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 - – talent flight as more people leaving formal jobs, increasing household debt because of falling income levels, wage bills are increasing, challanges to central banks by blockchain based private currencies, customer relationship management is fast transforming because of increasing concerns over data privacy, increasing government debt because of Covid-19 spendings, increasing inequality as vast percentage of new income is going to the top 1%,
banking and financial system is disrupted by Bitcoin and other crypto currencies, increasing transportation and logistics costs, 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 -
Superior customer experience
– The customer experience strategy of Westjet Airlines in the segment is based on four key concepts – personalization, simplification of complex needs, prompt response, and continuous engagement.
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.
Successful track record of launching new products
– Westjet Airlines has launched numerous new products in last few years, keeping in mind evolving customer preferences and competitive pressures. Westjet 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.
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.
Organizational Resilience of Westjet Airlines
– The covid-19 pandemic has put organizational resilience at the centre of everthing that Westjet Airlines does. Organizational resilience comprises - Financial Resilience, Operational Resilience, Technological Resilience, Organizational Resilience, Business Model Resilience, and Reputation Resilience.
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.
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.
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.
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.
Innovation driven organization
– Westjet Airlines is one of the most innovative firm in sector. Manager in WestJet Airlines: Information Technology Governance and Corporate Strategy Harvard Business Review case study can use Clayton Christensen Disruptive Innovation strategies to further increase the scale of innovtions in the organization.
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.
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.
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 -
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.
Skills based hiring
– The stress on hiring functional specialists at Westjet Airlines 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.
Interest costs
– Compare to the competition, Westjet 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 operating costs
– Compare to the competitors, firm in the HBR case study WestJet Airlines: Information Technology Governance and Corporate Strategy 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 Westjet Airlines 's lucrative customers.
Slow to harness new channels of communication
– Even though competitors are using new communication channels such as Instagram, Tiktok, and Snap, Westjet Airlines is slow explore the new channels of communication. These new channels of communication mentioned in marketing section of case study WestJet Airlines: Information Technology Governance and Corporate Strategy can help to provide better information regarding products and services. It can also build an online community to further reach out to potential customers.
Ability to respond to the competition
– As the decision making is very deliberative, highlighted in the case study WestJet Airlines: Information Technology Governance and Corporate Strategy, in the dynamic environment Westjet Airlines has struggled to respond to the nimble upstart competition. Westjet Airlines has reasonably good record with similar level competitors but it has struggled with new entrants taking away niches of its business.
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.
Aligning sales with marketing
– It come across in the case study WestJet Airlines: Information Technology Governance and Corporate Strategy that the firm needs to have more collaboration between its sales team and marketing team. Sales professionals in the industry have deep experience in developing customer relationships. Marketing department in the case WestJet Airlines: Information Technology Governance and Corporate Strategy can leverage the sales team experience to cultivate customer relationships as Westjet Airlines is planning to shift buying processes online.
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.
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.
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.
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 -
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.
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.
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.
Finding new ways to collaborate
– Covid-19 has not only transformed business models of companies in Leadership & Managing People industry, but it has also influenced the consumer preferences. Westjet Airlines can tie-up with other value chain partners to explore new opportunities regarding meeting customer demands and building a rewarding and engaging relationship.
Low interest rates
– Even though inflation is raising its head in most developed economies, Westjet 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.
Building a culture of innovation
– managers at Westjet Airlines can make experimentation a productive activity and build a culture of innovation using approaches such as – mining transaction data, A/B testing of websites and selling platforms, engaging potential customers over various needs, and building on small ideas in the Leadership & Managing People segment.
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.
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.
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 Westjet Airlines in the consumer business. Now Westjet Airlines can target international markets with far fewer capital restrictions requirements than the existing system.
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.
Developing new processes and practices
– Westjet 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.
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.
Reforming the budgeting process
- By establishing new metrics that will be used to evaluate both existing and potential projects Westjet Airlines can not only reduce the costs of the project but also help it in integrating the projects with other processes within the organization.
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 -
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.
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.
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 Westjet Airlines business can come under increasing regulations regarding data privacy, data security, etc.
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 .
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.
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.
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
– Westjet Airlines 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 Leadership & Managing People industry regulations.
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.
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.
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.
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 .
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.
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.
