Kingfisher Airlines Nosedives: Can It Soar Again or Will It Remain Grounded? SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
Leadership & Managing People
Strategy / MBA Resources
Case Study SWOT Analysis Solution
Case Study Description of Kingfisher Airlines Nosedives: Can It Soar Again or Will It Remain Grounded?
This case is based on Kingfisher Airlines, the brainchild of Dr. Vijay Mallaya. It made a grand entrance into the Indian aviation industry as a single-class, all-economy air carrier in 2005. The company soon turned its focus to becoming a premium service operator offering high-class in-flight services and unrivalled luxuries. Subsequently, it took a number of steps to differentiate itself from other airlines, while also embarking upon an ambitious expansion plan. Its acquisition of an ailing airline, Air Deccan, combined with rising fuel costs and a rapidly changing business environment made its survival difficult. The company's bank accounts were frozen several times by the Income Tax Department and the Service Tax Department because of defaults on tax payments, leaving it cash dry. The battered airline had to temporarily suspend its operations from several cities and cope with a staggering debt load that had reached Rs. 7,000 crore by March 27, 2012. The staff was demoralized and some employees left the company due to the non-payment of salaries. There was also widespread anger among passengers owing to last-minute flight cancellations. The challenge facing its CEO, Sanjay Agarwal, was to make Kingfisher Airlines bounce back from its precarious position. The company had to tackle the issue of raising funds to meet its day-to-day expenses, maintain the current number of flights and perhaps also conduct a thorough review of its past policies and strategies and try to learn from the competitors that had managed to weather the storm and still remain profitable in the most unfavourable of business environments.
Authors :: Ritu Narang, Gaurav Mahajan, Mohd Hassan Khan
Swot Analysis of "Kingfisher Airlines Nosedives: Can It Soar Again or Will It Remain Grounded?" written by Ritu Narang, Gaurav Mahajan, Mohd Hassan Khan includes – strengths weakness that are internal strategic factors of the organization, and opportunities and threats that Kingfisher Airlines facing as an external strategic factors. Some of the topics covered in Kingfisher Airlines Nosedives: Can It Soar Again or Will It Remain Grounded? case study are - Strategic Management Strategies, and Leadership & Managing People.
Some of the macro environment factors that can be used to understand the Kingfisher Airlines Nosedives: Can It Soar Again or Will It Remain Grounded? casestudy better are - – increasing commodity prices, increasing government debt because of Covid-19 spendings, supply chains are disrupted by pandemic , there is backlash against globalization, technology disruption, digital marketing is dominated by two big players Facebook and Google, competitive advantages are harder to sustain because of technology dispersion,
central banks are concerned over increasing inflation, geopolitical disruptions, etc
Introduction to SWOT Analysis of Kingfisher Airlines Nosedives: Can It Soar Again or Will It Remain Grounded?
SWOT stands for an organization’s Strengths, Weaknesses, Opportunities and Threats . At Oak Spring University , we believe that protagonist in Kingfisher Airlines Nosedives: Can It Soar Again or Will It Remain Grounded? case study can use SWOT analysis as a strategic management tool to assess the current internal strengths and weaknesses of the Kingfisher Airlines, and to figure out the opportunities and threats in the macro environment – technological, environmental, political, economic, social, demographic, etc in which Kingfisher Airlines operates in.
According to Harvard Business Review, 75% of the managers use SWOT analysis for various purposes such as – evaluating current scenario, strategic planning, new venture feasibility, personal growth goals, new market entry, Go To market strategies, portfolio management and strategic trade-off assessment, organizational restructuring, etc.
SWOT Objectives / Importance of SWOT Analysis and SWOT Matrix
SWOT analysis of Kingfisher Airlines Nosedives: Can It Soar Again or Will It Remain Grounded? can be done for the following purposes –
1. Strategic planning using facts provided in Kingfisher Airlines Nosedives: Can It Soar Again or Will It Remain Grounded? case study
2. Improving business portfolio management of Kingfisher Airlines
3. Assessing feasibility of the new initiative in Leadership & Managing People field.
4. Making a Leadership & Managing People topic specific business decision
5. Set goals for the organization
6. Organizational restructuring of Kingfisher Airlines
Strengths Kingfisher Airlines Nosedives: Can It Soar Again or Will It Remain Grounded? | Internal Strategic Factors
What are Strengths in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The strengths of Kingfisher Airlines in Kingfisher Airlines Nosedives: Can It Soar Again or Will It Remain Grounded? Harvard Business Review case study are -
Innovation driven organization
– Kingfisher Airlines is one of the most innovative firm in sector. Manager in Kingfisher Airlines Nosedives: Can It Soar Again or Will It Remain Grounded? Harvard Business Review case study can use Clayton Christensen Disruptive Innovation strategies to further increase the scale of innovtions in the organization.
