Strategies To Be Employed By The Griffjet Airlines

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Griffjet is an affordable airline that has been operating in Asia for the last two years and its still growing day in, day out. The Airline was started after there was a shortage of airlines to provide air transport in the region. Air transport in the Asian continent has undergone major transformation in the previous years and now they boost of a robust airline services in the air transport world (Duval, 2018). With a large population of people, Asia has come up with flexible regulations that facilitate the growth of airline services hence the establishing of the Griffjet airline. Despite the slow growth in the Asian economy, congestion is a reality in many countries in Asia creating a gap in the transport sector. This airline boosts of being the most affordable and more flexible in the Asian airline market. Asia continent has many rapidly developing countries hence there was a great need for faster mode of transport in the region and therefore air Griffjet was conceived to fill out this void (Wang, Gao, 2014). Today, there is an influx of new entries airline in the airline business but most of them are so expensive that only the middle class and the rich can access their services, leaving the poor population to use other means of transport in commuting from place to place. This paper will therefore discuss the strategies to be used by Griffjet airline in attempts to remain competitive in the market upon unbundling of ticket exchange fees, baggage fees and seat reservation fees which are key products in the company.

Types of Unbundled Flight Products

In the airline business there are different types of flight products that is usually offered namely bundled and unbundled flight products (Graham, 2016). Bundling has for a long time been a business technique for delivering extra value to clients by combining certain products or services and offering them at a cheap fee. A good example is the movie theatres. It often implies some kind of savings sometimes but classy retailers have learned through experiences that meaningful discounting is not necessary and the lure of the bundle is enough. Like in the movie theatres, concessions bundles are typically too low, hardly enough to get anyone interested but it does not matter. This method might garner additional revenue to the airline through cross-selling hence the airline can withstand hard times in the future when hit by fluctuations in the fuel prices, but it does not necessarily generate revenue per unit for the company (Steele, Reilly, 2010). On the other hand, unbundling is a method for maximizing per unit revenue for the seller For example, a florist offering free local or wire delivery is practicing bundling. That cost of delivery is hopefully built into the price of the flowers hence meaning that they are being charged as a bundle.

Strategies to be Employed By Griffjet Airline

The Griffjet airline management uses three unbundled flight products during its operations in the Asian market. Firstly, they offer ticket exchange fees. In this type of bundle, customers can buy a ticket and later on when they do not want to use the airline, they are allowed to sell or exchange the ticket or return the ticket to the airline and be refunded fully (Wu, 2016). This service will attract more Griffjet users hence boosting the airlines revenues. This is a good move that Griffjet is offering to the travelers because they will be able to compare prices online factoring in mind the costs of checking bags to avoid confusions and disappointments at the airport before flights. This means that customers who do not use Griffjet, have little  packages to chose from hence the risk of being unbundled are extremely high. This move is not only good to the travelers but also to the retailers in the airline because they will set a new competition standard in the market hence be preferred by many travelers. Secondly, another product to be used is the baggage fees.

This flight package is generally the amount of checked luggage, or hand carry bag the airline will allow per passenger. For economy class it is usually 20kgs, 30-36kgs for the business class and 40kgs for the first class and hand baggage that is carried in the passenger cabin is limited to 8 kilograms only. There might be limits on the amount that is allowed free of charge and hard limits on the amount that is regularly allowed. The third approach that Griffjet airline management can use is the organizational strategy. This is a term of how an organization desires to evolve over the time to rally its objectives together with a comprehensive assessment of what needs to be done.

For Griffjet airline to realize its full potential, some r major management approaches should be factored in to ensure delivery of a sustainable and competitive product into the future.

Industry Level Strategy

 This is a corporate approach that addresses the question of how can we compete in this industry. There are quite a few tools that companies can use to grow successful industry-level strategies and they include rivalry character (Sun, 2016). Here there is some degree of competition among the existing firms and therefore, stiff rivalry leads to lesser profits potential for companies in the same industry. Barriers to entrance, threats of surrogate products or services and the bargaining power for the sellers and buyers.

Situation Analysis

The second approach that can be used is the situation analysis (Auerbach, Koch, 2007). This refers to a compilation of methods that managers employ to investigate an organizations internal and external surroundings to understand the airlines capability, customers and the business environment. This is a vital part of any business and should be reviewed periodically to guarantee that it is reserved up to date. Also, it helps in identifying the strengths, weakness, opportunities and the threats to the organization or a business.

