5910_ASS 6 # REwork
DrAwesome
CapstonePresentation1.pptxCapstone Presentation Frontier Airlines
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Introduction
The frontier airlines company is an American organization that operates within the transport industry. It is based in Denver, Colorado.
The company is among the best, currently ranked as the 8th largest airlines in America. It operates in more than 100 destinations in the US.
However, the company has been facing a lot of competition over the past few years, due to new entrants into the market as barriers to the market are being eased and more investors are finding air transport to be a profitable industry.
The presentation is an analysis of Frontier Airlines and its strengths, market weakness and recommending actions to improve its strategy.
Frontier airlines was founded in february1994 and commenced operations July.
With over 100 destinations, the company employs more than 3000 staff members .
In 2020, a number of lawsuits have been filed against the company due to its refusal to refund airfare to customers who could not travel amidst the COVID -19 pandemic.
Its refusal to refund airfare and the negative publicity that has been generated as a result may feature negatively in future in its attempt to be competitive with other players in the airline industry.
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Competition in the airline industry
As technology evolves, transport by air is being rendered safer everyday and as such, more people are preferring travel by air for its speed convenience and safety as compared to other transport means (Kuhn et al. 2017)
Though transport through air plays a huge role in the global economy, it is an industry that is heavily regulated both at the domestic and the international level.
Trends in analyzing competition in this industry are:
Hybrid business models.
Airline mergers.
Financial distresses.
Deregulation and liberalization
Copetition in this industry is influence by the existing market structure explained below.
An airport attendant cleaning the inside of a plane.
Technology evolves daily and as a result, travel through air is being made easier and more accessible and safer than travel through land or sea.
Though flying was deregulated in 1974, it is still an industry that is regulated and governed by laws set by the government.
There are still antitrust laws put in place by the government that are implemented with the aim of preserving the benefit of competition that deregulation produced in the industry.
As a result of a larger preference for flying as a mode of transport, more people are investing in the industry resulting in increased competition.
Firms in this industry thus have to me up with techniques to stay ahead of the competition just as Frontier Airlines have adopted staying ahead in terms of technology.
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Market structures
There are four main market structures, all of which are determined by the variations in the cost of flights. They are described as follows:
Monopoly, where the seller is single.
Oligopoly, where few establishments regulate the market..
Perfect competition, where all sellers and customers have complete and symmetric data, no operation costs, with many manufacturers and customers who compete among themselves(Balliauw et al., 2018).
An imperfect competition where there are many producers, but they sell heterogeneous commodities (Balliauw et al., 2018).
The airline industry is considered to be an oligopoly because only a few numbers of firms set the pace an control the entire industry. Also, the barriers to entry into this market are significant enough to discourage competitors from venturing into this field.
Market structures differ and they are mainly determined by the sort of competition that is found in a given industry. The four main types of structures are monopoly, oligopoly, perfect competition and imperfect competition.
The airline industry definitely fits the bill to be an oligopoly because it is a market structure that have only a few number of firms controlling the entire industry and the barriers to entry often discourage new entries into the market.
The easing of barriers to this industry by the government may however rend it into a perfect competition market as more firms invest in the air industry thus changing the market structure (Kuhn et al. 2017).
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Use of technology to attain competitive advantage
Technology provides a competitive advantage for the flight industry due t:
Flight planning..
Digital operations.
Customer service.
Environmental conservation.
Firms that have embraced the use of technology have a competitive advantage when it comes to attracting customers to travel with them, the services they render and can assure their clients of higher levels of safety (Levine, 2016).
However, even with the apparent competitive advantage, an internal and external analysis of Frontier airlines can mark out its strengths and weaknesses as analyzed below.
The world is more an more depending on technology to ensure safety in the travel industry. Firms that are embracing the use of competiton thus are gaining a competitive advantage when compared to firms that opt to not use technology.
The once cumbersome activities of wasting time so as to book plane tickets have been reduced by technology and replaced with the swifter and more accurate online bookings.
Technology also has had a significant impact on reducing plane emission to reduce environmental pollution, repair and maintaining aircrafts and the general comfort of passengers when travelling.
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SWOT Analysis
The SWOT analysis is an analysis of the company’s strengths, weaknesses, opportunities and the threats that may face the company.
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VRIO Analysis
VRIO analysis pulls into focus the value of a firm, the rare points, what can be imitated and the nature of its organization.
