling.
Source: (W. Chan Kim and Renée Mauborgne: Make the Competition Irrelevant, 2016)
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PART - 2
SOUTHWEST AIRLINES
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Chapter 5: Blue Ocean Strategy & Southwest Airlines
Blue Ocean in Airlines Business Competition in Airlines Today
Southwest Airlines & Blue Ocean Strategy Introduction to Southwest Airlines Inception of Southwest Airlines Years Profile Initial Situation Target Market The Southwest Model Competitive Environment Southwest Competitive Advantage SWOT Analysis Fitting Southwest Strategy Into Blue Ocean Strategy
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5.1 Blue Ocean in airlines
5.1.1 BUSINESS COMPETITION IN AIRLINES TODAY
By now we studied Blue Ocean Strategy from general perspectives of its application in different industries but now, to be more specific & clear of "How can Air Indus make a strategic move & create its own blue ocean in Pakistani airline industry?", we would be discussing about how Southwest has so successfully operated on this strategy for years.
There are 2 sorts of oceans. Airlines today try surpassing competitors to snatch a bigger share of demand & generate huge profits. Due to everyday increase in air travel demand, market is getting jam-packed due to which profit ratios & growth prospects are reducing. Aggressive competition is twisting Red Ocean of respective industry bloody. So in order to obtain opportunity for highly money-making growth, companies are focusing more on exploiting their core competencies by bringing in significant changes to strategies.
Majority of Blue Oceans are twisted from within Red Oceans. Competition is irrelevant in Blue Oceans due to the fact that rules & regulations of competition are waiting to be set. Red Oceans will all the times be a reality but with supply higher than demand in airline industry; competitors fighting for shrinking profit markets, will not be adequate to maintain high performance. Airlines be obliged to go beyond competing to grab enough revenue & augmentative opportunities by forming Blue Oceans for themselves. Unluckily, airlines are not much aware of creation of Blue Oceans in such lucrative industry but since very beginning, strategy has been designed such as that the competition has been based upon Red Ocean strategies where competitors have been fighting for one common profit. This has, though in good meaning, lend us a hand to better comprehend & understand of how to struggle with expertises in Red Ocean, what fiscal structure is more beneficial to competitors, why strategic shift is important, & how can one sustain market profitably. A few discussions about Blue Oceans in airline industry are present yet there is little useful direction on which ways to build them. With no analytic frameworks to mould Blue Oceans & doctrines to successfully control threats & risks, creating Blue Oceans has only been a desirous dream that is seen as much unsafe for airlines to practise as strategy. Practical frameworks & guidelines for efficient creation & capture of Blue Oceans in airline industry have been explained further.
Several Low Cost Carriers today have based their competition on Blue Ocean Strategy & are obtaining enormous profit pools, most successful of which are Air Asia & Southwest Airlines. For this project, we will be considering Blue Ocean Strategy & features of Southwest Airlines, in order to help Air Indus create its Blue Ocean & reap successful profits & ultimately benchmark itself. So let's just go through a brief introduction about Southwest.
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5.2 SOUTHWEST AIRLINES & BLUE OCEAN STRATEGY
5.2.1 Introduction to Southwest Airlines
Southwest Airlines Co. is a U.S. based airline & largest low-cost carrier globally founded in 1967 by Herb Kelleher. It has a workforce of almost 49,583 employees & operates 3,800+ flights per day on multiple destinations. It's one of the airlines to carry most domestic passengers.
It operates only Boeing 737s, being largest operator of 737s worldwide as of January 2016, with 700+ in service.
Founded March 15, 1967 Commenced Operations June 18, 1971 Frequent-Flyer Program Rapid rewards Airport lounge Indus Lounge Fleet size 717 Destinations 97 Company slogan *Fly With Difference* Head Quarters Dallas, Texas, United States Gary C. Kelly (Chairmen, president, CEO) Colleen Barrett (President Emeritus) Key people Herb Kelleher (Co. Founder, Former CEO, Chairman Emeritus) Rollin King (Co-Founder, Former Executive)
Employees 49,583 (2015) Website www.southwest.com Source: (Southwest Airlines, 2016)
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5.2.2 Inception of southwest Airlines
Blue Ocean is about focusing more on being an alternative rather than a competitor to many. It emphasizes on need to focus more on new customers & less on current ones.
Southwest is amongst incumbents of successful Blue Ocean followers. It targeted the market which couldn't afford air travel expense rather preferred travelling by land. Southwest marked itself as an alternative to land transport & avoided to compete with other airlines. It offered increased flight frequency at extremely low fares with an on-time quality service.
Customers started to benefit from high travelling speeds at affordable prices & Southwest took over market in no time creating its pool of Blue Ocean with no competition but huge profit.
Southwest rejoiced 39th successive year of profitability in an extremely competitive industry. It has been operating in clock, earning huge profits & customer satisfaction, when other airlines have just been struggling in past so many years.
5.2.3 YEARS Profile
1. 1967: Company set up by Mr. Kelleher 2. 1971: First Flight in June 3. 1972-2001: Nation's best performing stock 4. 1997-2001: Most admired airline worldwide 5. 1986: Highly advanced training centre for flight crew 6. 1988: Best on time record, baggage handling, fewest complain 7. 1994: Ticketless travel 8. 1998: Fuel hedging strategy 9. 2002: Ranked 1st for customer service satisfaction 10. 2003: Airline of year 11. 2004: Gary Kelly became CEO, online boarding pass 12. 2005: America's top 10 most admired company 13. 2006: 1st in customer satisfaction 14. 2007: Listed as “100 Best innovative organizations" by Business Ethics 15. 2008: Purchased AirTrans Airlines Source: (Lang, 2016)
5.2.4 Initial situation
In the very beginning, Southwest ran into some financial troubles. The first challenge was to either sell one of its airplanes or lying off some employees. They decided to sell plane & in return, employees were asked to minimize turnaround time to 15 minutes. Goal was achieved & strong bond between managers & employees created till today.
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5.2.5 target market
Southwest targeted following market segments cost & value concerned people business executives at small level short haul distances frequent flyers
5.2.6 the southwest model
Company operational in airline business ought to sustain its competitive advantage & that's what Southwest has been doing since start. Its business model is based on low-cost pricing, exceptionally efficient operations, focus on customer experience, dynamic forecasting, & motivated employees. Through this practice, it has been able to achieve numerous competitive advantages allowing it to stay in competition this successfully.
Since its inception, the following simplified model is being used by airline to be successful.
Source: (southwest small logo - Google Search, 2016)
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5.2.7 COMPETITIVE ENVIRONMENT
Low Cost • vs. Skybus Airline • vs. Frontier
Value Airline • vs. Jetblue
• vs. Continental Traditional • vs.American Airways Airline • vs. US Airways • vs. United
Source: (Strategic Management Case Discussion on Southwest Airline, 2016)
Southwest offers a blend of all elements of its competitors in one way or the other. It provides value being low cost offering a homely environment. It's one in all experience for customers.
5.2.8 SOUTHWEST Competitive ADVANTAGE
Southwest has been profitable globally for over decades. Its competitors among industry have been facing a reduction in passenger capacity time & again but Southwest remains to be on top forever.
What is it which keeps Southwest on top every time? Answer to this lies in its strategy of keeping things simple & in an on-going cycle ultimately reducing costs, maximizing assets, & helps to keep up with customer expectations.
Southwest follows 4 major strategies:
Low-Cost Differentiated Employee-Driven Future-Minded
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Given below are some competitive dimensions followed by Southwest.
Operational Costs & Efficiency Customer Service Company Culture & Relations Technology
OPERATIONAL COST & EFFICIENCY
Air travel made cheaper
First of all Southwest recognized that flights being too expensive is main hurdle due to which people prefer travelling by other means of transport rather than on airplanes. It offers much low prices in contrast to its competitors. Southwest has shaped its business model around low operating costs for low priced solutions. It reduced its prices to a very greater extent as compared to any other airline, making air travel affordable for people of each & every class.
Source: (southwest air travel cheaper - Google Search, 2016)
Source: (southwest air travel cheaper - Google Search, 2016)
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Labour costs
Achieving higher labour productivity is most crucial factor of victorious low-fare airline business model. Because airlines workforce generates more output per employee, Southwest has an incredible cost advantage over other airlines.
Source: (southwest air travel cheaper - Google Search, 2016)
Aggressive Fuel Hedging to cut down large Fuel Costs
The 2nd largest expense after labour is fuel cost in airlines. The best solution to control airlines fuel costs is by fuel hedging. Controlling fuel costs can help company precisely guesstimate budgets & anticipate profit. As air travel is becoming a commodity business due to increased competition, the solution to airline’s success is being competitive on price. Raising ticket prices was no way to earn gap. Southwest has a lead in being successful in executing its fuel hedging strategy. It has a proven & easily adaptable service model. It can be seen that it has survived every industry downturn in ease, maturing its profitability immensely in no time.
Source: (southwest air travel cheaper - Google Search, 2016)
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Point-to-Point Flying
Southwest doesn't relies on hub-&-spoke flying i.e. in which planes are networked into connecting airports before flying to the final destinations which increases ground time of planes due to services. Hubs also make a single point of failure in ways that try getting to final destination on time when there’s poor weather at hub. The interdependent system goes upside down as flights don't arrive at respective destinations in time.
Southwest flies on point-to-point system i.e. plane lands, turnarounds & flies back to where it flew from. Its flying is non-stop between destinations which helps in minimizing ground time of planes & maximizing time of planes in air & we know that more time the aircraft is on ground, the more loss it brings to company & more time the aircraft is in air, more profit it brings to company. Southwest's on-time performance is higher than of its competitors.
Source: (southwest air travel cheaper - Google Search, 2016)
Single Type of Fleet
Southwest operates on just Boeing 737 series which saves it a millions in maintenance costs as single type of fleet abridging scheduling, operations & flight maintenance. Training costs are lesser. Without any costly disruptions & reconfigurations, one plane fits all concept empowers it a distinctive flexibility to operate aircrafts throughout network easily. Utilization of crew more efficiently is also possible due to same fleet.
Source: (Southwest Airlines, 2016)
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Use of Secondary Airports
Southwest operates on secondary airports reducing delays & thus providing exceptional service to travellers. It has also been successful in trimming down its airport operations costs somewhat much better than its competitors.
Source: (southwest air travel cheaper - Google Search, 2016)
E-Ticketing
Southwest started its ticketless service in mid- 90s, & presently they are about 90-95% electronic. Credit cards customers can go for online transactions & now Southwest.com bookings account for about 50 plus significant percentage of total revenue.
Source: (southwest air travel cheaper - Google Search, 2016)
Minimum Cabin Crew Assigned
Southwest assigns minimum number of cabin crew on each flight in order to keep costs low & serve more. It helps them utilize their human resource capabilities in most useful way possible.
Source: (southwest air travel cheaper - Google Search, 2016)
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Focused on Short Haul Travel
Southwest focus on short haul travelling is the basis on which airline was built upon. It has been successful generating a profit for over 4 consecutive decades based on potential of large customer market for short haul travelling. Shorter the flight times, more flights per day airline can operate. While Southwest's competitors could only operate 2-3 flights daily, Southwest has been successful operating 10-12 flights per day. It focused on key elements of maximizing utilization & minimizing ground time in order to be successful.
Source: (southwest air travel cheaper - Google Search, 2016)
High Frequency of Flights
Due to short haul services, it's very possible for Southwest to operate more number of flights to destinations than any other airline. Higher frequency of airline also gave flexibility to customers to choose their travelling hours at part of their ease.
COMPANY CULTURE & RELATIONS
Culture of the Company with Respect to Employees
Since its inception, Southwest has a strong culture that can't easily be imitated at any cost which is a big competitive advantage. This culture is the seed of its founder Herb Kelleher who worked hard & embedded in airline a culture that focuses on protection of employees far more than any other organization. 'Employees come first' was a very exclusive message by any company ever. Founders concern & care for his employees created a fun filled, friendly & extremely creative working environment. It was believed & realistically seen that contented employees work with more efforts making company successful. Southwest’s employee retention rate of 92.3% proves this & the concept that employees who love their company will make customers be keen on that company, too. Employees here enjoy some of most finest compensation packages & best benefits in industry.
Employees Loyalty directed to Exceptional Customer Service Experience
Southwest aimed its employees to be labelled to customers as a superlative workforce in all aspects. It has mostly been differentiated by other airlines on basis of low cost. Exceptional treatment of employees with customers helps it brand its employees automatically on a exclusive position in market. Positive attitude of employees towards customers has brought in much customer satisfaction & profitability.
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Culture of Sharing Goals
There's a keen focus on shared knowledge, shared goals, & mutual respect at Southwest. This can be seen the way airline monitors performance. Airline believes that metrics based on functional liability gives birth to chaos & quarrels in departments for pitfalls. Southwest makes use of team metrics for monitoring performance. All departments work mutually to improve all activities or operations within airline. Teams escort to a more unified company where all people struggle together, succeed together, & in case of failure, avoid blaming each other. This eradicates chances of internal chaos between individual employees. Culture in companies start at top. Herb & other top managers have burned fuel day & night in order to help a unique & fun loving culture evolve & sustain, bringing in employee contentment & customer satisfaction.
Branding:
Creating itself a brand is most important thing a company can do. Southwest brands itself to a congregation of entities. Southwest's success depends on its aptitude to lucratively brand itself to following 3 parties. Airline spends a significant amount of capital ensuring that it's being branded in goods ways to extent of the possibility.
The Right Recruits
Most valuable competitive advantage of Southwest has been its deep attention on hiring a competent force. It prides being a people-oriented airline that functions with approachable workforce. It hires people who personify airline's brand messaging & who have a zeal for serving people. Airline has rigid hiring policies & practices to ensure right blend of employees.
Employee profit-sharing program
Every employee at Southwest has a small share in airline which makes all liable to be eagerly dedicated towards company just as its solely theirs & any loss or success would directly impact them.