Organizational Resilience of Kingfisher Airlines
– The covid-19 pandemic has put organizational resilience at the centre of everthing that Kingfisher Airlines does. Organizational resilience comprises - Financial Resilience, Operational Resilience, Technological Resilience, Organizational Resilience, Business Model Resilience, and Reputation Resilience.
Superior customer experience
– The customer experience strategy of Kingfisher Airlines in the segment is based on four key concepts – personalization, simplification of complex needs, prompt response, and continuous engagement.
Operational resilience
– The operational resilience strategy in the Kingfisher Airlines Nosedives: Can It Soar Again or Will It Remain Grounded? Harvard Business Review case study comprises – understanding the underlying the factors in the industry, building diversified operations across different geographies so that disruption in one part of the world doesn’t impact the overall performance of the firm, and integrating the various business operations and processes through its digital transformation drive.
Ability to lead change in Leadership & Managing People field
– Kingfisher Airlines is one of the leading players in its industry. Over the years it has not only transformed the business landscape in its segment but also across the whole industry. The ability to lead change has enabled Kingfisher Airlines in – penetrating new markets, reaching out to new customers, and providing different value propositions to different customers in the international markets.
Analytics focus
– Kingfisher Airlines is putting a lot of focus on utilizing the power of analytics in business decision making. This has put it among the leading players in the industry. The technology infrastructure suggested by Ritu Narang, Gaurav Mahajan, Mohd Hassan Khan can also help it to harness the power of analytics for – marketing optimization, demand forecasting, customer relationship management, inventory management, information sharing across the value chain etc.
Training and development
– Kingfisher Airlines has one of the best training and development program in the industry. The effectiveness of the training programs can be measured in Kingfisher Airlines Nosedives: Can It Soar Again or Will It Remain Grounded? Harvard Business Review case study by analyzing – employees retention, in-house promotion, loyalty, new venture initiation, lack of conflict, and high level of both employees and customer engagement.
Sustainable margins compare to other players in Leadership & Managing People industry
– Kingfisher Airlines Nosedives: Can It Soar Again or Will It Remain Grounded? firm has clearly differentiated products in the market place. This has enabled Kingfisher Airlines to fetch slight price premium compare to the competitors in the Leadership & Managing People industry. The sustainable margins have also helped Kingfisher Airlines to invest into research and development (R&D) and innovation.
Strong track record of project management
– Kingfisher Airlines is known for sticking to its project targets. This enables the firm to manage – time, project costs, and have sustainable margins on the projects.
Effective Research and Development (R&D)
– Kingfisher Airlines has innovation driven culture where significant part of the revenues are spent on the research and development activities. This has resulted in, as mentioned in case study Kingfisher Airlines Nosedives: Can It Soar Again or Will It Remain Grounded? - staying ahead in the industry in terms of – new product launches, superior customer experience, highly competitive pricing strategies, and great returns to the shareholders.
Highly skilled collaborators
– Kingfisher Airlines has highly efficient outsourcing and offshoring strategy. It has resulted in greater operational flexibility and bringing down the costs in highly price sensitive segment. Secondly the value chain collaborators of the firm in Kingfisher Airlines Nosedives: Can It Soar Again or Will It Remain Grounded? HBR case study have helped the firm to develop new products and bring them quickly to the marketplace.
Successful track record of launching new products
– Kingfisher Airlines has launched numerous new products in last few years, keeping in mind evolving customer preferences and competitive pressures. Kingfisher Airlines has effective processes in place that helps in exploring new product needs, doing quick pilot testing, and then launching the products quickly using its extensive distribution network.
Weaknesses Kingfisher Airlines Nosedives: Can It Soar Again or Will It Remain Grounded? | Internal Strategic Factors
What are Weaknesses in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The weaknesses of Kingfisher Airlines Nosedives: Can It Soar Again or Will It Remain Grounded? are -
Slow to strategic competitive environment developments
– As Kingfisher Airlines Nosedives: Can It Soar Again or Will It Remain Grounded? HBR case study mentions - Kingfisher Airlines takes time to assess the upcoming competitions. This has led to missing out on atleast 2-3 big opportunities in the industry in last five years.
Slow to harness new channels of communication
– Even though competitors are using new communication channels such as Instagram, Tiktok, and Snap, Kingfisher Airlines is slow explore the new channels of communication. These new channels of communication mentioned in marketing section of case study Kingfisher Airlines Nosedives: Can It Soar Again or Will It Remain Grounded? can help to provide better information regarding products and services. It can also build an online community to further reach out to potential customers.
