Question:
Discuss About The Competitive Strategies Airline Industries?
The firm’s competitive advantage and its profitability are the key determinants of the company success in a given industry. For the company to possess the two aspects, it must come up with the robust competitive strategies that will overcome the existing competition as well as the threat of the new entrants in the industry. This report explores the competitive strategies exhibited by Chevrolet and Peugeot the two companies in the car industry. The report also investigates the competitive strategies attributable to British Airways and Emirates Airlines which are some of the major companies in the Airline industry.
In the recent the past, the competition in the car industry has been the intense one. However, there some companies in this industry such as Chevrolet and Peugeot that have been able to overcome the existing fierce competition through global strategy as a business model change to claim their competitive advantage both in the industry as well in the market. In the following discussion, this report discusses each company in detail.
Chevrolet is an American Automobile division of the General Motors Company. The Chevrolet Motor Car Company being an affiliate of the General Motors many its global entry strategies revolves around the parent company. General Motors applies the global strategy of a brand for every place. Whether in Europe, Asia or the United States, the buyer will find the Chevrolet cars in the market. This means this product is almost everywhere across the globe. The provision of the company products in a wide geographical region helps the company to claim largest market share even before the competitors can reach the market (Pfanner, 2012). This was the strategy that was used by the General Motors to market Chevrolet Cars in the global markets.
Originally, the Chevrolet cars were meant for the entry-level car buyers (Pfanner, 2012). Therefore, the company had to avail the product to many target markets. This was one approach to introduce new product in the market. However, with the passage of time the company has focused on making the product affordable for the middle-market consumers. Again, to suit the growing demands of the customers the company has opted for investing more than five billion dollars to strengthen its position in the global market.
In 2015 the company improved the Chevrolet brand to meet the rapidly growing customer needs in the global markets. They came up with an innovation of developing a new family car that still maintained the original name of the brand. According to the industry analysts, this was one of the most successful global strategy business model change that has maintained the competitiveness of the Chevrolet brand. The General Motors President, Dan Ammann in 2015 noted that with the anticipated growth of the automotive industry growth in the mature markets, the company should be a focus on capitalizing on the new emerging markets (Roman, 2015). That could only be achieved by modifying the company products to suit the growing needs of the markets.
The improvement of the Chevrolet was aimed a new and modern family car to replace the existing ones. By adopting this strategy Chevrolet substantially improved its profitability and competitiveness by providing what customers wanted in each market. General Motors applied the concept of satisfying the customer needs based on their economic status to take maximum advantage of the global scale.
Peugeot Company is a French company that has been dominating car industry over decades. Its objective encompasses on delivering the best-in-class driving experience that is characterized by the powerful driving sensations and heightened customer emotions. The success of the Peugeot Motor Car Company can be ascribed the continuous improvement that has been subjected to the brand since its invention. The Peugeot brand has been improved and maintained in line with the current technology in the market. Secondly, the company products are almost on over 180 countries and more than 10,000 points where customers can access the company products.
The stiff competition experienced within the industry forced the company to seek a strategy of entering the global market. As a result, the company changed its strategy by introducing the improved Peugeot brand. In 2012, the company came up with the Peugeot i-Cockpit that has attracted more than 2.2 million customers across the world since it was launched. This was the key feature that enabled Peugeot to continue maintaining its competitiveness as well success in the international market.
The competition continued to loom in the industry, and by 2015 the company implemented an innovative concept of Peugeot Fractal to improve the existing Peugeot i-Cockpit that was designed in 2012. This brand was aimed at improving and enhancing the company target customers both in the domestic and in the international markets. Out of continued innovations and with 180 countries and over 10,000 dealers the company profits increased by 4.6 percent during the period year that ended in 2015. The profit realized during the years was subjective to the 1,710, 000 vehicles worldwide.
Apart from the innovativeness as the strategy of entering into the global markets, Peugeot has focused on alliances with the aim of minimizing the global operational costs. In 2012, Peugeot and General Motors allied with the expectations that they will save approximately 2 billion dollars annually within a timeframe of five years (Reed, 2012). Being the most competitive companies in the industry, the two companies agreed to share vehicle modules, components, and platforms and establish a global purchasing joint venture of buying parts and commodities to increase their purchasing power.
The strategic alliance was meant to improve the competitiveness of each of the two companies on the global scale by ripping maximum benefits from the global market. Besides, the two companies have been able to realize profit increase especially in Europe and around the world as well.
