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Publish Date: 2024-11-03

Harvard Case - Alaska Airlines: For the Same Price, You Just Get More...

"Alaska Airlines: For the Same Price, You Just Get More..." Harvard business case study is written by Roger Hallowell, Tonicia Hampton. It deals with the challenges in the field of Service Management. The case study is 29 page(s) long and it was first published on : Oct 6, 1999

At Fern Fort University, we recommend that Alaska Airlines continues to focus on its 'For the Same Price, You Just Get More' value proposition by further investing in its service quality, customer experience management, and employee empowerment. This will involve a multi-pronged approach, encompassing service innovation, service design, marketing strategy, organizational culture, and technology integration.

2. Background

Alaska Airlines, a major US carrier, faced a competitive landscape with established players like Southwest Airlines and Delta Air Lines. The airline aimed to differentiate itself by offering a superior customer experience at competitive prices. This case study explores Alaska Airlines' efforts to build a strong brand identity based on its commitment to service excellence, highlighting its unique approach to customer service, employee empowerment, and operational efficiency.

The main protagonists of the case study are:

  • Bill Ayer: CEO of Alaska Airlines, who spearheaded the 'For the Same Price, You Just Get More' strategy.
  • Alaska Airlines employees: The backbone of the airline's success, embodying the company's values and delivering exceptional customer experiences.
  • Customers: The ultimate beneficiaries of Alaska Airlines' efforts, experiencing the airline's commitment to service quality and value.

3. Analysis of the Case Study

Service Quality: Alaska Airlines' success hinges on its commitment to service quality. The airline leverages the SERVQUAL model to assess service quality, focusing on tangibles, reliability, responsiveness, assurance, and empathy. This framework helps Alaska Airlines identify areas for improvement and ensure consistent service delivery across all touchpoints.

Customer Experience Management: Alaska Airlines employs a holistic approach to customer experience management, focusing on creating a positive and memorable journey for its customers. This includes customer journey mapping, service blueprinting, and service recovery strategies. The airline's focus on service innovation, such as the 'No Bag Fee' policy and the 'Alaska Lounge' experience, further enhances the customer experience.

Employee Empowerment: Alaska Airlines recognizes the crucial role of its employees in delivering exceptional customer service. The airline fosters a culture of employee empowerment through employee incentives, employee performance management, and employee training. This empowers employees to make decisions and take ownership of their roles, leading to greater customer satisfaction and loyalty.

Marketing Strategy: Alaska Airlines' marketing strategy emphasizes its commitment to service quality and value. The airline utilizes a combination of traditional and digital marketing channels to communicate its brand message and target specific customer segments. The 'For the Same Price, You Just Get More' tagline effectively communicates Alaska Airlines' unique value proposition.

Organizational Culture: Alaska Airlines' success is rooted in its strong organizational culture, characterized by diversity and inclusion, employee empowerment, and a focus on customer satisfaction. This culture is nurtured through organizational change management initiatives, leadership development programs, and a commitment to employee engagement.

Technology Integration: Alaska Airlines utilizes technology to enhance its operations and improve the customer experience. The airline has invested in technology-enabled services, such as online check-in, mobile boarding passes, and self-service kiosks. This technology integration streamlines processes, reduces wait times, and provides customers with greater control over their travel experience.

4. Recommendations

1. Enhance Service Innovation: Alaska Airlines should continue to invest in service innovation to stay ahead of the competition and meet evolving customer needs. This could include exploring new service offerings, such as personalized travel itineraries, on-demand entertainment options, and enhanced in-flight connectivity.

2. Optimize Service Design: Alaska Airlines should focus on optimizing its service design to create a seamless and efficient customer journey. This involves analyzing customer touchpoints, identifying pain points, and implementing solutions to improve the overall experience. For example, the airline could streamline the check-in process, improve baggage handling procedures, and enhance the onboard experience.

3. Strengthen Customer Relationship Management (CRM): Alaska Airlines should further invest in its CRM system to personalize customer interactions and build stronger relationships. This includes leveraging customer data to offer targeted promotions, provide personalized recommendations, and proactively address customer concerns.

4. Foster Employee Empowerment: Alaska Airlines should continue to empower its employees by providing them with the tools, training, and resources they need to excel. This could involve implementing employee recognition programs, offering career development opportunities, and fostering a culture of continuous improvement.

5. Leverage Technology for Growth: Alaska Airlines should leverage technology to drive business growth and enhance customer satisfaction. This could involve investing in artificial intelligence (AI) to automate tasks, improve operational efficiency, and personalize customer interactions. The airline could also explore partnerships with technology companies to develop innovative solutions for the travel industry.

6. Expand International Presence: Alaska Airlines should consider expanding its international presence to tap into new markets and diversify its revenue streams. This could involve establishing new routes, forming alliances with international carriers, or acquiring existing airlines in key markets.

5. Basis of Recommendations

These recommendations are based on the following considerations:

  • Core competencies and consistency with mission: The recommendations align with Alaska Airlines' core competencies in service quality, customer experience management, and employee empowerment. They are also consistent with the airline's mission to provide a superior travel experience at competitive prices.
  • External customers and internal clients: The recommendations address the needs of both external customers and internal clients. They aim to enhance the customer experience while also empowering employees and improving operational efficiency.
  • Competitors: The recommendations help Alaska Airlines stay ahead of its competitors by focusing on service innovation, technology integration, and market expansion.
  • Attractiveness ' quantitative measures: The recommendations are expected to generate a positive return on investment (ROI) by increasing customer satisfaction, loyalty, and revenue.

6. Conclusion

Alaska Airlines' 'For the Same Price, You Just Get More' strategy has proven successful in differentiating the airline and attracting loyal customers. By continuing to invest in service quality, customer experience management, and employee empowerment, Alaska Airlines can further strengthen its brand, drive business growth, and maintain its competitive advantage in the dynamic airline industry.

7. Discussion

Alternatives not selected:

  • Price competition: While price competition can be effective in attracting price-sensitive customers, it can also lead to a race to the bottom. Alaska Airlines has chosen to focus on service differentiation instead of price competition, which has proven to be a more sustainable strategy.
  • Mergers and acquisitions: While mergers and acquisitions can be a quick way to expand market share, they can also be complex and risky. Alaska Airlines has chosen to focus on organic growth through service innovation, technology integration, and market expansion.

Risks and key assumptions:

  • Economic downturn: A significant economic downturn could impact travel demand and reduce Alaska Airlines' revenue.
  • Competition: The airline industry is highly competitive, and new entrants or aggressive pricing strategies from existing competitors could erode Alaska Airlines' market share.
  • Technology disruption: Rapid technological advancements could render existing technology obsolete or create new competitive threats.

8. Next Steps

Timeline with key milestones:

  • Year 1: Implement service innovation initiatives, optimize service design, and strengthen CRM capabilities.
  • Year 2: Invest in technology integration, foster employee empowerment, and expand international presence.
  • Year 3: Continuously monitor and evaluate the effectiveness of implemented strategies, adapt to changing market conditions, and explore new opportunities for growth.

By following these recommendations and implementing them strategically, Alaska Airlines can continue to build on its success and solidify its position as a leading airline in the industry.

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Case Description

Alaska Airlines grapples with the issue of whether or not advanced use of technology to enable its customers to serve themselves (self-service) in certain airport functions will help it to achieve competitive advantage.

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