Air Deccan (A): "Simplifying" Air Travel in India SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
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Case Study Description of Air Deccan (A): "Simplifying" Air Travel in India
Captain Gorur Ramaswamy Gopinath started his journey with a dream - a dream inspired by one simple statement: "I want every Indian to fly at least once in their lifetime." With a population in excess of 1 billion people, India certainly offered a vast reservoir of future air travelers. In 2002, when Capt. Gopinath first broached the idea of starting a low-cost airline to serve India's travel needs, no one took him seriously. Bankers refused to fund him, aircraft manufacturers ignored him and aviation industry observers swore that India was not ready. However, he was convinced that India's burgeoning middle class, already buying color TVs and cell phones, could be converted to air travel. In 2003 he launched the first low-cost airline company in India with a leased 48-seater ATR aircraft and $10 million from investors. By 2007, Capt. Gopinath was close to realizing his dream. Air Deccan, with a market share of 21.6%, was India's fastest-growing low-cost carrier and the second-largest airline in the country. It ran the most extensive network in India, covering 61 airports, flew some 306 scheduled flights a day and operated a brand new fleet of 14 Airbus A320 and 22 ATR Turboprops. Visionary and always optimistic, Capt. Gopinath had brought about a total revolution to the highly regulated Indian skies. But every revolution carries the seeds of its own demise. Competition was increasing rapidly now that the model had been validated, and the Indian airport infrastructure was on the verge of a massive breakdown. New business models had to be devised to remain ahead of the curve. The new logo for the company enigmatically offered a glimpse of what Capt. Gopinath had in mind: S I M P L I F L Y ... Learning objectives: Learn about new business models, innovations, growth management, low cost carrier strategies, Indian issues.
Swot Analysis of "Air Deccan (A): "Simplifying" Air Travel in India" written by Benoit Leleux, Isabelle Pigeaux includes – strengths weakness that are internal strategic factors of the organization, and opportunities and threats that Gopinath Capt facing as an external strategic factors. Some of the topics covered in Air Deccan (A): "Simplifying" Air Travel in India case study are - Strategic Management Strategies, and Innovation & Entrepreneurship.
Some of the macro environment factors that can be used to understand the Air Deccan (A): "Simplifying" Air Travel in India casestudy better are - – competitive advantages are harder to sustain because of technology dispersion, banking and financial system is disrupted by Bitcoin and other crypto currencies, challanges to central banks by blockchain based private currencies, increasing transportation and logistics costs, increasing energy prices, technology disruption, talent flight as more people leaving formal jobs,
customer relationship management is fast transforming because of increasing concerns over data privacy, increasing inequality as vast percentage of new income is going to the top 1%, etc
Introduction to SWOT Analysis of Air Deccan (A): "Simplifying" Air Travel in India
SWOT stands for an organization’s Strengths, Weaknesses, Opportunities and Threats . At Oak Spring University , we believe that protagonist in Air Deccan (A): "Simplifying" Air Travel in India case study can use SWOT analysis as a strategic management tool to assess the current internal strengths and weaknesses of the Gopinath Capt, and to figure out the opportunities and threats in the macro environment – technological, environmental, political, economic, social, demographic, etc in which Gopinath Capt 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 Air Deccan (A): "Simplifying" Air Travel in India can be done for the following purposes –
1. Strategic planning using facts provided in Air Deccan (A): "Simplifying" Air Travel in India case study
2. Improving business portfolio management of Gopinath Capt
3. Assessing feasibility of the new initiative in Innovation & Entrepreneurship field.
4. Making a Innovation & Entrepreneurship topic specific business decision
5. Set goals for the organization
6. Organizational restructuring of Gopinath Capt
Strengths Air Deccan (A): "Simplifying" Air Travel in India | Internal Strategic Factors
What are Strengths in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The strengths of Gopinath Capt in Air Deccan (A): "Simplifying" Air Travel in India Harvard Business Review case study are -
Sustainable margins compare to other players in Innovation & Entrepreneurship industry
– Air Deccan (A): "Simplifying" Air Travel in India firm has clearly differentiated products in the market place. This has enabled Gopinath Capt to fetch slight price premium compare to the competitors in the Innovation & Entrepreneurship industry. The sustainable margins have also helped Gopinath Capt to invest into research and development (R&D) and innovation.
High brand equity
– Gopinath Capt has strong brand awareness and brand recognition among both - the exiting customers and potential new customers. Strong brand equity has enabled Gopinath Capt to keep acquiring new customers and building profitable relationship with both the new and loyal customers.
Low bargaining power of suppliers
– Suppliers of Gopinath Capt in the sector have low bargaining power. Air Deccan (A): "Simplifying" Air Travel in India has further diversified its suppliers portfolio by building a robust supply chain across various countries. This helps Gopinath Capt to manage not only supply disruptions but also source products at highly competitive prices.
