...Transferring low-cost marketing practices from air to rail services: The Ouigo case Paul Chiambaretto a,b, Anne-Sophie Fernandez c a b c MRM-Groupe Sup de Co Montpellier Business School, 2300 Avenue des Moulins, 34080 Montpellier, France Ecole Polytechnique, PREG-CRG, Bat. Ensta, 828 Boulevard des Maréchaux, 91762 Palaiseau, France MRM-ERFI, University of Montpellier 1, Espace Richter, Rue Vendémiaire, Bât. B, CS 19519, 34960 Montpellier Cedex, France a r t i c l e i n f o Article history: Received 24 October 2013 Received in revised form 11 May 2014 Accepted 12 May 2014 Available online 29 May 2014 Keywords: Low-cost High-speed train Replication strategy Intra and intermodal competition a b s t r a c t More and more airlines have adopted a low-cost business model and many scholars have studied the characteristics of such marketing strategy. While other transport modes have decided to copy and adopt this strategy, we investigate how they replicate this business model. To do so, we in-depth study the operational and marketing characteristics of Ouigo, the new low-cost offer launched by the French rail operator SNCF in 2013. Based on interviews and secondary data (press articles, reports, etc.), we analyze how the rail operator has adapted the low-cost model used by airlines to the high-speed rail industry. We first begin by explaining why rail operators need to implement low-cost strategies and we analyze the characteristics of these low-cost strategies...
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...AirAsia Case Study Abstract—This paper focuses on the company AirAsia. We will be talking about their strategy through out this paper and will also discuss their position in the global market. AirAsia’s strategy is to become the largest low cost airline in Asia; however, their coverage stays within south east Asia, which with our consultation and data presented in this paper we can analyze and seek a path towards a much larger coverage and becoming the leading largest low cost airline in the world. For the sake of this paper, we will be focusing on AiAsia’s partnership with Emirates in the middle east region. Keywords—AirAsia; Strategy; Sustainable Growth; Low-cost Airline; Alliance; Global Market Analysis; Introduction AirAsia, a successful global company based in Malaysia has been transporting people in Asian for over 15 years. The company is however thinking about expanding their coverage through out all Asia; currently they are covering and more focusing in East and Southeast Asia. Analyzing AirAsia’s strategy will help us understand any trends that is either helping them or decreasing their growth, hence, with proper recommendations we would be able to help AirAsia achieve its goal: Becoming the largest low-cost carrier in Asia. Having that said, by looking the global market and the growth rate of AirAsia; the company will be able to become the world’s largest low-cost carrier instead of only Asia. This requires the company to make a few smart modifications...
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...Low Cost Carriers An analysis of the Low Cost Carriers and its model with implications for the future of the industry segment. 2/23/2014 [Student ID Number] [Name] Low Cost Carriers Has there been too much hype about the Low Cost Carrier concept? Characterize the LCC business model, assess their reasons for success and failure, is it a sustainable business model, or is it in transition? Can you provide an outlook for the future of this industry? Before delving into the topic, it is necessary to explain what Low Cost Carriers actually entail and what the underlying concept behind it is. There are different names for the low cost carriers which include budget airlines, discount airlines and even no-frill airlines. The concept behind LCC is to present the customer with a low cost air travel but with fewer benefits (Dresner and Lin, 1996). Since the ticket price is low, the airlines puts a price tag for extras in the flight in order to generate more revenue for the revenue lost through decreased prices on tickets. The airline companies are able to generate a low cost operating structure which allows them to charge a lower price and hence maintain a reasonable amount of profitability. In order to analyze the topic, it will be needed to trace the history of the pioneering Low Cost Carriers in the world and how their model started off and how it has evolved over time to accommodate the changing market trends. Various case studies will be looked upon related to different...
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...Southwest Airlines Culture, Values And Operating Practices Essay retrieved from http://www.antiessays.com/free-essays/12682.html Case Study Southwest Airlines: Culture, Values and Operating Practices (in Thompson, A. A., Strickland. A. J. and Gamble, J. (2005) Crafting and Executing Strategy (Fourteenth Edition), McGraw-Hill, New York, pages C-636– C-664). Tasks The case study, prepared by Arthur A. Thompson, University of Alabama, and John E. Gamble, University of South Alabama, focuses on the rise to business prominence of Southwest Airlines, a regional airline with a low-cost no-frills approach. Based on the case study, and on online and offline research into Southwest Airline’s current state, complete the following Tasks: Task 1 - 20 Marks Provide an analysis of the company’s: • Potential resource strengths and competitive capabilities • Potential resource weaknesses and competitive deficiencies • Potential market opportunities • Potential market threats at the time this assignment is undertaken. Select suitable analytical tools from the text-book/course to help you structure your findings. Task 2 - 20 Marks On the basis of the critical factors identified in Task 1. a) Draw conclusions concerning the company’s overall situation. b) Suggest actions for improving the company’s strategy. Task 3 - 30 Marks Answer (in essay form) the following: It has been said that “talented people in possession of superior intellectual capacity are not only a resource...
