Aviation Business Strategies

Week 1 - Week 4 Content

What is a strategy?

A plan, action, or policy designed to achieve a major or overall aim; like a master plan or game plan.

What is a business strategy?

A comprehensive, long-term master plan that defines an organization’s goals, actions to achieve them, and resources allocated.

How can strategy be described conceptually?

Strategy is the blueprint of decisions.

What are the key components of strategy?

Goals and vision, action plans, resource allocation, environmental analysis, and competitive advantage.

What role do goals and vision play in strategy?

They define the objectives the organization aims to achieve.

Why are action plans important in strategy?

They outline the specific steps needed to achieve strategic goals.

What is resource allocation in strategy?

The process of assigning resources to support strategic objectives.

What is environmental analysis in strategy?

Evaluating internal and external factors that affect organizational performance.

What is competitive advantage?

A unique position that allows an organization to outperform competitors.

What is strategic management?

The ongoing process of planning, implementing, and evaluating strategy.

Why is strategy considered a core function?

It guides major organizational decisions and long-term direction.

Why is strategy described as dynamic?

It evolves in response to changing environments and conditions.

What is NOT considered a strategy?

Goals, plans, missions, visions, best practices, or a simple list of tasks.

Why are goals alone not a strategy?

Because they state what to achieve but not how to achieve it.

How is strategy best defined compared to goals or plans?

A cohesive and logical framework of choices and trade-offs about how to achieve goals.

What is fleet management strategy in aviation?

Creating and maintaining a fleet of aircraft that best fits an airline’s capacity and routing needs.

What is yield management strategy in aviation?

Maximizing revenue by selling as many seats as possible since unsold seats are perishable.

What are strategic partnerships in aviation?

Partnering with other airlines to expand networks and offer passengers more choices without expanding one’s own network.

What are the four main strategies of Southwest Airlines?

Low-cost, employee-driven, future-minded, and differentiated.

What does Southwest’s low-cost strategy focus on?

Fast, no-frills service with simplified operations.

How does Southwest reduce operational costs?

By not serving meals, not offering advanced seat reservations, and flying only Boeing 737 aircraft.

Why did Southwest’s low-cost decisions help during crises like 9/11 and economic downturns?

They reduced costs and allowed the airline to remain stable despite decreases in passenger demand.

How did Southwest handle economic downturns differently from competitors?

They used pay cuts instead of firing employees.

Why did Southwest employees accept pay cuts?

They valued job security over higher pay.

How did employee loyalty benefit Southwest Airlines?

It allowed the airline to recover faster than competitors.

What does employee-driven strategy mean at Southwest?

Employees are central to the airline’s overall strategy and success.

What is the relationship between employees and customers at Southwest?

Happy employees lead to happy customers.

Which management theory aligns with Southwest’s employee motivation strategy?

Douglas McGregor’s Theory Y.

How does Theory Y apply to Southwest employees?

Employees enjoy their work and see it as a natural part of their lives.

What is Southwest’s employee retention rate?

92.3%.

What is meant by Southwest’s differentiation strategy?

Creating unique value beyond low cost that separates the airline from competitors.

Why is differentiation usually associated with premium brands?

It often involves higher prices or unique products.

What is one key differentiation tool used by Southwest?

The Rapid Rewards loyalty program.

What makes Southwest’s Rapid Rewards program unique?

Points can be redeemed on any seat, any flight, anytime, with no blackout dates.

When do Rapid Rewards points expire?

Never, as long as there is account activity within 24 months.

How does differentiation benefit Southwest Airlines?

It attracts new customers, increases repeat business, and strengthens partnerships.

What is Southwest’s aggressive promotion strategy?

Delivering key messages through simple, easy-to-understand commercials.

What is the “bags fly free” campaign designed to do?

Differentiate Southwest from competitors and highlight unique policies.

What does future-minded strategy mean for Southwest?

Making decisions based on long-term benefits rather than short-term gains.

How did the acquisition of AirTran support Southwest’s future-minded strategy?

It expanded the network, added destinations, diversified markets, and absorbed competition.

What benefits did Southwest gain from acquiring AirTran?

Expanded network, more low-fare routes, new markets, and international destinations.

Why does Southwest invest in newer aircraft?

To increase capacity, efficiency, and fuel savings.

Which aircraft has Southwest added to modernize its fleet?

Boeing 737-800s and 737 Max 8s.

How do larger aircraft support Southwest’s strategy?

They increase seating capacity and operational efficiency.

How does fleet modernization support expansion to places like Hawaii and Alaska?

Newer aircraft can fly longer distances more efficiently.

What is competitive advantage according to Grant?

Earning persistently higher profits than competitors in the same market.

How is competitive advantage generally defined?

The ability to outperform competitors and gain market share or higher profits.

Why doesn’t competitive advantage always result in higher profits?

Firms may invest in safety, employees, the environment, or long-term growth.