Superior customer experience
– The customer experience strategy of Gopinath Capt in the segment is based on four key concepts – personalization, simplification of complex needs, prompt response, and continuous engagement.
Ability to recruit top talent
– Gopinath Capt is one of the leading recruiters in the industry. Managers in the Air Deccan (A): "Simplifying" Air Travel in India are in a position to attract the best talent available. The firm has a robust talent identification program that helps in identifying the brightest.
Strong track record of project management
– Gopinath Capt is known for sticking to its project targets. This enables the firm to manage – time, project costs, and have sustainable margins on the projects.
Training and development
– Gopinath Capt has one of the best training and development program in the industry. The effectiveness of the training programs can be measured in Air Deccan (A): "Simplifying" Air Travel in India 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.
Diverse revenue streams
– Gopinath Capt is present in almost all the verticals within the industry. This has provided firm in Air Deccan (A): "Simplifying" Air Travel in India 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.
Cross disciplinary teams
– Horizontal connected teams at the Gopinath Capt 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.
Operational resilience
– The operational resilience strategy in the Air Deccan (A): "Simplifying" Air Travel in India 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 Innovation & Entrepreneurship segment
- digital transformation varies from industry to industry. For Gopinath Capt digital transformation journey comprises differing goals based on market maturity, customer technology acceptance, and organizational culture. Gopinath Capt 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.
Learning organization
- Gopinath Capt 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 Gopinath Capt is open place that encourages instructiveness, ideation, open minded discussions, and creativity. Employees and leaders in Air Deccan (A): "Simplifying" Air Travel in India Harvard Business Review case study emphasize – knowledge, initiative, and innovation.
Weaknesses Air Deccan (A): "Simplifying" Air Travel in India | Internal Strategic Factors
What are Weaknesses in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The weaknesses of Air Deccan (A): "Simplifying" Air Travel in India are -
Employees’ incomplete understanding of strategy
– From the instances in the HBR case study Air Deccan (A): "Simplifying" Air Travel in India, it seems that the employees of Gopinath Capt 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.
Skills based hiring
– The stress on hiring functional specialists at Gopinath Capt has created an environment where the organization is dominated by functional specialists rather than management generalist. This has resulted into product oriented approach rather than marketing oriented approach or consumers oriented approach.
Increasing silos among functional specialists
– The organizational structure of Gopinath Capt is dominated by functional specialists. It is not different from other players in the Innovation & Entrepreneurship segment. Gopinath Capt needs to de-silo the office environment to harness the true potential of its workforce. Secondly the de-silo will also help Gopinath Capt to focus more on services rather than just following the product oriented approach.
Products dominated business model
– Even though Gopinath Capt 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 - Air Deccan (A): "Simplifying" Air Travel in India should strive to include more intangible value offerings along with its core products and services.
Slow to harness new channels of communication
– Even though competitors are using new communication channels such as Instagram, Tiktok, and Snap, Gopinath Capt is slow explore the new channels of communication. These new channels of communication mentioned in marketing section of case study Air Deccan (A): "Simplifying" Air Travel in India can help to provide better information regarding products and services. It can also build an online community to further reach out to potential customers.
Lack of clear differentiation of Gopinath Capt products
– To increase the profitability and margins on the products, Gopinath Capt needs to provide more differentiated products than what it is currently offering in the marketplace.
Low market penetration in new markets
– Outside its home market of Gopinath Capt, firm in the HBR case study Air Deccan (A): "Simplifying" Air Travel in India needs to spend more promotional, marketing, and advertising efforts to penetrate international markets.
Need for greater diversity
– Gopinath Capt 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 bargaining power of channel partners
– Because of the regulatory requirements, Benoit Leleux, Isabelle Pigeaux suggests that, Gopinath Capt 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.
No frontier risks strategy
– After analyzing the HBR case study Air Deccan (A): "Simplifying" Air Travel in India, it seems that company is thinking about the frontier risks that can impact Innovation & Entrepreneurship 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.
Workers concerns about automation
– As automation is fast increasing in the segment, Gopinath Capt needs to come up with a strategy to reduce the workers concern regarding automation. Without a clear strategy, it could lead to disruption and uncertainty within the organization.
Opportunities Air Deccan (A): "Simplifying" Air Travel in India | 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 Air Deccan (A): "Simplifying" Air Travel in India are -
Finding new ways to collaborate
– Covid-19 has not only transformed business models of companies in Innovation & Entrepreneurship industry, but it has also influenced the consumer preferences. Gopinath Capt can tie-up with other value chain partners to explore new opportunities regarding meeting customer demands and building a rewarding and engaging relationship.
Redefining models of collaboration and team work
– As explained in the weaknesses section, Gopinath Capt is facing challenges because of the dominance of functional experts in the organization. Air Deccan (A): "Simplifying" Air Travel in India 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.