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...STRATEGIC MANAGEMENT CASE STUDY SOUTHWEST AIRLINES SÜLEYMAN SİNAN ÖZTÜRK EBS 5103 STRATEGIC MANAGEMENT INSTRUCTOR: DR. AHMET BEŞKESE BAHÇEŞEHİR UNIVERSITY May 2013 Contents CONTENTS ................................................................................................................................... 2 INTRODUCTION: ......................................................................................................................... 3 THE HISTORY: .............................................................................................................................. 3 CASE ANALYSIS: PESTEL FRAMEWORK................................................................................. 5 CASE ANALYSIS: MICHAEL PORTER’S FIVE FORCES FRAMEWORK ................................. 7 CASE ANALYSIS: COMPETITIVE PROFILE MATRIX .............................................................. 9 CASE ANALYSIS: VALUE CHAIN ANALYSIS ......................................................................... 10 FINANCIAL ANALYSIS ............................................................................................................. 12 SWOT ANALYSIS ....................................................................................................................... 16 SPACE MATRIX .......................................................................................................................... 18 TOWS MATRIX: ..............................
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...Managerial Decision: United Airlines by Ronald J. Sanders HCM-540, MBOL5, Health Care Organization Instructor: Wenyuan Teng Saint Leo University Distance Learning November 10, 2013 Abstract United Airlines is one of many airlines that look to capitalize on it’s ability to provide air service to the consumer. Like other airlines, it is challenged to be creative and profitable in a changing market. The creativity may involve creating flights or analyzing the cost associated with providing a service. This paper offers some insight on the case study of United Airlines and provides some analysis on the managerial decisions within the company. The scenario given in the case study speaks about a situation of declining profits and the costs of operating were growing. A dialogue of cost and market organization will be noted and the recommended managerial decision of; whether the airline should run a specific flight or not. Introduction When making a business decision, many factors should be considered. The market structures in the economy are important in seeking whether the company is reasonable to continue to operate or not. The structure of the market or characteristics of the market environment that United Airline operates in is competitive market. Competition market is an economics term that refers to firms that have no influence on market price and take it as given. (Brickley Smith & Zimmerman, 2009). For United Airlines to operate involves the use...
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...How did the deregulation of air transportation in Europe foster entrepreneurial behavior and innovation in the European airline industry over the last twenty years? Case studies: SAS Airline & Ryanair Master Thesis in Entrepreneurship and Dynamic Business Contexts Spring 2007 Supervisor: Håkan Bohman Entrepreneurship Master Program Authors: Gilles Helterlin and Nuno Ramalho Acknowledgements We would like to express our gratitude to all who have contributed to the realization of this Master Thesis. A warm thank to our supervisor, Håkan Bohman from USBE (Umeå School of Business), for his guidance, his precious help and his advises during the last months. To Mr. Lundvall, from LFV (Luftfartsverket), Mr. Valinger from Scandinavian Airline and Mr. Wilsberg from SAS Braathens, Jessica Eriksson and Thomas Pettersson from USBE, thank you for your availability, willingness in answering our questions and for their so precious collaboration with interviews, comments and suggestions. Thank you also Sweden for the wonderful moments we have spent here. We will never forget your nature (your elks), your cold winter (-30°C), your long nights in winter and your short nights in late spring!! It has been a great experience and adventure up there in Northern Sweden!! We will miss you… Finally we would like to thank particularly the Studentexpedition for its kindness, without forgetting our family and friends (from Sweden, France, Portugal and Greece) for their everlasting daily support...
