Kulula Case Study - Question 1 The key success factors...

Info iconThis preview shows pages 1–4. Sign up to view the full content.

View Full Document Right Arrow Icon
Background image of page 1

Info iconThis preview has intentionally blurred sections. Sign up to view the full version.

View Full DocumentRight Arrow Icon
Question 1 The key success factors (KSFs) for the low cost airline industry are: Attracting new (eg. LSM 6+ sector in South Africa) and existing customers (current passengers) High operational efficiency (managing the operations) Providing unique customer services, good quality and simple value at a minimal cost (no additional cost to the business) Good financial management of the business 1.1 Attracting new (e.g. LSM 6+ sector in South Africa) and existing customers (current passengers) Attracting non frequent flyers (i.e. airline passengers) and travellers from an alternate market segment (people that use road and rail transportation) is key to the success of a low-cost airline. Townsend and Brick (2005) states that a survey conducted revealed that most passengers who flew with low-cost airlines were not defectors from the incumbents but rather that low prices encouraged people to fly when they otherwise have travelled by road, by rail or not at all. Attractive travel packages that address the customer needs in terms of affordable air fares, safety and security and simple value with no frills is fundamental since the customer’s reasons for travelling has little bearing on the choice of airline defined by this average income market segment individuals. 1.2 High operational efficiency (managing the operations) In order for a low cost airline to provide affordable fares to customers the company must maximize its operational effectiveness. Removing additional service and operations costs, a low cost airline can offer a significant discount on a conventional airline ticket (Townsend and Bick, 2003). High operational efficiency would reduce operational costs which will allow the airline to target a reasonable load factor range. No frills approach reduced operational complexity and service disruptions. Not offering benefits such as frequent flyer programmes or business class, free beverages onboard, ticket changes after purchase and pre-assigned seating, a low cost airline can pass this saving to the customer. Also, with the absence of some of these benefits a low cost airline can maintain a higher gate turnaround time compared to the conventional airlines thus increasing its passenger turnover.
Background image of page 2
1.3 Providing unique customer services, good quality and simple value at a minimal cost (no additional cost to the business) Using innovative approaches to maintain a competitive advantage over competitors is essential in developing brand loyalty. Low-cost airline can not dependent solely on competitive pricing as a strategy to grow and sustain business. Therefore product and service rendered must be unique and of good quality to attract new clientele and
Background image of page 3

Info iconThis preview has intentionally blurred sections. Sign up to view the full version.

View Full DocumentRight Arrow Icon
Image of page 4
This is the end of the preview. Sign up to access the rest of the document.

This note was uploaded on 10/16/2011 for the course BUSINESS 1010 taught by Professor Nicholas during the Three '11 term at South Australia.

Page1 / 8

Kulula Case Study - Question 1 The key success factors...

This preview shows document pages 1 - 4. Sign up to view the full document.

View Full Document Right Arrow Icon
Ask a homework question - tutors are online