Airline business models and Competitive Strategies
Strategic use of business models: case study
This is the last posting of this blog series which includes the case study. The case study helps portray the theoretical concepts that have been covered in the previous blog posts: the strategy, the canvas, and the implementation.
The current strategy
The case study follows the example of the fictitious organisation Travel Co. This organisation is a travel agency which has recently been experiencing some troubles with generating enough revenues to sustain itself.
There are three main competitors in the market that divide between them equally the majority of the market share: Travel Co., JourneyTime, and Tourism Inc. All three agencies have been experiencing problems since the financial crisis started. In order to be able to remain competitive in the current market, Travel Co. will need to try to adjust their strategy.
According to the Value Propositions model, the current competitive strategies of the three main competitors in the market are as follows:
- Travel Co.: complementary products and services (Product leadership)
- JourneyTime: excellent customer service and support (Customer intimacy)
- Tourism Inc.: online purchase and payment of tickets (Operational excellence)
The Travel Co. agency relies heavily on the perceived value of their offering to their customers. They offer complementary products and services that help their customers arrange an all-inclusive travel destination (accommodation, transport, informational materials about the chosen destination, etc.).
For the past few years Travel Co. has been employing the same business model which served the same general strategy. Until recently their chosen path has been highly successful. The first step helping the agency adjust to the new environment is looking at their current business model.