Harvard Case - SimpliFlying: Making a Great Idea Take Flight (A)
"SimpliFlying: Making a Great Idea Take Flight (A)" Harvard business case study is written by Michael Netzley, Robin Speculand, Adina Wong. It deals with the challenges in the field of Strategy. The case study is 17 page(s) long and it was first published on : Apr 17, 2015
At Fern Fort University, we recommend that SimpliFlying adopt a hybrid growth strategy focusing on market penetration in existing regions, market development in new emerging markets, and product development to enhance its offerings. This strategy will leverage SimpliFlying's core competencies in technology and analytics, operational efficiency, and customer service to achieve sustainable competitive advantage.
2. Background
SimpliFlying is a start-up airline founded by a group of experienced aviation professionals with a vision to revolutionize air travel through disruptive innovation. Their business model focuses on cost leadership by utilizing technology and analytics to optimize operations, streamline processes, and offer competitive pricing. SimpliFlying's initial success in the Indian market has led to opportunities for international business expansion. However, the company faces challenges in scaling its operations, managing growth, and navigating the complexities of globalization.
3. Analysis of the Case Study
Porter's Five Forces analysis reveals the following:
- Threat of New Entrants: High due to the relatively low barriers to entry in the airline industry.
- Bargaining Power of Buyers: Moderate, as customers have choices but are also influenced by price and convenience.
- Bargaining Power of Suppliers: Moderate, as airlines rely on suppliers for aircraft, fuel, and other services.
- Threat of Substitute Products: Moderate, as alternative modes of transportation exist, especially for short-haul flights.
- Competitive Rivalry: High, with established airlines constantly vying for market share.
SWOT Analysis reveals the following:
Strengths:
- Technology and Analytics: Advanced data-driven approach to operations and pricing.
- Operational Efficiency: Streamlined processes and cost-effective business model.
- Customer Service: Focus on providing a positive and personalized customer experience.
- Strong Brand Image: Innovative and customer-centric approach resonates with travelers.
Weaknesses:
- Limited Operational Scale: Currently operating in a single market, limiting economies of scale.
- Lack of International Experience: Limited expertise in navigating international regulations and cultural differences.
- Dependence on Technology: Vulnerable to technological disruptions and cybersecurity threats.
Opportunities:
- Expanding into Emerging Markets: Significant growth potential in underserved regions.
- Developing New Products and Services: Offer niche services like cargo transportation or specialized routes.
- Strategic Partnerships: Collaborate with other businesses to expand reach and enhance offerings.
Threats:
- Economic Fluctuations: Volatile fuel prices and global economic uncertainty can impact demand.
- Increased Competition: Existing airlines may respond aggressively to SimpliFlying's entry into new markets.
- Regulatory Challenges: Navigating complex international regulations and obtaining necessary licenses.
Value Chain Analysis highlights the following:
- Inbound Logistics: Efficient procurement and management of aircraft, fuel, and other supplies.
- Operations: Streamlined processes, optimized flight schedules, and efficient crew management.
- Outbound Logistics: On-time departures and arrivals, smooth baggage handling, and seamless passenger flow.
- Marketing and Sales: Effective marketing campaigns, online booking platform, and customer relationship management.
- Service: Personalized customer service, flexible booking options, and comfortable in-flight experience.
Business Model Innovation: SimpliFlying's value proposition is based on offering low-cost air travel with a focus on technology and analytics. This disruptive innovation challenges the traditional airline industry by leveraging technology to reduce costs and enhance customer experience.
4. Recommendations
1. Market Penetration in Existing Regions:
- Increase Flight Frequency and Destinations: Expand service offerings within India to capture a larger market share.
- Develop Loyalty Programs: Reward frequent flyers with exclusive benefits and discounts to foster customer loyalty.
- Targeted Marketing Campaigns: Utilize social media and digital marketing to reach specific customer segments.
2. Market Development in New Emerging Markets:
- Focus on Underserved Regions: Identify high-growth markets with limited competition and significant travel demand.
- Adapt Business Model: Customize pricing and service offerings to suit local market preferences and regulations.
- Strategic Partnerships: Collaborate with local businesses and government agencies to facilitate market entry and build relationships.
3. Product Development:
- Enhance In-Flight Experience: Offer premium services like Wi-Fi, entertainment options, and improved comfort.
- Develop Niche Products: Explore specialized routes, cargo transportation, or charter services to cater to specific needs.
- Leverage Technology: Integrate AI and machine learning to personalize customer experiences and optimize operations.
5. Basis of Recommendations
These recommendations are based on the following considerations:
- Core Competencies: Leveraging SimpliFlying's strengths in technology, operational efficiency, and customer service.
- External Customers: Meeting the needs of price-sensitive travelers seeking convenience and value.
- Competitors: Differentiating SimpliFlying's offerings through innovation and a customer-centric approach.
- Attractiveness: Projected growth potential in emerging markets and the potential for increased profitability through market penetration and product development.
Assumptions:
- Continued advancements in technology and analytics will support SimpliFlying's business model.
- Emerging markets will continue to experience economic growth and increasing travel demand.
- SimpliFlying can successfully navigate regulatory hurdles and cultural differences in new markets.
6. Conclusion
By adopting a hybrid growth strategy, SimpliFlying can leverage its core competencies to achieve sustainable competitive advantage in the global airline industry. The company must prioritize strategic planning and resource allocation to ensure successful implementation of its growth strategy.
7. Discussion
Alternative strategies include:
- Mergers and Acquisitions: Acquiring existing airlines in new markets to accelerate expansion.
- Strategic Alliances: Partnering with other airlines to share resources and expand reach.
Risks:
- Economic Downturn: A global economic recession could negatively impact travel demand.
- Competition: Established airlines may respond aggressively to SimpliFlying's expansion.
- Technological Disruptions: Emergence of new technologies could challenge SimpliFlying's business model.
Key Assumptions:
- The global airline industry will continue to grow in the coming years.
- SimpliFlying can maintain its cost leadership advantage through technological innovation.
- The company can effectively manage its expansion and navigate cultural differences in new markets.
8. Next Steps
Timeline:
- Year 1: Focus on market penetration in India and initial market development in one emerging market.
- Year 2: Expand operations in existing markets and enter additional emerging markets.
- Year 3: Develop new products and services, and explore strategic partnerships.
Key Milestones:
- Secure necessary licenses and approvals for international operations.
- Develop marketing campaigns targeted at new markets.
- Establish partnerships with local businesses and government agencies.
- Implement a robust IT infrastructure to support international operations.
By focusing on a hybrid growth strategy, leveraging its core competencies, and managing risks effectively, SimpliFlying can position itself for continued success in the global airline industry.
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Case Description
Part (A) of the case is about how Shashank Nigam, CEO of SimpliFlying Pte Ltd, a company based in Singapore, searches for the corporate strategy and vision for his company. SimpliFlying was founded in March 2008, and was originally a blog which commented on issues in marketing aviation. After thinking about how he could find a niche for his business, Nigam decided to sell his company's services by combining the three pillars of aviation, marketing and technology through social media. However, he recognised that he still needed to decide on the long-term positioning of the company - should SimpliFlying focus on strategy consulting, strategy execution (agency) work, or both? At the same time, Nigam's company was also receiving calls from hotels to help them with branding projects. Nigam needed to make a decision.
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