Compensation and incentives
– The revenue per employee as mentioned in the HBR case study Kingfisher Airlines Nosedives: Can It Soar Again or Will It Remain Grounded?, is just above the industry average. Kingfisher Airlines needs to redesign the compensation structure and incentives to increase the revenue per employees. Some of the steps that it can take are – hiring more specialists on project basis, etc.
Low market penetration in new markets
– Outside its home market of Kingfisher Airlines, firm in the HBR case study Kingfisher Airlines Nosedives: Can It Soar Again or Will It Remain Grounded? needs to spend more promotional, marketing, and advertising efforts to penetrate international markets.
High dependence on existing supply chain
– The disruption in the global supply chains because of the Covid-19 pandemic and blockage of the Suez Canal illustrated the fragile nature of Kingfisher Airlines supply chain. Even after few cautionary changes mentioned in the HBR case study - Kingfisher Airlines Nosedives: Can It Soar Again or Will It Remain Grounded?, it is still heavily dependent upon the existing supply chain. The existing supply chain though brings in cost efficiencies but it has left Kingfisher Airlines vulnerable to further global disruptions in South East Asia.
High bargaining power of channel partners
– Because of the regulatory requirements, Ritu Narang, Gaurav Mahajan, Mohd Hassan Khan suggests that, Kingfisher Airlines is facing high bargaining power of the channel partners. So far it has not able to streamline the operations to reduce the bargaining power of the value chain partners in the industry.
Lack of clear differentiation of Kingfisher Airlines products
– To increase the profitability and margins on the products, Kingfisher Airlines needs to provide more differentiated products than what it is currently offering in the marketplace.
Aligning sales with marketing
– It come across in the case study Kingfisher Airlines Nosedives: Can It Soar Again or Will It Remain Grounded? that the firm needs to have more collaboration between its sales team and marketing team. Sales professionals in the industry have deep experience in developing customer relationships. Marketing department in the case Kingfisher Airlines Nosedives: Can It Soar Again or Will It Remain Grounded? can leverage the sales team experience to cultivate customer relationships as Kingfisher Airlines is planning to shift buying processes online.
High operating costs
– Compare to the competitors, firm in the HBR case study Kingfisher Airlines Nosedives: Can It Soar Again or Will It Remain Grounded? has high operating costs in the. This can be harder to sustain given the new emerging competition from nimble players who are using technology to attract Kingfisher Airlines 's lucrative customers.
Slow decision making process
– As mentioned earlier in the report, Kingfisher Airlines has a very deliberative decision making approach. This approach has resulted in prudent decisions, but it has also resulted in missing opportunities in the industry over the last five years. Kingfisher Airlines even though has strong showing on digital transformation primary two stages, it has struggled to capitalize the power of digital transformation in marketing efforts and new venture efforts.
High cash cycle compare to competitors
Kingfisher Airlines has a high cash cycle compare to other players in the industry. It needs to shorten the cash cycle by 12% to be more competitive in the marketplace, reduce inventory costs, and be more profitable.
Opportunities Kingfisher Airlines Nosedives: Can It Soar Again or Will It Remain Grounded? | External Strategic Factors
What are Opportunities in the SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The opportunities highlighted in the Harvard Business Review case study Kingfisher Airlines Nosedives: Can It Soar Again or Will It Remain Grounded? are -
Finding new ways to collaborate
– Covid-19 has not only transformed business models of companies in Leadership & Managing People industry, but it has also influenced the consumer preferences. Kingfisher Airlines can tie-up with other value chain partners to explore new opportunities regarding meeting customer demands and building a rewarding and engaging relationship.
Low interest rates
– Even though inflation is raising its head in most developed economies, Kingfisher Airlines can still utilize the low interest rates to borrow money for capital investment. Secondly it can also use the increase of government spending in infrastructure projects to get new business.
Identify volunteer opportunities
– Covid-19 has impacted working population in two ways – it has led to people soul searching about their professional choices, resulting in mass resignation. Secondly it has encouraged people to do things that they are passionate about. This has opened opportunities for businesses to build volunteer oriented socially driven projects. Kingfisher Airlines can explore opportunities that can attract volunteers and are consistent with its mission and vision.
Building a culture of innovation
– managers at Kingfisher Airlines can make experimentation a productive activity and build a culture of innovation using approaches such as – mining transaction data, A/B testing of websites and selling platforms, engaging potential customers over various needs, and building on small ideas in the Leadership & Managing People segment.
