...MNGT 370 Michael Pienkowski WestJet Case Analysis 6/9/2015 WestJet Case Analysis WestJet Airlines is a fairly new airline based out of Canada that started out small, but soon distinguished itself from other airlines by the way that they operated. Starting in 1994, they quickly found their niche market as a discount airliner by only flying to certain areas of Canada. Clive Beddoe, a founder of WestJet, discovered a demand for short distance flights to certain parts of Canada that many larger airlines were not willing to offer since short distance flights were not cost effective for them. WestJet grew slowly and developed their own style of operation that included a lack of a union as well as a “Fun” corporate structure. Their employees were also some of the highest paid workers in their fields. These are the just some of the reasons why WestJet believes that they are so successful. The problem in the WestJet case is that the reasons that allowed them to thrive and become so successful in the past, might be the same reason that their growth will slow down in the future. Their culture of being “fun” and success in their niche market has allowed them to grow into a larger airline that is very effective...
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...to become a major competitor among international carriers. The low cost “no-frills” service and corporate culture have been the praise of West Jet success. To use market share as a measure, West Jet began with none and now has approximately 33% Canadian market share with plans for this to increase. Nonmarket Environment West Jet has developed a very strong market position in a short period of time. They certainly have a strong marketing strategy and low-cost structure that promotes strong margins. The non-market environment can nullify any market advantages such as price and product attributes, so it is crucial to the long term success of an organization to identify and act on issues. Here I have identified some non-market issues that WestJet either currently faces or has faced in the past, I will briefly analyze each to determine WestJet’s non-market...
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... S w 909C12 WESTJET: BUILDING A HIGH-ENGAGEMENT CULTURE Ken Mark wrote this case under the supervision of Professor Gerard Seijts solely to provide material for class discussion. The authors do not intend to illustrate either effective or ineffective handling of a managerial situation. The authors may have disguised certain names and other identifying information to protect confidentiality. Ivey Management Services prohibits any form of reproduction, storage or transmittal without its written permission. Reproduction of this material is not covered under authorization by any reproduction rights organization. To order copies or request permission to reproduce materials, contact Ivey Publishing, Ivey Management Services, c/o Richard Ivey School of Business, The University of Western Ontario, London, Ontario, Canada, N6A 3K7; phone (519) 661-3208; fax (519) 661-3882; e-mail cases@ivey.uwo.ca. Copyright © 2009, Ivey Management Services Version: (A) 2009-08-11 INTRODUCTION In late April, 2009, a senior manager at WestJet Airlines (WestJet) came across two news articles — one in Maclean’s, a Canadian news magazine, and the other in the Globe and Mail, Canada’s national newspaper — that hinted at a dilemma faced by WestJet: How to continue to build its high-engagement culture as it experienced high rates of growth?1 WestJet stood out from other Canadian airlines in many ways. For example, despite a difficult year in 2008, WestJet was one of only a few...
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...Introduction WestJet began as a Canadian low-cost carrier which has been growing rapidly and has experienced domestic and non-domestic expansion. Its unique corporate culture of engagement and invested interest is based on creativity, innovation, care, productivity and fun which has been its sustainable competitive advantage in the market. II. Issues WestJet is experiencing some underlying issues and problems which threaten the success of future growth. First of all, there is a lack of knowledge and experience necessary to further develop their cultural-business complex to assure the sustainability of the corporate culture in their growth. As well no discernable succession plan for management may lead to the inability of executives to maintain the core competencies. Finally the requirement of staff at all levels to be youthful is facing a future workforce that will have a high demand for young talent thus pressing WestJet to find new ways to recruit employees and employee retention. Some symptoms of the associated growing pains WestJet is undergoing are: in 2009 WestJet’s disagreed with the new contract proposal based on the lack of a strategic retention policy, the outsourcing of activities in foreign countries to organizations that do have a vested interest in the success of WestJet and the underlying corporate culture, and the increased need for upper level management personnel creating the potential for a bureaucratic disconnect. III. Analysis The success of WestJet resides...
