Setting Up a New Product at Airbaltic

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Setting up a new product at AirBaltic|
Business Administration course work |
|
Laura Pärnasalu 2v1||

April 2010

Table of Contents

Introduction2
Setting up a new product3
Identifying and analyzing the gap for new business3
Scanning for opportunity5
Positioning the new venture6
Analyzing the opportunity8
Gaining commitment9
Sustaining competitiveness10
Air transport in tourism industry11
AirBaltic introduction12
History12
Current AirBaltic fleet15
Network planning at AirBaltic16
Main responsibilities of network planning18
Mission and vision of network planning19
Setting up a new product at AirBaltic19
Scanning for opportunities20
Positioning the new line21
Analyzing the opportunity23
Gaining commitment24
Sustaining competitiveness of the new line26
Conclusion28
Bibliography30

Introduction

The last two years have brought changes all over the economic sector which have made companies reconsider the way they do business and the models they use. No other area in Europe has been more affected by these changes than the Baltic countries. One of the few companies that has had some good news to report over the last year and seems to have come out of the situation as a winner is AirBaltic. That is the reason why looking into the way this company is run and the way their new product which are their new routes are developed and maintained. The aviation industry reacts to all changes in the economy and so has AirBaltic which makes it especially rewarding to look into this case as a future business manager or entrepreneur. This work has been divided into parts whereas the first parts go over the theoretical topics concerning the set up of new products as well as the airline industry as a whole. In the second part of this study, the author plans to introduce the airline AirBaltic more closely as well as the network planning department directly responsible for developing the product at AirBaltic. The final chapters will describe the new product set up and development in AirBaltic as well how the theoretical steps are followed in this company. The aim of this study is to explore the ways and methods of AirBaltic to gain an understanding of company management during economical crisis and the reason behind their low price politics and continuous passenger growth.

Setting up a new product
Identifying and analyzing the gap for new business

In principle established businesses are in stronger position than entrepreneurial entrants. They have gained experience in their field through serving customers, they have experience operating their businesses, and they have established themselves in a strong network with their customers and suppliers. They face lower risks and have a lower cost for the capital. They may experience lower costs as they have developed experience curve economies; they have established output volume which gives them an economy of scale cost advantage. Despite these advantages there always seems to be a way to do things better, and that is where new entrepreneurs step in and have a chance. Reasons why large, established businesses fail to see opportunities, new opportunities are thought to be too small. Opportunity is seen as very small compared with the company’s sales but a company with much less of a turnover might see it as the great chance. Existence of technological inertia - established companies might not see the need or necessity to innovate their technology. Newcomers as a rule have a much higher level of technology and modern knowledge of its usage. Cultural inertia, the way of doing things - way of delivering value to customers must adapt with time as the competitive climate changes. Internal politics - establishment may not value advancements, problems, conflicts within the company. Anti-trust actions by government - establishment may be in the position of monopoly or gain too much importance on the market and...
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