Case Study Description of The Hawaiian Airline Industry, 2001-2008
Two Hawaiian airlines' cooperative environment is disrupted by the entry of a third competitor, Mesa Airways. The price war leads to fares as low as $0 and causes more than $100 million in losses in the first year with no end in sight. Industry risk factors for price competition were reduced in 2001 when the government granted a one-year reprieve from anti-trust laws, but increased dramatically after Mesa's announced entry.
Swot Analysis of "The Hawaiian Airline Industry, 2001-2008" written by Brett Saraniti includes – strengths weakness that are internal strategic factors of the organization, and opportunities and threats that Hawaiian Mesa's facing as an external strategic factors. Some of the topics covered in The Hawaiian Airline Industry, 2001-2008 case study are - Strategic Management Strategies, Marketing, Pricing, Strategy and Strategy & Execution.
Some of the macro environment factors that can be used to understand the The Hawaiian Airline Industry, 2001-2008 casestudy better are - – geopolitical disruptions, digital marketing is dominated by two big players Facebook and Google, cloud computing is disrupting traditional business models, competitive advantages are harder to sustain because of technology dispersion, increasing inequality as vast percentage of new income is going to the top 1%, wage bills are increasing, increasing government debt because of Covid-19 spendings,
technology disruption, talent flight as more people leaving formal jobs, etc
Introduction to SWOT Analysis of The Hawaiian Airline Industry, 2001-2008
SWOT stands for an organization’s Strengths, Weaknesses, Opportunities and Threats . At Oak Spring University , we believe that protagonist in The Hawaiian Airline Industry, 2001-2008 case study can use SWOT analysis as a strategic management tool to assess the current internal strengths and weaknesses of the Hawaiian Mesa's, and to figure out the opportunities and threats in the macro environment – technological, environmental, political, economic, social, demographic, etc in which Hawaiian Mesa's 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 The Hawaiian Airline Industry, 2001-2008 can be done for the following purposes –
1. Strategic planning using facts provided in The Hawaiian Airline Industry, 2001-2008 case study
2. Improving business portfolio management of Hawaiian Mesa's
3. Assessing feasibility of the new initiative in Strategy & Execution field.
4. Making a Strategy & Execution topic specific business decision
5. Set goals for the organization
6. Organizational restructuring of Hawaiian Mesa's
Strengths The Hawaiian Airline Industry, 2001-2008 | Internal Strategic Factors
What are Strengths in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The strengths of Hawaiian Mesa's in The Hawaiian Airline Industry, 2001-2008 Harvard Business Review case study are -
Training and development
– Hawaiian Mesa's has one of the best training and development program in the industry. The effectiveness of the training programs can be measured in The Hawaiian Airline Industry, 2001-2008 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.
Successful track record of launching new products
– Hawaiian Mesa's has launched numerous new products in last few years, keeping in mind evolving customer preferences and competitive pressures. Hawaiian Mesa's 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.
High switching costs
– The high switching costs that Hawaiian Mesa's 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.
Effective Research and Development (R&D)
– Hawaiian Mesa's 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 The Hawaiian Airline Industry, 2001-2008 - staying ahead in the industry in terms of – new product launches, superior customer experience, highly competitive pricing strategies, and great returns to the shareholders.
Strong track record of project management
– Hawaiian Mesa's is known for sticking to its project targets. This enables the firm to manage – time, project costs, and have sustainable margins on the projects.
Digital Transformation in Strategy & Execution segment
- digital transformation varies from industry to industry. For Hawaiian Mesa's digital transformation journey comprises differing goals based on market maturity, customer technology acceptance, and organizational culture. Hawaiian Mesa's 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.
Operational resilience
– The operational resilience strategy in the The Hawaiian Airline Industry, 2001-2008 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.
Learning organization
- Hawaiian Mesa's 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 Hawaiian Mesa's is open place that encourages instructiveness, ideation, open minded discussions, and creativity. Employees and leaders in The Hawaiian Airline Industry, 2001-2008 Harvard Business Review case study emphasize – knowledge, initiative, and innovation.
