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 - – challanges to central banks by blockchain based private currencies, increasing commodity prices, increasing transportation and logistics costs, central banks are concerned over increasing inflation, geopolitical disruptions, wage bills are increasing, competitive advantages are harder to sustain because of technology dispersion,
talent flight as more people leaving formal jobs, increasing household debt because of falling income levels, 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 -
Cross disciplinary teams
– Horizontal connected teams at the Kingfisher Airlines are driving operational speed, building greater agility, and keeping the organization nimble to compete with new competitors. It helps are organization to ideate new ideas, and execute them swiftly in the marketplace.
High brand equity
– Kingfisher Airlines has strong brand awareness and brand recognition among both - the exiting customers and potential new customers. Strong brand equity has enabled Kingfisher Airlines to keep acquiring new customers and building profitable relationship with both the new and loyal customers.
Learning organization
- Kingfisher Airlines is a learning organization. It has inculcated three key characters of learning organization in its processes and operations – exploration, creativity, and expansiveness. The work place at Kingfisher Airlines is open place that encourages instructiveness, ideation, open minded discussions, and creativity. Employees and leaders in Kingfisher Airlines Nosedives: Can It Soar Again or Will It Remain Grounded? Harvard Business Review case study emphasize – knowledge, initiative, and innovation.
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.
High switching costs
– The high switching costs that Kingfisher Airlines has built up over years in its products and services combo offer has resulted in high retention of customers, lower marketing costs, and greater ability of the firm to focus on its customers.
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.
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.
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.
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.
Digital Transformation in Leadership & Managing People segment
- digital transformation varies from industry to industry. For Kingfisher Airlines digital transformation journey comprises differing goals based on market maturity, customer technology acceptance, and organizational culture. Kingfisher Airlines has successfully integrated the four key components of digital transformation – digital integration in processes, digital integration in marketing and customer relationship management, digital integration into the value chain, and using technology to explore new products and market opportunities.
Diverse revenue streams
– Kingfisher Airlines is present in almost all the verticals within the industry. This has provided firm in Kingfisher Airlines Nosedives: Can It Soar Again or Will It Remain Grounded? case study a diverse revenue stream that has helped it to survive disruptions such as global pandemic in Covid-19, financial disruption of 2008, and supply chain disruption of 2021.
Low bargaining power of suppliers
– Suppliers of Kingfisher Airlines in the sector have low bargaining power. Kingfisher Airlines Nosedives: Can It Soar Again or Will It Remain Grounded? has further diversified its suppliers portfolio by building a robust supply chain across various countries. This helps Kingfisher Airlines to manage not only supply disruptions but also source products at highly competitive prices.
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 -
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.
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.
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.
Products dominated business model
– Even though Kingfisher Airlines has some of the most successful products in the industry, this business model has made each new product launch extremely critical for continuous financial growth of the organization. firm in the HBR case study - Kingfisher Airlines Nosedives: Can It Soar Again or Will It Remain Grounded? should strive to include more intangible value offerings along with its core products and services.
No frontier risks strategy
– After analyzing the HBR case study Kingfisher Airlines Nosedives: Can It Soar Again or Will It Remain Grounded?, it seems that company is thinking about the frontier risks that can impact Leadership & Managing People strategy. But it has very little resources allocation to manage the risks emerging from events such as natural disasters, climate change, melting of permafrost, tacking the rise of artificial intelligence, opportunities and threats emerging from commercialization of space etc.
Increasing silos among functional specialists
– The organizational structure of Kingfisher Airlines is dominated by functional specialists. It is not different from other players in the Leadership & Managing People segment. Kingfisher Airlines needs to de-silo the office environment to harness the true potential of its workforce. Secondly the de-silo will also help Kingfisher Airlines to focus more on services rather than just following the product oriented approach.
Capital Spending Reduction
– Even during the low interest decade, Kingfisher Airlines has not been able to do capital spending to the tune of the competition. This has resulted into fewer innovations and company facing stiff competition from both existing competitors and new entrants who are disrupting the industry using digital technology.