From the above discussion and analysis, it is indisputable that the Peugeot Company global entry strategy was maintained through innovativeness business model change. Besides, the company has embraced the aspect of cooperation and strategic alliance with its competitors to get maximum benefit from the global markets.
The weakening of barriers to enter the airline industry has increased competition in the industry. This has been accompanied by high buyers’ power intensifying the competition further. Likewise, it has become difficult for the competitive international airline companies to reach target markets with ease. However, companies such British Airways and the United Emirates have been for long time operating in the global market effectively. The success of the two companies can be linked to their target markets as well as their modes of entry. This report discusses the competitive strategies of each company in the following paragraphs.
British Airways target market is classified into economy class, premium economy, executive club and first class. The economy class comprises of the domestic flights within the United Kingdom as well as the whole of Europe, urban and rural migration and international flights. Premium economy includes selected international flights and targets low and middle-class customers. The executive class encompasses of international flights specifically focusing on business people and professionals. First class is based on selected international flights and as executive class targets business people and professionals.
Ideally, market targeting strategy involves planned selection of the right market segment (Meyers, 2013, p. 28). The company should be able to satisfy the needs and preferences of the target market appropriately. The diversity and the preferences of the buyers in the target market determine the competitiveness of the company. British Airways has targeted on the diverse and differentiated target market based on the customers’ characteristics. For example, the company has segmented its target market based on the price. The different products offered by the company both in the domestic and international are in accordance to the affordability by their customers. This approach helps the company to serve all the markets.
In the above discussion, the report has elaborated the specific target markets that British Airways focuses its operations. It has come out clear that the company aims at serving both the domestic and the international market. The competitive advantage of the company in the home and regional markets appear to be robust. However, the company competitive advantage in the international market seems to be fluctuating because of the fierce competition offered by other international flights. Therefore, it is important to review the company’s global entry strategy to ascertain how the company has been able to penetrate as well as maintain its competitiveness in the global market. British Airways applies four modes of entry to enter both domestic and global markets;
The Emirates Group is one of the most profitable and competitive international companies in the airline industry. Its success can be tied to the competitive strategies that the company has maintained both in the domestic market as well in the global markets. Apart from Asia, The United Emirates has been focusing on Europe and America. The huge number of countries in these continents, as well as their population, has given the company a strong position in the global market.
Just like any other airline company, the Emirates Airline Target market can be classified into the average customers, middle-class customers, and high-class customers. The company applies this approach in segmenting its target market to serve the largest number of customers possible. The three segmentation approaches of the target are applied in all the markets where the company is selling its services. The major company markets comprise of the Middle East, Africa, Asia Pacific and western countries.
The Emirates Group has appealed to the international customers by coming up with the global marketing strategy that portrays customers as the globalists. The “Hello Tomorrow” term is widely used to woo global customers to purchase the company products. This slogan aims at positioning the airline as the facilitator of the global connectivity. As the company strives to reach more target markets, it has resulted on applying market entry strategies as applied by British Airways. The company applies these entry modes to reach both domestic and international markets.
Conclusion
The success and the competitiveness of the company depend on its laid down strategies. The four companies in two different industries discussed in this report have been able to outperform their competitors because of their robust strategies. Chevrolet Motor Car Company success is built on the continuous success and improvement of its brand. The company has often modified its brands to suit the need of the customers in different markets. Likewise, Peugeot brand has been enhanced by taking advantage of the technology. On the other hand, the success of British Airways and the Emirates Group in the airline industry can be linked to appropriate segmentation of the target market as well as the application of the right market entry strategie
References
Lynn, M., 2014. Segmenting and Targeting Your Market: Strategies and Limitations. School of Hospitality Administration, 4(2), pp. 65-92.
Meyers, Y. J., 2013. Target marketing and the product: categorizing products to understand the resulting marketing communication outcome measures. Journal of Management and Marketing Research , 2(2), pp. 22-38.
Pfanner, E., 2012. G.M.’s Global Strategy: A Brand for Every Place. [Online]
Available at: https://www.nytimes.com/2008/02/04/business/worldbusiness/04gm.html?mcubz=3
[Accessed 11 September 2017].
Reed, J., 2012. GM and Peugeot confirm alliance. [Online]
Available at: https://www.ft.com/content/ac3aa4ca-62f0-11e1-9245-00144feabdc0
[Accessed 11 Septmber 2017].
Roman, D., 2015. Chevrolet Strengthens Position in Growth Markets with $5 Billion Investment. [Online]
Available at: https://media.gm.com/media/us/en/gm/news.detail.html/content/Pages/news/us/en/2015/jul/0728-chevrolet.html
[Accessed 11 September 2017
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