Superior customer experience
– The customer experience strategy of Hawaiian Mesa's in the segment is based on four key concepts – personalization, simplification of complex needs, prompt response, and continuous engagement.
Ability to lead change in Strategy & Execution field
– Hawaiian Mesa's 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 Hawaiian Mesa's in – penetrating new markets, reaching out to new customers, and providing different value propositions to different customers in the international markets.
Sustainable margins compare to other players in Strategy & Execution industry
– The Hawaiian Airline Industry, 2001-2008 firm has clearly differentiated products in the market place. This has enabled Hawaiian Mesa's to fetch slight price premium compare to the competitors in the Strategy & Execution industry. The sustainable margins have also helped Hawaiian Mesa's to invest into research and development (R&D) and innovation.
Analytics focus
– Hawaiian Mesa's 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 Brett Saraniti 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.
Weaknesses The Hawaiian Airline Industry, 2001-2008 | Internal Strategic Factors
What are Weaknesses in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The weaknesses of The Hawaiian Airline Industry, 2001-2008 are -
Lack of clear differentiation of Hawaiian Mesa's products
– To increase the profitability and margins on the products, Hawaiian Mesa's needs to provide more differentiated products than what it is currently offering in the marketplace.
Products dominated business model
– Even though Hawaiian Mesa's 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 - The Hawaiian Airline Industry, 2001-2008 should strive to include more intangible value offerings along with its core products and services.
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 Hawaiian Mesa's supply chain. Even after few cautionary changes mentioned in the HBR case study - The Hawaiian Airline Industry, 2001-2008, it is still heavily dependent upon the existing supply chain. The existing supply chain though brings in cost efficiencies but it has left Hawaiian Mesa's vulnerable to further global disruptions in South East Asia.
Slow to strategic competitive environment developments
– As The Hawaiian Airline Industry, 2001-2008 HBR case study mentions - Hawaiian Mesa's 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 decision making process
– As mentioned earlier in the report, Hawaiian Mesa's 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. Hawaiian Mesa's 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
Hawaiian Mesa's 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.
Low market penetration in new markets
– Outside its home market of Hawaiian Mesa's, firm in the HBR case study The Hawaiian Airline Industry, 2001-2008 needs to spend more promotional, marketing, and advertising efforts to penetrate international markets.
Employees’ incomplete understanding of strategy
– From the instances in the HBR case study The Hawaiian Airline Industry, 2001-2008, it seems that the employees of Hawaiian Mesa's don’t have comprehensive understanding of the firm’s strategy. This is reflected in number of promotional campaigns over the last few years that had mixed messaging and competing priorities. Some of the strategic activities and services promoted in the promotional campaigns were not consistent with the organization’s strategy.
Compensation and incentives
– The revenue per employee as mentioned in the HBR case study The Hawaiian Airline Industry, 2001-2008, is just above the industry average. Hawaiian Mesa's 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.
Increasing silos among functional specialists
– The organizational structure of Hawaiian Mesa's is dominated by functional specialists. It is not different from other players in the Strategy & Execution segment. Hawaiian Mesa's needs to de-silo the office environment to harness the true potential of its workforce. Secondly the de-silo will also help Hawaiian Mesa's to focus more on services rather than just following the product oriented approach.
Ability to respond to the competition
– As the decision making is very deliberative, highlighted in the case study The Hawaiian Airline Industry, 2001-2008, in the dynamic environment Hawaiian Mesa's has struggled to respond to the nimble upstart competition. Hawaiian Mesa's has reasonably good record with similar level competitors but it has struggled with new entrants taking away niches of its business.
Opportunities The Hawaiian Airline Industry, 2001-2008 | 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 The Hawaiian Airline Industry, 2001-2008 are -
Increase in government spending
– As the United States and other governments are increasing social spending and infrastructure spending to build economies post Covid-19, Hawaiian Mesa's can use these opportunities to build new business models that can help the communities that Hawaiian Mesa's operates in. Secondly it can use opportunities from government spending in Strategy & Execution sector.
Buying journey improvements
– Hawaiian Mesa's can improve the customer journey of consumers in the industry by using analytics and artificial intelligence. The Hawaiian Airline Industry, 2001-2008 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.
