BennettWeek2CaseAnalysis Essay

1358 Words Jan 24th, 2015 6 Pages
Jacqueline Bennett
Week 2 Business Case Analysis
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MBA526 Excellent work Jacqueline. With the airline industry, we have to be really current with articles leading up to 2012 (time period of the case study). And the de-bundling effort isn’t all profit but revenue. The difference between carrier operating costs is pretty low, so how does a continuing sustainable advantage get built when most customers do not differentiate? – Professor Becraft
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From these forces of competition and actual business results, the profit potential of the US passenger airline industry is questionable (Grahm & Vowles, 2006, p. 108). In this paradigm, the business lesson for other companies is to look beyond the core business model for non-core opportunities to create competitive advantage (Lewis & McKone, 2013, p. 1). It is not only about getting from point A to point B. It’s about identifying what the business’ customers really want and providing it better than the competition (Grant, 2013, p. 79).
For the legacy airlines to profitably compete in their industry, they adopted an edge strategy utilizing complementary products and services. An edge strategy focuses on the monetization of those items not from the core business model (McKone, 2013, para. 3). For the US airline industry, complimentary products and services to bundle together or unbundle from the core service to upsell separately are in flight wireless internet access, branded credit cards offering frequent flier miles or extra leg room. Other combinations include access to airport lounges, fast track boarding and costs for checked bags. In 2012, the airline industry earned an estimated $12.8B from these ancillary products (McKone, 2013, para. 2). Other businesses such as movie theatres, hotels, grocery stores, car

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