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...4 Promotion 10 4.5 Features and Benefits 10 5. Conclusion 12 Reference 13 1. Introduction Australian domestic airlines industry has recently had a major change in competitiveness when Virgin Blue entered on the market. Their low cost fares strategy quickly captured 25% of the market share. Analysts have predicted that Virgin Blue would grow to reach a third of the market until next year. The success of the Virgin Blue’s new business model is based on the balance between affordable airfares and company’s profitability. This model leaded to a new consumer behavior, forcing QANTAS to study the new market niche and consequently study the feasibility of opening a new low-cost airlines. The aim of this study is to propose to the creation of a new company for Australian domestic airline called KOALA AIRLINES. Two questions must be answered by the study: first, how will this new airline affect QANTAS business? Second, should we undertake this opportunity? 2. Evaluation Some initial questions are important for understanding the market time with the introduction of a new competing company. How will this opportunity affect your current customers? There is a constant challenge of today's airlines to differentiate themselves by offering better service, greater agility and lower cost. This allows a reduction in the buyers’ bargaining power, since they do not find a personalized...
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...Southwest Airlines Case Study Jared G. Sanders BUSN412 Business Policy April 1, 2012 SOUTHWEST AIRLINES WWW.SOUTHWEST.COM AIRLINE INDUSTRY BACKGROUND /HISTORY/ COMPANY TIMELINE: Southwest, founded by Rollin King and Herb Kelleher, began as a small Texan airline almost 35 years ago and has grown to become one of the largest airlines in America. It was created on the following premise: “If you get your passengers to their destinations when they want to get there, on time, at the lowest possible fares, and make darn sure they have a good time doing it, people will fly your airline!” (www.southwest.com). Today Southwest Airlines flies more than 70 million passengers a year to 60 great cities all across the country, and they do it more than 3,000 times a day. They have 436 of the newest jets in the nation, with each plane being an average age of 9 years. (www.southwest.com). Southwest’s combination of low fares, outstanding customer service, and strong leadership have helped the airline remain profitable even in the midst of tragedies like the terrorist attacks on September 11, 2001. SWOT ANALYSIS: Southwest was set up for success from the beginning because of its unique upside-down organizational structure. Upper management is at the bottom and supports the front line employees, who are the real experts. Kelleher’s unorthodox leadership style, in which everyone in the company makes management decisions, is largely unheard of these days. The company doesn’t...
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...CASE ANALYSIS Southwest Airlines, Co. COMPANY NAME: Southwest Airlines Co. INDUSTRY: Regional Airlines COMPANY WEBSITE: www.southwest.com COMPANY BACKGROUND: Southwest Airlines was founded in 1967 (Yahoo Finance, 2012) and started out as an idea from Rollin King, a San Antonio entrepreneur of a commuter air service. The idea was a response to complaints from his banker about the expense and inconvenience of ground travel between the cities of Houston, Dallas and San Antonio, also known as the Golden Triangle (Dess, Lumpkin, & Eisner, 2010 page C194). King, wanting to bring the idea to fruition, pooled his money together with a San Antonio lawyer, Herb Kelleher, who later won many of the company’s legal and territorial battles, and they started Southwest Airlines. After four years of legal battles with major airlines while the company was still very new, Southwest Airlines (SWA) finally launched its first flight in 1971 and continued to run with the assistance of many key people. One of the key people who got the company on its feet was Lamar Muse, former CEO. Howard Putnam later took Muse’s place as CEO from 1978 to 1982 and was then replaced by Herb Keller who was previously Chairman of the Board. Under the influence of Keller and SWA’s “low-cost strategy” (Dess, Lumpkin, & Eisner, 2010 page C194), SWA expanded from flying to only 14 cities, but still earning $270 million, to later servicing 64 cities, all at low rates. SWA continues to be a popular...
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...Introduction: Ryanair Ltd. is an Irish low-cost airline headquartered in Swords, Dublin, Ireland, with its primary operational bases at Dublin and London Stansted Airports. In 2013, Ryanair was both the largest European airline by scheduled passengers carried, and the busiest international airline by passenger numbers. The case study “ Dog Fight Over Europe: Ryanair (A), (B), & (C) presents the situation of April 1986 onwards when the Ryan brothers announce that their fledging Irish airline Ryanair will soon commence service between Dublin and London. For the first time, Ryanair were faced with formidable competitors such as Aer Lingus and British Airways on a major route. In the following write we will present as follows 1) Case study analysis based on literature provided in class 2) Key competencies & recommendations for future. Case Study Analysis of Ryanair European Aviation Scenario 1) Air travel become possible due to technical advancements made during World war-I which led to Emergence of small private airlines across Europe which got amalgamated and paved routs for National Flag carriers serving mainly from national capitals to other capital cities and colonies. National Flag carriers were Gradually owned and subsidized by respective National governments. 2) After World war II, air travel become widely economical. America emerged as dominant country in Air-Travel business. Governements on Europe resorted to bilateral & multilateral...
