Question 3 : What Are the Industry’s Driving Forces of Change and What Impact Will They Have?
There are some factors which an industry uses, to make a decision. These factors can be customers, suppliers, competitors, etc. Something that really impactful to the action made by the industry is called driving force.
Garuda Indonesia driving force are:
1. Competitor
Because there are a lot of low cost airlines in Indonesia, Garuda Indonesia need to create their own low cost brand called Citilink. Citilink is created by Garuda Indonesia to take over the majority of Indonesian customer that needs low cost fee transportation. This will give a positive impact for Garuda Indonesia, and because of the existence of City Link, an airline price will be more competitive.
2. Growing Buyer Preferences
With a lot of demand by customer in increasing international flight, Garuda Indonesia add more flight to Japan and Saudi Arabia. This off course a really good change made by Garuda Indonesia, because increasing demand means more profit for them. Not only for international flight, Garuda Indonesia also getting a lot of demand for Citilink domestic flight. In 2015 there will be more option for domestic flight from Citilink.
3. Increasing Globalization
By add more international flight to Japan and Saudi Arabia, Garuda Indonesia also make some contract with local company in order to press the cost of add a new flight. Right now 50% of Indonesia – Japan flight is occupied by Garuda Indonesia, and Garuda is targeting 20% more by associating with All Nippon Airways. And in the end of 2015 their target is 65% of the flight, and 70% in the 2016.
If there is a change, there will be an impact also. The impact in Garuda Indonesia decision in opening Citilink is making airline price in Indonesia become more Competitive. A lot of discount and promos from other airline will be a common thing.