Iberia Airlines Essay

i. whom does it serve? In 1944, the civil Aviation Conference was held in Chacigo, where fifty two states siged an International Convention that established the basic principles for the functioning of the air market: each country could negotiate bilateral agreements with other countries in order to regulate the market conditions that would govern air traffic. Before the 1980’s, the planning system used was basically â€Å" point to point†, that is to say, direct flights from one city of origin to another of destination. Instead of planning simple routes, they planned routes from and to the hub airports that came from or were going to other cities. In 1959, ii. What value does it deliver? They used medium and low capacity aircraft on low density routes. Generally they only made domestic flights and rarely international ones. They competed with flag carriers and also with low cost carriers, which had caused a decline in their per passenger income. For that reason, some regional companies decided to go into partnership with flag carriers which results to also low cost carriers. iii. Why does it matter? It matters with the 1.9 billion passengers carried safely by the airline, because of the low cost but efficient carrier. The strategic master plan II 2000-2013, established customer service as one of its priority objectives which in fact result with the passenger’s satisfaction that would be converted to profit. iv. What is its ambition? Its ambition is to suffice the need of its passengers while giving low cost in a way that their service will be still in the international level and not only for domestic purposes with the intention to give a safe and worth it flights. 2. How does the firm create and capture value? i. What is its difference? Its difference is that it gives low cost flights which gives the customers the right satisfaction. They managed flights â€Å"point-to-point†, both scheduled and short haul. They used to regional airports that were cheaper and less crowded than the main airports. Nevertheless, some low-cost carriers such as easyJet and Vueling also used main airports. They had homogenous fleets that facilitated crew information and saved on maintenance costs. They offered one class only with high density seating and no in-flight service. They made sales directly by telephone and internet without issuing tickets. They offered unnumbered seats on the aircraft so as to speed-up the boarding process. They subcontracted many activities such as ground assistance or maintenance. They employees were not union members, and in many cases they contracted for several tasks. Iberia enabled Iberia to ramp up its security without having to take on additional staff. The automatic detections made by Vi-System have resulted in more effective surveillance, managed centrally from the security team’s headquarters, without the need for regular patrols around the large site. ii. How does it deliver its value proposition? Our research indicates that most companies, when asked to construct a customer value proposition, simply list all the benefits they believe that their offering might deliver to target customers. Therefore, the benefits of Iberia are as follows: 1. Non expensive flights 2. Safe flights What makes its strategy superior? Its strategy is superior because they know how to choose their trusted customers. Customers which aims for a low prices offered by the airlines, they made their schedules convenient and frequent, made a good edge by making good previous experience and definitely a direct flight. iii. How does it evolve? It has established partnerships with other flag carriers. Iberia became a partner of European regional airlines although still having independent capitals but it they achieved better service and obtained positive results 8. Describe the here and now condition of the firm as given by your case material PEST Political factors: -Government regulations regarding the safety of the people -Economic policies of government regarding the airline industry, these may include licenses, inspection by the duly authorities that is airline companies follow. Economic factors: – Interest rate would impact the cost of capital, the rate of interest being directly proportionate to the to the cost of capital – Economic trends act as an indicator of the sustenance and profitability of your business in the chosen region and help you in deciding your marketing strategy. – Rate of inflation determines the rate of remuneration of employees and directly affects the price of the restaurant’s products. Again, the proportion between the inflation rate and wages/prices is direct Social Factors: -Certain cultures, like 1st world countries would not choose to go to the Iberia airline just to save money, they would choose airlines which gives better customer satisfaction. Technological Factor: – The technology of the Iberia Airlines is very efficient because when the internet was used, the Iberia Airlines quickly took the idea of selling tickets in the internet. Porters 5 forces It is known for a fact the Iberia Airlines is not the first airlines, but it is said by porter that when there’s a new one, there will always be an old one. Its idea of selling tickets cheaper compared to other companies is a stepping stone. The advantage of this airline is that it has cheaper flights compared to other airlines but same service. Its technology is sufficient and ready for competition. In its early age, it is a fact that there were already 1.9 billion customers and a basis to have a reason of better achievement compared to other rivals. The Mckinsey 7S Strategy: to build partnerships among other airlines but still having independent capital to have independent profit Structure: Everyone reports to the CEO, Rafael Sanchez- Luzano Turmo who decides whether the proposals are to be accepted Systems: Iberia Airlines became more established in the world of air travel and began commercial connections six days a week between Madrid and Barcelona. Shared Values: Its goal is to dominate the airline industry Style: Its style is selling cheaper flights but efficient service. Staff: The Iberia airlines provides ground staffs and cabin crew with iPads to improve customer service Skills: Its main objective is to give services to customers who wants a point to point flights (domestic flights) but it is currently serving international flights SWOT: Strength- Low cost price but efficient service Weakness- Too many international airlines. The train industries are also being their rival companies in term of short term travels Opportunities- well known internationally by giving efficient service Threat- insufficient capital, companies that are well known giving services faster and easier in terms of international flights 9. Formulate the vision and mission statement As we move towards our goal of being a world-class airline, we will continue to give extra-ordinary services to attain customer needs. We intend to provide our customers with a efficient though low cost pricing flights and will surely give memorable experience in the flight. Mission statement Our mission is to run a profitable business by providing high-end international airline. To provide quality and efficient service to the customers, we will maintain the low-cost prices of our services. references: http://www.buzzle.com/articles/pest-analysis-example.html http://www.mindtools.com/pages/article/newTMC_05.htm http://hbr.org/2006/03/customer-value-propositions-in-business-markets/ar/1 http://www.mindtools.com/pages/article/newSTR_91.htm http://www.airlinetrends.com/2012/07/23/iberiacabin-crew-ipad/