WestJet Airlines: Information Technology Governance and Corporate Strategy SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
Leadership & Managing People
Strategy / MBA Resources
Case Study SWOT Analysis Solution
Case Study Description of WestJet Airlines: Information Technology Governance and Corporate Strategy
WestJet Airlines grew from a startup regional carrier in 1996 serving five Western Canadian cities to an international airline with more than 80 destinations and 9,000 employees by 2011. In a strategic move to implement code sharing and several other strategic IT applications to enhance WestJet's competitiveness, the CEO and his executive team hired an experienced and highly successful CIO to bring WestJet up to par with other airlines. The new CIO was asked by WestJet to assess its IT competence as part of a corporate drive to gain competitive advantage by delivering innovative guest services. The executive saw IT as the key to WestJet achieving its ambitions and corporate growth so formulated an ambitious plan to restructure the IT organization. But certain senior IT staff members, some of whom had been with the company since the beginning and had played a major role in developing the existing systems, believed the plan was ill advised and unworkable. The executive had to convince both senior management and the IT group that implementing the new IT governance model was essential if WestJet hoped to achieve its strategic goals. Authors Malcolm Munro and Sharaz Khan are affiliated with University of Calgary.
Swot Analysis of "WestJet Airlines: Information Technology Governance and Corporate Strategy" written by Malcolm Munro, Sharaz Khan includes – strengths weakness that are internal strategic factors of the organization, and opportunities and threats that Westjet Airlines facing as an external strategic factors. Some of the topics covered in WestJet Airlines: Information Technology Governance and Corporate Strategy case study are - Strategic Management Strategies, and Leadership & Managing People.
Some of the macro environment factors that can be used to understand the WestJet Airlines: Information Technology Governance and Corporate Strategy casestudy better are - – cloud computing is disrupting traditional business models, customer relationship management is fast transforming because of increasing concerns over data privacy, increasing household debt because of falling income levels, increasing energy prices, central banks are concerned over increasing inflation, technology disruption, challanges to central banks by blockchain based private currencies,
increasing transportation and logistics costs, increasing government debt because of Covid-19 spendings, etc
Introduction to SWOT Analysis of WestJet Airlines: Information Technology Governance and Corporate Strategy
SWOT stands for an organization’s Strengths, Weaknesses, Opportunities and Threats . At Oak Spring University , we believe that protagonist in WestJet Airlines: Information Technology Governance and Corporate Strategy case study can use SWOT analysis as a strategic management tool to assess the current internal strengths and weaknesses of the Westjet Airlines, and to figure out the opportunities and threats in the macro environment – technological, environmental, political, economic, social, demographic, etc in which Westjet 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 WestJet Airlines: Information Technology Governance and Corporate Strategy can be done for the following purposes –
1. Strategic planning using facts provided in WestJet Airlines: Information Technology Governance and Corporate Strategy case study
2. Improving business portfolio management of Westjet 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 Westjet Airlines
Strengths WestJet Airlines: Information Technology Governance and Corporate Strategy | Internal Strategic Factors
What are Strengths in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The strengths of Westjet Airlines in WestJet Airlines: Information Technology Governance and Corporate Strategy Harvard Business Review case study are -
Cross disciplinary teams
– Horizontal connected teams at the Westjet 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.
Effective Research and Development (R&D)
– Westjet 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 WestJet Airlines: Information Technology Governance and Corporate Strategy - staying ahead in the industry in terms of – new product launches, superior customer experience, highly competitive pricing strategies, and great returns to the shareholders.
Operational resilience
– The operational resilience strategy in the WestJet Airlines: Information Technology Governance and Corporate Strategy 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 Westjet Airlines digital transformation journey comprises differing goals based on market maturity, customer technology acceptance, and organizational culture. Westjet 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.
Sustainable margins compare to other players in Leadership & Managing People industry
– WestJet Airlines: Information Technology Governance and Corporate Strategy firm has clearly differentiated products in the market place. This has enabled Westjet Airlines to fetch slight price premium compare to the competitors in the Leadership & Managing People industry. The sustainable margins have also helped Westjet Airlines to invest into research and development (R&D) and innovation.
