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Entrepreneurship and Innovation


Postgraduate Engineering Programmes Module Assignment

Prepared by

Mr. Lionel Martis

Submission Date 2nd JUNE, 2008


Entrepreneurship and Innovation for Engineers

Module Leader: Mr. NIGEL DENTON

Lionel Martis

Entrepreneurship and Innovation

Introduction to Innovation and Entrepreneurship..........................................................3 Andy Denton..................................................................................................................4 Don Vincent...................................................................................................................5 Similarities and Differences...........................................................................................6 Introduction to Kingfisher Airlines................................................................................7 Vijay Mallya...................................................................................................................8 Audit of Kingfisher Airlines..........................................................................................9 SWOT analysis.............................................................................................................13 Industrial life cycle.......................................................................................................15 Competitor analysis......................................................................................................17 Porters 5 Forces...........................................................................................................19 Bowmans Clock..........................................................................................................21 Strategies adopted by Kingfisher Airlines...................................................................24 Challenges for Kingfisher Airlines..............................................................................26 Strategy suggested for Kingfisher Airlines..................................................................28 Ansoffs Matrix............................................................................................................30 Conclusion....................................................................................................................32 References....................................................................................................................33

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Entrepreneurship and Innovation

Introduction to Innovation and Entrepreneurship

Innovation gives the venture the competitive advantage that results in wealth creation. Innovation may be in the product or service itself, or in the business processes used to deliver it. Innovation can be developing and implementing ideas for restructuring the organization, cost cutting, better level of communication within the organization or for introduction of new technology. This approach could help the company progress in a successful manner. Ref: (www.quickmba.com/entre/definition) Entrepreneurship refers to an activity which leads to the creation and management of a new organization designed to pursue a unique innovative opportunity. According to an Austrian economist Joseph Schumpeter, wealth is created when innovation results in new demand and the function of the entrepreneur is to combine various input factors in an innovative manner to generate value to the customer with the hope that this value will exceed the cost of the input factors, thus generating superior returns that result in the creation of wealth. Ref: (www.quickmba.com/entre/definition)

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Andy Denton
Andy Denton left school at the age of 15 and joined college. At college he opted for a three year course in engineering motor vehicle but this didnt benefit him much, the only knowledge he acquired about vehicles was during his schooling period. Andy has worked in successful large firms such as Aston Martin, Ford and Vauxhall, but he quit from the following firms within a short period due some tiffs with the managements. Denton then started operating from home itself, his business dealt with the recovery and stolen cars. Andy now intends to enter into tuning motor sport vehicles.

Characteristics of Andy Denton:

Grasp opportunities: Andy is always been very keen to grab more and more opportunities available to him be it when he was working in large firms or when he started operating form home. Sense of independence: Andy never liked been bossed or pressurized from his managers, he always preferred to have a sense of independence and freedom so that he could utilize his potentials to the maximum. Need for achievement: Andy always dreamt of entering into the world of tuning motor sport engines and finally after a long ride in his career he is planning to open a new unit which deals with the tuning of motor sport engines. Risk taker: Andy had been left jobless once he quit from all the large firms, but he never lost hope and took the risk of starting his own small business which shows that he had the ability to take risks. Ability to cooperate: Andy always preferred to work in teams despite the tiffs with his manager at Vauxhall, I like to work as a team states Andy.

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Don Vincent
Don Vincent is 51 in age. He quit schooling and directly went to work. Initially he started his career as a clerical accountant and moved to London. He then worked as a financial accountant. Later Don ran a franchise of Ford, the business seemed to be going very good initially but suffered later on when the parent company reached into a declining stage. Don had become financially very weak at that instant his wife came to his rescue and they started a water cooler company known as the Fresher water coolers by borrowing money from the bank. This firm started with some initial minor difficulties but flourished within no time.

Characteristics of Don Vincent:

Grasp opportunities: Don has been very adaptive towards any opportunities that come across his way be it owning a franchise of Ford or starting a new water cooler company. Risk taker: Even when Don was in heavy financial crises he started a new business with the help of his wife which turned out to be worth the risk. Self confidence: Don was unaware about the water cooler business but still he stepped into it with a self confidence of achieving success in the business. Need for achievement: Don always wanted to own his own business though he was financially broke after owning a franchise of Ford; he didnt step back but else borrowed money from the bank and started a new business along with his wife. Business skills: His role as a financial accountant helped Don develop an analyst skill which proved to be a key factor that drove him to become an entrepreneur.