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A Relatively Happy Workforce
World's most unionized carrier is Southwest with 87% of its workers in union but there has never been a strike. Moreover, its workforce is one of the highest paid.
Leadership
Another very important key to success factor of Southwest is their strong leadership. Strong leadership has always proved to lead to financial success. Leaders at Southwest have all qualities that it takes to be a strong leader. Their strong visions & motivation has lead company towards success.
Herb Kelleher - Founder (Southwest Airlines) Source: (southwest air travel cheaper - Google Search, 2016)
Gary Kelly - Chairman & CEO (Southwest Airlines) Source: (southwest air travel cheaper - Google Search, 2016)
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Source: (southwest air travel cheaper - Google Search, 2016)
Source: (southwest air travel cheaper - Google Search, 2016)
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Source: (southwest air travel cheaper - Google Search, 2016)
Source: (southwest air travel cheaper - Google Search, 2016)
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Gary Kelly, Southwest's C.E.O., dressed as Woody from “Toy Story” at the airline's Halloween party.
Source: (southwest air travel cheaper - Google Search, 2016)
Fun LUVing creative attitude
Source: (southwest air travel cheaper - Google Search, 2016)
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CUSTOMER SERVICE
No Meals, Just Snacks
Only beverages & snacks have always been on flights; no meals. Due to low fares & short haul travel, there has never been a strong need to introduce meals on flights as customers are more concerned with price than any other thing & only snacks would do much for them for a short travelling. This also allows airline to tidy & stock swiftly, resulting in low turnaround time & reduce costs.
Source: (no meals just snacks southwest - Google Search, 2016)
No assigned seats
In Southwest there are no assigned seats. If new airplane is brought in with dissimilar configuration of seats, then there's no need to adjust seating arrangement & issue new boarding passes, avoiding chaos & ruptures in flow of operations. Passengers simply board & sit where they like & sit.
No Frills, No Fees
It only sells one-way fares which helps in trimming down costs. Moreover, it inculcates into travellers the feel that they're getting value for money. It doesn't have fuel surcharges, neither charge for ticket changes etc.
No Extra Baggage Charge
Southwest has resisted trend of charging bags. Southwest's “second bag flies free” policy is an excellent marketing strategy which has brought operational benefits too. Luggage is important to passengers & it saves time for the reason that when people are charged for check bags, then they seek to carry extra in cabin, which is to be checked at gate before departure. Time just before departure is very crucial for on-time performance.
Source: (no assigned seats southwest - Google Search, 2016)
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Source: (southwest air travel cheaper - Google Search, 2016)
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Rewards
Southwest offers Rapid Rewards points that customers can benefit from in future. It has partnered with Chase Bank & proposes travellers a Southwest Chase® Visa credit card that enables passengers to earn & redeem points for future flights which ultimately helps in bringing new customers, & expands business from existing customers. Southwest has positioned itself as a company dedicated to serving customer needs & wants.
Source: (Image: Southwest Rapid Rewards - Susie Lim - Creative Director, 2016)
Source: (Image: Southwest Heart, 2016)
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Source: (Image: Southwest Rapid Rewards - Susie Lim - Creative Director, 2016)
Source: (Image: How to Make Airline Rewards Work for You – Traverse, 2016)
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TECHNOLOGY
Use of technology is extensive in airline in order to fulfil its many different objectives & let operations run efficiently.
Acquisition of Upgraded Fleets
New Boeing 737-800s were brought in 1st quarter of 2012 keeping in view customer capacity & increase in demand which means more profits. 737-800s have better fuel efficiencies & can reduce unit costs. Moreover, due to large size of aircrafts, additional seats can be introduced in same number of planes; reducing flights & capacitating demand, ultimately helping cover fuel costs & chip in to company’s operating margins.
No Complementary In-Flight Electronic Entertainment Services
Southwest does not offers much in-flight electronic entertainment to its customers rather a fun LUVing attitude is practiced by crew on flight to let lively atmosphere take place. Now it has introduced free live TV for passengers. Absence of electronic media helps Southwest cuts costs by a significant degree.
Source: (no in-flight entertainment southwest - Google Search, 2016)
Rock artist Gavin DeGraw performing on a Southwest flight Source: (no in-flight entertainment southwest - Google Search, 2016)
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Source: (no in-flight entertainment southwest - Google Search, 2016)
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Aggressive Promotions
Another differentiation strategy of airline is aggressive promotion that it does to promote airline. It conveys its messages in form of easy & lucid advertisements that help in making potential customers aware of airline & its policies. Moreover, a lively environment is kept at company, airports & within airline in order to enhance their attractiveness & foster innovation.
New Aircraft Look Promotions
Source: (southwest aggressive promotion - Google Search, 2016)
Facebook Marekting Series (Southwest)
Source: (southwest aggressive promotion - Google Search, 2016)
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Promoting GOLFWEEK creating a Marketing Alliance between 2 companies using Adams and the sport of golf as vehicles to court more business travellers
Source: (southwest aggressive promotion - Google Search, 2016)
Featured on Southwest's homepage, airline's marketing team is hitting tropical destinations hard
Source: (southwest aggressive promotion - Google Search, 2016)
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Limited Travel Agents by the Use Technology
The primary airline to create home page on Internet was Southwest which is an immense cost cutting tool. If cost of making a reservation online costs Southwest $1, same reservation costs $10 via travel agent. Various marketing strategies are being used by it, keeping costs low by cutting down travel agents.
Southwest's reservation page, alongside other non-Southwest flight
Source: (southwest aggressive promotion - Google Search, 2016)
Southwest app includes several functions
Source: (southwest aggressive promotion - Google Search, 2016)
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Southwest Self Reservation
Source: (southwest aggressive promotion - Google Search, 2016)
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LONG TERM FORESIGHTEDNESS
Focus on Future in Order to Keep Improving
Since beginning, Southwest holds a unique position in industry. Making profits by cutting costs with employee satisfaction have been the strongest phases.
Southwest’s focus on its future is one of another major strategy that it follows advanced by a flexible business model that supports undetermined violent changes. Everything is done in best interest of company & decisions are made keeping long term benefits of company in mind. AirTrans acquisition by Southwest depicts the ways it is expanding its services & growth by fixating on escalating its offering, rising its share, absorbing competition on first hand, & preparing for future growth. Such strategies hold immense importance in order to survive competition both today & tomorrow. It keeps searching for opportunities of lower- cost solutions increasing capacity & revenue. It eradicates anything that increases costs.
There are many reasons that Southwest has sustained to mature this successful in industry by breeding corporate strategy & via competitive advantages, & supreme company culture.
The Acquisition of AirTRAN
Source: (southwest air travel cheaper - Google Search, 2016)
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The Biggest Success Factors Of All Times:
Though Southwest has adapted a number of ways that differentiates it, a survey relating it has shown that 'LOW PRICE' has been most important of all to public, & all other complementary factors come after. Second important factor has been its 'CULTURE'.
Source: http://teamsparksouthwest.blogspot.com/
Source: http://teamsparksouthwest.blogspot.com/
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Sources: http://teamsparksouthwest.blogspot.com/ http://archive.wired.com/cars/futuretransport/news/2008/07/portfolio_0708 http://www.investopedia.com/articles/investing/061015/how-southwest-different-other-airlines.asp
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5.2.9 SWOT ANALYSIS
Before we proceed further, first let's take a look on SWOT analysis of Southwest. SWOT analysis stands for strengths , weaknesses, opportunities, & threats—& is a structured planning method that assess es 4 aspects of any business.
Though being much successful, Southwest still have many challenges presently to overcome, most important of which is sustaining its culture, searching for new opportunities to generate profit & limiting entry of new LCCs in market.
Strengths Weakness - Strong fleet operations - No class of seating - Courteous & friendly staff - No long haul flights - Strong management team - Growth into larger airports - Dominant market position - One type of fleet - Low turnaround time - Carry limited cargo - Largest airlines in terms of highest - Declining profits & margins passenger per year - Heavy dependence on Passengers - One type of fleet (cutting costs) - Strong brand image & best LCC known - Highest domestic daily departure than any other US airlines - Ticketless travel SWOT
Opportunities Threats - International expansion - Intense Competition - New markets for long haul flights - New entrants - Market growth due to low prices - Regulation restrictions - Benefit form AirTran acquisition - Fluctuations in oil prices - New technologies leading to new - Environemntal concerns offerings - Decrease in business travel due to IT - Better utilization of internet for - High speed rails could endanger short marketing haul flights
Source: (southwest airlines swot analysis 2016 - Google Search, 2016)
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5.2.10 FITTING SOUTHWEST STRATEGY INTO BLUE OCEAN STRATEGY
Now let's see whether if Southwest strategy fits into most important different dimensions of Blue Ocean Strategy. Points of Blue Ocean Strategy First let's screen if Southwest fits into summarized points of Blue Ocean Strategy or not.
Pursues Low Cost & Differentiation Southwest pursuits both differentiation & low cost simultaneously.
Creates Uncontested Market Space Southwest made competition in airline industry irrelevant by reconstructing market boundaries.
Empowers through Frameworks & Tools Southwest followed various systematic frameworks & tools proposed by Blue Ocean Strategy in order to escape competition.
Step-by-Step Process Provides a understandable four-step process in order to allow formation of Blue Ocean Strategy.
Maximizes Opportunity; Minimizing Risk Southwest has maximized its opportunities to grow using different means of expanding its market growth through new viable ideas thus decreasing risks of its loss.
Execution into Strategy Southwest, since its inception, had a simple & easy-to-understand strategy which resulted in its easy implementation.
A Win-Win Outcome Southwest kept aligned 3 strategy propositions of value, profit & people ensuring stakeholders, employees, company, & buyers a win-to-win outcome.
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Value Innovation
This cornerstone comes when price, utility & cost structures are aligned in best possible way. Southwest has given best example of this concept by decreasing costs & increasing buyer value.
DECREASING COSTS DECREASING COSTS one type of fleet no- oneclass type segmentation of fleet no meals- no meals no much in flight - noentertainment in-flight entertainment minimum cabin crew -
INCREASING BUYER VALUE
high employee productivity lower turnaround time customer delightfulness great quality of service
Value Innovation of Southwest Airlines
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Strategy Canvas
Strategy Canvas detains up to date strategic landscape & future of company in a graphical representation.
Strategy Canvas of Southwest Airlines
Source: (southwest aggressive promotion - Google Search, 2016)
Notice how Southwest competes with model of car transport. The competing factors of market & degree to which these factors are taken into consideration are visible enough to show well Southwest has captured market.
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Four Actions Framework & ERRC Grid
This breaks trade-off between differentiation & low cost, reconstructing buyer value by eliminating, reducing, raising & creating factors which when merged together will direct a company to create Blue Ocean. (ERRC) Grid also steers companies to pay attention on eliminating, reducing, raising & creating different factors during creation of a new Blue Ocean. Both when loop together create new value curve benefitting companies.
ELIMINATE
meals
in-flight entertainment ticket in hard form use of primary airports assigned seats baggage charge travel agents
REDUCE RAISE
fuel hedging prices short haul flights l abour costs New t ype of fleet Value frequency of flights c abin crew Curve domestic destinations
employee motivation upgraded fleets
CREATE
applications for services exceptional culture great leadership style iconic brand passenger rewards joint venture with AirTran
Four Action Framework & (ERRC) Grid of Southwest Airlines
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Three Characteristics of a Good Strategy
The three characteristics can clearly be seen in strategy of Southwest:
Focus Southwest emphasizes & focuses only on main important factors & exploits its core competencies to achieve good profits & repute than its competitors operating in Red Ocean.
Divergence By implementing four actions framework & ERRC Grid factors, Southwest sets apart its profile from industry’s typical one.
Compelling Tagline It has a strong & valid tagline that shows strength & efficacy of its strategy & executes "more than just a flight experience".
Source: (southwest airlines - Google Search, 2016)
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Six Paths Framework
This lets company to cope up with risks & reconstruction of market boundaries. Southwest created its Blue Ocean Strategy using this framework too.
Industry It competed with companies in its own industry. It also competed with products & services produced in substituting industries e.g. automobile industry. Its customers can make a decision between substitutes & alternatives due to it being low cost.
Strategic Group
Acquisition of AirTran by Southwest pursues similar strategy within industry. It understood which factors drive customers to trade up or down between choices. It's ranked on dimensions of Price & Performance.
Buyer Group
Not only one customer but a series of “buyers” is involved directly or indirectly, in buying decisions. It targeted a specific customer segment. It fixated on particular buyer group. It created Blue Ocean by targeting specific market & offering something different from anything industry has seen before.
Scope of Product or Service Offering
It provided what buyers wanted when they choose product or service. It analyzed all compulsory needs to complement customer seek.
Functional - Emotional Orientation
It very well knew how to target customers on different appeals. It added emotion to offerings by use of different mediums in order to stimulate demand.
Time
Southwest created Blue Ocean by analyzing changes that business trends will bring to value offered to customers & its impact on company’s business model, both in present & future. It tries predicting future trends & works accordingly to meet future goals.
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3 Tiers of Non-customers
Southwest has strived to retain & expand existing customer base in order to grow market share by better segmentation & greater variety of offerings to cater market needs due to which it ended up generating specific target markets for itself.
To exploit more of its Blue Oceans, it now needs to fixate on non-customers & construct buyer value on dominant customer commonalities instead of differences to reach beyond existing demand.
Its current target market is already giving it giant revenues & satisfaction. It's very quickly targeting its soon-to-be customers that are half agreed to choose specific offering by focusing on their immediate need. It also analyzes refusing customers by offering something completely latest that has only been created to attract new segments. It's trying to explore new markets of customers in order expand market share.