Training and development
– Westjet Airlines has one of the best training and development program in the industry. The effectiveness of the training programs can be measured in WestJet Airlines: Information Technology Governance and Corporate Strategy 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.
Low bargaining power of suppliers
– Suppliers of Westjet Airlines in the sector have low bargaining power. WestJet Airlines: Information Technology Governance and Corporate Strategy has further diversified its suppliers portfolio by building a robust supply chain across various countries. This helps Westjet Airlines to manage not only supply disruptions but also source products at highly competitive prices.
Learning organization
- Westjet 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 Westjet Airlines is open place that encourages instructiveness, ideation, open minded discussions, and creativity. Employees and leaders in WestJet Airlines: Information Technology Governance and Corporate Strategy Harvard Business Review case study emphasize – knowledge, initiative, and innovation.
Diverse revenue streams
– Westjet Airlines is present in almost all the verticals within the industry. This has provided firm in WestJet Airlines: Information Technology Governance and Corporate Strategy 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.
Highly skilled collaborators
– Westjet 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 WestJet Airlines: Information Technology Governance and Corporate Strategy HBR case study have helped the firm to develop new products and bring them quickly to the marketplace.
Ability to recruit top talent
– Westjet Airlines is one of the leading recruiters in the industry. Managers in the WestJet Airlines: Information Technology Governance and Corporate Strategy are in a position to attract the best talent available. The firm has a robust talent identification program that helps in identifying the brightest.
High switching costs
– The high switching costs that Westjet 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.
Weaknesses WestJet Airlines: Information Technology Governance and Corporate Strategy | Internal Strategic Factors
What are Weaknesses in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The weaknesses of WestJet Airlines: Information Technology Governance and Corporate Strategy are -
Capital Spending Reduction
– Even during the low interest decade, Westjet 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.
Need for greater diversity
– Westjet 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.
Increasing silos among functional specialists
– The organizational structure of Westjet Airlines is dominated by functional specialists. It is not different from other players in the Leadership & Managing People segment. Westjet Airlines needs to de-silo the office environment to harness the true potential of its workforce. Secondly the de-silo will also help Westjet Airlines to focus more on services rather than just following the product oriented approach.
High cash cycle compare to competitors
Westjet 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.
Slow decision making process
– As mentioned earlier in the report, Westjet 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. Westjet 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 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 Westjet Airlines supply chain. Even after few cautionary changes mentioned in the HBR case study - WestJet Airlines: Information Technology Governance and Corporate Strategy, it is still heavily dependent upon the existing supply chain. The existing supply chain though brings in cost efficiencies but it has left Westjet Airlines vulnerable to further global disruptions in South East Asia.
Products dominated business model
– Even though Westjet 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 - WestJet Airlines: Information Technology Governance and Corporate Strategy should strive to include more intangible value offerings along with its core products and services.
Compensation and incentives
– The revenue per employee as mentioned in the HBR case study WestJet Airlines: Information Technology Governance and Corporate Strategy, is just above the industry average. Westjet 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.
High dependence on star products
– The top 2 products and services of the firm as mentioned in the WestJet Airlines: Information Technology Governance and Corporate Strategy 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 Westjet Airlines has relatively successful track record of launching new products.
Lack of clear differentiation of Westjet Airlines products
– To increase the profitability and margins on the products, Westjet Airlines needs to provide more differentiated products than what it is currently offering in the marketplace.
No frontier risks strategy
– After analyzing the HBR case study WestJet Airlines: Information Technology Governance and Corporate Strategy, 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.
Opportunities WestJet Airlines: Information Technology Governance and Corporate Strategy | 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 WestJet Airlines: Information Technology Governance and Corporate Strategy 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 Westjet 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.
Remote work and new talent hiring opportunities
– The widespread usage of remote working technologies during Covid-19 has opened opportunities for Westjet 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 Westjet Airlines to hire the very best people irrespective of their geographical location.