Similarity and Difference

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In terms of individual potential and achievements Don and Andy both are of equivalent caliber. But in terms of attitude towards their employees both of them marginally differ. Andy would prefer requesting his employees to carry out a job; on the other hand Don contradicted this approach. In my view both are right on their own part, the approach of requesting employees would motivate the employees and on the other hand in an comparatively bigger organization like Fresh water following this approach wouldnt be feasible because of the larger organizational structure.

Introduction to Kingfisher Airlines

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Kingfisher Airlines is a wholly owned subsidiary of United Breweries Holdings Limited (the second largest brewery group in the world), the UB Group's investments holding company. Kingfisher Airlines has been allocated the IATA airline code of 'IT'. The UB Group is one of India's largest conglomerates with a turnover of US $2 billion and is the largest Indian manufacturer of beverage alcohol-beer and liquor. With the foray of UB Groups birds into the Indian aviation industry, Kingfisher Airlines has become a force to reckon with. The Airline already has a number of firsts to its credit. Kingfisher Airlines Limited is an airline company based in Bangalore, India. This airline was introduced in the market to target the domestic luxury segment. Kingfisher Airlines was introduced into the Indian airline market by the Indian Business Tycoon Dr Vijay Mallya (the owner of United Breweries Limited). It was introduced on 9th May, 2005. It operates in 37 destinations with 218 flights a day. It has a fleet size of 71 and also the first Indian domestic airlines to introduce the Airbus A380. Kingfisher is one of only six airlines in the world to have a five-star rating from Skytrax, along with Asiana Airlines, Malaysia Airlines, Qatar Airways, Singapore Airlines and Cathay Pacific Airways. Kingfisher airlines have been awarded The best new airline of the year 2005. Presently kingfisher airlines has acquired Air Deccan (one of the major profitable domestic low cost airline) hence penetrating into the lower segment of the market too. Ref: (www.thehindubusinessline.com/2007/06/01/stories/2007060106400100.htm)

Vijay Mallya
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Vijay Mallya is 51 years old was born in India. Vijay Mallya has amassed an enormous fortune from inherited and growing. With an estimated current net worth of around $1.5 billion, he is ranked by Forbes (2007) as the 692th-richest person in world. UB group chairman Vijay Mallya, a trained pilot himself and an avid aviation enthusiast, has delivered an ultimate product to the Indian aviation industry which is called as Kingfisher Airlines, names after the popular liquor brand of the UB group (Taking a very different approach again). Ref: (www.how-to-make-more-money.com/Vijay-Mallya_biography.html)

Characteristics of Vijay Mallya

Grasp opportunities: Since the Indian aviation industry is a growing market, Vijay Mallya positively noticed the opportunities of expansion in this industry hence launched Kingfisher Airlines. Risk taker: Vijay Mallya did know the strong competition he would have to face from the old player Jet Airways which could shatter his dreams but he never went on a back foot, instead he took the risk of launching Kingfisher Airlines with a focused aim of conquering the industry. Need for achievement: Vijay Mallya is very much known for his different approaches in any industry which helps him outplay the others. To capture every possible industry has been his goal from the start of his business career. Sense of independence: Vijay Mallya likes to be his own boss rather than working in someones shoes. The freedom to play and create a market of his own makes him a successful Tycoon. Ability to accept change: Though Vijay Mallya makes his own stand in the market but all his groups have be very much adaptive to the changes in both the external and internal environment. Ref: (www.gaebler.com/entrepreneur-characteristics.htm)

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Audit of Kingfisher Airlines

This audit deals with the present situation in various areas of the organisation.

1. Strategic Planning

Target Market: The Company has targeted a niche market for its operations. The company operates in the luxury segment of the Indian aviation industry and leads the competition with its world class services at competitive prices

Master strategy to stay ahead of the competition: The Company has adopted aggressive strategy of customer acquisition through world class services which have increased their market share and made them a preferred choice within the customer base.

Transparency within the organisation: The employees are aware of the companys policies and the top management encourages the employees to develop their skills to help them become the best in the industry

Potential opportunities for business development: The Company has overtaken its competitors in order to extend their services in the low cost segment along with the existing premium class and this has provided them with an opportunity to develop and extend their operations more profoundly.