Interest costs
– Compare to the competition, Kingfisher Airlines has borrowed money from the capital market at higher rates. It needs to restructure the interest payment and costs so that it can compete better and improve profitability.
High dependence on star products
– The top 2 products and services of the firm as mentioned in the Kingfisher Airlines Nosedives: Can It Soar Again or Will It Remain Grounded? HBR case study still accounts for major business revenue. This dependence on star products in has resulted into insufficient focus on developing new products, even though Kingfisher Airlines has relatively successful track record of launching new products.
Need for greater diversity
– Kingfisher Airlines has taken concrete steps on diversity, equity, and inclusion. But the efforts so far has resulted in limited success. It needs to expand the recruitment and selection process to hire more people from the minorities and underprivileged background.
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.
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 -
Reconfiguring business model
– The expansion of digital payment system, the bringing down of international transactions costs using Bitcoin and other blockchain based currencies, etc can help Kingfisher Airlines to reconfigure its entire business model. For example it can used blockchain based technologies to reduce piracy of its products in the big markets such as China. Secondly it can use the popularity of e-commerce in various developing markets to build a Direct to Customer business model rather than the current Channel Heavy distribution network.
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.
Use of Bitcoin and other crypto currencies for transactions
– The popularity of Bitcoin and other crypto currencies as asset class and medium of transaction has opened new opportunities for Kingfisher Airlines in the consumer business. Now Kingfisher Airlines can target international markets with far fewer capital restrictions requirements than the existing system.
Developing new processes and practices
– Kingfisher Airlines can develop new processes and procedures in Leadership & Managing People industry using technology such as automation using artificial intelligence, real time transportation and products tracking, 3D modeling for concept development and new products pilot testing etc.
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.
Better consumer reach
– The expansion of the 5G network will help Kingfisher Airlines to increase its market reach. Kingfisher Airlines will be able to reach out to new customers. Secondly 5G will also provide technology framework to build new tools and products that can help more immersive consumer experience and faster consumer journey.
Buying journey improvements
– Kingfisher Airlines can improve the customer journey of consumers in the industry by using analytics and artificial intelligence. Kingfisher Airlines Nosedives: Can It Soar Again or Will It Remain Grounded? suggest that firm can provide automated chats to help consumers solve their own problems, provide online suggestions to get maximum out of the products and services, and help consumers to build a community where they can interact with each other to develop new features and uses.
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.
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.
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.
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.
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.
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 -
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.
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.
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.
Instability in the European markets
– European Union markets are facing three big challenges post Covid – expanded balance sheets, Brexit related business disruption, and aggressive Russia looking to distract the existing security mechanism. Kingfisher Airlines will face different problems in different parts of Europe. For example it will face inflationary pressures in UK, France, and Germany, balance sheet expansion and demand challenges in Southern European countries, and geopolitical instability in the Eastern Europe.
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 .
Easy access to finance
– Easy access to finance in Leadership & Managing People field will also reduce the barriers to entry in the industry, thus putting downward pressure on the prices because of increasing competition. Kingfisher Airlines can utilize it by borrowing at lower rates and invest it into research and development, capital expenditure to fortify its core competitive advantage.
Shortening product life cycle
– it is one of the major threat that Kingfisher Airlines is facing in Leadership & Managing People sector. It can lead to higher research and development costs, higher marketing expenses, lower customer loyalty, etc.
Increasing wage structure of Kingfisher Airlines
– Post Covid-19 there is a sharp increase in the wages especially in the jobs that require interaction with people. The increasing wages can put downward pressure on the margins of Kingfisher Airlines.
Stagnating economy with rate increase
– Kingfisher Airlines can face lack of demand in the market place because of Fed actions to reduce inflation. This can lead to sluggish growth in the economy, lower demands, lower investments, higher borrowing costs, and consolidation in the field.
Aging population
– As the populations of most advanced economies are aging, it will lead to high social security costs, higher savings among population, and lower demand for goods and services in the economy. The household savings in US, France, UK, Germany, and Japan are growing faster than predicted because of uncertainty caused by pandemic.
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.
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.
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? .
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.