Corporate Rivalry and Market Power †Free Samples to Students

Question: Discuss about the Corporate Rivalry and Market Power. Answer: Introduction: The aviation industry is highly competitive and creates the need for industry players to adopt effective strategies to remain competitive and achieve the desired objectives. With the rise in the number of airlines, competition continues to grow to create the need for airlines to establish strategic positions to achieve their overall objectives (Abeyratne, 2014). Focusing on customer service quality is one of the key aspects of the aviation industry that significantly helps retain and attract new customers as well as effectively addressing competition problems (Tsiakis, 2015). NZIA is also a low-cost carrier based in Auckland and operates scheduled passenger services using 10 leased Airbus A330-200 aircraft which has an all-economy cabin configuration. The case demonstrates that the airline is not a full-service network carrier increasing the possibility of experiencing competition in the market; hence the need to create a new strategic focus and strategic positioning to expand the cu rrent routes and product offering to achieve profits and market optimization (Bruce, 2011). The situational analysis of NZIA presents understanding on the strategic objective of the airline, the fleet, and network coverage to enhance understanding of the competitive position and the given routes. Besides, the situational analysis will focus on the future route opportunities for the airline which can help in the long-term performance or success of the organization as well as the market trends and products. NZIA Strategic Objective According to the case, NZIA is not a full-service network carrier which is one of the key aspect limiting its ability to maximize profits or success in the industry. As such, the strategic objective of the airline involves becoming a full-service network carrier which involves focusing on increased passenger flights rather than the scheduled only. The strategic objective is also based on expanding the existing routes in order to position the airline in the competitive industry. The strategic objective is based on enhancing the ability of the airline to optimize new market opportunities as well as increasing the company's profitability. Additionally, the strategic objective will see the company expand its routes and product offering in order to increase the overall number of passengers and gain a competitive position in the market (Mahadevan, 2009). According to the case scenario, NZIA is a low-cost carrier and has been previously based on operating scheduled passenger services which limited their fleet number and network. Currently, NZIA provides its passenger services using 10 leased Airbus A330-200 aircraft which has an all-economy cabin configuration and a capacity of 260 seats. The airline's network in both domestic and international routes involves Auckland-Sydney, Christchurch-Sydney, Auckland-Cook Islands, Auckland-Nadi, Auckland-Noumea, Wellington-Sydney, and Auckland-Wellington-Christchurch. The fleet and network for the airline are limited based on the idea that the company only operated as scheduled passenger services. However, in the achievement of the new strategic objective, the airline is bound to increase the fleet number in order to meet the growing demand and competition in the market as well as achieve the desired profits. The airline must also expand the network cover to enhance the chances of serving passen gers from different areas as well as maximizing the profits. Competition on Given Routes As earlier identified, the aviation industry is one of the most competitive which creates the need for airlines to have unique services of product offerings to meet the competing demands. Competition is a key challenge that will be experienced by NZIA in given routes owing to the existence of other key players in the industry (Ireland, Hoskisson Hitt, 2012). In this regard, NZIA should adopt product differentiation strategy and service quality in order to address the competing demands as well as achieve the desired objectives (Odoni, 2015). For example, NZIA can provide pre-flight and in-flight services to enhance the passenger's experience as well as satisfaction which can significantly help address the competing demands. NZIA can also introduce in-flight entertainment, seat configuration and menu's which also play a significant role in improving customer experience and retention with the company. NZIA operates in routes with key competitors which creates the need to perform a market survey prior to establishing new routes in order to enhance the returns on investments. The company can also focus on less competitive markets or routes in order to enhance the chances of achieving its objectives (Couto, Plansky Caglar, 2017). One of the key parts of achieving the strategic objective of the company involves the acquisition of a new fleet of 20 Boeing B787-8 or Boeing B787-9 which are critical and significantly used by competitors. Adding the fleet enhances NZIA ability to carry a large number of passengers and load as well as expand its network as well as enhancing the airline's