2. Organisational Structure

Relationship between individuals and functions: There are specific people for specific jobs in the company and the company has hired some of the most experienced people in the industry to help them move towards their goal of becoming a leading player in the Indian aviation industry

Job description: There are clearly defined roles in the top and the middle management and these are complimented by the ground level employees in

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the company. The company has a sound organizational structure which is backed up by a strong parent company.

3. Human Resource Management

Recruitment: Recruiting quality people is a major plus point of the company. They hire the best people in the industry and pay them handsomely so that they contribute to the companys goals and ambitions to the best of their capabilities. The crew members of Kingfisher are paid more than their counterparts in any other airline company in India.

Training: The Company provides its employees with suitable training and development opportunities to help them grow and develop their skills which are unmatched in the industry. This aspect of their training has helped their employees in creating a sound impression on their customers and they have become a highly admired airline company in India.

Performance appraisal: The employees are paid good salaries and performance based incentives to motivate them even more.

4. Marketing & Sales Promotion

Market Segment: The Company operates in the premium segment of the Indian domestic segment offering world class flying experience to its customers. The company is entering into the low cost sector along with the existing premium segment.

Mode of Marketing & Sales: The Company does extensive marketing through celebrities, sponsorship of sports events etc. The sales are mainly done through offices and websites and through SMS booking.

Market Research: The Company has done an extensive market research before entering into the aviation industry and they have specifically targeted a niche market wherein they are concentrating on the premium segment. They are also entering into the low cost segment through acquisition of smaller competitors.

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5. Pricing of Products

Pricing Strategy: The Company offers world class services at the most competitive prices. Their services are rated as the best in the Indian aviation industry and their pricing strategy aims at acquiring customers from their competitors by providing state of the art services at very competitive prices.

Break-Even Analysis: The company carefully analyzes its load factors in order to optimize their investments in the operations and to break even because they are operating in a very dynamic industry and it is very crucial for them to have a measure their costs so that they can optimize the profitability of their operations.

6. Location

Accessibility to Market: They have a good accessibility to their target market through modern fleet of aircraft and the best trained staff in the industry. They are backed up by a strong parent company so they can afford to spend considerable sums of money to establish themselves as a major player in the Indian domestic airline industry.

Availability of customers: They have earned their customers trust with their services over time and have willing customers ready to use their services again and again and this has given them an edge over their competitors.

7. Planning for Growth

Advance Planning: They are entering into the low cost sector along with their existing operations in the premium segment and this offers excellent chances for future growth as they will have a monopoly in the industry through a well targeted product mix wherein they will have a major share of both segments.

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Recurring Crises: Despite their best efforts to become the best airline in the industry, they have not been able to make considerable profits ever since their introduction in the industry. They are lagging behind the nearest rival but they are still trying their best to cope up and become a market leader.

Ref: (www.prenhall.com/scarbzim/html/smallbus.html)

SWOT Analysis

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A scan of the internal and external environment is an important part of the strategic planning process. Environmental factors internal to the firm usually can be classified as strengths (S) or weaknesses (W), and those external to the firm can be classified as opportunities (O) or threats (T). Such an analysis of the strategic environment is referred to as a SWOT analysis. The SWOT analysis provides information that is helpful in matching the firms resources and capability. Source: (http://www.quickmba.com/strategy/swot)

SWOT analysis for Kingfisher Airlines


Kingfisher Airlines have targeted the Indian domestic luxury segment, therefore operating in a niche market.

Kingfisher Airlines has a strong financial support from the parent company UB Group and Kingfisher itself is a well established brand.

The customer service provided on Kingfisher is extremely exceptional for a domestic airline, hence providing an ultimate flying experience.

Kingfisher Airlines is well known for its highly trained and attractive staff.


The company has a immature organisational structure and lacks mature management practices.

The company is unable to generate expected returns on the investments done. Loads are lesser than that of its competitor Jet Airways which is a reflection of its marketing and sales capabilities.

The main weakness of the company is the overspending of funds.

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The Indian aviation industry is a growing industry with a growth rate of nearly 24%.

There are a large number of domestic untapped routes. There has being a growth in the disposable income of the people especially in the middle class, therefore more people can afford to fly by a luxury airline.

The air cargo market is still untapped.


