Presented by

Neelutpal Saha (222012)

Shan Lal (222021)

Mrinmoy Sarkar (222011)

Pankaj Srivastava (222014)

•Aviation Industry•About IndiGo Airlines

•PEST analysis•Porter’s 5 forces analysis•SWOT and TOWS analysis

•Competitive Strategy•STP

•Product Mix•Market Leader Strategy

•Branding and Promotional Strategy•The road ahead

•Recommendations

AGENDA

Total domestic passengers carried by the scheduled domestic airlines between January and May 2013 were 25.998 million, as

against 25.808 million during the corresponding period of previous year thereby registering a growth of 0.74 per cent, revealed the

statistics from Directorate General of Civil Aviation

No-frill carrier IndiGo lead in terms of market share with almost 30 per cent of the pie, followed by Jet Airways-Jet Lite combine at

25.3 per cent, Air India Domestic at 19.2 per cent, Spice Jet at 17.5 per cent, and Go Air at 8.3 per cent for the month of July

2013.

The air transport (including air freight) in India has attracted foreign direct investment (FDI) worth US$ 456.84 million from

April 2000 to July 2013, as per the data released by Department of Industrial Policy and Promotion

AVIATION INDUSTRY

Indigo is an Indian airline company headquartered at Gurgaon. It is a low cost carrier and the largest airline in India with a market share of 30.3% as of September 2013. IndiGo is one of the fastest growing low cost carriers in the world. With its fleet of 72 new Airbus A320

aircraft, the airline offers 447 daily flights connecting to 35 destinations.

Indigo was set up in early 2006 by Rahul Bhatia of InterGlobe Enterprises and Rakesh S Gangwal, a United States-based NRI.

InterGlobe holds 51.12% stake in IndiGo and 48% is held by Gangwal's Virginia based company Caelum Investments

On 17 August 2012, Indigo became the largest airline in India in terms of market share (27%), In August 2013, the Centre for Asia

Pacific Aviation ranked Indigo amongst the 10 biggest low-cost carriers in the world.

ABOUT INDIGO

India’s largest airline by passengers carried, reported a more than sixfold increase in profit to Rs. 787 crore for 2012-13—

the low-fare airline’s fifth consecutive profitable year. Revenue rose 65.4% to Rs.9,458 crore, according to data

submitted to the Directorate General of Civil Aviation

MARKET SHARE

Indigo's stuck to its low-cost,

single class model unlike rivals Jet Airways.

Selling and leasing back planes

helps its balance sheet

Quality and detail key to good service

It’s all about customer focus

Using technology smartly

WHY IS THE MARKET LEADER?

A d i t y a G h o s h , P r e s i d e n t

R a h u l B h a t i a , M D

This analysis is a framework or tool used by marketers to analyze and monitor the macro environmental (external

marketing environment) factors that have an impact on an organization

PEST ANALYSIS

Political:Open Sky Policy/ Deregulation (+)Low Entry Barriers (+)FDI Limits (+)49 % for airlines100% for airportsExtensive airports development planned

Political:Open Sky Policy/ Deregulation (+)Low Entry Barriers (+)FDI Limits (+)49 % for airlines100% for airportsExtensive airports development planned

Socio- Cultural:Growing Middle Class (+)Domestic Leisure Travel (+)Foreign Tourist (+)Status Symbol (+)Security Issues & Terrorism (-)

CONTD

Economic:Growing Middle Class Income (+)Consistent GDP Growth (+)Hike in average income (+)Growth in Tourism (+)Rising ATF Price (-)

Technological:Modernized Airports (+)Greenfield Airports (+)Better handling of Aircrafts, passengers and Cargo (+)Video-conferencing/VoIP (-)

It is a simple framework for assessing and evaluating the competitive strength and position of a business organization

(in short the micro-environment)

PORTER’S 5 FORCES ANALYSIS OF AVIATION

INDUSTRY

Threat of New EntrantsLow Product differentiation in basic servicesLow Switch cost for Customers but high for airlinesOpen sky policy for foreign entrantsVery high set-up costsIncreasing fuel pricesShortfall + High cost of skilled resources- Pilots

