I started to be interested into Airline Companies – and the way they compete with each other – when I realized that most of the times to make a personal choice I was used to focus on a few key indicators only: flight price and flight schedule.
In fact there are some others “relevant” indicators that typically Airline Companies submit to customers in terms of Questionnaires: truth is that since these Key Performance Indicators are consistently used by most of the Companies, these finally benchmark with each other converging towards the same Market Arena.
When this phenomenon occurs, either a Company invests into Marketing and creates the so called “Marketing Obfuscation”, proposing packages apparently not comparable with each others, or moves towards the frontier of Operational Effectiveness trying to squeeze costs as much as possible.
The latter operation – when done from the very beginning – may lead towards a Market Segment called “low cost” (which most of the time is not even synonym of “low service”, once again showing that standard services are not strategically relevant).
The former operation allows instead some companies to survive for a longer period: when finally the Operational Costs vs. Revenue ratio no longer justifies the presence within the Market, only three are the most relevant alternative scenarios:
The latter two points, mixed together, were the recipe through which one year ago the former Alitalia Company was somehow re-branded and repositioned within the Airline Market. One year later, the relevant question is: did something really change in terms of Market Positioning?
When I made the simple exercise to access the web site and look for a flight, the perception I had – as a final Customer – was that nothing really happened: if I had not known from newspapers and media, I would have not be in the position to sense it.
Why is that? The key point is that the Company did not position itself in terms of Strategic Approach but just in terms of Operational Effectiveness, a move not particularly visible by the final Customer (apart, maybe, flight ticket prices which are now lower than before, since they do not have to cover a relevant debt exposure).
But was this the only way this NewCo could approach the Market starting from anew?
How a Theoretical Italian Airline Might Look Like
As said in one of the previous articles, it is always possible to work on a Theoretical Strategy, meaning a Strategy that should work fine as a model first and then proved through a specific – and as complex as necessary – Business Plan.
An interesting Theoretical Strategy for a Company focused on Italy would be just that of focusing on Italy. As a Country, Italy is known to be the place with the 60% of the World Art, as the “Bel Paese” where living well is a must, where cooking and eating are a pleasure, where Tourism is so various in terms of offering to fulfill any request.
Such a Country (that from the description I’m giving might sound to be a “Theoretical Country”, while it is not) joined together with an Airline Company whose mission and position would be that of bringing people in and help them enjoy their staying, might be an incredible barrier, allowing to create a new “Customer Questionnaire” tailored on a brand new Market Segment.
Just some quick hints:
In fact there are some others “relevant” indicators that typically Airline Companies submit to customers in terms of Questionnaires: truth is that since these Key Performance Indicators are consistently used by most of the Companies, these finally benchmark with each other converging towards the same Market Arena.
When this phenomenon occurs, either a Company invests into Marketing and creates the so called “Marketing Obfuscation”, proposing packages apparently not comparable with each others, or moves towards the frontier of Operational Effectiveness trying to squeeze costs as much as possible.
The latter operation – when done from the very beginning – may lead towards a Market Segment called “low cost” (which most of the time is not even synonym of “low service”, once again showing that standard services are not strategically relevant).
The former operation allows instead some companies to survive for a longer period: when finally the Operational Costs vs. Revenue ratio no longer justifies the presence within the Market, only three are the most relevant alternative scenarios:
- End of the Company
- Buyout of the most relevant assets (e.g. for an Airline Company the slots to fly and the presence on key airports)
- Merge with another Airline Company in good shape to absorb Operational Inefficiencies in the short term and invest into Operational Effectiveness in the long term
The latter two points, mixed together, were the recipe through which one year ago the former Alitalia Company was somehow re-branded and repositioned within the Airline Market. One year later, the relevant question is: did something really change in terms of Market Positioning?
When I made the simple exercise to access the web site and look for a flight, the perception I had – as a final Customer – was that nothing really happened: if I had not known from newspapers and media, I would have not be in the position to sense it.
Why is that? The key point is that the Company did not position itself in terms of Strategic Approach but just in terms of Operational Effectiveness, a move not particularly visible by the final Customer (apart, maybe, flight ticket prices which are now lower than before, since they do not have to cover a relevant debt exposure).
But was this the only way this NewCo could approach the Market starting from anew?
How a Theoretical Italian Airline Might Look Like
As said in one of the previous articles, it is always possible to work on a Theoretical Strategy, meaning a Strategy that should work fine as a model first and then proved through a specific – and as complex as necessary – Business Plan.
An interesting Theoretical Strategy for a Company focused on Italy would be just that of focusing on Italy. As a Country, Italy is known to be the place with the 60% of the World Art, as the “Bel Paese” where living well is a must, where cooking and eating are a pleasure, where Tourism is so various in terms of offering to fulfill any request.
Such a Country (that from the description I’m giving might sound to be a “Theoretical Country”, while it is not) joined together with an Airline Company whose mission and position would be that of bringing people in and help them enjoy their staying, might be an incredible barrier, allowing to create a new “Customer Questionnaire” tailored on a brand new Market Segment.
Just some quick hints:
- Strategic Alliance with Inland Transportation to bring the Customer in the most relevant places, creating a unique experience, with a great variety of choices
- Strategic Network to access the most relevant “events of the period” to make them accessible, reachable and appealing
- tailored – unique – way to map together the outcomes of such Strategic Alliances to allow a tourist to have a single – not repeatable – experience
- a way to show to foreigners how these unique experiences – in small scale – might happen also in their own Country, counting on a set of Business Processes and Skills which at this point would become unique into the Airline Market