Manufacturing automation
– Kingfisher Airlines can use the latest technology developments to improve its manufacturing and designing process in Leadership & Managing People segment. It can use CAD and 3D printing to build a quick prototype and pilot testing products. It can leverage automation using machine learning and artificial intelligence to do faster production at lowers costs, and it can leverage the growth in satellite and tracking technologies to improve inventory management, transportation, and shipping.
Redefining models of collaboration and team work
– As explained in the weaknesses section, Kingfisher Airlines is facing challenges because of the dominance of functional experts in the organization. Kingfisher Airlines Nosedives: Can It Soar Again or Will It Remain Grounded? case study suggests that firm can utilize new technology to build more coordinated teams and streamline operations and communications using tools such as CAD, Zoom, etc.
Changes in consumer behavior post Covid-19
– Consumer behavior has changed in the Leadership & Managing People industry because of Covid-19 restrictions. Some of this behavior will stay once things get back to normal. Kingfisher Airlines can take advantage of these changes in consumer behavior to build a far more efficient business model. For example consumer regular ordering of products can reduce both last mile delivery costs and market penetration costs. Kingfisher Airlines can further use this consumer data to build better customer loyalty, provide better products and service collection, and improve the value proposition in inflationary times.
Reforming the budgeting process
- By establishing new metrics that will be used to evaluate both existing and potential projects Kingfisher Airlines can not only reduce the costs of the project but also help it in integrating the projects with other processes within the organization.
Using analytics as competitive advantage
– Kingfisher Airlines has spent a significant amount of money and effort to integrate analytics and machine learning into its operations in the sector. This continuous investment in analytics has enabled, as illustrated in the Harvard case study Kingfisher Airlines Nosedives: Can It Soar Again or Will It Remain Grounded? - to build a competitive advantage using analytics. The analytics driven competitive advantage can help Kingfisher Airlines to build faster Go To Market strategies, better consumer insights, developing relevant product features, and building a highly efficient supply chain.
Harnessing reconfiguration of the global supply chains
– As the trade war between US and China heats up in the coming years, Kingfisher Airlines can build a diversified supply chain model across various countries in - South East Asia, India, and other parts of the world. This reconfiguration of global supply chain can help, as suggested in case study, Kingfisher Airlines Nosedives: Can It Soar Again or Will It Remain Grounded?, to buy more products closer to the markets, and it can leverage its size and influence to get better deal from the local markets.
Remote work and new talent hiring opportunities
– The widespread usage of remote working technologies during Covid-19 has opened opportunities for Kingfisher Airlines to expand its talent hiring zone. According to McKinsey Global Institute, 20% of the high end workforce in fields such as finance, information technology, can continously work from remote local post Covid-19. This presents a really great opportunity for Kingfisher Airlines to hire the very best people irrespective of their geographical location.
Lowering marketing communication costs
– 5G expansion will open new opportunities for Kingfisher Airlines in the field of marketing communication. It will bring down the cost of doing business, provide technology platform to build new products in the Leadership & Managing People segment, and it will provide faster access to the consumers.
Increase in government spending
– As the United States and other governments are increasing social spending and infrastructure spending to build economies post Covid-19, Kingfisher Airlines can use these opportunities to build new business models that can help the communities that Kingfisher Airlines operates in. Secondly it can use opportunities from government spending in Leadership & Managing People sector.
Threats Kingfisher Airlines Nosedives: Can It Soar Again or Will It Remain Grounded? External Strategic Factors
What are Threats in the SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The threats mentioned in the HBR case study Kingfisher Airlines Nosedives: Can It Soar Again or Will It Remain Grounded? are -
Increasing international competition and downward pressure on margins
– Apart from technology driven competitive advantage dilution, Kingfisher Airlines can face downward pressure on margins from increasing competition from international players. The international players have stable revenue in their home market and can use those resources to penetrate prominent markets illustrated in HBR case study Kingfisher Airlines Nosedives: Can It Soar Again or Will It Remain Grounded? .
Trade war between China and United States
– The trade war between two of the biggest economies can hugely impact the opportunities for Kingfisher Airlines in the Leadership & Managing People industry. The Leadership & Managing People industry is already at various protected from local competition in China, with the rise of trade war the protection levels may go up. This presents a clear threat of current business model in Chinese market.
Technology disruption because of hacks, piracy etc
– The colonial pipeline illustrated, how vulnerable modern organization are to international hackers, miscreants, and disruptors. The cyber security interruption, data leaks, etc can seriously jeopardize the future growth of the organization.
