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Smiths strategic decision to compete nationally is a gamble that will either make or break
WestJet. Its a risk, and this isnt an industry that tolerates a lot of mistakes. To accommodate
its national expansion, WestJet ordered 20 new Boeing 737 jets to be delivered over eight years
and plans to lease 10 more. Also, WestJets competitor, Air Canada, started its own discount
carrier in summer 2000, serving WestJets stronghold, western Canada. Although industry
analysts say that unionized Air Canada will have a hard time matching nonunionized WestJets
cost structure, some feel that WestJet may be overextending itself and expanding faster than
demand for its services.
Questions
1. What competitive advantage(s) do you think WestJet has? What competitive advantages do
you think Air Canada has? Explain your choices.
2. What competitive strategy does WestJet appear to be following? Explain your choice.
3. How could Stephen Smith have used SWOT analysis in developing his strategy to go
national? Do an abbreviated SWOT analysis using information from the case.
4. What do you think of WestJets strategic decision to compete nationally? What suggestions
might you make to Stephen Smith?
Essential Readings/Reference:
J. Brooke, Taking Off? And for a Lot Less, New York Times, June 3, 2000, pp. B1+; and J.
Baglole, Canadas WestJet Battles Giant, Wall Street Journal, April 24, 2000, p. A26.