Lowering marketing communication costs
– 5G expansion will open new opportunities for Westjet 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, Westjet Airlines can use these opportunities to build new business models that can help the communities that Westjet Airlines operates in. Secondly it can use opportunities from government spending in Leadership & Managing People sector.
Harnessing reconfiguration of the global supply chains
– As the trade war between US and China heats up in the coming years, Westjet 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, WestJet Airlines: Information Technology Governance and Corporate Strategy, to buy more products closer to the markets, and it can leverage its size and influence to get better deal from the local markets.
Creating value in data economy
– The success of analytics program of Westjet Airlines has opened avenues for new revenue streams for the organization in the industry. This can help Westjet Airlines to build a more holistic ecosystem as suggested in the WestJet Airlines: Information Technology Governance and Corporate Strategy case study. Westjet Airlines can build new products and services such as - data insight services, data privacy related products, data based consulting services, etc.
Leveraging digital technologies
– Westjet Airlines 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.
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. Westjet 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. Westjet 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.
Redefining models of collaboration and team work
– As explained in the weaknesses section, Westjet Airlines is facing challenges because of the dominance of functional experts in the organization. WestJet Airlines: Information Technology Governance and Corporate Strategy 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
– Westjet Airlines can improve the customer journey of consumers in the industry by using analytics and artificial intelligence. WestJet Airlines: Information Technology Governance and Corporate Strategy 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.
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. Westjet Airlines can explore opportunities that can attract volunteers and are consistent with its mission and vision.
Better consumer reach
– The expansion of the 5G network will help Westjet Airlines to increase its market reach. Westjet 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.
Using analytics as competitive advantage
– Westjet 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 WestJet Airlines: Information Technology Governance and Corporate Strategy - to build a competitive advantage using analytics. The analytics driven competitive advantage can help Westjet Airlines to build faster Go To Market strategies, better consumer insights, developing relevant product features, and building a highly efficient supply chain.
Threats WestJet Airlines: Information Technology Governance and Corporate Strategy External Strategic Factors
What are Threats in the SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The threats mentioned in the HBR case study WestJet Airlines: Information Technology Governance and Corporate Strategy are -
Environmental challenges
– Westjet 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. Westjet Airlines can take advantage of this fund but it will also bring new competitors in the Leadership & Managing People industry.
Stagnating economy with rate increase
– Westjet 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.
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. Westjet 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.
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. Westjet Airlines needs to understand the core reasons impacting the Leadership & Managing People industry. This will help it in building a better workplace.
Increasing wage structure of Westjet 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 Westjet Airlines.
Barriers of entry lowering
– As technology is more democratized, the barriers to entry in the industry are lowering. It can presents Westjet Airlines with greater competitive threats in the near to medium future. Secondly it will also put downward pressure on pricing throughout the sector.
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 Westjet 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 Westjet Airlines.
Increasing international competition and downward pressure on margins
– Apart from technology driven competitive advantage dilution, Westjet 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 WestJet Airlines: Information Technology Governance and Corporate Strategy .
Learning curve for new practices
– As the technology based on artificial intelligence and machine learning platform is getting complex, as highlighted in case study WestJet Airlines: Information Technology Governance and Corporate Strategy, Westjet 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 .
High dependence on third party suppliers
– Westjet 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.
Shortening product life cycle
– it is one of the major threat that Westjet Airlines is facing in Leadership & Managing People sector. It can lead to higher research and development costs, higher marketing expenses, lower customer loyalty, etc.
Consumer confidence and its impact on Westjet 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.
Weighted SWOT Analysis of WestJet Airlines: Information Technology Governance and Corporate Strategy 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 WestJet Airlines: Information Technology Governance and Corporate Strategy 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 WestJet Airlines: Information Technology Governance and Corporate Strategy 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 WestJet Airlines: Information Technology Governance and Corporate Strategy 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 WestJet Airlines: Information Technology Governance and Corporate Strategy 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 Westjet Airlines needs to make to build a sustainable competitive advantage.