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SPICEJET • Parent company : spice jet
• Category : Indian domestic sector
• Sector : airlines
• Tagline/slogan: flying for everyone
• Usp: lowest price
• Segment: cost conscious passengers
• Target: lower middle class/ middle class
• Positioning : low cost no frills
INTRODUCTION
• Spice jet is a low-cost airline based in New Delhi.
• It began service in 23 May 2005.
• Spice Jet was earlier known as Royal Airway
• The director of this airlines is Mr. Ajay Singh.
• This airline has more than 2500 employees working with them
currently.
• SpiceJet names all its aircraft after various spices and herbs like
Cinnamon, Thyme, Oregano.
Swot analysis
STRENGTH
• Entered with RS 99 fares for the
first 99 days
• Strong backing by the promoters
• Having more than 35
destinations in India
• Good presence in the market due
to its branding and advertising
SWOT
WEAKNESS• Low market share due to
presence of significant competition
• no international destinations
• Dependency on leased assets
• Small load deficiency compared with competitors
OPPORTUNITIES• Growing population for• demographics• growing interest on tourism • Growing aviation market• International tie ups would
boost brand image• Tax holiday on aircraft
leasing– The Union Budget Government of India announced 5year tax holiday on aircraft leasing.
SWOTANALYSIS
STRENGTH
• One of the largest low cost carrier
• Only LCC to make consistent profit
• Has entered international markets and boosted its brand value
• Increased brand recall due to goodmarketing and advertising
WEAKNESS• Not on too many routes
compared to competitors • Still has to establish itself
on international destinations
• Concentrate only on middle class society
• Customers are not happy with Inflight services
OPPORTUNITITES• Attracted loyal customers
and converted them into indigo flyers
• Opportunity to go abroad markets
• Rapid expansion by buying new airbuses
• International tie-ups would boost the image of indigo
THREATS • Strong competition in the
LCC segment• Rising fuel cost • Changing government
policies • Companies are cutting air
travels due to economic crises
STRENGTH
• 1. Has created a good image among Indian fliers2. Strong backing from promoters
• 3. Awarded as one of the most premium domestic airlines in India
• 4. More than 1 million passengers catered in a year
• 5. Exclusive and premium advertising and sponsorship give it a high brand recall
• 6. It has flights to 25 Indian destinations and international flights as well
WEAKNESS
• 1. Financial issues due to Heavy Debt
• 2. Laying off employees caused a bad image
OPPORTUNITIES
• 1. Reputation of providing the best amenities in Indian skies
• 2. Financial stability can improve operations
• 3. More domestic and international destinations
THREATS 1. LCCs eating up the market
share2. Rising Fuel Costs3. Pressure from aviation
committees and govt policies
strength• Strong backing by the
promoters• Nearly 1000 flights per
week• Covers almost all major
cities• Good branding and
marketing in India
weakness
• market share is very less• It entered Indian market
very late• Not too many destinations
compared with its competitor
OPPORTUNITIES• More destinations yet to be
covered• Global operations can also
be a value addition
THREATS
• Plenty of new LCC’s to compete with who already have taken the lead
• Rising labour costs• Rising fuel costs
CUSTOMER ANALYSIS• SEGMENTATION Geographic : tier I and tier II cities Target : premium class of train travellers business people corporate employees Psychographic Segmentation : aiming for higher life style
• UNMET NEEDSMore international destinationsNeed for technological advancementNeed for trained cabin crews
COMPETITOR ANALYSIS
• Quality• Reputation• Customer security• Product performance• Product features• Price• Geo coverage• Add effects
ENVIRONMENTAL ANALYSISPEST
POLITICAL FACTORS : • Bureaucracy• No clear policies for state carriers
ECONOMIC FACTORS:• increasing tax and tariff • Price depends upon individual firm’s behaviour• International fuel price
PEST .. (CONT)
SOCIAL FACTORS :• Lack of skilled manpower ( in flight staffs)• Customers services• Safety concerns (9/11)
TECHNOLOGICAL FACTORS : • Night landing facilities• Operation during winter• Capital intensive technology
MARKET AND SUBMARKET ANALYSIS
• MARKET : aviation industry• SUB MARKET : low cost carriers ( LCC’S)• SIZE AND GROWTH : 14 % of market share• MARKET ATTRACTIVENESS : fast
transportation
MARKET TRENDS ( EMERGING MARKET)
India’s fastest growing tourism destination (majordemand driver)
• economic growth• growth in business travels Low cost carriers ( Lcc’s)• Resulted in middle income people people and self employed
shifting from premium class travel in trains to air travel• Domestic air passengers grew at a 38.5% from 25 %• CAPA predicts that domestic traffic would increase from 25%
to 30%
CUSTOMER PROFITABILITY
• Focusing towards enhancing the customer experience • Complimentary supervision of unaccompanied minors • Hot beverage and combo meals available for sale• Waiver on additional charges on sport kits Reaching out to business travellers : 1. business travellers can collect their boarding passes on
the same day return flight. 2. introduction of corporate travel programs 3. free two piece baggage
Key success factors
• Low cost carrier • Point to point services • Cheaper product design • Sales via internet• Word of mouth marketing
CUSTOMER SERVICES
• personal wallet at airport• Personal and exclusive baggies• Refreshment and music• Three course meal• Baggage assistance
Promotional tools
• Word of mouth marketing• Print ads in newspapers • TV commercials• Internet media initiatives • Hoardings in railways, platforms, airports
and shopping malls
COST AND VALUE DRIVERS (COMPETATIVE ADVANTAGE)
HIGH SEAT DENSITY :• Single class 189 seats per flight• Focus on maximum space utilization for generating
more revenue per flight
DIRECT DISTRIBUTION OF TICKETS : • Sells its ticket via internet or call centres
HIGH CRAFT UTILIZATION:• consistently reporting high aircraft utilization
Strategic uncertainty
• Uncertainty in forecasting the future• Market fluctuations • Rapidly changing clients How to over come ?• Government should develop and promote
policies
SCENARIO ANALYSIS
• control of emission level• Risk of high-jacks • Increasing fuel price • Decreasing rupee value
How to overcome ?• Increase security level• Fuel hedging