Leveraging digital technologies
– Hawaiian Mesa's can leverage digital technologies such as artificial intelligence and machine learning to automate the production process, customer analytics to get better insights into consumer behavior, realtime digital dashboards to get better sales tracking, logistics and transportation, product tracking, etc.
Lowering marketing communication costs
– 5G expansion will open new opportunities for Hawaiian Mesa's in the field of marketing communication. It will bring down the cost of doing business, provide technology platform to build new products in the Strategy & Execution segment, and it will provide faster access to the consumers.
Learning at scale
– Online learning technologies has now opened space for Hawaiian Mesa's to conduct training and development for its employees across the world. This will result in not only reducing the cost of training but also help employees in different part of the world to integrate with the headquarter work culture, ethos, and standards.
Low interest rates
– Even though inflation is raising its head in most developed economies, Hawaiian Mesa's 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.
Remote work and new talent hiring opportunities
– The widespread usage of remote working technologies during Covid-19 has opened opportunities for Hawaiian Mesa's 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 Hawaiian Mesa's to hire the very best people irrespective of their geographical location.
Using analytics as competitive advantage
– Hawaiian Mesa's 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 The Hawaiian Airline Industry, 2001-2008 - to build a competitive advantage using analytics. The analytics driven competitive advantage can help Hawaiian Mesa's to build faster Go To Market strategies, better consumer insights, developing relevant product features, and building a highly efficient supply chain.
Reforming the budgeting process
- By establishing new metrics that will be used to evaluate both existing and potential projects Hawaiian Mesa's can not only reduce the costs of the project but also help it in integrating the projects with other processes within the organization.
Developing new processes and practices
– Hawaiian Mesa's can develop new processes and procedures in Strategy & Execution 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.
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 Hawaiian Mesa's 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.
Redefining models of collaboration and team work
– As explained in the weaknesses section, Hawaiian Mesa's is facing challenges because of the dominance of functional experts in the organization. The Hawaiian Airline Industry, 2001-2008 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.
Manufacturing automation
– Hawaiian Mesa's can use the latest technology developments to improve its manufacturing and designing process in Strategy & Execution 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.
Threats The Hawaiian Airline Industry, 2001-2008 External Strategic Factors
What are Threats in the SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The threats mentioned in the HBR case study The Hawaiian Airline Industry, 2001-2008 are -
Stagnating economy with rate increase
– Hawaiian Mesa's 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.
Learning curve for new practices
– As the technology based on artificial intelligence and machine learning platform is getting complex, as highlighted in case study The Hawaiian Airline Industry, 2001-2008, Hawaiian Mesa's may face longer learning curve for training and development of existing employees. This can open space for more nimble competitors in the field of Strategy & Execution .
Consumer confidence and its impact on Hawaiian Mesa's 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
– Hawaiian Mesa's 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.
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 Hawaiian Mesa's business can come under increasing regulations regarding data privacy, data security, etc.
Increasing wage structure of Hawaiian Mesa's
– 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 Hawaiian Mesa's.
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.
Barriers of entry lowering
– As technology is more democratized, the barriers to entry in the industry are lowering. It can presents Hawaiian Mesa's with greater competitive threats in the near to medium future. Secondly it will also put downward pressure on pricing throughout the sector.
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.
Trade war between China and United States
– The trade war between two of the biggest economies can hugely impact the opportunities for Hawaiian Mesa's in the Strategy & Execution industry. The Strategy & Execution 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, Hawaiian Mesa's 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 The Hawaiian Airline Industry, 2001-2008 .
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 Hawaiian Mesa's in the Strategy & Execution sector and impact the bottomline of the organization.
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. Hawaiian Mesa's needs to understand the core reasons impacting the Strategy & Execution industry. This will help it in building a better workplace.
Weighted SWOT Analysis of The Hawaiian Airline Industry, 2001-2008 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 The Hawaiian Airline Industry, 2001-2008 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 The Hawaiian Airline Industry, 2001-2008 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 The Hawaiian Airline Industry, 2001-2008 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 The Hawaiian Airline Industry, 2001-2008 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 Hawaiian Mesa's needs to make to build a sustainable competitive advantage.