Fierce competition from other airlines such as Jet Airways Cost cutting is become a prime need in the aviation industry, hence pressurising a lot of airline companies

Infrastructure constraints The major rises in fuel prices

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Industrial life cycle

Indian aviation industry growth rate=24% Kingfisher airlines growth rate=37%

Fig 1: Distribution of players in the Indian Aviation Industry

India is the 3rd fastest growing domestic aviation market in the world with a growth rate of about 24%.Indian Subcontinent is the third largest market for new aircraft in Asia, behind China (1790) & Japan (640). More and more middle class families now prefer air travel to traditional rail travel this because of the growing income which is over Rs 90,000 per annum for a normal employees. People are also having an

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increasing disposable income. The Indian aviation has swiftly expanded after its liberation with the ending of government protection for Indian Airlines, the adoption

of an open skies agreement with the United States and the loosening of a previously tightly restrictive quota pact with Britain, hence making the Indian market very exciting to carry out business. These are the some of the possible factors that drove the Indian flamboyant business tycoon Vijay Mallya to eye this particular market. Since the introduction of Kingfisher Airlines it has maintained a rapid growth rate of about 37% which is really extremely remarkable. Ref: (www.coolavenues.com/know/gm/manasi_6.php3)

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Competitors analysis
Attributes Kingfisher Airlines Price 25% higher than Jet Airways and Indian Permission to fly to US Permission to fly to UK IPO EMI scheme Targeted Customers Positioning Floated It doesnt Both ends of customers Premium segment Floated It doesnt Both ends of customers Two-class, fullservice airline that will further leverage its domestic and international reach Not yet It has Lower end of customers Low fares Not yet It doesnt Lower end of customers Lowest fares and no frills It hasnt It has NA NA It has It has NA NA Lower than Kingfisher Airlines Lower than Jet Airways Extremely low Jet Airways Indian Spice Jet

Kingfishers only strong obstacle proves to be Jet Airways, since Jet has control on both ends of the market and secondly it has penetrated into the international market as well. Benchmarking against Jet Airways, Kingfisher Airlines has acquired Air Deccan

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which was one of the most profitable low cost airlines, hence kingfisher too has entered in the lower end of the market but bearing in mind that they havent changed the name Deccan to Kingfisher Airlines so that the brand doesnt lower. Kingfisher is still testing the lower end of the market with Deccan. Kingfisher is also going to start non-stop flights to US so as to foray into the international market.

New players into the market

Name Magic Air Go Indus Inter Air One Crystal Air Paramount Air Visa East Air West Airlines Type No frills airlines Low Value carrier Low Cost Regional Regional Regional Low Value Cost carrier

Airlines Airways Globe

domestic Cost

Ref: (www.coolavenues.com/know/gm/manasi_8.php3)

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Porters 5 Forces for Kingfisher Airlines

Fig 2: Porters 5 Forces for Kingfisher Airlines Threats from competitors: The level of threat from the domestic competitors is very high. Competitors like Jet Airways, Indian are some of the old well established players in the market which prove to be strong competitors for the emerging Kingfisher Airlines Threats from new entrants: The level of threat from new entrants is quite low such as Virgin Atlantic, Qantas. The major players in the Indian aviation industry form an obstacle to foreign airlines and moreover Indian flyers prefer to have an Indian experience on the flight. Threats of substitutes: The introduction of high speed trains, high tech buses and other means of transport has given more options to people to travel.

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Bargaining power of suppliers: The bargaining power of suppliers is medium. For example, Airbus and Boeing are the major aircraft manufacturers and there arent many aircraft manufacturers other than these two, this confines Kingfishers options therefore the bargaining power of Airbus or Boeing increases. In case of other suppliers such as caters the bargaining power of the suppliers is low therefore Kingfisher has many other options of caters to contract to. Bargaining power of customers: The bargaining power of the customers is low since kingfisher is designed to meet the total comfort and value for money; therefore customers arent reluctant to pay a little more sum to gain this experience.

Position of Kingfisher Airlines

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The position of Kingfisher Airlines in the market can be determined using the Bowmans Clock.