By considering the VRIO analysis, the company can identify its internal strengths and weakness and by so doing, come up with ways to improve them.
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PEST Analysis
The PEST analysis states the external factors that affect the company’s performance. For these factors, the company has no ability to change them and can only adapt its strategies to fit them.
A factor such as how the clients behave cannot be change by Frontier Airlines but they can better train their staff to deal with clients.
By understanding the external factors affecting a company, the firm can come up with better ways to change its structure and to create a better impression on the clientele.
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Overcoming Barriers to Competition
Barriers to competition in the industry can be overcome through
Aggressive innovation.
Provision of training and development programs for employees.
Revising the prices.
Introduction of low capacity aircraft.
Provision of high-quality customer service.
Guaranteeing air safety.
Aggressive marketing (Levine, 2016).
Competition barriers once overcome then raises the question of ethical consideration and leadership by the company as factors influencing success.
Competition is a challenge in all industries but, to get a share of the market, every firm must have means in place by which it can trump it.
The tactics chosen by a company must be such that they give it a competitive advantage over its competitors.
The tactics recommended to Frontier in this case are: 1. aggressive innovation, 2. staff training 3. reduce flight prices 4. higher quality services, 5. increased flight destinations and . Aggressive marketing.
Adopting these techiques will make it one of the most competitive firms.
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Ethical considerations
Among the most important virtues within the airline industry are:
Honesty
Fairness
Confidentiality
Privacy
They are also encouraged to keep client information confidential.
Ethics are a key concern when training the staff working with Frontier Airlines as they are the image of the company.
Frontier Airlines works to ensure that all customers will have a great experience and enjoy their flights (Levine, 2016).
Ethics form the backbone of treatment in any institution. As Kant puts it, one should treat others just as he would expect to be treated.
Honesty, fairness, confidentiality and maintaining the privacy of clients are all factors that should be considered when dealing with clients.
An ethical company will maintain clients because its treatment of clients will be impartial and equal for all people.
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Leadership and collaboration
Leadership is a fundamental factor influencing success. Such those in leadership positions must possess some characteristics. These include;
Leaders must think big.
Leaders must have a vision.
Leaders must motivate collaboration and teamwork.
Leaders should promote the creation of relationships.
The company’s vision is clearly outlined and known to all staff members to ensure they understand the goal they are working towards.
The stellar performance of a company is heavily dependent upon the type of leadership that is displayed.
Leaders must have characteristics such that they motivate the staff to work towards the success of the company.
A company must also have a broadly accepted vision to ensure that the staff know what they are working towards, what the achievement will be.
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Recommendations
The company should be more innovative to upgrade its services globally. (Park & Seo, 2019).
Training and development programs should be adopted.
Promote collaboration and teamwork to consolidate ideas from employees.
Built better relations between leadrs and employees. (Cote, 2017).
The company can adopt a variety of strategies to ensure that its performance now and in the future is better. Embracing the recommendations will also make it more competitive and the returns from its business will be more.
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Conclusion.
Frontier airlines can be considered an upcoming firm in the airline industry.
To become competitive however, it has to take into consideration the factors recommended.
If the company were to boost its image to America, it could end up being one of the greatest airlines in the world.
References
Balliauw, M., Meersman,aH., Onghena, E., & Van de Voorde, E. (2018). U.S. all-cargo carriers' costs structure and efficiency: A stochastic frontier analysis. Transportation Research Part A: Policy and Practice, 112,229-45. Retrieved from https://www.sciencedirect.com/sciece/article/abs/piii/S096588564188300168
Cote, R. (2017). Vision of effective leadership. Journal of Leadership, Accountability, and Ethics, 14(4). Retrieved from https://articleegateway.com/indeex.phf/JLAE/article/view/1486
Park, A.H., & Seo, K., (2019). Common Ownership and Product Market Competiton: Evidence from the U.S. Airline Industry 48(5), 617-640. Retrieved from http://www.e-kjfss.org/upload/pdf/KJFS-2019-0-488-5-617.pdf
Kuhn Jr, J. R., Courtney, J. F., Morris, B., & Tatara, E. R. (2017). Agent-based analysis and simulation of the consumer airline market share for Frontier Airlines. Knowledge-Based Systems, 23(8), 875-882.
Levine, M. E. (2016). Airline competition in deregulated markets: theory, firm strategy, and public policy. Yale J. on Reg., 4, 393.