Keeping the Strategic Sequence Right
Southwest's strategy is in sequential order of buyer utility, price, cost & adoption building a feasible business model & mitigating risks. 1. There's an exceptional buyer utility in Southwest's idea. 2. Price of offerings by Southwest is easily accessible to public. 3. It has successfully attained cost target to profit at its strategic price. 4. There's been much low trouble for Southwest to carry on with idea due to an exceptional business model. Strategic price of Southwest appeal customers & help retain them. Repute has been earned since its inception & has quickly multiplied which is ultimately essential to steer clear of replications. Its imitation is dejected as its incomparable utility is pooled with strategic pricing. To secure profits, cost is extremely important. Southwest’s cost structure permits profitability & it's difficult for rivals to copy.
Tipping Point Leadership
Southwest has used tipping point leadership in strategy to turn over conventional perception & triumph over 4 obstacles quickly & cost effectively while captivating support of employees’ in order to rupture from status quo. It has always been focusing on changing people, acts, & activities that have a great impact on performance.
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Four Hurdles in Strategy Execution
There are 4 main types of hurdles in strategy execution which Southwest has very easily cut through: Cognitive hurdle: It has awakened employees by making them realize strong need for Blue Ocean in order to let them work for company they love rather than being a resistance.
Resource hurdle: It has been utilizing best of everything needed to run successfully.
Motivational hurdle: It has motivated everyone in company since its inception in order to let company progress quickly & persistently to succeed & avoid status quo.
Political hurdle: Everyone works as a team & union workers have never been against interest of the company.
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PART - 3
air indus (PVT) Ltd. & Blue Ocean Strategy
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Chapter 6: Air Indus (PVT) Ltd Air Indus In Brief Introduction & Scope Mission Statement Vision Fleet Routes
Where they Fly Routes Schedules
Products & Services On Ground Services In-flight Experience Cargo Catering Charters Indus Miles
Planning Travel with Air Indus Online booking Terms & Conditions
Contact
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6.1 Air Indus In Brief
Information in this chapter has been taken from Air Indus Official website in order to obtain real facts & figures of Airline.
Source: (Welcome to Air Indus Airline (PVT) Ltd., 2016)
6.1.1 Introduction & Scope
Air Indus is backed by a Group of Companies that have made a repute in automotive, engineering, & hospitality sectors. The portfolio of group encompasses chief projects that Group has itself undertaken plus in association with reputed international entities.
Air Indus came into being when the key stakeholders of Group pondered that business in aviation sector in Pakistan is under a rainy day. They exceptionally believed that there is no such Pakistani based airline that has ever set any global aviation standards resulting in no Pakistani airline being a World Class Airline.
Passengers were given sub-standard services with not so good quality & low safety standards at high prices.
So stakeholders designed a transforming business model that they believed would change face of aviation industry in Pakistan with stimulation of a World Class Airline in true meanings serving on all possible routes of cities of Pakistan.
Source: (Welcome to Air Indus Airline (PVT) Ltd., 2016)
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Air Indus was born
It was at this time the Government of Pakistan made certain adjustments in Aviation Policy. Standards were improved & policies were made stricter in order to establish an airline in Pakistan.
Its inception took several months of keen hard work & extreme determination of a capable team shored up by investors to construct a ground-breaking & sustainable business model satisfying all latest Aviation Policy requisites as a result of which Air Indus originated as 1st private airline in Pakistan granted a license under most strict policy conditions & in a obvious procedure.
The Chairman's vision is to revolutionize industry of air travel into a reality now. According to airline, passengers will never be taken for granted instead will be welcomed with esteem, will be given value & be served with utmost promising standard of customer care. Air Indus states to be 1st Pakistani air carrier to target more domestic routes to offer variety, constancy, reliability, & aid for travellers.
A warm welcome by Chairman & management team of Air Indus is extended to everyone with a pledge that public will:
Source: (Welcome to Air Indus Airline (PVT) Ltd., 2016)
Air Indus in Brief Founded 2010 Commenced Operations 28 July 2013 Hubs Jinnah International Airport (Karachi) Frequent-Flyer Program Indus Miles Airport lounge Indus Lounge Fleet size 6 Destinations 10 incl. cargo Company slogan *Fly With Difference* Head Quarters Karachi, Pakistan Key people Abdul Wahab (Chairmen & CEO) Website airindus.com.pk Source: (Air Indus, 2016)
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Source: (air indus links pakistan - Google Search, 2016)
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6.1.2 Mission Statement
Air Indus terms itself as a company devoted to make available:
• Safe; • Punctual; • Reliable; • Affordable air travel & • Convenient Schedules services of premier &best eminence & quality.
In order to accomplish its vision, it has started a LCC with focus on both regional & domestic routes to fulfil traveller needs within Pakistan. They also plan to serve on all major destinations globally very soon.
It offers highest air travel services within Pakistan & overseas by offering flights that are propped up with 4 crucial constituents of quality travel namely safety, schedules, services & savings.
On both ground & in air, its inventive conception has extended a fresh chapter in industry of commercial airline.
Source: (Welcome to Air Indus Airline (PVT) Ltd., 2016)
6.1.3 Vision
A vision of collective principles & ethics is something that that guide organizations throughout varying markets & its trends & circumstances. Air Indus terms itself as an airline dedicated to offer passengers an incomparable service.
To cater needs of travellers within Pakistan, Air Indus is focused to emerge as a LCC. They also plan to serve on all major destinations globally very soon.
It offers highest air travel services within Pakistan & overseas by offering flights that are propped up with 4 crucial constituents of quality travel namely safety, schedules, services & savings.
On both ground & in air, its inventive conception has extended a fresh chapter in industry of commercial airline.
Source: (Welcome to Air Indus Airline (PVT) Ltd., 2016)
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6.1.4 Fleet
Air Indus fleet consists of Boeing 737-300 aircraft; all 148 economy seats. They are very well maintained. In Pakistan, these contemporary & popular aircrafts are youngest of its sort.
Manufacturer Aircraft MSN Boeing 737-300 27469 Boeing 737-300 27910 Boeing 737-300 24672
Source: (Welcome to Air Indus Airline (PVT) Ltd., 2016)
airindus.com.pk 6.2 Where We Fly
6.2.1 Routes
It aims to connect all main cities in country & give enhanced prospects of boom for industry & commerce in Pakistan.
Destinations Air Indus has plan to serve within the country include Bahawalpur, Faisalabad, Islamabad, Karachi, Lahore, Multan, Peshawar & Quetta.
It plans to serve in Gulf & Middle East after victorious operations of its 1st year & then will sketch to serve on destinations in Far East, Europe & North America.
Source: (Welcome to Air Indus Airline (PVT) Ltd., 2016) Source: (Air Indus, 2016)
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Source: (Welcome to Air Indus Airline (PVT) Ltd., 2016)
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6.2.2 Schedule
To cater both general & specific needs of customers, it has scheduled to serve on wide range of destinations at convenient time slots. After doing well in its 1st year of operation, it plans to fly to Gulf, Middle East, Far East, Europe & America.
Source: (Welcome to Air Indus Airline (PVT) Ltd., 2016)
Source: (Welcome to Air Indus Airline (PVT) Ltd., 2016)
6.3 Products & Services
6.3.1 On Ground Services
Air Indus believes that customer services must be matchless. The devoted personnel at Air Indus will for all time help out & support by taking care of all customer needs.
Source: (Welcome to Air Indus Airline (PVT) Ltd., 2016)
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Source: (Jobinpk.com, 2016)
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Source: (Historyofpia.com, 2016)
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6.3.2 In-flight Experience
Cabin Ambiance To improve & make memorable customer experience, Air Indus has fashioned a new look with sparkling & modern ambiance complementing calm & spacious cabin environment. Cabins are designed to give more space with comfort. Cabin crew serves travellers with finest welcoming services onboard.
Source: (Welcome to Air Indus Airline (PVT) Ltd., 2016)
Source: (Pakwheels.com, 2016)
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Safety Comfort Air Indus assures disable travellers a safe & cosy air travel. Safety briefings are given to customers who wants them which includes safety measures & procedures, exit spots & communiqué concerning most proper approach to offer support to passengers in compliance to their needs. During flight announcements, flight attendant will provide updates. Safety briefings are delivered in Urdu & English. Seat pockets of aircrafts have safety briefing cards for passengers. Source: (Welcome to Air Indus Airline (PVT) Ltd., 2016)
Source: (Historyofpia.com, 2016)
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Source: (air indus cargo - Google Search, 2016)
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6.3.3 Cargo
Air Indus Domestic & International Cargo Service
Most important task that it claims as its major liability is to transmit freight on time. At present, cargo services of Air Indus are restricted to domestic operations but it has plans to extend services worldwide. It considers freight safety as its first priority & takes all safety measures to make sure that cargo does not spoils or gets misplaced.
It claims to have high-tech cargo booking & tracking system to certify that customer cargo has reached on time.
Airlines range of cargo services are designed to amplify output & profitability of customers at very economical rates.
Special chartered flights at discounted rates are also provided on requests.
Source: (Welcome to Air Indus Airline (PVT) Ltd., 2016)
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6.3.4 Catering
Air Indus intends to deliver most excellent when it comes to services. Drinks & meal onboard are provided by trustworthy suppliers before being freshly ready for flights. All course meals are designed by top chefs. The stimulating blend of savours, quality & aromas make meals scrumptious. Premium class ingredients are used & there is no compromise on standards of food safety when it comes to creating appetizing food. Due to different needs of each customer, Air Indus provides an immense selection of snacks & meals. It aims to make passengers fine dining experience to forever stay ever green in their minds.
Source: (Welcome to Air Indus Airline (PVT) Ltd., 2016)
Source: (Welcome to Air Indus Airline (PVT) Ltd., 2016)
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Source: (air indus catering - Google Search, 2016)
Source: (Image: Inflight food | Indus Air Karachi to Islamabad | Flickr - Photo ..., 2016) %3A%2F%2Fwww.flickr.com%2Fphotos%2Fameerhamza%2F17524648589&docid=8oWyBHiyd6VcM&tbni d=fTm0DmwerKwIhM%3A&w=70 0&h=472&bih=698&biw=1536&
0ahUKEwjz4LTUg5nMAhXCl5QKHderCvkQMwgbKAEwAQ&iact =8
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6.3.5 Charters
When airlines can’t meet traveller needs then charter is convenient & efficient way to travel by air. Aircraft charters, being a first-class service, answers transport troubles & issues.
For both short-term and long-term purposes, Air Indus can set up on-demand private charters to grant a safe & hassle free air travel experience. It states that business travellers will be delighted to find airline services safe, homely, convenient & both time & cost saving.
Source: (Welcome to Air Indus Airline (PVT) Ltd., 2016)
6.3.6 Indus Miles
After joining Indus Miles Frequent Flyer Program, customer enters an exclusive world full with privileges & fanatical services by airline keeping their focus on customers' needs & wants.
Following are the reasons that it gives, to bond to Indus Miles Frequent Flyer Program:
1) Free & easy membership as customer only needs to fill a specific form. 2) There are lots of ways to earn Indus Miles. It rewards customers each time customer travels on it. Doesn't matter if customer does not travel much with respective Airline, Miles still reward customer just the same. Air Indus is thankful enough to its business Partners for services they offer to them. Miles are easily earned when customers book a hotel, a car, go dining & in many more ways. 3) There are many other ways that customer can spend miles & achieve benefits.
With Indus Miles Frequent Flyer Program, customer can ask for an award ticket get discounted fares have an additional baggage allowance have priority boarding & priority check-in experience soothe of VIP lounges at certain airports get discounts at certain retail outlets
Source: (Welcome to Air Indus Airline (PVT) Ltd., 2016)
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6.4 Planning Travel with Air Indus
6.4.1 Online booking
The easiest method to book flight on Air Indus is booking online through airlines website. Customers can get most up-to-date special offers, discover airlines incredible low fares & shun fees of booking agents.
To book a flight using airline website Internet Booking Engine, customers ought to follow 5 simple steps:
1. Check Availability 2. Select preferred flights 3. Confirm Flights 4. Enter Passenger Details 5. Confirmation & Payment
Source: (Pakwheels.com, 2016)
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Source: (Welcome to Air Indus Airline (PVT) Ltd., 2016)
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6.5 Contact
Source: (Welcome to Air Indus Airline (PVT) Ltd., 2016)
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Chapter 7: PAKISTANI AVIATION INDUSTRY
Industry in Brief Then & Now IATA Reports National Aviation Policy (NAP 2015) Old Carriers; New Strategy
Why Air Indus? With Reference to External Factors With Reference to Internal Factors
Blue Ocean Strategy in Pakistani Aviation Industry... Success or Failure? Global Passenger Surveys & Pakistani Context
Public Pole
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7.1 INDUSTRY IN BRIEF
7.1.1 THEN & NOW
One of the most important sectors of a country's economy is transportation & aviation industry is a major part of this segment. Communication & transportation sector in Pakistan holds over 10% share in GDP. Other sectors of economy that aviation industry can have an impact on include tourism, trade & socio-economic condition of country.
Historically, until the deregulation of aviation industry, Pakistan International Airline has been dominant & enjoyed monopoly. It was ranked as one of the best airlines round globe until incompetent leadership & poor management took over PIA.
Other airlines started to operate & get recognized only when PIA started to collapse due to certain reasons. The downfall has been a nightmare to PIA but it has turned out to be no less than a blessing to many other Airlines, both domestic & international, starving for giant profit that PIA was gulping all alone due to its sole good identity & monopoly.
Emirates Airlines, Etihad Airways, Qatar Airways, Turkish Airlines, Kuwait Airways, Oman Air, Gulf Airlines, & Saudi Airlines are amongst major international competitors to Pakistani Airlines these days.
Domestic Airlines in rivalry include PIA, Shaheen Airlines; Air Blue & Air Indus. Exit of Bhoja Airlines & Aero Asia has left market open for new fish to enter.
7.1.2 IATA REPORTS
According to IATA, Pakistan is amongst fastest growing domestic air travel markets with an estimated augmentation of 9.5% annually, over 2 times quicker than world average annual growth rate of 4.1% in coming 20 years.
