Harvard Case - Vueling's Mobile Strategy Takes Flight
"Vueling's Mobile Strategy Takes Flight" Harvard business case study is written by Evgeny Kaganer, Javier Zamora, Katherine Tatarinov, Andreu Ore. It deals with the challenges in the field of Information Technology. The case study is 27 page(s) long and it was first published on : Sep 15, 2015
At Fern Fort University, we recommend that Vueling continue to invest in its mobile strategy by focusing on enhancing its mobile app's functionality, leveraging data analytics, and expanding its digital marketing efforts. This will allow Vueling to further solidify its position as a digital-first airline, improve customer experience, and drive revenue growth.
2. Background
Vueling, a Spanish low-cost airline, has been a pioneer in adopting mobile technology. The company recognized the potential of mobile devices to enhance customer experience and drive operational efficiency. In 2010, Vueling launched its first mobile app, offering basic functionalities like booking flights and managing reservations. Since then, Vueling has continuously improved its app, adding features like flight tracking, check-in, and mobile boarding passes.
The case study focuses on Vueling's mobile strategy in 2015, a time when the airline was facing increasing competition from other low-cost carriers and traditional airlines embracing digital transformation. Vueling's mobile strategy was crucial for maintaining its competitive edge and attracting new customers.
The main protagonists of the case study are:
- Alex Cruz: Vueling's CEO, who championed the company's digital transformation and mobile strategy.
- David Garcia: Vueling's Head of IT, responsible for developing and implementing the mobile app and related technology infrastructure.
- Maria Lopez: Vueling's Head of Marketing, responsible for promoting the mobile app and leveraging digital marketing channels.
3. Analysis of the Case Study
To analyze Vueling's mobile strategy, we can use the Porter's Five Forces framework:
- Threat of New Entrants: The low-cost airline industry is characterized by low barriers to entry, posing a significant threat from new entrants. Vueling's mobile strategy helps differentiate itself by providing a superior customer experience, mitigating this threat.
- Bargaining Power of Buyers: Passengers have a high degree of bargaining power due to the availability of multiple airlines and online travel agencies. Vueling's mobile app empowers customers with greater control and convenience, potentially reducing their bargaining power.
- Bargaining Power of Suppliers: Suppliers, such as aircraft manufacturers and fuel providers, have moderate bargaining power. Vueling's mobile strategy helps optimize operations and reduce costs, mitigating the impact of supplier bargaining power.
- Threat of Substitute Products: Other modes of transportation, such as trains and buses, pose a threat as substitutes. Vueling's mobile app enhances the overall travel experience, making air travel more attractive and reducing the threat of substitutes.
- Rivalry Among Existing Competitors: The low-cost airline industry is highly competitive, with numerous players vying for market share. Vueling's mobile strategy provides a competitive advantage by offering a differentiated customer experience and leveraging digital marketing channels effectively.
Key takeaways from the case study:
- Mobile technology adoption: Vueling recognized the importance of mobile technology early on and invested heavily in developing a user-friendly and feature-rich mobile app.
- Digital transformation: Vueling's mobile strategy was a key component of its broader digital transformation, aiming to enhance customer experience, improve operational efficiency, and drive revenue growth.
- Customer relationship management (CRM): The mobile app enabled Vueling to collect valuable customer data and personalize their interactions, improving customer satisfaction and loyalty.
- Data analytics: Vueling leveraged data analytics to understand customer behavior, optimize pricing strategies, and improve operational efficiency.
- Marketing and promotion: Vueling effectively used digital marketing channels to promote its mobile app and attract new customers.
4. Recommendations
To further strengthen Vueling's mobile strategy, we recommend the following:
- Enhance Mobile App Functionality:
- Personalized Recommendations: Leverage data analytics to provide personalized flight recommendations, travel tips, and special offers based on customer preferences and past behavior.
- Seamless Integration: Integrate the mobile app with other travel services like airport parking, hotel bookings, and travel insurance.
- Enhanced Customer Support: Offer 24/7 customer support through the app, including live chat and virtual assistants.
- Leverage Data Analytics:
- Predictive Analytics: Utilize predictive analytics to forecast demand, optimize pricing strategies, and improve operational efficiency.
- Customer Segmentation: Segment customers based on their behavior and preferences to tailor marketing campaigns and promotions.
- Performance Monitoring: Track key performance indicators (KPIs) to measure the effectiveness of the mobile app and identify areas for improvement.
- Expand Digital Marketing Efforts:
- Mobile-First Marketing: Focus on mobile-first marketing campaigns, optimizing content and targeting for mobile devices.
- Social Media Engagement: Utilize social media platforms to engage with customers, build brand awareness, and promote the mobile app.
- Influencer Marketing: Partner with travel influencers to promote Vueling's mobile app and reach a wider audience.
5. Basis of Recommendations
These recommendations are based on the following considerations:
- Core Competencies and Consistency with Mission: Vueling's core competency lies in providing affordable and convenient air travel. The mobile app aligns with this mission by offering a user-friendly experience and enhancing operational efficiency.
- External Customers and Internal Clients: The recommendations are focused on improving customer experience and enhancing internal operations, benefiting both external customers and internal clients.
- Competitors: Vueling's competitors are also investing heavily in digital transformation and mobile technology. These recommendations ensure Vueling remains competitive by offering a superior customer experience and leveraging data analytics effectively.
- Attractiveness: The recommendations are expected to enhance customer satisfaction, increase revenue, and improve operational efficiency, making them financially attractive.
- Assumptions: These recommendations are based on the assumption that Vueling continues to prioritize digital transformation and invest in its mobile strategy.
6. Conclusion
Vueling's mobile strategy has been instrumental in its success as a low-cost airline. By continuing to invest in its mobile app, leveraging data analytics, and expanding its digital marketing efforts, Vueling can further solidify its position as a digital-first airline, improve customer experience, and drive revenue growth.
7. Discussion
Alternative options not selected include:
- Outsourcing mobile app development: While outsourcing can be cost-effective, it may compromise control over the app's development and integration with Vueling's systems.
- Focusing solely on website optimization: This approach would miss the opportunity to leverage the unique capabilities of mobile devices and provide a superior customer experience.
Key assumptions of the recommendations include:
- Continued investment in technology: Vueling will continue to invest in its IT infrastructure and mobile app development.
- Availability of skilled personnel: Vueling has access to skilled personnel to develop and implement the recommended strategies.
- Customer adoption: Customers will continue to use and engage with Vueling's mobile app.
8. Next Steps
To implement the recommendations, Vueling should take the following steps:
- Develop a detailed roadmap: Outline the specific features to be added to the mobile app, the data analytics initiatives to be implemented, and the digital marketing campaigns to be launched.
- Allocate resources: Secure the necessary financial and human resources to support the implementation of the recommendations.
- Establish clear timelines: Define milestones and deadlines for each phase of the implementation process.
- Monitor progress and adjust as needed: Regularly track progress against the roadmap and make adjustments as necessary to ensure successful implementation.
By taking these steps, Vueling can ensure that its mobile strategy continues to be a key driver of its success in the competitive low-cost airline industry.
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Case Description
Vueling Airlines announced in 2014 that a larger percentage of its IT budget would be spent on mobile applications than on the website. However, the revenue from mobile remained relatively small compared with that from the Web. In designing Vueling's future mobile strategy, the IT and online marketing managers face the dilemma of whether to prioritize sales or customer experience.
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