Threat of New EntrantsLow Product differentiation in basic servicesLow Switch cost for Customers but high for airlinesOpen sky policy for foreign entrantsVery high set-up costsIncreasing fuel pricesShortfall + High cost of skilled resources- Pilots

CONTD…

Bargaining Power of SuppliersDuopoly in Aircraft Market- Low bargaining power with airlinesSwitch cost to other suppliers is highShortage of Commercial Pilots in IndiaLimited Suppliers of ATF in India

Bargaining Power of SuppliersDuopoly in Aircraft Market- Low bargaining power with airlinesSwitch cost to other suppliers is highShortage of Commercial Pilots in IndiaLimited Suppliers of ATF in India

Competitive RivalryVery little product differentiation in ServicesMature Industry- Only scope for growth by gaining other people’s market shareHigh bargaining power of suppliersNo sense of brand royalty amongst customers and can easily switch to other airlines

Competitive RivalryVery little product differentiation in ServicesMature Industry- Only scope for growth by gaining other people’s market shareHigh bargaining power of suppliersNo sense of brand royalty amongst customers and can easily switch to other airlines

CONTD

Bargaining Power of BuyersHigh number of buyers fragmented- lowers their powerWith high number of buyers, growth opportunities are also highSwitch costs are minimal for buyers

Bargaining Power of BuyersHigh number of buyers fragmented- lowers their powerWith high number of buyers, growth opportunities are also highSwitch costs are minimal for buyers

Availability of SubstitutesIndirect Substitutes are railways- but not powerful as airlines, score highly in travel timeTravel by air is a status symbolHowever direct substitutes are other Low Cost Carriers –since switch cost is low, threat of substitutes is high

Availability of SubstitutesIndirect Substitutes are railways- but not powerful as airlines, score highly in travel timeTravel by air is a status symbolHowever direct substitutes are other Low Cost Carriers –since switch cost is low, threat of substitutes is high

A tool that identifies the strengths, weaknesses, opportunities and threats of an organization. The method of

SWOT analysis is to take the information from an environmental analysis and separate it into internal

(strengths and weaknesses) and external issues (opportunities and threats).

S.W.O.T ANALYSIS

Strength:1.Low fares2.High Service Quality3.Operational Efficiency4.Customer Service5.Short haul flights6.Fuel Efficient Aircrafts

Strength:1.Low fares2.High Service Quality3.Operational Efficiency4.Customer Service5.Short haul flights6.Fuel Efficient Aircrafts

Weaknesses:1.Less differentiation2.Short lived innovations3.Untapped domestic cargo segment4.No established alliances5.Lack of product depth and breadth

Weaknesses:1.Less differentiation2.Short lived innovations3.Untapped domestic cargo segment4.No established alliances5.Lack of product depth and breadth

CONTD…

Opportunity:1.Increasing middle class population2.Increase in domestic tourism3.Booming air cargo business4.Chartered Services

Opportunity:1.Increasing middle class population2.Increase in domestic tourism3.Booming air cargo business4.Chartered Services

Threats:1.High ATF prices2.Economic slowdown3.Government policies4.Technological advancement in communication

Threats:1.High ATF prices2.Economic slowdown3.Government policies4.Technological advancement in communication

TOWS analysis is a method of strategic analysis used to study the environment of the organization and its interior

TOWS ANALYSIS

SO:1.Increase domestic destinations2.Upgrade to long haul aircrafts as per demand3.Offering affordable international holiday packages to the middle class travelers

SO:1.Increase domestic destinations2.Upgrade to long haul aircrafts as per demand3.Offering affordable international holiday packages to the middle class travelers

WO:1.Plan to go international2.Expand to freight/cargo services3.Diversify to Chartered flight services4.Loyalty, Rewards and other Customer retention programs

WO:1.Plan to go international2.Expand to freight/cargo services3.Diversify to Chartered flight services4.Loyalty, Rewards and other Customer retention programs

CONTD

ST:1.Effective incentive program to prevent talent drain2.Sign anti-poaching agreement with competitors3.Continue to successfully hedge fuel prices by importing