2013-2014 Provisional Figures
Source: (Haq's Musings: IATA Says Pakistan Among Fastest Growing Domestic Air Travel Markets, 2015)
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7.1.3 National aviation policy
The middle class in Pakistan is highly shifting choice of transportation to air travel. Air travellers in Pakistan augmented by 8% to 17.9 million in fiscal year 2013-14 recording best ever intensification in travellers in last 3 years. In order to capacitate passenger growth, airport upgrades & new construction is taking place. Islamabad, Sialkot & Multan airports are recent examples.
PIA is losing both its market share & money when air travel is in growing mode. Competitors, both domestic & international, have benefited at expense of PIA.
Government of Pakistan declared a latest National Aviation Policy, NAP 2015, estimating prospects of attracting new investments in this sector. Taxes & duties on investments in this policy are reduced in order to let aviation sector promote in Pakistan ultimately expanding markets, creating jobs & booming GDP.
7.1.4 OLD CARRIERs; NEW STRATEGY
Yes, it's indeed a pleasure to witness Pakistani aviation sector beginning to grow by increase in investments, improvements in offerings & creation of employment opportunities but with only a few Pakistani airlines, what possible options are left for perfections in industry?
Increase in demand & intense competition would lead carriers to highly pay heed to everyday changing needs & wants of customers & any fail in this aspect would gradually result in decline of industry overall.
The answer to this question is not emergence of new airlines but existing airlines taking up a new strategy. Pakistani carriers are competing their rivals in traditional market that has been in rivalry since beginning of this industry. Nothing new has ever taken place when it comes to a big change i.e. changes that are long lasting. This long lasting change will only occur when a enhancements in strategies of would take place.
Value-innovation is attained by simultaneous pursuing both low cost & differentiation. Both value & innovation are required to accomplish this. Value without innovation is deficient to attract a market. Innovation without value often shoots afar what users are set to pay for.
Pakistani airlines, specially low cost, need to exit traditional competition, strategically known as Red Ocean & fit into latest concept of Blue Ocean which should be reflected in their strategic planning & operations in order to offer services to markets that are right away low cost, high-impact, & operationally executable. All airlines need to spin for a first-class genuine professional team. Blue Ocean is the only way to provide low cost yet high quality service to passengers especially in a region where we live.
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7.2 Why Air Indus?
7.2.1 with reference to external factors
I particularly think that Air Indus is amongst the domestic carriers of Pakistan that can easily create its Blue Ocean pool. Reasons to this are as follows:
Established Players
Other competitors in market have already established their good say & advocacy. They are running into deep profits & have attracted a number of loyal customers since the downfall of PIA. The decline of PIA has benefitted others in market to the extent of possibility due to high profit margins & low competition for Pakistani Airlines. With such fierce oppositions, it would take much time along with dire efforts for Air Indus to establish a very strong position in market.
New Entrants; better change then to collapse
According to Express Tribune, Rayyan Air, Fly Pakistan Air & Vision Air are soon to enter market, with Rayyan to offer charter services too. Competition will get more intense & prospects for growth would ultimately decrease because of a number of choices that public would have access to. Air Indus can never be sure what percentage of traffic would like to choose their services. This uncertainty can lead to various falls.
Addressing Public Demand
Due to substitutes, people wouldn't have problem of travelling by air. Multiple Airlines would be operating in near future & the developed perception of Shaheen Airlines & Air Blue would automatically appeal customers more towards them. In scenarios like this, only one thing that could help any airline stand out is offering something which industry & public have not seen before. Something based on value innovation.
Increase in Operational Costs
Due to fluctuations in fuel prices, procurements costs & higher expenses of retaining human resources, it's very important for Air Indus to control its costs by cutting off secondary needs of passengers to the best possible verge. This would not only help airline to save revenue but also attract more passengers as Air Indus could then easily lower its prices. More demand & less expense would result in best combination.
7.2.2 With reference to internal factors
Till now we analyzed why Air Indus needs to change its strategy. Now we'll see internal reasons that can logically depict why shift of strategy to Blue Ocean is vital for airline. Following reasons have to do with the airline itself only.
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New Existence
Air Indus is newest entrant in market. It has not yet developed to an extent like other domestics carriers. A new baby in family can bring new joys very easily in its own ways attracting many people & creating new perception.
Easy Shift of Long Term Strategy
Blue Ocean is all a game of changes in long term strategy. Air Indus, being a new born can easily shift its strategy to Blue Ocean unlike other carriers. Big giants who are already gobbling up major share of market would never like risking their efforts of over years just by changing their strategy & especially when their businesses are already running into deep profits. Only Air Indus is this feasible to take shift but this single shift would for always take it to new heights where other carriers would not be able to reach easily within a few years because the victorious win is then for over right away 15-20 years across.
Domestic Passenger Growth
Around 6.7 million Pakistani passengers use airlines to travel domestically every year. This new increase in domestic demand can easily be capacitated by LCCs. With this number of passengers & expected increase in demand, there is a big pool for huge profit margins for Air Indus.
Low Funding
Blue Ocean Strategy, one like Southwest has adopted, doesn't requires much investment due to low operational costs & cut down of expenses. Many costly factors are reduced or eliminated in Blue Ocean so Air Indus would not have to invest much in order to start with a brand new Strategy.
Same yet Different
Need for travelling can be easily capacitated by many multiple choices of airlines. Need for travelling isn't need of time. The need of moment is something that is different based on a keen focus of customers rather than fighting heavily with so many competitors. Everyone is offering the common need i.e. same service but customer "delight" is somewhere waiting to be tapped. Advocacy is best build when customers are delighted by offerings rather than fulfilment of common need merely.
Sole Identity
Shaheen Air & Air Blue are running into their pool of competition at a high pace whereas it is utmost essential here for Air Indus to create its own unique identity by following something which could really make it "the only one" in industry so that it could stand up to its competitors in a same yet different way. Adopting this model would lead it to a good distinctive identity & advocacy build with time would itself create its goodwill.
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Shortcut to Successful Perception
Shaheen Air & Air Blue have already established good public perception. It'd be a little difficult for Air Indus to create wide perception about its goodwill as it already delayed in starting its operations & many claimed it a bad start. In Red Ocean pool, it can't compete that efficiently or it could take much enough time to be successful. The only way mindsets can be influenced & altered is with the help of something extremely influencing & nothing else can be done so successfully than to create a Blue Ocean, benefiting both itself & public.
Maximized opportunity; minimized risks
As we know, Air Indus would have no problem changing strategy. Why because it is still in developing mode. It has to beat much in order to level other dominant carriers. Much of the investment in terms of efforts, time & funding that other LCCs have invested in their airlines, Air Indus would take years to come in line with them but adapting Blue Ocean Strategy would avoid Air Indus the big wait & would help nurture best results in less time because of no competition. This is a very good example of maximum opportunity & minimized risks.
7.3 Blue ocean in Pakistani aviation industry...
a success or a failure?
According to case studies & research, Blue Ocean Strategy wherever applied has been a success reaping giant profits. It has never been a failure when applied properly. Many organizations have unknowingly been working with fit of this strategy till it officially got its name in 2005 by Kim & Mauborgne.
According to all my research & keeping in scene Pakistani psychological traits of public, Blue Ocean Strategy for LCC would prove to be hit. Let us see how.
7.3.1 IATA Global passenger surveys & Pakistani context
IATA compiles different surveys every year round the globe in order to present a self- sufficient data of air travellers from round the globe answering questions
what travellers want how travellers behave why travellers make choices what travellers spend their money on
It covers whole thing regarding customer decisions & purchase. Recent most survey was conducted in 2015 which has been detailed below. Let’s go through it & conclude whether if Blue Ocean will be a hit or not as survey is completely based on market study of customer preferences & choices.
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Source: (IATA - Global Passenger Survey , 2016)
This image depicts age groups who have been interviewed & percentage ratio of interviews. It can be seen that highest ratio of interview has been conducted from public in between ages of 25-54 as people between these ages travel most, stretching from seasonal trips to business commitments.
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Source: (IATA - Global Passenger Survey , 2016)
General
This image of survey clearly shows how customer make their decisions & what metrics do they use when choosing their airline of choice. There are a number of things that travellers consider when they decide to travel by air. It involves activities connected to both airports & airlines.
Pakistani context
Passengers travelling on any Pakistani airline would probably go through all these activities related to passenger travelling, from home till his destination. There’s not much for airline to focus here.
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Source: (IATA - Global Passenger Survey , 2016)
General
World has changed into a global village & everything is hoped to be best. Marketing these days is all focused on branding. Image above shows how important is value of branding & which immediate factors impact most when it comes to branding; everything else comes after.
It can easily be seen that on time departure & arrival is most important when brand perception is concerned. People do not think about anything else but on-time performance of airlines prior to all things.
Of course things would not sell when there would be nil marketing. First most attractive way to attract customer in order to build brand is appearance of aircraft.
Customers feel pleasured & valued when given attention. This attention may be focus on solving customer complain or taking feedback.
Pakistani Context
Coping up with on-time performance should be no big issue for any Pakistani LCC. Timely departures should be ensured. Delays can be due to some uncertainties when in air but departure should never be delayed.
An appealing aircraft appearance is one time investment only but can return much value to airline. Minor adjustments keep occurring but big investment last year's.
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Addressing customer issues & taking feedback is not so difficult. This can be done by
use of social media portals use of airline websites complaint & feedback boxes customer paper reviews customer direct interactions
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Source: (IATA - Global Passenger Survey , 2016)
General
Now this image of Survey is most important which depicts what impacts the most when customers are make their purchase decisions. Airline travel is most expensive means of travel in major part of world where there are either a few LCCs to capacitate demand or small dragons don’t meet psychological contentment of public due to which they prefer travelling on either full cost carrier on any other means of transportation.
As image shows, ‘price’ is most important factor to public when deciding whether to avail the offerings of airline or not. The ultimate goal of business is to earn profit & it will only be earned when offerings will be utilized by public. Purchase of offerings heavily depends on price. So price influences most when it comes to travelling by air.
Other important factors include flight timings that people are easy & willing to travel on. Moreover, different frequent flight programs are of immense importance as it brings a number of benefits to travellers.
Pakistani Context
We people live in era where low class & middle class people are more as compared to elite class. Elite class people don’t worry much about prices but low class & middle class people are more concerned about price.
Everyone is desirous to travel on aircraft but high prices are a big hindrance. This is the main reason why people here choose to travel on other modes of transportation rather than airlines.
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Pakistani LCCs can lower its prices in order to target this market very easily. Lower the prices, more the customer attraction. This can create big profit pools for airline due to reasons of Low Price & fulfilment of desire of public.
Additionally, due to stagflation, student class & leisure travellers highly prefer low cost travelling.
Overall, low cost travelling especially by air is best combination people search for & appeals them most.
Pakistani airline can easily schedule its flights on times when people are best willing to travel. The best way to check which timings match most of demand is to see which flight of day people prefer more to travel on.
Low air travel & Frequent Flyer Program; what could be more delighting to customers. More the customers, more programs airline could introduce creating word of mouth ultimately booming airline revenue.
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Source: (IATA - Global Passenger Survey , 2016)
General
Travellers today try to be as free as possible. They agree on carrying fewer things in hands. Paper boarding pass are a big problem when it comes to safeguarding it. The fear of misplacing it is always adhered to passengers & to some extent ruins their trip & in case it misplaces or destroys, it creates a chaotic environment.
These days’ people prefer electronic mobile boarding pass. There are fewer chances for such boarding pass to get misplaced. Plus people don’t always have to keep an eye on pass for long period of time.
Pakistani Context
These days, use of I.T is no big issue. Certain applications & portals can be designed & maintained to facilitate customers. Pakistani airlines can very easily manage data through such tools.
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Source: (IATA - Global Passenger Survey , 2016)
General
It can be seen that eating & drinking have low percentage ratios in both long & short haul flights. Watching movies, overall, has more ratios. The need of watching movie can be fulfilled by 2 ways Customer has his own device one big screen for all on board
Pakistani Context
Due to fewer ratios of eating & drinking, it can easily be concluded that eliminating meals from LCCs on short hauls would not result in loss. People prefer other things over eating & drinking. It can be considered that people on long hauls flights may get hungry to some extent. That too if passenger is all good after eating the meal on board else many refuse to eat due to medical disorders.
Eradicating meal on long haul is not easy but on short haul flights it’s no difficult. Merely a good snack with a drink can do much in order fill customer appetite to bearable extent.
Customers primary concern is price of offerings whereas meal falls somewhere in secondary needs where customers are easy to compromise as low price has already saved them enough to spend on something else rather than a mere meal that one isn't much confirmed whether if meal would amuse him/her or not.
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Source: (IATA - Global Passenger Survey , 2016)
General
It’s clear from this that access to devices by public has eradicated need for providing travellers with customized needs particularly on LCCs. Many people like to carry their devices. People, especially youth, are more inclined towards their ease of use & customized personal needs they have already feed in.
Pakistani Context
Though the image showcases much of other parts of globe rather than our region but it’s very obvious that these days every single person is moving around with up to date entertainment devices. More or less, every person is seen carrying personal belongings for their ease & amusement.
Again airline would not have to invest in more. Yes in order to facilitate public that are out of this scope, a little bit of entertainment, that serves all, can be provided for examples a main screen TV.
Cheap yet joyous entertainment can also be provided by airline staff or introduction of games or activities live on board can be introduced that involve fun & keep people busy.
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Source: (IATA - Global Passenger Survey , 2016)
General
This shows ratio of satisfaction customers feel after travelling by air, degree of recommendation to travel by air & decision of re-selecting air travel again. People love travelling by air. If people can choose to go again & again by airlines, just imagine what cheap prices could it bring to airlines? The only thing that they need is access to low fare travelling with safe & quality services.
Pakistani Context
The best conclusion for Pakistani LCC is to see number of passengers willing to travel again & again by air. Only if low price strategies are combined with differentiated offerings keeping costs low & focusing more on primary needs, customer delight can easily be achieved. It might take time though but results would be everlasting.