Bowmans clock:
The 'Strategy Clock' is based upon the work of Cliff Bowman (see C. Bowman and D. Faulkner 'Competitve and Corporate Strategy - Irwin - 1996). It's another suitable way to analyze a company's competitive position in comparison to the offerings of competitors. As with Porter's Generic Strategies, Bowman considers competitive advantage in relation to cost advantage or differentiation advantage. Ref: (www.marketingteacher.com/Lessons/lesson_bowman.htm)

Fig 3: Bowmans Clock

1 - Low price/low added value - Likely to be segment specific 2 - Low price - Risk of price war and low margins/need to be a 'cost leader'. 3 Hybrid - Low cost base and reinvestment in low price and differentiation

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4 - Differentiation Without a price premium - Perceived added value by user, yielding market share benefits With a price premium -Perceived added value sufficient to bear price premium 5 - Focused differentiation - Perceived added value to a 'particular segment' warranting a premium price 6 - Increased price/standard - Higher margins if competitors do not value follow/risk of losing market share. 7 - Increased price/low values - Only feasible in a monopoly situation 8 - Low value/standard price - Loss of market share Ref: (www.marketingteacher.com/Lessons/lesson_bowman.htm)

Focused Differentiation (Kingfisher Airlines)

Kingfisher Airlines operates in a niche market which is the luxury segment of the market therefore on the bowmans clock it lies on the focused differentiation. The prices of the air tickets for Kingfisher Airlines is comparatively higher than other airlines but the benefits and services rendered by them is exceptionally excellent.

Brand loyalty: Vijay Mallya himself is a brand in the first place and the brand kingfisher has also established a remarkable standing in the market place. Even before the introduction of Kingfisher Airlines into the aviation industry the company always thought the brand image of Kingfisher must always outstand in any industry. Therefore focus on quality service, entertainment and better technology made Kingfisher Airlines to be known as a unique airline. Kingfisher airlines address all its customers as guests rather than passengers which bring a sense of importance in the flyers mind.

Insulation from competitors: Kingfisher Airlines is the only domestic airline that has the technology and standards as that of an international flight. Since the UB group stands as a strong financial support for Kingfisher behind it, hence

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these milestones are been able to be crossed. These factors prove out be a competitive edge for Kingfisher over other competitors.

Excellent marketing skills: Vijay Mallya has always used celebrities as his medium to deliver his products to the customer. Popular celebrities like Katrina Kaif, Shah Rukh Khan have always been in his good books. He even endorses his products through sports like F1, golf, cricket so as to popularize his brand which has turned out to be successful strategy. Promotions are also done through events, parties and swimsuit calendars that have been the key strategy to concentrate the youth.

Additional services: SMS ticketing and Web check in has been organised by this airlines for the ease of their customers. Kingfisher is the only domestic airline that has the home ticket delivery service as their additional service.

Highly skilled employees: The recruitment process is personally carried out by the CEO of the company Dr Vijay Mallya to ensure the best possible staffs serve his guests. The company offers an attractive package of Rs 75,000 and additional benefits which is a rare scenario in a domestic airline firm. The employees have to undergo systematic training programmes in order to successfully fly on Mallyas birds.

Innovative: The Company has always had the flair for new technology; the future introduction of Airbus A380s would give them a clean advantage in the market. All the aircrafts of Kingfisher are equipped with the CAT-III B technology that is very useful for pilots in case of low visibility therefore avoiding cases of delay or mishaps during bad weather.

Ref: (www.flykingfisher.com)

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Strategies adopted by Kingfisher Airlines

Kingfisher Airlines is not a run-of-the mill Indian airline but else a value-added, designer some-friller flight.

Kingfisher Airlines emphasizes on spunky, well-done interiors and trained airhostesses.

Each A-320 carries 180 passengers. Borrowing from the Kingfisher beer tagline of The King of Good Times the theme of Fly the Good Times is given to Kingfisher Airlines.

Kingfisher has captured the Indian airline market with the twin engines of special flying experience and value for money. (Contests like Kingfisher flying face of the month are on cards).

The Kingfisher airhostesses are selected through a nationwide contest. The Kingfisher Funliners has in-flight silent auctions for lifestyle products and sales of packaged food and beverages.

The Kingfisher brand of exuberant, youthful and fast-paced image is leveraged (the brand recall).

Brand endorsement, Kingfisher Airline has roped in model Katrina Kaif to endorse the airline.

Acquiring Air Deccan has helped Kingfisher to eye the deeper end of the market too.