ST:1.Effective incentive program to prevent talent drain2.Sign anti-poaching agreement with competitors3.Continue to successfully hedge fuel prices by importing

WT:1.Create a tie-up with other LCC players like Air Asia for the Indian customer base to provide last mile connectivity2.Offer business class seats, continue innovation of value added services while focusing on cost optimization

WT:1.Create a tie-up with other LCC players like Air Asia for the Indian customer base to provide last mile connectivity2.Offer business class seats, continue innovation of value added services while focusing on cost optimization

SEGMENTATION, TARGET AND POSITION

Segmentation, targeting, and positioning together comprise a three stage process. We first (1) determine which kinds of customers exist, then (2) select which ones we are best off trying to serve and, finally, (3) implement our segmentation by optimizing our products/services for that segment and communicating that we have made the choice to distinguish ourselves that way.

A firm possesses a Sustainable Competitive Advantage (SCA) when it has value-creating processes and positions that

cannot be duplicated or imitated by other firms that lead to the production of above normal rents

PORTER’S SCA MODEL

Cost Leadership and Competencies•Avoiding in flight services•No free meals•Strategic use of disposable bags for quick cleaning of aircrafts before landing•Highest no. of seats•Light weight seats•Internet Reservations•Cost and Service Culture•Human Resource training on efficient processes•Centralized operation controls Centre•Highest no. of CAT III compliant pilots

CONTD…

Operational Efficiency•Low turnaround time•Aircraft Utilization•On-time performance for time sensitive travelers•Young fleet of aircraft (hence less maintenance issues)•Lower employees per aircraft•Fuel efficient engine•Zero inventory of components•Same configuration of all aircrafts providing flexibility in allocation

Positioning•Limited Passenger Service•Low price tickets•Point to point routes•Frequent and reliable departures

Giving a feel of the Product inside a Service Wrapper: Consumers are demanding not products or features of

products but the benefits they will be offered

The airline product consist of two types of Services: On the ground Service, In flight Services.

PRODUCT MIX

MARKET LEADER STRATEGY

IndiGo’s media campaign has focused more on customer service and less on pricing where it is hard to be competitive, and the airline’s avant-garde branding has been a major differentiator.

IndiGo’s same-day return flights from major Indian cities, extra seat pitch (2 inches more than India’s industry standard) and new aircraft.

IndiGo’s check-in counters feature banners saying “India’s Coolest Airline” and check-in queues have “Cut The Red Tape” signs.

BRANDING

Communication Objective: IndiGo promotes the following three things majorly as part of its advertising program- On time

performance, Affordable fares and Hassle free Passenger experience

PROMOTIONAL STRATEGY

Advertising Strategies:

Hoarding at airports with focus on Best on Time performanceAdvertisement through social networking medium like Facebook, Twitter, etc.Collaboration with multiplexes in major cities to promote the airline and its offersHoardings in multistoried buildings and officesAds in magazines targeting urban populationSponsoring fashion shows, talent hunts, new year parties, etc. Collaboration with consumer banks, credit card companies, hotels, ticketing websites to promote special offers, discount, cashback etc.Promoting in regional languages in respective sectors thus giving a local flavorSending special offers to frequent fliers through sms, email, etc.

CONTD…

•IndiGo will have over 45% of the capacity of

all low-cost carriers in 2016-17•It will get delivery of fuel-efficient A-320 Neos

from end 2015•12-13 new cities will be added in two years,

taking the total destinations to 40 by 2016-17•It plans to increase frequency on the India-Dubai

and India-Muscat routes

THE ROAD AHEAD

Building on strength

Meet the Global challenge and increase its footprint

Cost Control

Increase depth by venturing into cargo and chartered airlines

Continue being close to the customer by being consistent in their services and comfort to customers

Come up with innovative offerings

Provide exciting and affordable travel packages

Increase tie-ups with hotels and banks

Differentiate themselves even more by improving media and communication channels thus improving the overall

communication plan

Continue to improve organizational development, which is a critical to airlines

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THANK YOU