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Source: (IATA - Global Passenger Survey , 2016)
General
Generally if we see world as whole, we can easily figure out what customers prefer today. Above in image are mentioned few important things that customers demand when it comes to travelling by air.
Pakistani Context
Following Blue Ocean Strategy & offering customers products & services that delight them is best way that Pakistani carriers can satisfy customer before any other airline does.
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7.4 PUBLIC pole
In order to see if adopting this strategy is need for Pakistani Aviation Industry or not, I took some opinions of general public asking them which things appeal them most when travelling domestically.
"First thing that I’d be assuring of is the safety that airlines would provide. “Safety first.” After safety, costs that I’d incur by travelling on an airline would make me think about the most. These days trains in Pakistan have been updated to good qualities that it saves round 5000 rupees as compared to travelling by air. Yes time is an issue but for a girl like me, who has to see back at household expenses, I’d prefer travelling by modes that my pocket allows."
Rida Rashid BS (Mass communication) Student UMT
"Time & price both are most important to me when it comes to travelling. At times an air travel is comfortable enough for me & at times even Daewoo is a good option. It all depends on nature of my need. Air travelling cost more but due to time saving cuts me other costs of travelling whereas bus travelling takes time but ticket costs low comparatively. I have no experience on travelling on train till now."
Faisal Khan Niazi BS (Textile Engineering) Student UMT
"Being a business man, the most important thing to me is time & then price. I need to be at multiple destinations due to my working commitments & so domestically I prefer travelling by my own car or at times travelling by air. Expenses that occur while I'm on my own transportation depend on me & my wants. Which things on & how am I going to manage my spending? When it comes to travelling by air, I mostly travel by air for foreign lands. Safety is automatically a consideration as far as air travel is concerned but air travel is both safest & the most dangerous mode of travelling. Price is my next important consideration here. I evaluate among available airlines in market but my domestic travelling by air does not happen to be much as my own transportation complements my need within boundaries."
Hassan Ahmed Malik CEO (International Migration Consultants) Lahore
“Factor that I consider most while travelling is price. I live in hostel here in Lahore due to my studies. I need to keep control over my expenses. I mostly use Daewoo to cater my need for transportation as air travel is expensive & I don't like travelling by air due to cracking sounds of its tyres. It aches me."
Sehrish Ather Chattha Department of Physiotherapy Student UMT
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"I have a family of Ma sha Allah 4 children. My wife & I have many expenses to look after in order fulfil our needs. Price is indeed most considerable factor for us. It might sound weird but I'm afraid to travel by air but that does not eliminate my need for travelling by air plus the excitement my kids are enthralled with. Whenever I have to travel by air, what I do is estimate costs of travelling by checking ticket prices & guesstimating my budgets."
Malik Rashid CEO (KF Technologies)
Essence:
Very clearly we can see that every person in pole opinion has a consideration for price factor. It may vary from person to person when prioritizing these certain factors of price, safety & time but mostly price is something that has greatest influence of all. It seems quite visible from here that there is a need for low cost travelling in Pakistan.
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Chapter 8: Recommendations
Air Indus - The Present Environment Air Indus SWOT Analysis
Air Indus - The Future The Corporate Governance SWOT Analysis After the New Strategy More Simplified Corporate Resources Strategic Objectives & Goals Still Advantageous
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8.1 air indus - the present environment
8.1.1 AIR INDUS SWOT Analysis
Let’s scan a SWOT analysis of Air Indus in present environment with present strategies
Opportunities
The incidents of existing airlines
After the incidents of Shaheen Airlines & Air Blue, people to some extent hesitate travelling by Shaheen. It automatically has struck a negative image in minds of people.
o Shaheen Airlines (Karachi-Lahore flight NL -142) On November 2015, tyre of a Shaheen Air flight burst when landing at Lahore Airport injuring at least 10 people.
Source: (10 injured as Shaheen Air flight crash lands, 2016)
Source: (10 injured as Shaheen Air flight crash lands, 2016)
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o Shaheen Airlines (Lahore- Dubai flight NL-766) On 2nd June 2016, Shaheen Air flight tyres exploded just before departure at Lahore Airport. No injuries were reported.
Source: (Dubai-bound Shaheen Air flight narrowly escapes crash at Lahore airport - The Express Tribune, 2016)
o Airblue (Jeddah-Islamabad flight PA 271) Airblue's flight coming from Jeddah nearly missed an accident as its tyres ruptured during landing at Karachi Airport, tilting aircraft to side. No loss was reported.
Source: (Airblue plane narrowly escapes accident as tyre bursts during landing, 2016)
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o Airblue (Karachi-Rawalpindi flight 202) On 28 July 2010, Airblue flight 202, Karachi to Islamabad, crashed in Margalla hills taking away the lives of everyone on aircraft.
Source: (airblue 202 crash - Google Search, 2016)
These incidents to some extent have confused public. They have fewer choices when choosing in between domestic LCCs. Though, people are travelling on these airlines but advent of a new dragon ensuring low prices, safety & good service can gobble up all market of Shaheen Airline & Airblue.
At present, it is a golden chance for Air Indus to target psychological perception of market by showcasing good performance & aggressive marketing depicting all those essentials in order to run smooth, efficient & safe flying that others are lacking in.
Low-cost Travellers
People living in Pakistan are mostly low-middle class. It's a big opportunity for Air Indus to target all those travellers that are price conscious as first thing that they look for is cost on their travelling.
Domestic Geographical Expansion
Air Indus has a big strength that it operates domestically only on destinations that are within boundaries. It doesn’t have to focus over operations widely. It should exercise all its energy & capacity focusing on domestic destinations only in order to take up big share of domestic market & reap handsome profits. The next should be focused when sufficient domestic share is with Air Indus.
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Mergers
New airlines are entering Pakistani industry. Air Indus can strengthen its position more through an alliance. It could easily then exploit this by acquisitions or mergers. This could then give access to much feasibility for example easy routes into major hubs brand name etc.
Threats
Cost of operations
Operational Rising labour & fuel costs are amongst most significant expenses which cannot be avoided. These factors are biggest threats when it comes to controlling costs of airline.
Security Due to security conditions of a country, demand for travelling decreases which ultimately results in service reduction & reduction of employees. Attack on Pakistani airports & military organizations in last few years have also caused many challenges to airline relating to passenger security. These things negatively impact industry profits.
Political environment Airlines in Pakistan face issues of political instability. This uncertainty has always been a big challenge when it comes to airlines long term strategic planning as laws & policies several times disturbed settlement of airlines.
Varied competitive factors
Another threat to airline is competition that comes from other modes of transportation as far as domestic travelling is concerned. Low pricing, frequency & ease of travelling on time of choice, transportation safety, security procedures & service can be things that customers think about as being more reliable when travelling through own means of transport. This can reduce airline travel.
Number & Size of Rivals
Everyday a number of airlines are entering Pakistani aviation industry many of which very big in size which have no problem in operating flights at high frequency. This increase can seriously endanger existence of small airlines specially ones that are already running on very low operations.
Economic Conditions
Due to economic downturn & hyperinflation, many people keep travelling far below in to-do list. They think of avoiding expenses that could occur while travelling. These things can badly reduce air travel potential & demand.
Declining Customer Confidence
Due to airline incidents, both international & within the boundaries, people hesitate travelling by air. Safety need is what matters most when travelling by air.
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Incompetent Employees
Incompetency these days is diminishing & market has more unqualified employees in order to fill gap on empty positions. A mere training by company & accustoming to culture is easy for employees to get start with but this incompetency has no hope for a big good change & leverage that company can take benefit from. Company can get best out of him only according to his limitations. This is a big threat to overall industry.
Unchallengeable Factors
Disruptions of operations due to bad weather conditions & restrictions can many a times be a big threat both when it comes to safety of aircraft in air & delay of flights to destinations. This can be adverse when bad weather stays for long.
Strengths
Low Cost Business Model
Region we live in has less business class travellers. Secondly, due to economic conditions people hardly prefer travelling on air transportation & ones who travel prefer travelling on economy class. Many airlines in our region have either reduced number of business class from planes or either operated low executive seats on these routes from very beginning. Air Indus being low cost carrier already has this benefit that it operates only low fare travelling so economy class is no issue for airline.
Safety Record
Air Indus luckily has not seen any incident till now. Though operations had been suspended by CAA back in July 23, 2015 but no incident has taken place. This is a good strength point for airline as no matter what but people do not regard it as an bad airline subjected to incidents ever.
Easy to Shift
As we have already discussed earlier, in case of altering strategy it’s very easy for Air Indus to shift to a new strategy as it has just started operations 3 years back unlike its other national competitors. It would from very start be easily targeting low cost travellers.
Weaknesses
Lack of Professionalism
Following is given one a customer review about experience he had with Air Indus:
“On 23 June I had to travel by Air Indus to Karachi to attend funeral of my close relatives & during the flight I seriously observed things which were not in accordance with general standard procedures. First of all I wasn't aware of such Airline operating in Pakistan. Since no other flight was available that night I had to purchase ticket for Air Indus. I even asked receptionist that since when this airline is operating as I was reluctant to travel with non famous operator. He replied though that since 2 years they are working. I boarded & during that flight I observed that perhaps some relatives of Captain were also on board which were strangely allowed to get entered into cockpit which I thing were not supposed to at all in any
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Creating Blue Ocean Strategy for Air Indus (PVT) Ltd. 157 case. I travelled quite a few times through other carriers but never observed such thing... Today when I learned this, I thanked God that I'm safe now..." Ali Tahir Jul 01, 2015 Source: (CAA suspends Air Indus' operations for violating safety regulations, 2016)
It can be seen that permission for pilots family to enter cockpit is big issue. It could’ve resulted in big incident threatening lives of all people on board. This should never be allowed as it’s against laws. Cockpit is an extensively sensitive area where complex operations are taking place time & again & any carelessness in cockpit could ultimately result in fatal loss.
Moreover, this statement would have prevented so many people from travelling on Air Indus. A bad perception is extremely difficult to remove from minds of people. Following is a statement by public under news posted on Dawn.com "CAA suspends Air Indus' operations for violating safety regulations"
“Good move, but here are my questions, why so late? Why was Air Indus, Bhoja & Aero Asia allowed to operate in first place? Why do our departments wait for a catastrophe before waking up to learn gross irregularities in procedures?..." Muneeb Jul 01, 2015 Source: (CAA suspends Air Indus' operations for violating safety regulations, 2016)
Such statements by public are serious threat to worthiness & good brand name of airline.
Limited Strategic Development
Air Indus is operating in an environment which is getting competitive day by day. Industry is also under immense influence of political environment. Competitors have more fleet & a reputed established brand name & operate on major airports with major hubs. Air Indus would have to adjust it strategy for long haul destinations in order to beat competition.
Weak Financial Position
Air Indus is financially not that strong as other airlines in market as recently it came into public notice that airline had leased an aircraft but returned it back after it failed to fulfil timely payments. Lack of funding is a big weakness of Air Indus.
Lack of Good Aircrafts
Suspension of Air Indus operations back in June 2015 due to aircraft not meeting required safety standards show that their aircrafts need to be in worthy conditions to operate.
Lack of Public Awareness
Due to low promotion strategies & low brand name, people do not prefer Air Indus to such an extent as they prefer other LCCs.
No Alliances
Airlines set up marketing alliances with each other. This puts strain on airline to keep up its position with a smaller fleet.
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No Service/Product Innovation
With advent of Air Indus, people had many hopes connected with new airline. Something new was being expected than more just an airline but no new novelty lead to customer dissatisfaction & they agreed on continuing services on same old airlines. It lacks modernism.
Technological Expertise
Lack of technological expertise is one of biggest weakness an airline can suffer from because aircraft & systems are all based on technological advancements..
Fleet size
For now in order to capacitate low demand for airline, a small fleet size may be okay to start with but with gradual increase in capacity, this fleet size can weaken bone of Air Indus.
8.2 AIR INDUS - THE FUTURE
Following topics showcases positive aspects of adopting Blue Ocean Strategy & recommendations are given to help Air Indus operate successfully on this strategy.
8.2.1 Corporate Governance
Board of directors
This part of family should be wisely elected & appointed as these are members who mutually watch over actions of any company hence board of governors should be assigned by Air Indus keeping in mind all certain factors that can immensely, both directly & indirectly, impact goodness of company.
Top Management
Executives of Air Indus should be elected annually at maiden meetings of Air Indus board of shareholders & directors. Following few positions are most important to be filled in order to run this part successfully:
Executive Officers: Chairman of Board Vice Chairman & Chief Executive Officer Director, President & Chief Operating Officer Executive Vice President - Customer Service Executive Vice President & Chief Financial Officer Executive Vice President - Chief Operations Officer Senior Vice President - Marketing Vice President - Governmental Affairs Vice President - Ground Operations
Members of Executive Planning Committee: All Executive Officers Vice Chairman & CEO President & Corporate Secretary
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Executive Vice President Customer Operations Executive Vice President Aircraft Operations Senior Vice President Corporate Communications Senior Vice President Enterprise Spend Management Senior Vice President Technology & Chief Information Officer Senior Vice President Law, Airports & Public Affairs Senior Vice President People & Leadership Development Senior Vice President Marketing Senior Vice President Planning Senior Vice President Finance & CFO
8.2.2 SWOT ANALYSIS AFTER THE NEW STRATEGY
Let us now examine SWOT analysis after fitting in airlines the concept of Blue Ocean Strategy as strategy would enable it to a number of diversifications.