How does McGree define competitive advantage?

Delivering superior value to customers while earning above-average returns.

What does sustainable competitive advantage require?

Being different in ways customers value and are willing to pay for.

What are the key elements of competitive advantage according to McGree?

Competitive intent, customer-visible advantage, cost or differentiation benefits, and valued customer benefits.

What role do customers play in competitive advantage?

They must perceive, value, and be willing to pay for the benefits offered.

What type of airline is Biman Bangladesh Airlines?

A government-owned airline.

Why is Biman Bangladesh Airlines notable competitively?

It competes successfully despite limited resources and infrastructure.

What challenges does Biman Bangladesh Airlines face?

Limited aircraft, infrastructure, technology, and qualified personnel.

What does the literature say about the emergence of competitive advantage?

It requires internal or external change.

Why do profit levels differ between firms?

Because firms have different resources and capabilities.

How does responsiveness to change create competitive advantage?

By allowing firms to exploit environmental changes more effectively.

According to Grant, what is the greatest source of competitive advantage?

Anticipating future changes and planning accordingly.

What are the two key elements needed to benefit from environmental change?

Information and flexibility.

How is flexibility of response determined?

By how quickly a firm can redeploy its resources and capabilities.

How does innovation affect competitive advantage?

It creates advantage while destroying competitors’ advantages.

What is the main goal of business strategy?

Establishing competitive advantage.

Which tools are used in the theoretical framework of this analysis?

SWOT, PEST, and Porter’s Five Forces.

What does SWOT analysis stand for?

Strengths, Weaknesses, Opportunities, and Threats.

What does PEST analysis examine?

Political, Economic, Social, and Technological factors.

What are Porter’s Five Forces?

New entrants, substitutes, supplier power, buyer power, and industry rivalry.

What is primary data in research methodology?

Data collected firsthand through surveys, interviews, observations, or experiments.

What is secondary data?

Existing information that may be relevant to the research problem.

When is primary research most useful?

When investigating new areas with limited existing information.

Why is secondary research considered reliable?

It often comes from established and credible sources.

What is a competitive strategy?

A long-term action plan designed to gain competitive advantage by evaluating competitors’ strengths, weaknesses, opportunities, and threats and comparing them with the firm’s own.

What is the main goal of a competitive strategy?

To achieve an above-average market position and generate superior return on investment (ROI).

Why does competitive strategy require industry analysis?

To understand rivals and identify opportunities for gaining advantage.

What are the four types of competitive strategies?

Cost leadership, differentiation leadership, cost focus, and differentiation focus.

What is a cost leadership strategy?

A strategy focused on offering products or services at the lowest price in the market.

Why is cost leadership difficult for small businesses?

It requires long-term commitments and large-scale efficiencies to maintain low prices.

What is a differentiation leadership strategy?

A strategy based on offering unique product attributes that distinguish a firm from competitors.

What drives success in a differentiation leadership strategy?

Identifying and delivering unique features valued by customers.

What is a cost focus strategy?

A strategy that targets a specific market segment and offers the lowest prices to that segment.

How is cost focus different from cost leadership?

Cost focus targets a specific market segment, while cost leadership targets the entire market.

Why is a cost focus strategy useful?

It satisfies specific consumers and increases brand awareness.

What is a differentiation focus strategy?

A strategy targeting a specific market segment by offering differentiated products rather than lower prices.

How does differentiation focus differ from cost focus?

Differentiation focus emphasizes uniqueness, while cost focus emphasizes lower prices.

Why can a strong strategy fail during execution?

If the team does not understand how daily efforts contribute to the final objective.

Why must a strategy be reflected in KPIs?

Without KPIs, companies lose focus, especially when early progress is not obvious.

What happens when a company lacks the right KPIs?

It may lose focus in actions and consistency in messaging and activities.

What does KPI stand for?

Key Performance Indicators.

Why are KPIs important in translating strategy into action?

They connect strategic goals to measurable outcomes.

What did Walmart publicly announce in 2015?

A three-year growth plan focused on omnichannel retailing.

What was Walmart’s main strategic goal in its growth plan?

Delivering a seamless omnichannel shopping experience at scale.

What sales target did Walmart use to measure success?

$45–60 billion in new sales.

How many growth areas did Walmart identify?

Five growth areas.

How did KPIs help Walmart internally?

They ensured a shared language, clarified priorities, and enabled progress measurement.

What KPIs supported Walmart’s value delivery strategy?

Price leadership and private brand performance.

Which KPIs supported Walmart’s convenience strategy?

E-commerce, online grocery, and smaller store formats.

Which geographies were prioritized in Walmart’s strategy?

North America and China.

How does business intelligence help define strategy?

It provides fact-based insights instead of gut feelings.

Why is internal and external data analysis important in strategy?

It reveals trends, opportunities, and competitive advantages.

What data sources are used in BI for strategy definition?

Market research and historical data.