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...2.QUESTIONS REGARDING THE CASE “WESTJET AIRLINES: THE CULTURE THAT BREEDS A PASSION TO SUCCEED” 1. What is WestJet’s competitive advantage? What are the sources of the competitive advantage? Their main competitive advantages are low prices and exceptional customer service. The low prices can be offered because they offer no meals, no frequent fliers and have a very fast turnaround at the gate, landed on airports that have low landing fees. in addition to this WestJet’s employees are very motivated to work and help out wherever they can, the team spirit, which is also a reason why the company can offer low prices for their flights. With this spirit the company has to hire less people. Their second competitive advantage which is the high customer service is a result of the employees of the company and their corporate culture. Employees were able to make their own decisions when dealing with clients, which made them very flexible and the problem could be resolved fast. Besides that they were properly trained to deal with the clients in a caring, positive and cheerful way. 2. Is the culture at WestJet as important to the success of the organisation as its management team believes it to be? Yes, it is. The reason why I agree with this is because the low costs and the high customer service cannot be reached if the workers are not motivated enough to work as hard as they were currently doing. The reason behind them...
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...weStJet mini case a great guest experience As the filled-to-capacity Boeing 737 taxis to the ramp at Maui’s Kahului Airport, 200 weary travellers are brought back to life by the a capella stylings of the lead flight attendant’s playful rendition of “Over the Rainbow.” Customers, or “guests” as WestJet prefers to call them, quickly realize that they are now part of another unique WestJet moment. They chuckle as the WestJetter cleverly integrates local time, temperature, and gate information into the lyrics, but he earns genuine LOLs when he works in the verse, “flying to Hawaii is free when you’re a WestJet employee.” Thus, despite being awake since 4:30 a.m., boarding a plane in Calgary in the dead of a prairie winter, and enduring a seven-hour flight with two young children who refused to sleep, these “guests” are ready to embrace the magic of Maui. The travellers may never know the reason for the improv performance, but maybe it was just another example of what the advertisements have been telling us for the better part of a decade: “Owners care,” a slogan communicating how the airline’s employee stock option package motivates participating WestJetters to go just a little bit further to please. WestJet’s philosophy of creating customer value is not based in its industry-leading turnaround times, modern fleet of planes, or even its competitively priced fares. Customer value stems from the core of a corporate culture, something only achievable when your people are engaged...
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...WestJet Airlines WestJet Airlines is a Canadian low-cost carrier that was founded in 1996 by an entrepreneur Clive Beddoe. With an idea to start up a low-fare airline company, Beddoe quickly found a team of like-minded partners and WestJet Airlines was born. The role model for WestJet was Southwest Airlines and Morris Air, both operating in the United States. The main goal of the newfound company was to offer “affordable air travel coupled with good service” (WestJet handout, pg 52). Besides being a very successful low-fare carrier, WestJet has a unique corporate culture that has been built around caring for its passengers. Even though, the image of WestJet Airlines seems perfect for today’s economy, this company faces some issues that will be discussed throughout the paper. The main problem WestJet faces is how to maintain the corporate culture with rapid company growth. The “fun” culture is what WestJet is very proud of and “believed that the culture was the key to their airline’s continued success and they could not afford to mismanage it” (WestJet handout pg 52). In tough economy and market competition, WestJet top management needs to make very important decisions to compete with its competitors while keeping the unique corporate culture. First, the company’s challenges need to be analyzed to decide what the best alternatives are for WestJet future. To begin with the analysis, very important characteristic of the WestJetters is they are so customer oriented and...
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...9B15C008 Robert Way wrote this case under the supervision of Professor Gerard Seijts and Professor Jean-Louis Schaan solely to provide material for class discussion. The authors do not intend to illustrate either effective or ineffective handling of a managerial situation. The authors may have disguised certain names and other identifying information to protect confidentiality. This publication may not be transmitted, photocopied, digitized or otherwise reproduced in any form or by any means without the permission of the copyright holder. Reproduction of this material is not covered under authorization by any reproduction rights organization. To order copies or request permission to reproduce materials, contact Ivey Publishing, Ivey Business School, Western University, London, Ontario, Canada, N6G 0N1; (t) 519.661.3208; (e) cases@ivey.ca; www.iveycases.com. Copyright © 2015, Richard Ivey School of Business Foundation Version: 2015-05-22 In early 2014, Ferio Pugliese looked back on his turbulent first nine months as president of WestJet Airlines Ltd.’s (WestJet) new regional air service Encore. Officially launched in Western Canada in June 2013, this venture represented the company’s most significant organizational change in its 18 years of dramatic growth and was billed as WestJet’s “second coming” — hence, the chosen name Encore. The process of expanding the airline’s fleet to include smaller, short-haul aircraft servicing smaller destinations throughout...