Opportunities
Geographical Expansion
Once airline starts to operate efficiently on pre planned schedule routes with new strategy, it should be able to search for new destinations in order to give people more choices to travel. At first, it should target just whole of Pakistan & give an extremely tough competition to other airlines who are also focused on operating abroad. It's a good opportunity as Air Indus would only have to think keeping Pakistani context & feasibilities into mind which are not very difficult to meet as Pakistan already does not have so very good excellent domestic airlines & people are not very difficult to please. Its good repute will help it operate in new cities targeting more market. Good brand name, once established, would not cause much marketing & public relations costs. Domestic success should then shift focus to international destinations but best start is with domestic destinations.
Long Term Industry Growth
Blue Ocean Strategy is a long term Strategy concept & incumbents of this strategy have golden opportunity of earning all revenues right away for 10-20 years. If applied correctly in sequence, no competitors’ can cross it very easily due to established position in market.
Growth Opportunities for Smaller Airport Destinations
Due to Blue Ocean Strategy, many factors will eliminate & reduce ultimately resulting in rise of other factors. Due to more frequency of flights, as a result of new strategy & only domestic focus, Air Indus would have much greater growth opportunities for urban or less travelled destinations.
Boom in Trade & Tourism Industry
Due to stability in trade & tourism industry, it's a big opportunity for Air Indus to follow Blue Ocean strategy & fulfil needs of people of both industries providing low cost but good carrier services. This will give easy access to people for travelling by air without getting tired.
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Mergers
Different airline in market operating on success of a different concept would help Air Indus to make mergers with other airlines, both seeking their interests & profiting.
Majority of Population with Average Income
One of the biggest opportunities that Air Indus would have is that we have majority of people with low or average income. Biggest target of airline should be class of market which is already waiting be a prey as people needs & wants are changing everyday & due to commoditization of products or services & value of time, people are shifting towards ways that bring ease.
Threats
Cost of Operations
Operational Threat of fuel & labour costs would still exist but can be compensated easily by budgeting money that has been saved by cutting costs of other things that Blue Ocean tools help us to eliminate or reduce.
Security Security situations in country, to some extent, are in good control but still fear & uncertainty remains. Though operating on Blue Ocean that too domestically would not bring deep loss to airlines as service reduction & reduction of employees will not be needed due to reason that domestic travelling already does not need much number of employees till you extend destinations, but still fear in people never let them breath in peace.
Political environment Political environment always remains unstable here especially in our region. This uncertainty for sure is a big challenge when it comes to airlines long term strategic planning.
Small Subsidiaries of Airlines Replicating the Same Strategy
A serious threat can come from other big carriers but not other means of transportation. Why because airline offering safety, quality & timely operations at low cost is best blend people would prefer to travel as far as domestic travelling is concerned but an airline can challenge Air Indus by inaugurating its subsidiaries based on same strategy & big successful airlines it’s not a issue mostly.
Employees Failing to Understand
Another threat to Air Indus that can prevail to some extent at its initial stages is its employees failing to understand concept of this new strategy. For this, Air Indus would have to clear everything unmistakably to workforce so that it does not causes any mishaps in future.
Unchallengeable Factors
Bad weather conditions & restrictions can never be challenged & will always remain a threat. They can just be avoided by mitigation.
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Strengths
Easy to Shift
As we have already discussed earlier, in case of altering strategy it is very easy for Air Indus to shift to a new strategy as it has just started operations 3 years back unlike its other national competitors. It would from very start be easily targeting low cost travellers.
Low Cost Positioning with Differentiation
Our society being low-middle class mostly, the strongest point that Blue Ocean Strategy would enable Air Indus is to position it at a low cost positioning than its competitors with value innovation. This would ultimately make a strong branding for airline.
Culture
Blue Ocean Strategy tends to motivate employees & develop in them professionalism with love & loyalty for company. People working in teams develop a sense of togetherness & people start to think collectively for every interest related to company than to individually blame each other. This will keep company strong & help it fight any contingency efficiently & effectively with lively & active work force.
Service Innovation
Blue Ocean Strategy would help Air Indus bring innovation to its service that is based on "Value innovation" - Low cost but more buyer value. This is something new that Pakistani Aviation Industry would see & complement public demand.
Reformations & Automation
Reformations & automation, both are necessary in order to cut costs maintaining competitive advantage. Blue Ocean Strategy would enable airline to maximize specific customer market plus reducing turnaround time & bringing delight to customers. Better if airline could possibly replace paper boarding with an automated one that works on new self check-in technology. It's a onetime investment but could pay for good. This would both reduce boarding timing & avoid mess of long queues of travellers.
Sensible Expansion Strategy
Due to adoption of new Blue Ocean Strategy, airline would successfully be able to expand its strategic operations to cities where there is less competition. This would help it keep its costs low due to small airports low fees & attract customers of local area that travel long distances to reach main airports.
Efficient Operations
Our airlines have seen problem of delay time & again. People have developed a bad perception about airlines in this regard. Air Indus has a full good opportunity to position itself as an efficient airline in mindsets of people by reducing its turnaround time & managing timely departures & arrivals. This could very easily be possible with Blue Ocean Strategy as it eliminates many secondary activities saving time of passengers & airlines.
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Comparatively Less Impact of Legislative Factors
Due to only domestic operations & based on low cost strategy, changes in laws & regulations of regulatory authorities or political instability would impact Air Indus but not as much as these factors will influence big airlines. Legislative factors mostly effect International network operations.
Varied Competitive Factors
Low pricing, increased frequency of flights & timely operations with safety & security would act as strengths to Air Indus enabling to beat its other traditional competitors.
Strong Position
A big strengthening point for Air Indus after successful application of this strategy would be itself setting rules, regulations & standards of competition in industry. Any replicator would have to adhere to these laws in order to be successful which is usually not very easy to follow.
Success Stays for Decades
Company adopting Blue Ocean since very start, without any competitors in pool generate high revenues, are successful to establish strong customer loyalty with deep knowledge about competitive environment. For a straight 10-20 years, original company, that has Blue Ocean Strategy fit in its structure, reaps profit without any sharer.
Weaknesses
Limited Strategic Development
Air Indus is operating in an environment which is getting competitive. Industry is also under immense influence of political environment. Many competitors have more fleet & a reputed established brand name & operate on major airports with major hubs. To enter big markets, strategy of Air Indus would have to be adjusted carefully for long haul destinations.
Lack of Funding
Air Indus is financially not strong which is as one of weaknesses of Air Indus until & unless it's financial position is improved.
Deprivation of International Routes
Blue Ocean Strategy is based on low cost concept. This means Air Indus would not have to think about international routes till it has strong control over domestic market.
8.2.3 MORE SIMPLIFIED?
Let's see on how Air Indus should start it. We know Value Innovation is created when costs are cut down & buyer value is increased. To cut costs down elimination & reduction of certain factors is essential whereas to increase value, creation & rising of certain factors is important. Let’s see on simple scale based on these 4 factors that how can Air Indus with present feasibilities.
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More or less, elements that these factors would cover be similar to Southwest's ones.
Eliminate what ?
Meals; only drinks & snacks In-flight entertainment Paper Work Baggage charge Booking though travel agents Flight delays reduce What?
Fare prices Labour costs (gradually) Type of fleet Cabin crew Turnaround time
Raise What?
Efficiency Short haul flights Freq. of flights Domestic destinations service to undeserved markets Employee motivation Upgraded fleets Quality of services Marketing Strategies Finance create What?
IT applications Exceptional company culture based in fun & innovation Employee training programs Good managers-employee relationships Great leadership styles Promotional campaigns offering special offers & services Customer Satisfaction Iconic brand Passenger rewards Joint venture
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8.2.4 Corporate Resources
Marketing
Marketing is done for selling. Air Indus would have to accomplish its heavy marketing. Public awareness is only way to attract customers to shown airline offerings. Marketing has different forms & all should be utilized as every class of people have an access to different marketing awareness. Billboards, brochures, direct marketing, social utilities pages, websites, banners, campaigns & different special offerings are few of best ways to start with.
Finance
Gradually with increasing traffic & substantial profit growth, Air Indus would have to invest in its factors of both external & internal market in order to let things flow smoothly & be successfully profitable.
Operations & Logistics
Air Indus already has online reservations & booking systems. It just needs to introduce new applications & accessible ways that public can have good access to book seats & take information. It should maintain a high gratitude ratio & low customer complaint ratio by addressing customers’ needs.
Human Resource Management
Employee motivation is considered to be most difficult part of internal environment of an organization. Air Indus should emphasize much on it. It will have to increase employee loyalty towards airline. Satisfied employees would create satisfied customers, ultimately creating good brand name.
There should be training programs to help employees work more efficiently with updated knowledge & performance metrics should be used to check employee efficacy.
Compensation & benefits should also be appealing enough to nurture a great workforce.
Best thing Air Indus can do is induce employees & care for them to such a great extent that they should will to work due to affiliation with company rather than for what they get in terms of monetary worth. Only top management can help this thing prevail & stay integrated till the end. It’s difficult but not impossible as we can see example of Southwest.
Information Systems
More enhanced Information Systems should be introduced with new advancements enabling airline to work with more efficiency.
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8.2.5 STRATEGIC OBJECTIVES & goals
Objectives
Air Indus should focus on following long & short term objectives to establish itself strong.
Short Term
2 years:
Augmenting shares by certain % Leasing new aircrafts Increase utilization of aircrafts by certain % Increase route frequency for most travelled routes annually Increase route for new cities annually One-time performance improving by certain %
3 years:
Continue to improve & be successful Improve technological knowledge by certain % Introduce new offerings to market annually
5 years:
Continue increasing quality by certain % Continue developing innovative offerings by certain % Continue satisfying customers & rank no. 1 in market
Long TERM
5-10 years:
Reduction in employee turnover Increase quality by a higher % than before Increase passenger traffic by higher % than before Decrease operating cost by certain % Increase online sale by very high % Continue to stay best amongst its customers Decrease any complaints & increase customer gratitude by certain % Increase fleet by certain % Try to move towards fuel hedging
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Goals
Short - Term goals
Heavy marketing strategies can be implemented immediately at departmental level. mid - Term goals
To improve operational efficiency, different programs can be implemented on annual basis. long - Term goals
Strategic goals such as fleet expansion, mergers & market expansion should be planned keeping in mind span of 5-10 years.
8.2.6 Still Advantageous ?
We don’t have carriers as superior as USA but Southwest still managed to triumph over all carriers in domestic market. LCCs in Pakistani Aviation Industry, having an inferior quality of competitors, can easily be challenged by any good airline that takes initiative to serve customers more than expected.
Intrinsic needs
To satisfy customer, Airlines today need to understand intrinsic needs of customers, rooted deep down back into minds of customers. People demand more & different every time. It’s very important to satisfy psychological & safety needs of customers with a drastic change.
Need for Low Cost
As we have seen that price is most important for majority of travellers. Due to value of time & health, people today demand a good time saving low cost means of transport that can satisfy their needs & wants in best possible ways.
Need for Different Offerings
People want to shift & utilize onto new things & services that can bring joy. They have almost forgotten what actually it feels like sitting with new offerings because experience is always same. Nothing new is introduced to them beyond expectations for delight.
Set Standards
Blue Ocean Strategy would not only set standards for respective airline but for Pakistani aviation industry on whole as its success would ultimately set good standards & remarks for Pakistani Aviation industry.
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High Profit Margin
Applying Blue Ocean Strategy would give high profit margins to Air Indus as overall demand & competition for air travel will grow, benefitting other airlines too as they would also try to cut competition.
Creation of Brand Equity
Pakistani Airlines don’t have good brand reputations. PIA once had good repute before its downfall. Since then, no other airline has been successful to attain a branded position. With success of this strategy, it’s very viable that Air Indus would be successful in creating a good brand name.
Benchmark
Air Indus would create a benchmarking metrics by its success. This would not only inculcate in other airlines urge to improve more but keep Air Indus spirits high to improve more with time in order to sustain its position.
Essence Instead of competing, Air Indus should position itself as an alternative to affordable means of transport with improved check-in times & increased flight frequencies.
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Chapter 9: Conclusion
In a Nutshell
Further Research
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Now according to all gathered information, I’d draw conclusion to sum up my practicum.
9.1 In a nutshell
Competition in businesses is becoming hard as competitors are emerging; shrinking profit margins. To obtain a big share of market, companies need to come up with new approach. Red Ocean & Blue Ocean, both strategies have for all time co-existed. A company already knows what is it to be like in Red Ocean as it’s a traditional approach.
According to its originators, Blue Ocean is mostly essential when supply exceeds demand. On one hand, there are several competitors, both national & international, in Pakistani aviation industry that are fulfilling demands of customers but on other hand, there is a market whose demands are not being addressed for one reason or other. Airlines are suffering from high price combats & constricting markets. This results in companies competing for high profit in bloody pool of Red Ocean.
Solution to avoid rivalry in today's highly competitive environment is Blue Ocean Strategy.
Blue Ocean is a blend of tools, frameworks, theories & concepts that can help Air Indus create uncontested market with no rules; generating deep profits. Company originally adapting this strategy would focus now on customers’ value rather than competitors in rivalry; value innovation being cornerstone of strategy. There are many advantages this strategy can lead to. At first, rivals would not trust relevance, legitimacy & benefits of this strategy but once respective company is successful with this strategy, and it’ll be running into pool of irrelevant competition, imitators will try to enter but original incumbent would be step a step forward making impossible for rivals. One of the biggest benefit of creating Blue Ocean is that, company will be in a strong enough as compared to its competitors as it itself will set standards, regulations, prices & rules of competition which will ultimately be an obstacle in way of imitators. Another benefit is that this irrelevant competition will help company stay successful for decades. No new entrant would be able to come in competition for years & years. Benefits of strong competitive advantages would also not lead rivals to jump into pool. Moreover, these days SWOT of competitors can easily be done. Incumbent company will be aware of what competitor is doing & will have an edge shooting down that very plan of rivals by being pro-active as rules would already be set according to incumbent. Opportunities of Blue Ocean are greater & more advantageous whenever there are fewer prospects for success. Concluding, I have seen all through my work that Blue Ocean is an excellent concept which needs a boom & boost by being identified in Pakistani aviation industry. Though it’s a theory based on observations, assumptions & on successful case studies, still it has shown remarkable results wherever & whenever applied by various companies.
