FlyBaboo: How High Can It Fly?VALUE CHAIN AND STRATEGIC INNOVATION

Case Discussion1. Please provide Five Forces Analysis of the European airlines industry?

2. What are the key elements of the FlyBaboo value systems (FlyBaboo Value Chain)?

3. What are the key elements of FlyBaboo’s strategic innovation?

4. Which customer segment is FlyBaboo serving? What perceived value are FlyBaboo aiming for?

5. How could the upstart airline build sustainable competitive advantage and what strategy should it pursue to ensure long-term growth and profitability?

FlyBaboo Value ChainPurchasing Operations Marketing Distribution

Leadership Culture Processes Infrastructure

FlyBaboo Strategic Innovation

Traditional EasyJet FlyBaboo

VALUED CUSTOMER Everyone, especially business class

People who pay from their own pockets and some who don’t fly

VALUE PROPOSITION FlexibleFull ServiceWorldwide NetworkHigh prices

One-way faresRefunds, if plane is lateNo seat choiceLow pricesNo meals

VALUE CHAIN

Purchasing Integrated Outsourced

Operations Multiple planes for mix of short and long haul travelWorldwide network

Short-haul routesSingle type of planeSelect destinations

Marketing Segmented customersVaried meal servicesFrequent flyer program

Treat all customers the same“Focused”

Distribution Travel agentsBundling possibilities

Direct sales/internet