In another strategic move, the airline entered into a breakthrough agreement with Indian Airlines, making it the first public-private partnership in the sector. This partnership under which Indian Airlines will provide all ground handling services at its exclusive terminals in Mumbai and Delhi will allow Kingfisher Airlines to efficiently manage investments and overhead costs. The partnership encompasses a host of areas like mutual assistance on account of cockpit commonality and over a period of time will expand to cover

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engineering and schedule coordination. It ensures that Indian Airlines makes incremental returns on its existing infrastructure. Kingfisher has adopted an extremely simple pricing structure so that irrespective of the fare that a customer buys at, the rules, regulation and cancellation policy remain the same.

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Challenges for Kingfisher Airlines

The fluctuating aviation turbine fuel (ATF) prices are always a concern for low cost airlines, according to analysts. Many doubt how long these no-frills airlines can survive in the market. In Europe, low cost airline boom was followed by a bust, which only a few competitors survived. Since low cost airliners depend on maximum utilization due to lack of stand-by aircraft, any technical snag would adversely affect on the travellers as only a refund is made and no alternative travel arrangements are done

Experts say that airlines compete primarily on three fortes such as price, customer service and value-added services. While no-fillers fight the price war, service is the main thing provided by their larger peers.

The critical factor will be the ability to keep costs low and the offer of an on time service at an affordable price, despite the infrastructure constraints, for survival.

The next issue to tackle is to properly position itself in the aviation market. The Indian customers are not that much mature as compared to their American contemporaries. They will not pay more for just mere entertainment or watching TV in a flight of one or a half hour journey.

Poor airport infrastructure such as few landing slots, Inefficient Air traffic controllers, not yet automated systems prone to human delays and errors, shortage of skilled personnel.

The revenue per seat is low. It cannot rely solely upon the direct selling model for sell of the tickets as the Internet and credit card penetration is not that remarkable.

The dishonesty of travel agent who usually do not push their seats as that of the rivals.

A certain amount of churn and turmoil for players who dont have the deep pockets. For example, as happened in USA, many smaller airlines without deep

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pockets fell by the wayside unable to sustain the predatory pricing techniques adopted by their strong opponents.

The outdated Aviation rules in India which compels the airlines to add more to their operating cost, which could have been easily, do away with.

Taxes like passenger service fee which is Rs. 221 on one seat looks ridiculous for a ticket worth Rs. 99.

Overhauling costs is another major hurdle. Current number of pilots in India is over 1,500. According to aviation ministry sources, the money that is coming to the sector is from dubious origin in several cases & is from investor seeking quick returns. So it may be possible that some of the players may not even be in the game for long. They may sellout after listing on the stock market or get bought out, once the market starts consolidating.

Ref: (www.ficci.com/media-room/speeches-presentations/2007/feb/air-con/session3)

Strategy suggested for Kingfisher Airlines

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Collaboration with competitors: The company can get into collaborations with its competitors to improve their operations and cut costs because costs are a major issue in any industry especially in airline industry which is such a dynamic industry that challenges of cutting the costs are of utmost importance to any company in order to improve their operational efficiency and increase their profits.

Reconsider the pricing strategy: The Company should rethink its pricing strategy because they are offering premium services at prices which are unmatched to the experience that the customers get. The company is offering too much in terms of value to the customers and this is seriously affecting their profit margins. Therefore, aligning their services with the industrial standards and benchmarking with competitors could help them improve their return on investment and add value to their stakeholders money.

Expansion of coverage: The company can exploit the untapped routes in the domestic sector especially in the urban towns and cities where the disposable income of the people is rising and the company can take advantage of this because people prefer to travel by air because they can afford it.

Developing the cargo operations: The cargo sector in the domestic industry is very much unexploited and the company can exploit this because they have access to some of the most profitable routes in the industrial towns and cities in India. The company has got a sound infrastructure to support its cargo operations and they should take advantage of this before their competitors.

Improving load factors: The company can improve their load factors by employing more fuel efficient fleet because this will help them to cut down their fuel costs compared to the passenger count and this will improve their load factors.

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Flamboyant Image of CEO: The company should not be using the flamboyant image of the CEO to promote their company as this could prove to be fatal for the company in case his corporate image is tarnished as a result of any mis-happening. The company should be aware of any such scenario and should carefully plan their promotions which are centred on the CEOs corporate image.

Acquiring hangers: The company should acquire hangers at the major airports in order to increase their revenues while cutting down the costs. For Example, if they have their own hangers then they will not pay the parking charges to the competitors and at the same time if they have their own hangers then they can charge their competitors for using their hangers which will increase their revenues.