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9.2 Further research I’ve tried my best to put light on most important aspects of this violent industry of aviation. I’ve tried to give best explanation to theory & concept in brief & tried applying it into real life to an airline in need. Further study on my research can be done as many questions may arise in minds of readers that I may not have been able to think over or there may be other ways to improve or apply concepts differently. This study can be done by people belonging to different areas of managerial & applied sciences studies.
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Creating Blue Ocean Strategy for Air Indus (PVT) Ltd. 173 commercial viable blue ocea strategy - Google Search. (2016, May 3). Retrieved from Google.com.pk: https://www.google.com.pk/search?q=commercial+viable+blue+ocea+strategy&biw=1536&bih=698& source=lnms&tbm=ischandsa=X&ved=0ahUKEwixg62m_73MAhVTbY4KHRljD98Q_AUIBigB#tbm =ischandq=the+profit+and+growth+consequences+&imgrc=vqsBhqvzO2AuvM%3A
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Dubai-bound Shaheen Air flight narrowly escapes crash at Lahore airport - The Express Tribune. (2016, June 4). Retrieved from The Express Tribune: http://tribune.com.pk/story/1115010/dubai-bound-shaheen- air-flight-narrowly-escapes-crash-lahore-airport/
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Essence of Blue Ocean Strategy | 8 Key Points of Blue Ocean Strategy. (2016, May 12). Retrieved from Blue Ocean Strategy: https://www.blueoceanstrategy.com/8-key-points-of-blue-ocean-strategy/
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Four Hurdles to Strategy Execution | Blue Ocean Strategy Tools and Frameworks. (2016, May 19). Retrieved from Blue Ocean Strategy: https://www.blueoceanstrategy.com/tools/four-hurdles-to-strategy- execution/
Four Steps of Visualizing Strategy | Blue Ocean Strategy Tools and Frameworks. (2016, May 13). Retrieved from Blue Ocean Strategy: https://www.blueoceanstrategy.com/tools/visualizing-strategy/
Haq's Musings: IATA Says Pakistan Among Fastest Growing Domestic Air Travel Markets. (2015, June 2). Retrieved from Riazhaq.com: http://www.riazhaq.com/2015/04/iata-says-pakistan-among-fastest.html
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Image: How to Make Airline Rewards Work for You – Traverse. (2016, June 1). Retrieved from Google.com.pk: https://www.google.com.pk/imgres?imgurl=https%3A%2F%2Ftravelingmegpie.files.wordpress.com% 2F2015%2F05%2Fsouthwest-airlines-visas.jpg&imgrefurl=https%3A%2F%2Ftraverse- blog.com%2F2015%2F05%2F07%2Fhow-to-make-your-airline-rewards-work-for- you%2F&docid=oNEd4u
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Image: Southwest Heart. (2016, June 1). Retrieved from Google.com.pk: https://www.google.com.pk/imgres?imgurl=http%3A%2F%2Fwww.southwest- heart.com%2Fimg%2Fheart%2Frewards_card_1_general_member.png&imgrefurl=http%3A%2F%2F
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Creating Blue Ocean Strategy for Air Indus (PVT) Ltd. 174
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Image: Southwest Rapid Rewards - Susie Lim - Creative Director. (2016, June 1). Retrieved from Google.com.pk: https://www.google.com.pk/imgres?imgurl=http%3A%2F%2Fpayload.cargocollective.com%2F1%2F4 %2F129581%2F1703856%2Fsusielim_card1.jpg&imgrefurl=http%3A%2F%2Fcargocollective.com% 2FSusieLim%2Ffilter%2FWeb%2FSouthwest-Rapid- Rewards&docid=To8B8xmMx7OQQM&tbnid=X6I1
Image: Southwest Rapid Rewards - Susie Lim - Creative Director. (2016, June 1). Retrieved from Google.com.pk: https://www.google.com.pk/imgres?imgurl=http%3A%2F%2Fpayload.cargocollective.com%2F1%2F4 %2F129581%2F1703856%2Fsusielim_card4.jpg&imgrefurl=http%3A%2F%2Fcargocollective.com% 2FSusieLim%2Ffilter%2FWeb%2FSouthwest-Rapid- Rewards&docid=To8B8xmMx7OQQM&tbnid=06Zd iTunes. (2016, May 21). Retrieved from Wikipedia: https://en.wikipedia.org/wiki/ITunes
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NICOLAS, G. (n.d.). The evolution of strategic thinking and practices: Blue Ocean Strategy . no assigned seats southwest - Google Search. (2016, June 1). Retrieved from Google.com.pk: https://www.google.com.pk/search?noj=1&tbm=ischandq=no+assigned+seats+southwest&spell=1&sa =X&ved=0ahUKEwiAvrW4uIfNAhXJORQKHcAbAZYQvwUIFygA&dpr=1.25&biw=1536&bih=69 9#imgrc=E0YuF9MMjO1jsM%3A no in-flight entertainment southwest - Google Search. (2016, June 1). Retrieved from Google.com.pk: https://www.google.com.pk/search?noj=1&biw=1536&bih=699&tbm=ischandsa=1&q=no+in- flight+entertainment+southwest&oq=no+in- flight+entertainment+southwest&gs_l=img.3...888708.894850.0.895333.26.21.0.0.0.0.564.4134.3- 7j1j2.10.0....0...1c.1.64.img..22.0.0.eXpSk-c no in-flight entertainment southwest - Google Search. (2016, June 1). Retrieved from Google.com.pk: https://www.google.com.pk/search?noj=1&biw=1536&bih=699&tbm=ischandsa=1&q=no+in- flight+entertainment+southwest&oq=no+in- flight+entertainment+southwest&gs_l=img.3...888708.894850.0.895333.26.21.0.0.0.0.564.4134.3- 7j1j2.10.0....0...1c.1.64.img..22.0.0.eXpSk-c
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Peirce College. (2016, May 21). Retrieved from Wikipedia: https://en.wikipedia.org/wiki/Peirce_College
Philips. (2016, May 21). Retrieved from Wiipedia: https://en.wikipedia.org/wiki/Philips
Pioneer-Migrator-Settler Map | Portfolio Mapping | Blue Ocean Strategy Tools and Frameworks. (2016, May 13). Retrieved from Blue Ocean Strategy: https://www.blueoceanstrategy.com/tools/pms-map/
Price Corridor of the Target Mass | Strategic Pricing | Blue Ocean Strategy Tools and Frameworks. (2016, May 13). Retrieved from Blue Ocean Strategy: https://www.blueoceanstrategy.com/tools/price- corridor-mass/
Quicken. (2016, May 21). Retrieved from Wikipedia: https://en.wikipedia.org/wiki/Quicken
Ralph Lauren Corporation. (2016, May 21). Retrieved from Wikipedia: https://en.wikipedia.org/wiki/Ralph_Lauren_Corporation red ocean strategy versus Blue Ocean Strategy - Google Search. (2016). Retrieved from Google.com.pk: https://www.google.com.pk/search?q=red+ocean+strategy+versus+blue+ocean+strategy&biw=1536&b ih=698&source=lnms&tbm=ischandsa=X&ved=0ahUKEwjco9jBjLTMAhWUxY4KHX3IAWQQ_A UIBigB#tbm=ischandq=blue+ocean+strategy&imgrc=IJmwkMDGRG4VoM%3A
Red Ocean Strategy vs Blue Ocean Strategy. (2016, May 12). Retrieved from Blue Ocean Strategy: https://www.blueoceanstrategy.com/tools/red-ocean-vs-blue-ocean-strategy/ red ocean vs blue ocean - Google Search. (19, May 2016). Retrieved from Google.com.pk: https://www.google.com.pk/search?q=red+ocean+vs+blue+ocean&biw=1536&bih=698&source=lnms &tbm=ischandsa=X&sqi=2&ved=0ahUKEwiUz8zK2NXMAhXBNY8KHZOEDjwQ_AUIBigB#tbm= ischandq=tipping+point+leadership&imgrc=21nHWMw_PD_tAM%3A red ocean vs blue ocean - Google Search. (2016, May 12). Retrieved from Google.com.pk: https://www.google.com.pk/search?q=red+ocean+vs+blue+ocean&biw=1536&bih=698&source=lnms &tbm=ischandsa=X&sqi=2&ved=0ahUKEwiUz8zK2NXMAhXBNY8KHZOEDjwQ_AUIBigB#imgr c=ZXbJJO_ySw8JrM%3A red ocean vs blue ocean - Google Search. (2016, May 13). Retrieved from Google.com.pk: https://www.google.com.pk/search?q=red+ocean+vs+blue+ocean&biw=1536&bih=698&source=lnms &tbm=ischandsa=X&sqi=2&ved=0ahUKEwiUz8zK2NXMAhXBNY8KHZOEDjwQ_AUIBigB#tbm= ischandq=+four+major+steps+for+visualizing+strategy+&imgrc=BMZsQaxCeaK8ZM%3A red ocean vs blue ocean - Google Search. (2016, May 13). Retrieved from Google.com.pk: https://www.google.com.pk/search?q=red+ocean+vs+blue+ocean&biw=1536&bih=698&source=lnms &tbm=ischandsa=X&sqi=2&ved=0ahUKEwiUz8zK2NXMAhXBNY8KHZOEDjwQ_AUIBigB#tbm= ischandq=strategy+canvas+&imgrc=WJk2Ok-fHaI9nM%3A
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Six Paths Framework | Reconstruct Industry Boundaries | Blue Ocean Strategy Tools and Frameworks. (2016, May 13). Retrieved from Blue Ocean Strategy: https://www.blueoceanstrategy.com/tools/six-paths- framework/
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Creating Blue Ocean Strategy for Air Indus (PVT) Ltd. 177 southwest aggressive promotion - Google Search. (2016, June 2). Retrieved from Google.com.pk: https://www.google.com.pk/search?q=southwest+aggressive+promotion&biw=1536&bih=699&source =lnms&tbm=ischandsa=X&ved=0ahUKEwjV- Kz_6ojNAhWCvxQKHb66BDQQ_AUIBigB#tbm=ischandq=southwest+marketing&imgrc=nIOExdh 1gwdCNM%3A southwest aggressive promotion - Google Search. (2016, June 2). Retrieved from Google.com.pk: https://www.google.com.pk/search?q=southwest+aggressive+promotion&biw=1536&bih=699&source =lnms&tbm=ischandsa=X&ved=0ahUKEwjV- Kz_6ojNAhWCvxQKHb66BDQQ_AUIBigB#tbm=ischandq=southwest+marketing&imgrc=afhF1Epz u7bc6M%3A southwest aggressive promotion - Google Search. (2016, June 2). Retrieved from Google.com.pk: https://www.google.com.pk/search?q=southwest+aggressive+promotion&biw=1536&bih=699&source =lnms&tbm=ischandsa=X&ved=0ahUKEwjV- Kz_6ojNAhWCvxQKHb66BDQQ_AUIBigB#tbm=ischandq=southwest+marketing&imgrc=d2qcieqE LKMsxM%3A southwest aggressive promotion - Google Search. (2016, June 2). Retrieved from Google.com.pk: https://www.google.com.pk/search?q=southwest+aggressive+promotion&biw=1536&bih=699&source =lnms&tbm=ischandsa=X&ved=0ahUKEwjV- Kz_6ojNAhWCvxQKHb66BDQQ_AUIBigB#tbm=ischandq=southwest+marketing&imgrc=WoVE4Q Nia_t3_M%3A southwest aggressive promotion - Google Search. (2016, June 2). Retrieved from Google.com.pk: https://www.google.com.pk/search?q=southwest+aggressive+promotion&biw=1536&bih=699&source =lnms&tbm=ischandsa=X&ved=0ahUKEwjV- Kz_6ojNAhWCvxQKHb66BDQQ_AUIBigB#tbm=ischandq=southwest+booking&imgrc=4JW73UL NA-0baM%3A southwest aggressive promotion - Google Search. (2016, June 2). Retrieved from Google.com.pk: https://www.google.com.pk/search?q=southwest+aggressive+promotion&biw=1536&bih=699&source =lnms&tbm=ischandsa=X&ved=0ahUKEwjV- Kz_6ojNAhWCvxQKHb66BDQQ_AUIBigB#tbm=ischandq=southwest+booking&imgrc=yxTCEDM etxKMCM%3A southwest aggressive promotion - Google Search. (2016, June 2). Retrieved from Google.com.pk: https://www.google.com.pk/search?q=southwest+aggressive+promotion&biw=1536&bih=699&source =lnms&tbm=ischandsa=X&ved=0ahUKEwjV- Kz_6ojNAhWCvxQKHb66BDQQ_AUIBigB#tbm=ischandq=southwest+booking&imgrc=KIsTI71rb7 HocM%3A southwest aggressive promotion - Google Search. (2016, June 2). Retrieved from Google.com.pk: https://www.google.com.pk/search?q=southwest+aggressive+promotion&biw=1536&bih=699&source =lnms&tbm=ischandsa=X&ved=0ahUKEwjV- Kz_6ojNAhWCvxQKHb66BDQQ_AUIBigB#tbm=ischandq=strategy+canvas+southwest+airlines&im grc=lU_mHCjTBpNcEM%3A southwest air travel cheaper - Google Search. (2016, June 1). Retrieved from Google.com.pk: https://www.google.com.pk/search?q=southwest+air+travel+cheaper&biw=1536&bih=699&source=ln ms&tbm=ischandsa=X&ved=0ahUKEwjwuouE_YXNAhVBsBQKHUS0DTQQ_AUIBygC#imgrc=1 Q3pHd-i2N06bM%3A southwest air travel cheaper - Google Search. (2016, June 1). Retrieved from Google.com.pk: https://www.google.com.pk/search?q=southwest+air+travel+cheaper&biw=1536&bih=699&source=ln ms&tbm=ischandsa=X&ved=0ahUKEwjwuouE_YXNAhVBsBQKHUS0DTQQ_AUIBygC#imgrc=bi 8Jopt8sr9PTM%3A