Technology acceleration in Forth Industrial Revolution
– Kingfisher Airlines has witnessed rapid integration of technology during Covid-19 in the Leadership & Managing People industry. As one of the leading players in the industry, Kingfisher Airlines needs to keep up with the evolution of technology in the Leadership & Managing People sector. According to Mckinsey study top managers believe that the adoption of technology in operations, communications is 20-25 times faster than what they planned in the beginning of 2019.
High level of anxiety and lack of motivation
– the Great Resignation in United States is the sign of broader dissatisfaction among the workforce in United States. Kingfisher Airlines needs to understand the core reasons impacting the Leadership & Managing People industry. This will help it in building a better workplace.
Consumer confidence and its impact on Kingfisher Airlines demand
– There is a high probability of declining consumer confidence, given – high inflammation rate, rise of gig economy, lower job stability, increasing cost of living, higher interest rates, and aging demography. All the factors contribute to people saving higher rate of their income, resulting in lower consumer demand in the industry and other sectors.
High dependence on third party suppliers
– Kingfisher Airlines high dependence on third party suppliers can disrupt its processes and delivery mechanism. For example -the current troubles of car makers because of chip shortage is because the chip companies started producing chips for electronic companies rather than car manufacturers.
Environmental challenges
– Kingfisher Airlines needs to have a robust strategy against the disruptions arising from climate change and energy requirements. EU has identified it as key priority area and spending 30% of its 880 billion Euros European post Covid-19 recovery funds on green technology. Kingfisher Airlines can take advantage of this fund but it will also bring new competitors in the Leadership & Managing People industry.
New competition
– After the dotcom bust of 2001, financial crisis of 2008-09, the business formation in US economy had declined. But in 2020 alone, there are more than 1.5 million new business applications in United States. This can lead to greater competition for Kingfisher Airlines in the Leadership & Managing People sector and impact the bottomline of the organization.
Capital market disruption
– During the Covid-19, Dow Jones has touched record high. The valuations of a number of companies are way beyond their existing business model potential. This can lead to capital market correction which can put a number of suppliers, collaborators, value chain partners in great financial difficulty. It will directly impact the business of Kingfisher Airlines.
Backlash against dominant players
– US Congress and other legislative arms of the government are getting tough on big business especially technology companies. The digital arm of Kingfisher Airlines business can come under increasing regulations regarding data privacy, data security, etc.
Barriers of entry lowering
– As technology is more democratized, the barriers to entry in the industry are lowering. It can presents Kingfisher Airlines with greater competitive threats in the near to medium future. Secondly it will also put downward pressure on pricing throughout the sector.
Learning curve for new practices
– As the technology based on artificial intelligence and machine learning platform is getting complex, as highlighted in case study Kingfisher Airlines Nosedives: Can It Soar Again or Will It Remain Grounded?, Kingfisher Airlines may face longer learning curve for training and development of existing employees. This can open space for more nimble competitors in the field of Leadership & Managing People .
Weighted SWOT Analysis of Kingfisher Airlines Nosedives: Can It Soar Again or Will It Remain Grounded? Template, Example
Not all factors mentioned under the Strengths, Weakness, Opportunities, and Threats quadrants in the SWOT Analysis are equal. Managers in the HBR case study Kingfisher Airlines Nosedives: Can It Soar Again or Will It Remain Grounded? needs to zero down on the relative importance of each factor mentioned in the Strengths, Weakness, Opportunities, and Threats quadrants.
We can provide the relative importance to each factor by assigning relative weights. Weighted SWOT analysis process is a three stage process –
First stage for doing weighted SWOT analysis of the case study Kingfisher Airlines Nosedives: Can It Soar Again or Will It Remain Grounded? is to rank the strengths and weaknesses of the organization. This will help you to assess the most important strengths and weaknesses of the firm and which one of the strengths and weaknesses mentioned in the initial lists are marginal and can be left out.
Second stage for conducting weighted SWOT analysis of the Harvard case study Kingfisher Airlines Nosedives: Can It Soar Again or Will It Remain Grounded? is to give probabilities to the external strategic factors thus better understanding the opportunities and threats arising out of macro environment changes and developments.
Third stage of constructing weighted SWOT analysis of Kingfisher Airlines Nosedives: Can It Soar Again or Will It Remain Grounded? is to provide strategic recommendations includes – joining likelihood of external strategic factors such as opportunities and threats to the internal strategic factors – strengths and weaknesses. You should start with external factors as they will provide the direction of the overall industry. Secondly by joining probabilities with internal strategic factors can help the company not only strategic fit but also the most probably strategic trade-off that Kingfisher Airlines needs to make to build a sustainable competitive advantage.