Buying journey improvements
– Gopinath Capt can improve the customer journey of consumers in the industry by using analytics and artificial intelligence. Air Deccan (A): "Simplifying" Air Travel in India 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.
Creating value in data economy
– The success of analytics program of Gopinath Capt has opened avenues for new revenue streams for the organization in the industry. This can help Gopinath Capt to build a more holistic ecosystem as suggested in the Air Deccan (A): "Simplifying" Air Travel in India case study. Gopinath Capt can build new products and services such as - data insight services, data privacy related products, data based consulting services, etc.
Better consumer reach
– The expansion of the 5G network will help Gopinath Capt to increase its market reach. Gopinath Capt 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.
Remote work and new talent hiring opportunities
– The widespread usage of remote working technologies during Covid-19 has opened opportunities for Gopinath Capt 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 Gopinath Capt to hire the very best people irrespective of their geographical location.
Harnessing reconfiguration of the global supply chains
– As the trade war between US and China heats up in the coming years, Gopinath Capt 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, Air Deccan (A): "Simplifying" Air Travel in India, to buy more products closer to the markets, and it can leverage its size and influence to get better deal from the local markets.
Changes in consumer behavior post Covid-19
– Consumer behavior has changed in the Innovation & Entrepreneurship industry because of Covid-19 restrictions. Some of this behavior will stay once things get back to normal. Gopinath Capt 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. Gopinath Capt 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.
Lowering marketing communication costs
– 5G expansion will open new opportunities for Gopinath Capt in the field of marketing communication. It will bring down the cost of doing business, provide technology platform to build new products in the Innovation & Entrepreneurship segment, and it will provide faster access to the consumers.
Low interest rates
– Even though inflation is raising its head in most developed economies, Gopinath Capt 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.
Increase in government spending
– As the United States and other governments are increasing social spending and infrastructure spending to build economies post Covid-19, Gopinath Capt can use these opportunities to build new business models that can help the communities that Gopinath Capt operates in. Secondly it can use opportunities from government spending in Innovation & Entrepreneurship sector.
Manufacturing automation
– Gopinath Capt can use the latest technology developments to improve its manufacturing and designing process in Innovation & Entrepreneurship 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.
Loyalty marketing
– Gopinath Capt has focused on building a highly responsive customer relationship management platform. This platform is built on in-house data and driven by analytics and artificial intelligence. The customer analytics can help the organization to fine tune its loyalty marketing efforts, increase the wallet share of the organization, reduce wastage on mainstream advertising spending, build better pricing strategies using personalization, etc.
Threats Air Deccan (A): "Simplifying" Air Travel in India External Strategic Factors
What are Threats in the SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The threats mentioned in the HBR case study Air Deccan (A): "Simplifying" Air Travel in India are -
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 Gopinath Capt in the Innovation & Entrepreneurship sector and impact the bottomline of the organization.
Easy access to finance
– Easy access to finance in Innovation & Entrepreneurship field will also reduce the barriers to entry in the industry, thus putting downward pressure on the prices because of increasing competition. Gopinath Capt can utilize it by borrowing at lower rates and invest it into research and development, capital expenditure to fortify its core competitive advantage.
Technology acceleration in Forth Industrial Revolution
– Gopinath Capt has witnessed rapid integration of technology during Covid-19 in the Innovation & Entrepreneurship industry. As one of the leading players in the industry, Gopinath Capt needs to keep up with the evolution of technology in the Innovation & Entrepreneurship 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.
Increasing wage structure of Gopinath Capt
– 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 Gopinath Capt.
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.
Consumer confidence and its impact on Gopinath Capt 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.
Barriers of entry lowering
– As technology is more democratized, the barriers to entry in the industry are lowering. It can presents Gopinath Capt with greater competitive threats in the near to medium future. Secondly it will also put downward pressure on pricing throughout the sector.
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 Gopinath Capt.
High dependence on third party suppliers
– Gopinath Capt 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.
Stagnating economy with rate increase
– Gopinath Capt 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.
Regulatory challenges
– Gopinath Capt needs to prepare for regulatory challenges as consumer protection groups and other pressure groups are vigorously advocating for more regulations on big business - to reduce inequality, to create a level playing field, to product data privacy and consumer privacy, to reduce the influence of big money on democratic institutions, etc. This can lead to significant changes in the Innovation & Entrepreneurship industry regulations.
Environmental challenges
– Gopinath Capt 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. Gopinath Capt can take advantage of this fund but it will also bring new competitors in the Innovation & Entrepreneurship industry.
Weighted SWOT Analysis of Air Deccan (A): "Simplifying" Air Travel in India 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 Air Deccan (A): "Simplifying" Air Travel in India 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 Air Deccan (A): "Simplifying" Air Travel in India 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 Air Deccan (A): "Simplifying" Air Travel in India 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 Air Deccan (A): "Simplifying" Air Travel in India 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 Gopinath Capt needs to make to build a sustainable competitive advantage.