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...Welcom e - Already a m em ber? [ Sign In ] My Itineraries My Account Customer Support Online Check-in Feedback Français Cancel My Hotel Booking Home Flights Vacation packages Hotels LAS VEGAS DEALS DISNEY Car rental Cruises Things to do Insurance Mobile Like 243k Your Trip to Oranjestad, Aruba Sat 5/Oct/2013 - Thu 10/Oct/2013 | Total price: C$2,309.27 Trip Summary Halifax to Oranjestad Your flight and hotel were added to your trip. Sat 5/Oct/2013 - Thu 10/Oct/2013 Return: Arrives on 11/Oct/2013. 1 Ticket: 1 Adult Change Flights Show Details The Westin Resort & Casino, Aruba Sat 5/Oct/2013 - Thu 10/Oct/2013 1 Room: 5 nights Flights October 5, 2013 - Departure Halifax 1 stop Toronto Total travel time : 9h 45m Flight + Hotel C$2,636.24 -C$326.97 Total: C$2,309.27 All prices include taxes & fees and are quoted in Canadian dollars YHZ 8:00am Air Canada 607 Economy/Coach (M) YYZ 9:27am 2h 27m Your Savings Layover: 2h 13m Toronto Oranjestad 5h 5m Best Price Guarantee Congratulations! You're getting the lowest possible rate. We guarantee it. YYZ 11:40am Air Canada 1294 Economy/Coach (M) October 10, 2013 - Return Oranjestad AUA 4:45pm 2 stops Newark Total travel time : 17h 33m 4h 52m AUA 2:59pm UNITED 1039 Economy/Coach (L) EWR 7:51pm Important Trip Information We want you to know this trip has the following restrictions regarding your flight and hotel. Layover:...
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...company started in 1996 by a small group of entrepreneurs. According to the References for Business website for WestJet the WestJet founder Clive Beddoe was born in England and came to Canada and made a “fortune in developing commercial real estate in the Calgary area (References for Business website 2010)”. Clive Beddoe teamed up with Tim Morgan, Don Bell and Mark Hill to start a now frills airline according to the References of Business website. The WestJet Annual Information Report 2009 says WestJet started with three planes flying to five Canadian cities; Vancouver, Kelowna, Calgary, Winnipeg, and Edmonton. WestJet’s IPO was in 1999 on the Toronto stock exchange as WJA with Steven Smith as CEO (References for Business website 2010). WestJet Airlines Limited is made up of four subsidiaries; WestJet Aircraft Acquisition Corporation, WestJet Investment Corporation, WestJet Operations Corporation, WestJet Vacations Incorporated(WestJet Annual Information Report 2009 p.9) . The WestJet mission statement is “to enrich the lives of everyone in WestJet’s world by providing safe, friendly and affordable air travel (WestJet Annual Information Report 2009 p. 18)”. Organizational Strengths and Weaknesses Organizational Strengths First Organizational Strength A major strength of WestJet is the corporate culture. Corporate culture affects performance. WestJet was named Canada’s 10 Most Admired Corporate Cultures for four years in a row by Waterstone Human Capital and recently...
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...Our Airline WestJet Airline was founded in 1996 by Clive Beddoe and a team of people with the same thinking. WestJet airlines were started with the philosophy that just because you pay less doesn’t mean you should get less. Clive Beddoe and team started their journey with three aircraft fly to five destinations and 220 friendly WestJetters — a journey that would help them become a company of more than 8,800 passionate WestJetters flying one of the youngest fleets of Boeing 737 Next-Generation aircraft to more than 80 destinations in North America, Central America and the Caribbean. Culture “Owners Care” is what WestJet Airlines says in their ads. WestJet entire corporate culture has been built around caring for their customers, by providing a great customer service experience. This resulted them to claim top spot in Waterstones' study of Canada's 10 Most Admired Corporate Cultures for four years, WestJet was inducted into its Hall of Fame in 2010. In 2011 WestJet was designated as a J.D. Power Customer Service Champion (one of two companies in Canada and the only airline to make the list), ranked 3rd in Aon Hewitt's best employers in Canada and was chosen as the Canadian airline with the best flight attendants by flightnetwork.com. On top of this WestJet was chosen as Canada's preferred airline. mission To enrich the lives of everyone in WestJet's world by providing safe, friendly and affordable air travel. vision By 2016, WestJet will be one of the five most successful...