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Creating Blue Ocean Strategy for Air Indus (PVT) Ltd. 178 southwest air travel cheaper - Google Search. (2016, June 1). Retrieved from Google.com.pk: https://www.google.com.pk/search?q=southwest+air+travel+cheaper&biw=1536&bih=699&source=ln ms&tbm=ischandsa=X&ved=0ahUKEwjwuouE_YXNAhVBsBQKHUS0DTQQ_AUIBygC#tbm=isch andq=southwest+labour+cost&imgrc=m1wSS61FRDVhZM%3A southwest air travel cheaper - Google Search. (2016, June 1). Retrieved from Google.com.pk: https://www.google.com.pk/search?q=southwest+air+travel+cheaper&biw=1536&bih=699&source=ln ms&tbm=ischandsa=X&ved=0ahUKEwjwuouE_YXNAhVBsBQKHUS0DTQQ_AUIBygC#tbm=isch andq=southwest+labour+cost&imgdii=m1wSS61FRDVhZM%3A%3Bm1wSS61FRDVhZM%3A%3B h2TPOX0EhKCw-M%3A&imgr southwest air travel cheaper - Google Search. (2016, June 1). Retrieved from Google.com.pk: https://www.google.com.pk/search?q=southwest+air+travel+cheaper&biw=1536&bih=699&source=ln ms&tbm=ischandsa=X&ved=0ahUKEwjwuouE_YXNAhVBsBQKHUS0DTQQ_AUIBygC#tbm=isch andq=southwest+fuel+hedging+strategy&imgrc=z-8bmgxzE2TKYM%3A southwest air travel cheaper - Google Search. (2016, June 1). Retrieved from Google.com.pk: https://www.google.com.pk/search?q=southwest+air+travel+cheaper&biw=1536&bih=699&source=ln ms&tbm=ischandsa=X&ved=0ahUKEwjwuouE_YXNAhVBsBQKHUS0DTQQ_AUIBygC#tbm=isch andq=southwest+point+to+point+system&imgdii=ITZE26JoXbqbPM%3A%3BITZE26JoXbqbPM%3 A%3BdY7cFhQB2ldm southwest air travel cheaper - Google Search. (2016, June 1). Retrieved from Google.com.pk: https://www.google.com.pk/search?q=southwest+air+travel+cheaper&biw=1536&bih=699&source=ln ms&tbm=ischandsa=X&ved=0ahUKEwjwuouE_YXNAhVBsBQKHUS0DTQQ_AUIBygC#tbm=isch andq=southwest+secondary+airports&imgrc=kvH4QmTGNV06KM%3A southwest air travel cheaper - Google Search. (2016, June 1). Retrieved from Google.com.pk: https://www.google.com.pk/search?q=southwest+air+travel+cheaper&biw=1536&bih=699&source=ln ms&tbm=ischandsa=X&ved=0ahUKEwjwuouE_YXNAhVBsBQKHUS0DTQQ_AUIBygC#tbm=isch andq=southwest+e+ticket&imgrc=TR6u12Covj48XM%3A southwest air travel cheaper - Google Search. (2016, June 1). Retrieved from Google.com.pk: https://www.google.com.pk/search?q=southwest+air+travel+cheaper&biw=1536&bih=699&source=ln ms&tbm=ischandsa=X&ved=0ahUKEwjwuouE_YXNAhVBsBQKHUS0DTQQ_AUIBygC#tbm=isch andq=southwest+least+cabin+crew&imgdii=fkvgEDEvY7TNwM%3A%3BfkvgEDEvY7TNwM%3A %3BY4J1SFO2ZZsh5M%3A southwest air travel cheaper - Google Search. (2016, June 1). Retrieved from Google.com.pk: https://www.google.com.pk/search?q=southwest+air+travel+cheaper&biw=1536&bih=699&source=ln ms&tbm=ischandsa=X&ved=0ahUKEwjwuouE_YXNAhVBsBQKHUS0DTQQ_AUIBygC#tbm=isch andq=southwest+short+haul&imgrc=V3GA-IrUFyxLcM%3A southwest air travel cheaper - Google Search. (2016, June 1). Retrieved from Google.com.pk: https://www.google.com.pk/search?q=southwest+air+travel+cheaper&biw=1536&bih=699&source=ln ms&tbm=ischandsa=X&ved=0ahUKEwjwuouE_YXNAhVBsBQKHUS0DTQQ_AUIBygC#tbm=isch andq=culture+of+southwest+airline&imgdii=VGxcjEkPGCFYzM%3A%3BVGxcjEkPGCFYzM%3A %3BYu8azAciHklgSM% southwest air travel cheaper - Google Search. (2016, June 1). Retrieved from Google.com.pk: https://www.google.com.pk/search?q=southwest+air+travel+cheaper&biw=1536&bih=699&source=ln ms&tbm=ischandsa=X&ved=0ahUKEwjwuouE_YXNAhVBsBQKHUS0DTQQ_AUIBygC#tbm=isch andq=culture+of+southwest+airline&imgrc=0u-uvw5Xz7O8tM%3A southwest air travel cheaper - Google Search. (2016, Jue 1). Retrieved from Google.com.pk: https://www.google.com.pk/search?q=southwest+air+travel+cheaper&biw=1536&bih=699&source=ln ms&tbm=ischandsa=X&ved=0ahUKEwjwuouE_YXNAhVBsBQKHUS0DTQQ_AUIBygC#tbm=isch andq=culture+of+southwest+airline&imgrc=Gw_ep9mSoGW9XM%3A
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Creating Blue Ocean Strategy for Air Indus (PVT) Ltd. 179 southwest air travel cheaper - Google Search. (2016, June 1). Retrieved from Google.com.pk: https://www.google.com.pk/search?q=southwest+air+travel+cheaper&biw=1536&bih=699&source=ln ms&tbm=ischandsa=X&ved=0ahUKEwjwuouE_YXNAhVBsBQKHUS0DTQQ_AUIBygC#tbm=isch andq=culture+of+southwest+airline&imgrc=PgJO_s7isVMOTM%3A southwest air travel cheaper - Google Search. (2016, June 1). Retrieved from Google.com.pk: https://www.google.com.pk/search?q=southwest+air+travel+cheaper&biw=1536&bih=699&source=ln ms&tbm=ischandsa=X&ved=0ahUKEwjwuouE_YXNAhVBsBQKHUS0DTQQ_AUIBygC#tbm=isch andq=culture+of+southwest+airline&imgrc=LWT0MbsHrOzPvM%3A southwest air travel cheaper - Google Search. (2016, June 1). Retrieved from Google.com.pk: https://www.google.com.pk/search?q=southwest+air+travel+cheaper&biw=1536&bih=699&source=ln ms&tbm=ischandsa=X&ved=0ahUKEwjwuouE_YXNAhVBsBQKHUS0DTQQ_AUIBygC#tbm=isch andq=culture+of+southwest+airline&imgrc=sRwEZ_b85KamIM%3A southwest air travel cheaper - Google Search. (2016, June 1). Retrieved from Google.com.pk: https://www.google.com.pk/search?q=southwest+air+travel+cheaper&biw=1536&bih=699&source=ln ms&tbm=ischandsa=X&ved=0ahUKEwjwuouE_YXNAhVBsBQKHUS0DTQQ_AUIBygC#tbm=isch andq=culture+of+southwest+airline&imgrc=cW9EWS9aE7QI2M%3A southwest air travel cheaper - Google Search. (2016, June 1). Retrieved from Google.com.pk: https://www.google.com.pk/search?q=southwest+air+travel+cheaper&biw=1536&bih=699&source=ln ms&tbm=ischandsa=X&ved=0ahUKEwjwuouE_YXNAhVBsBQKHUS0DTQQ_AUIBygC#tbm=isch andq=culture+of+southwest+airline&imgrc=RKQnhpP_rFtdhM%3A southwest air travel cheaper - Google Search. (2016, June 1). Retrieved from Google.com.pk: https://www.google.com.pk/search?q=southwest+air+travel+cheaper&biw=1536&bih=699&source=ln ms&tbm=ischandsa=X&ved=0ahUKEwjwuouE_YXNAhVBsBQKHUS0DTQQ_AUIBygC#tbm=isch andq=culture+of+southwest+airline&imgrc=adSFtVOE2HBmlM%3A southwest air travel cheaper - Google Search. (2016, June 1). Retrieved from Google.com.pk: https://www.google.com.pk/search?q=southwest+air+travel+cheaper&biw=1536&bih=699&source=ln ms&tbm=ischandsa=X&ved=0ahUKEwjwuouE_YXNAhVBsBQKHUS0DTQQ_AUIBygC#tbm=isch andq=herb+kelleher&imgrc=An6lMovOtGGZ4M%3A southwest air travel cheaper - Google Search. (2016, June 1). Retrieved from Google.com.pk: https://www.google.com.pk/search?q=southwest+air+travel+cheaper&biw=1536&bih=699&source=ln ms&tbm=ischandsa=X&ved=0ahUKEwjwuouE_YXNAhVBsBQKHUS0DTQQ_AUIBygC#tbm=isch andq=gary+kelly&imgrc=u8zN7NzRO6mQWM%3A southwest air travel cheaper - Google Search. (2016, June 1). Retrieved from Google.com.pk: https://www.google.com.pk/search?q=southwest+air+travel+cheaper&biw=1536&bih=699&source=ln ms&tbm=ischandsa=X&ved=0ahUKEwjwuouE_YXNAhVBsBQKHUS0DTQQ_AUIBygC#tbm=isch andq=gary+kelly&imgrc=u8zN7NzRO6mQWM%3A southwest airlines - Google Search. (2016, June 2). Retrieved from Google.com.pk: https://www.google.com.pk/search?q=southwest+airlines&biw=1536&bih=699&source=lnms&tbm=is chandsa=X&ved=0ahUKEwj2p5Xtx4nNAhUD6xoKHckaAuQQ_AUIBygC#imgrc=pHwN5d2VmUzs QM%3A
Southwest Airlines. (2016, May 11). Retrieved from Wikipedia: https://en.wikipedia.org/wiki/Southwest_Airlines
Southwest Airlines. (2016, May 21). Retrieved from Wikipedia: https://en.wikipedia.org/wiki/Southwest_Airlines#/media/File:Southwest_Airlines_logo_2014.svg
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8&source=lnms&tbm=ischandsa=X&ved=0ahUKEwj9rI-Ky-zMAhWCMhoKHUZYC- oQ_AUIBygC#imgrc=pTtBvwEyAkXm8M%3A the profit model of Blue Ocean Strategy - Google Search. (2016, May 22). Retrieved from Google.com.pk: https://www.google.com.pk/search?q=the+profit+model+of+blue+ocean+strategy&biw=1536&bih=69 8&source=lnms&tbm=ischandsa=X&ved=0ahUKEwj9rI-Ky-zMAhWCMhoKHUZYC- oQ_AUIBygC#tbm=ischandq=build+execution+into+strategy&imgrc=FmCUww_O49lvtM%3A
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Welcome to Air Indus Airline (PVT) Ltd. (2016, May 9). Retrieved from Airindus.com.pk: http://www.airindus.com.pk/index.html
Welcome to Air Indus Airline (PVT) Ltd. (2016, May 9). Retrieved from Airindus.com.pk: http://www.airindus.com.pk/introduction.html
Welcome to Air Indus Airline (PVT) Ltd. (2016, May 9). Retrieved from Airindus.com.pk: http://www.airindus.com.pk/introduction.html
Welcome to Air Indus Airline (PVT) Ltd. (2016, May 9). Retrieved from Airindus.com.pk: http://www.airindus.com.pk/our-mission.html
Welcome to Air Indus Airline (PVT) Ltd. (2016, May 9). Retrieved from Airindus.com.pk: http://www.airindus.com.pk/our-vision.html
Welcome to Air Indus Airline (PVT) Ltd. (2016, May 9). Retrieved from Airindus.com.pk: http://www.airindus.com.pk/our-fleet.html
Welcome to Air Indus Airline (PVT) Ltd. (2016, May 9). Retrieved from Airindus.com.pk: http://www.airindus.com.pk/our-routes.html
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Welcome to Air Indus Airline (PVT) Ltd. (2016, May 9). Retrieved from Airindus.com.pk: http://www.airindus.com.pk/index.html
Welcome to Air Indus Airline (PVT) Ltd. (2016, May 9). Retrieved from Airindus.com.pk: http://www.airindus.com.pk/our-schedules.html
Welcome to Air Indus Airline (PVT) Ltd. (2016, May 9). Retrieved from Airindus.com.pk: http://www.airindus.com.pk/index.html
Welcome to Air Indus Airline (PVT) Ltd. (2016, May 9). Retrieved from Airindus.com.pk: http://www.airindus.com.pk/on-ground.html
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Welcome to Air Indus Airline (PVT) Ltd. (2016, May 9). Retrieved from Airindus.com.pk: http://www.airindus.com.pk/index.html
Welcome to Air Indus Airline (PVT) Ltd. (2016, May 9). Retrieved from Airindus.com.pk: http://www.airindus.com.pk/index.html
Welcome to Air Indus Airline (PVT) Ltd. (2016, May 9). Retrieved from Airindus.com.pk: http://www.airindus.com.pk/book-online.html
Welcome to Air Indus Airline (PVT) Ltd. (2016, May 9). Retrieved from Airindus.com.pk: http://www.airindus.com.pk/book-online.html
Welcome to Air Indus Airline (PVT) Ltd. (2016, May 9). Retrieved from Airindus.com.pk: http://www.airindus.com.pk/checkin.html
Welcome to Air Indus Airline (PVT) Ltd. (2016, May 9). Retrieved from Airindus.com.pk: http://www.airindus.com.pk/our-offices.html
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