Improving management styles: The Company totally focuses on its marketing strategy rather than evenly focusing on its finance throughput. If an absorption costing analysis of the company done it will enormous number of assets which would be non liquid cash but in terms of variable costing Kingfisher Airlines faces a loss of Rs 577 crore.

Ref: (economictimes.indiatimes.com/.../articleshow/2602464.cms)

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Ansoff Marketing Mix Model

To portray alternative corporate growth strategies, Igor Ansoff presented a matrix that focused on the firms present and potential products and markets (customers). By considering ways to grow via existing products and new products, and in existing markets and new markets, there are four possible product-market combinations. Ansoffs matrix is shown below:

Ansoffs matrix provides four different strategies:

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Market penetration: the firm seeks to achieve growth with existing products in their current market segments, aiming to increase its market share.

Market development: the firm seeks growth by targeting its existing products to new market segments.

Product development: The firms develops new products targeted to its existing market segments.

Diversification: the firm grows by diversifying into new businesses by developing new products for new markets.

Ref: (www.quickmba.com/strategy/ansoff/)

Ansoff for Kingfisher Airlines

Market penetration

Encouraging existing Customer to buy more Showing benefits for using more associating freebies/extra service/membership with primary offering.

Try to look for foreign entrants weakness such as Virgin Atlantic which lacks in Indian values & tastes.

Product development

Seek additional distribution channels such as more tie ups & collaboration, try seeking collaboration with international carriers, bilateral discussions over seats and code-sharing between the carriers.

New product development.

Market development

Try to find out new customer group such as Old-retired persons. Special offering for first time fliers


May go for other services like international flights (concentric diversification).

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May go for arrangement fashion shows (horizontal diversification).

The ROI (return on interest) for Kingfisher Airlines turns out to be low since the capital investments done by them are very high and profits incurred are low. ROI = Profit / Capital Employed The strategy proposed for Kingfisher Airlines in this assignment would help Kingfisher Airlines to recover from their losses by a substantial amount but the strategy of Vijay Mallya is to conquer the Indian Aviation market by any cost. Vijay Mallya has been providing exceptional standards of flying experience for the domestic customer base in order to attract more and more costumers. He has acquired Air Deccan which has been a profitable low cost airline therefore now penetrating towards the lower end of the market too and now he is intending to buy out another competitor Spicejet. This shows that the main motive of Vijay Mallya is to first conquer the Indian aviation industry at any cost and then dictate over it. Another strategy of Vijay Mallya is that he uses Kingfisher Airlines to popularize his beer Kingfisher throughout the world which has proven to be successful with additional sales of 459%, hence increasing its profits to a huge margin. The losses attained through Kingfisher Airlines are easily compensated through the sales of Kingfisher Beer. But the drawback of this company is that it promotes its brand using the CEOs flamboyant image rather than promoting the brand Kingfisher individually. In

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case the CEO vanishes, the brand Kingfisher will blur out from the market because they have always used Vijay Mallya as their medium to market Kingfisher. In case this style of marketing continues Kingfisher which is known for its Good Times might one day have its Bad times. Therefore I would conclude saying that there is a lot of water to draw from the Indian wells and I personally feel that Kingfisher Airlines has the potential to do so.



http://avindia.blogspot.com/2006_12_24_archive.html www.moneycontrol.com/india/news/press--news/kingfisher-airlines -paymate-to-launch-flybuysms/307281

timesofindia.indiatimes.com/articleshow/2007722.cms timesofindia.indiatimes.com/articleshow/1955887513.cms

http://www.coolavenues.com/know/gm/manasi_1.php3 http://www.slideshare.net http://www.wekipedia.com http://www.google.com


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Lionel Martis


Entrepreneurship and Innovation

www.prenhall.com/scarbzim/html/smallbus. http://www.quickmba.com/strategy/swot www.coolavenues.com/know/gm/manasi_6.php3 www.coolavenues.com/know/gm/manasi_8.php3 www.marketingteacher.com/Lessons/lesson_bowman.htm www.ficci.com/media-room/speeches-presentations/2007/feb/air-con/session3 economictimes.indiatimes.com/.../articleshow/2602464.cms Entrepreneurship and Innovation, Module Notes by Nigel Denton Strategic Management, Module Notes by Suresh George

Lionel Martis