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...WestJet Ltd. Business History West Jet Airlines is the second largest airline in Canada, the first being Air Canada. The Airline has its headquarters in Calgary, Alberta, Canada. It is run by Gregg Sarektsky, who is the CEO and President of the airline and Clive Beddoe, who is both the Chairman of the board of directors and a co-founder of the Airline. West Jet Airlines employs roughly 10,000 employees as of August 2014. The Airline was founded by Clive Beddoe, David Neelman, Mark Hill, Tim Morgan and Donald Bell. WestJet Airlines is a non-unionized company and is not part of any other airline alliance. It however has a subsidiary- WestJet Encore. The Airline’s first flight was on February 29, 1996. (Arnusch, 2013) The Airline in its early starting years had all its routes in Western Canada, and this is where its name is derived from. Between 1996 and 2001, the airline experienced changes in leadership and shareholding. The Companies changed its CEOs From Clive Beddoe, to Steve Smith in 1999. As of 1999, the company made its first Initial Public offering. Steve Smith was replaced by Clive Beddoe again in 2000 until 2007. Later the company rose, expanding its destination flights to include more international flight. In terms of domestic shares, the airline rose from 7% in the year 2000 when, Air Canada was at 77% to 38% in the year 2009 when Air Canada was at 55%. The airline is clearly rising against its main competitor. (The Globe and Mail). The Airlines main goals as of...
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...Case 3 Southwest Airlines business-level strategy was cost leadership. They have employed numerous ways to reduce cost while still providing great service for their loyal customers. The best evidence of this strategy was the decision to use one type of aircraft which cut out expenses such as maintenance, tools, and parts to name a few. The implementation of blended winglets and the use of EcoPower engine wash, which saved the company millions, were also good indicators of a cost leadership strategy. Southwest Airlines has the capability to operate at a high profit margin. The company’s high profit margin of 4% is a direct result of the business-level strategy. Southwest Airlines was able to successfully lower costs in all the right places, and as a result, had the highest profit margin of all the airlines. Not only did they have the highest profit margin, but they also had the highest ROA of 1.2%, nearly double the closest competitor. Southwest Airlines competitive advantage is their ability to make a profit and successfully lower costs which is directly related to their cost leadership strategy. Southwest’s net income has increased each year from $484 million in 2005 to $499 million in 2006 and $645 million in 2007, they are also the only company besides JetBlue with a positive profit margin in 2008. Southwest is able to provide a low price flights, while maintaining low costs, and exceptional customer service in a presence of strong competitive forces. These...
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...WestJet airline is a discount airline based in Canada. WestJet has been very successful and they believe that their success is due to their distinct culture. WestJet offers low fare prices and friendly service, which has helped them gain great ratings in customer service. They believe in running a fun organization, having trust and respect for all employees, and treating all employees as equals no matter what their title. This, they believe, reflects on their customers because happy employees will offer the best customer service. WestJet also believes in teamwork, which in return helps cut costs. They feel that, when necessary, employees can do things outside of their job description in order to make things run smoother. This also helps cut costs because it means they do not have to hire more people to do a specific job since everyone is willing to help out. Also, employees have so much trust in the company that they do not even have contracts or unions, just agreements. All of this is what WestJet believes contributes to their success the most. The major problem in this case is that WestJet has big expansion plans, and if they continue to expand they will probably not be able to keep their “fun” culture. The more WestJet expands, the more people they are going to need to hire. Hiring so many new people can possibly ruin the culture of the company. This was proven to be a problem when Beddoe hired Steve Smith to takeover his job as CEO. Smith was hired in early 1999 and suddenly...
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...WestJet Airlines is a Calgary-based discount airline founded in 1996. Starting with only three aircrafts in 1996, the company is now “Canada’s leading high-value low-fare airline.” The management of WestJet Airlines assumes that the success of the business is anchored in the culture of the corporation and the welcoming service provided to its customers. Beddoe, the president and the CEO of WestJet, is proud of the airlines performance and the customer service it offers. He believes that the corporate culture was the key to success and the company’s attainment. WestJet’s culture is very entertaining, hassle-free, unperturbed, and relaxed. The ratings of the customer satisfaction are higher than those of the other airlines. Top management trusts and values its employees. It is assumed that having content, cheerful personnel results in a first-rate customer service. WestJet is a company that is managed “from the bottom up.” As Beddoe states, “We set some standards and expectations, but don’t interfere in how our people do their jobs.” Due to the fact that the employees and the management work as a crew, WestJet management saves money on hiring additional human resources. There is no need for supervisors because the employees supervise themselves and work together towards the organization’s goal. The corporation culture is what led WestJet to their “victory.” With the success, the company came to a decision about expanding its market. With the development strategy, the risk of the...
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