MM5012

Azwimar Putranusa29114335

Anindya Prawita Sari29114337

Syachriani Syam29114384

Anugrah Tri Padma29114397

Business Strategy and Enterprise Modeling

HISTORY

• In 2000 Cook founded Newlines Airways Ltd., a UK-based start-up airline that aim at the transatlantic business market.

• 11 September 2001, airline industry crisis• October 2002, co-founded Baboo SA, his attention back to the

airline industry• In July 2003, Swiss International Air Lines announced drastic

reduction in its network• 26 October, Swiss was halting operations• 19 September 2003 the DETEC granted the route to Flybaboo

Five Forces Analysis ofthe European Airlines Industry

Bargaining Power of Buyers: LOW

There is a large number of buyers relative to the number of firms in this business

There is a large number of customers, each with relatively small purchase The customer doesn’t face any significant cost in switching suppliers The buyer need a lot of important information with regard to using the

product The products unique to some degree and they have accepted branding The firms provide incentives to decision-makers on the buyer side

Five Forces Analysis ofthe European Airlines Industry

Bargaining Power of Suppliers: MODERATE

Inputs (material, labor, service) in this industry are standard rather than differentiated

Firms can’t switch between suppliers quickly and easily Suppliers would find it difficult to enter this business There aren’t many current and potential suppliers in this industry This business is important to the suppliers

Five Forces Analysis ofthe European Airlines Industry

Threat of new entrants: LOW

Existing firm have cost and/or performance advantage in this industry There aren’t proprietary products/services on offer in this industry There are established brand identities in this industry Customers don’t incur significant costs in switching suppliers There is a lot of capital needed to enter this industry A new comer doesn’t to the industry face difficulty in assessing distribution channels Experience in this industry help firms to continually lower costs and/or improve

performance. In other words, there is a “learning effect” in this industry There are any licenses, insurance and other qualifications required in this industry

that are difficult to obtain A new comer can entering this industry expect strong retaliation from the existing

players

Five Forces Analysis ofthe European Airlines Industry

Threat of substitutes: LOW

Available substitutes have performance limitations and/or high prices that do not justify their use as mainline products.

Customers will incur costs in switching to substitutes. There truly are real substitutes for the products available in this industry. Customers are not likely to go for substitutes.

Five Forces Analysis ofthe European Airlines Industry

Rivalry among existing players: HIGH

The industry is growing rapidly. The industry have overcapacity at the moment. The fixed costs of the business are not relatively low proportion of the total costs. There are significant product differences and brand identities among the

competitors. It would be hard to get out of this business because there are no long-term

commitments that bind players to the industry. Customers would not incur high costs if the switched from one player to another. Products on offer are not highly complex and require significant customer-

producer interaction. Market shares in the industry are more-or-less equally distributed among

competitors.

Five Forces Analysis ofthe European Airlines Industry

Favorable Moderate Unfavorable

Threats of new entrants ✓Bargaining power of buyers ✓Threats of substitutes ✓Bargaining power of suppliers ✓Intensity of rivalry among competitors ✓

Traditional EasyJet Flybaboo

VALUE CUSTOMERS Everyone, especially class People who pay from their own pocket and some who don’t fly

Business travelers and leisure customers.

VALUE PROPOSITION - Flexible- Full Service- Worldwide Network- High prices

- One way Fares- Refunds, if plane is late- No seat choice low price- No meals

- Low volume routes- Low cost- Selling seats on a first

come first serves

Flybaboo Strategic Innovation

Flybaboo Strategic Innovation (cont.)

VALUE CHAIN Traditional EasyJet Flybaboo

Purchasing Integrated Outsourced Outsourced

Operating - Multiple planes for mix of short and long haul travel

- World wide network

- Short-haul routes- Single type of

plane- Select destinations

- Point-to-point, short haul flights

- Single type of plane

- No catering on board

Marketing - Segmented customer

- Varied meal services

- Frequent flyer program

- Treats all the customers the same

- “Focused”

- First come, first serve

- Low price for early booking

- Target tourist and business travelers

Distribution - Travel agent- Bundling

possibilities

- Direct sales/internet

Direct sales, internet (Flybaboo website) or telephone (call centre)

Customer Segment & Value Target of Flybaboo

Sustainable Competitive Advantage

The upstart business must do :

• Maintain the quality• Establish Brand Loyalty. • Focus• Continually Innovate• Offered competitive price• Location, information systems and distribution channel.• The product must unique (valuable, rare, imperfectly imitable)• Relations