product offering. NZIA improved fleet enhances the ability to compete on any new routes in terms of load and destination as well as the frequency of the travel in all the destinations. The intended additional aircraft empowers the airline to achieve its strategic objective as well as manage competition fr om new and existing players. Additionally, the idea that, the company is not relatively presenting the notion that its experienced in the market and have improved abilities to achieve its objectives in the expanded network and increase profitability (Papatheodorou, 2006). NZIA has key growth opportunities primarily by expanding its routes which enhances the chances of achieving its strategic objectives as well as managing competition. The increase in the fleet number and expansion of the product offering by the company enhances the chances of growth. Some of the future route opportunities that can help NZIA achieve its strategic objectives include Auckland-Hong kong (9142.68 km), Auckland-Singapore (8420 km), Auckland- Los Angeles (10,477 km), Auckland-Kuala Lumpur which would be achieved by a partnership with other regional airlines to help in achieving the objectives. Other key future route opportunities for the company includes Auckland- Beijing (10,386 km), Auckland- Delhi (12,843 km), Auckland Tokyo, and Auckland-Seoul. Achieving success in the future route opportunities is also dependent on a widespread partnership with airlines from different regions to enhance the ability of NZIA effectively reaching its desired destinations. Additionally, th e airline is expected to change its transit airport which is based in Auckland in order to enhance its capacity to serve passengers from different regions as well as reduce the operational costs while enhancing the returns on investments. Market Trends Products The current market trends and products demonstrate key aspects of differentiation while the trends involve the rise of technology in the industry. NZIA is expected to adopt the new trends in the industry in order to effectively meet passenger needs and satisfaction. One of the key issues that are critical to the success of the airlines involves the ability to achieve customer satisfaction which enhances the ability of the airlines to retain and attract more customers (Pycraft, 2000). In order to remain relevant, NZIA is expected to be flexible to the market trends such as the inclusion of online booking, demand in luxury services or provision of charter services. In regards to product, NZIA can improve its product offerings to enhance the passenger's experience and satisfaction in the airline. NZIA can focus on in-flight services for all passengers irrespective of their class of travel, providing regular offers and reward programs. The current market trend in the aviation industry in volves outsourcing services which promote the chances of airlines reducing their operational costs as well as enhancing their efficiency (Young, 2009). For example, NZIA can outsource services such as maintenance or flight booking which enhances the chances of the airline focusing on service provision to customers only thus improved chances of customer satisfaction. The consideration of current market trends and products promotes the ability of the airlines to achieve growth in existing and new markets due to the adoption of the market-focused business model. The aviation industry in Australia is also estimated to have grown by a significant percentage since 2005. The graph presents the growth in revenues demonstrating the market trend and opportunities for NZIA. In 2009 the revenues were around $9.7 Bn where $5.9 billion were from domestic flights while $3.8 billion resulted from export activities. By 2016, the industry trend demonstrated growth to $12Bn-$16 Bn. The graph demonstrates the demand and total earning which has improved over the years creating the need for NZIA to engage in full service carrier. The second figure demonstrates the growth in domestic travel which demonstrates key opportunities for NZIA in the market. References Abeyratne, R. I. R. 2014.Aviation and climate change: In search of a global market based measure. Cham: Springer Bruce, P. J. 2011.Understanding decision-making processes in airline operations control. Farnham, Surrey, England: Ashgate. Couto, V., Plansky, J., Caglar, D. 2017.Fit for growth: A guide to strategic cost cutting, restructuring, and renewal. Ireland, R. D., Hoskisson, R. E., Hitt, M. A. 2012.Understanding business strategy: Concepts plus. Mason, OH: South-Western Cengage Learning.p Mahadevan, B. 2009.Operations management: Theory and practice. New Delhi: Published by Dorling Kindersley (India), licensees of Pearson Education in South Asia. Odoni, A. 2015.The global airline industry. John Wiley Sons Inc. Papatheodorou, A. 2006.Corporate rivalry and market power: Competition issues in the tourism industry. London [u.a.: Tauris. Pycraft, M. 2000.Operations management. Cape Town: Pearson Education South Africa. Tsiakis, T. 2015.Trends and innovations in marketing information systems. Hershey, PA : Information Science Reference. Young, S. T. 2009.Essentials of operations management. Thousand Oaks: Sage Publications.