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...entrance of new budget airlines? What opportunities and challenges are associated with that environment? The environment for new entrants into the budget or low cost carriers market in the Southeast Asian region has become very competitive in the last few years despite the fact that the low cost carrier industry is still young. One of the most appealing aspects for operating a low cast carrier in Southeast Asia is the size of the market. Moreover, the untapped potential for growth in many countries within the region is great. As stated in the case study, some government regulations have been adjusted, lifted or cancelled and this has brought about a flood of new entrants. While government deregulation is viewed as good news, there are some limitations to the potential of intra-Asia flights. “A major disadvantage of the LCCs in Asia is the smaller geographic areas of domestic economies. As LCCs turn their attention to international routes for expansion opportunities, they would confront regulatory constraints applying in international markets.” (Zhang, 2008). This is key to the development and continued growth of the low cost carriers in Southeast Asia. There are also many challenges and pitfalls when it comes to running an airline, especially if the profit margins are thin. With any airline, be it full service carrier or a low cost carrier, fuel cost is always going to be at the top of the list. Fuel costs for an airline, as a percentage of operating costs, typically runs from...
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...OF CASE STUDY Commercial Air Services (Pty) Ltd (Comair) operated as South Africa's first private airline since 14 July 1946. On 27 October 1996 a British Airways franchise agreement came into effect and Comair became known as British Airways Comair (BA). Comair remained a South African controlled company and in 1998 was listed on the Johannesburg Securities Exchange (JSE). In 1999 the airline realised that there was a growing need for affordable air travel as the market had become seriously price sensitive. The economy had weakened at the time and travelling expenses had been cut.6 This realisation led to the launch of kulula.com in July 2001 as a separately branded Comair initiative: a South African low-cost, no-frills airline modelled on the successful European low-cost airline, easyJet. Kulula.com offered return flights between Johannesburg and Cape Town for as little as R800, three times a day, and received 2 000 bookings on its first day of operation. The product offering was simple: easy online booking directly with the airline and affordable fares. At the same time, frills were kept to a minimum: tickets could not be changed once they had been purchased7; there was no pre-assigned seating8, frequent flyer programme or business-class; and food and drink were sold on board rather than distributed for free.9 By stripping costs out of kulula.com's operations and business systems, the airline was able to offer up to a 40% discount on a conventional airline ticket...
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...Market for Southwest Airlines Steven Garnes MKT/571 August 10, 2015 Denise A. Rueb Segmentation and Target Market for Southwest Airlines Introduction Southwest Airlines was formed in 1967 by Rollin King and Herb Kelleher and started service in June of 1971. The airline is headquartered in Dallas, Texas and originally operated flights within the state of Texas. The company has since expanded and now operates flights from Dallas to almost all major cities in the United States and is considered the largest low-cost carrier in the country. “Southwest seeks to offer a travel product that is built around flights targeted to specific demographics and ticket pricing that is simplified so that passengers know exactly what they getting for what they pay” (Bhutada, 2009). Market Brand Southwest has created a strong market brand by focusing on points of difference. “Points of difference are attributes or benefits that consumers strongly associate with a brand, positively evaluate, and believe they could not find to the same extent with a competitive brand” (Kotler, Keller, 2012). The points of difference for Southwest has been its focus on reliability, the value the airline offers its customers, and the fact it’s a fun airline to fly. Target Market Market segmentation in the airline industry is not as straightforward as it may seem. Airlines may consider it common sense to simply separate the market into business and economy class passengers. “However, airline companies that rely...
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...Introduction Air Asia has successfully been xpositioned itself in the market as one of the leaders in the airline industry in Asia with its technical strategies. It has a route network that spans through over 20 countries and is one of the low cost aviation services in Asia. The Business level strategy adopted by air Asia is cost leadership strategy. To gain its market share they focused on specific markets like domestic services, short and long haul regional services and selling their products below the average industry prices. Air Asia adopted a number of actions to compete in the industry. It launches the values added services which are to provide ticketless travel and implement a free seating policy. In 2007 air-Asia became the first airline in Malaysia to offer internet checking services that allowed all the passengers to print their own boarding passes and pay extra money to board first. So, by doing this the passengers can choose their seats easily. In addition, they can also pre-book their checked baggage and meals. This paper describes Air Asia’s each xstrategies that maintain its effective control of low cost/focus business level strategy. Air Asia’s structure, cultures and systems that are used to create loyalty of the customers and satisfied them to lead the organisation to be profitable. SWOT analysis is conducted to focus aspects of Air Asia and business sector. It also evaluates the current business, future prospects and the economic climate. Porter's five force...
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