Organizational Strategy

Developing an organizational strategy for a business requires comparing its current state to its targeted state to define differences, and then stating what is required for the needed changes to take place (Welch, 2006). Using these three major approaches, Griffjet airline will ensure its sustainability and competitive in future is enhanced. In using the organizational strategy, the Airline’s management ought to ask various questions that will determine whether the unbundled products are going to create value for the organization. The management should inquire on what the company’s entrepreneurial vigor are, and what the result of the company’s substantial investments is in their strategic plan which impacts on the strategic planning process. The lessons learned from the unbundling of the ticket exchange fees, baggage fees and seat reservation fees are then examined to determine if the company is making progress in its overall strategic plan.

The whole process of organizational strategy involves exploring the two questions through a systematic examination of the relation between formal planning strategic performance and formal planning in the company (Steele & Reilly, 2010). To achieve the best results for unbundling of the three products using the organizational strategy, the airline will use four sequential phases that will be determined by the clear formulation of issues, the alternatives available, the readiness of the top management to guide the strategic plan, and the quality of preparatory staff (Steele & Reilly, 2010).

Apart from using the major approaches available in the market, the airline can make use of other certified approaches to maximize their productivity and these includes; organizational strategy (Welch, 2006). An organizational strategy is the total of the actions a company intends to take place to achieve a long term goal and they take a longer time to achieve them. It requires top management the top management to formulate the strategies while the lower management adopts and plans to fullfil the overall strategy. Also, it is the total sum of the actions a company intends to achieve after a long term goal. This is important because it helps in setting priorities and direction in the business venture. Other strategies that can be used by the company is the positioning strategy.

In marketing and business policy, market position refers to the end-users perception of a brand in relations to competing brands and products. Yield management is applied also which involves price discrimination and product separation (Vila, Corcoles, 2011). Innovation streams; whereby organizational designs sustain current productivity while at the same time building new products, services or processes. Managing change is another strategy that the Griffjet airline should use. It is a planned method of ensuring that changes are thoroughly and correctly implemented and lasting benefits is achieved and the last strategy is the marketing market segmentation. This is the method of separating a market potential customer into groups according to certain characteristics. The market segments can be demographic, behavioral, psychographics and geographic segmentation.

Recommendations and Conclusions

Despite the packaging or how resourceful Griffjet products and services are, not every customer will be satisfied with them. Every product and service has a certain target group of individuals who will appreciate a certain service being offered. Making a market determination is a major step that a company should make before starting up a company or a business venture. To enable the success of the airline, the management should occasionally reassess their target market and the strategies applied by other competitors for the maintenance of a competitive advantage in the market.

References

Auerbach, S., & Koch, B. (2007). Cooperative approaches to managing air traffic efficiently—the airline perspective. Journal of Air Transport Management, 13(1), 37-44. doi:10.1016/j.jairtraman.2006.10.005

Boyar, J., Krarup, S., & Nielsen, M. N. (2001). Seat Reservation Allowing Seat Changes. Electronic Notes in Theoretical Computer Science, 50(1), 24-38. doi:10.1016/s1571-0661(04)00163-x

Duval, D. T. (2016). Air Transport in the Asia Pacific. doi:10.4324/9781315566344

Graham, A. (2016). Air transport in the asia pacific. Tourism Management, 54, 150-151. doi:10.1016/j.tourman.2015.11.006

Steele, J. R., & Reilly, J. D. (2010). Bundled Payments: Bundled Risk or Bundled Reward? Journal of the American College of Radiology, 7(1), 43-49. doi:10.1016/j.jacr.2009.08.012

Sun, R. (2016). Normalization of Airline Companies’ Internal Management System. ISME 2016 - Information Science and Management Engineering IV. doi:10.5220/0006446201660169

Vila, N., & Córcoles, M. (2011). Yield Management and Airline Strategic Groups. Tourism Economics, 17(2), 261-278. doi:10.5367/te.2011.0037

Wang, Y., & Gao, D. (2014). A comparison of different types of motors used for low speed electric vehicles: Experiments and simulations. 2014 IEEE Conference and Expo Transportation Electrification Asia-Pacific (ITEC Asia-Pacific). doi:10.1109/itec-ap.2014.6940689

Welch, T. J. (2006). Airline Security and a Strategy for Change. doi:10.21236/ada449418

Wu, C. (2016). Airline Operations and Delay Management. doi:10.4324/9781315566467

October 24, 2023
Category:

Business Government

Subcategory:

Economy

Number of pages

7

Number of words

1734

Downloads:

57

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