Application of E-Business Strategy Creates Competitive Advantage for Airlines

Topics: Airline, Southwest Airlines, Low-cost carrier Pages: 21 (7027 words) Published: October 19, 2008
The airline industry is an area facing immense competition and with high fuel and maintenance costs, the margins in this industry are proportionately very low. As a result of this it is an area undergoing constant consolidation through a number of mergers and acquisitions. This means every airline is fighting tooth and nail to stay afloat and not go bankrupt, yet at the same time they need to find a method to create competencies for itself. On the basis of this it would create competitive advantages for itself and become a market leader. It is in this backdrop that the this paper tries to analyse whether evolving and adopting an e-business strategy helps an airline gain sufficient market advantage to prove beneficial for it. It was found that in order to provide an adequate answer to the research question "Can an airline increase market share and customer loyalty by achieve competitive advantage utilising e-business models?" One must fully understand the main features of E-commerce and their relevance to Airline competitive advantage. The features of an e-Business strategy have been outlined below. F1. Online/immediate/24-hour availability, directly connect buyers and sellers A Web server is usually online 24 hours per day, and virtually immediately accessible (depending on line speed and network traffic, of course). This creates time independence and enables customer service to be decoupled from supplier availability. Such 24-hour availability is a strong facilitator of a global presence, overcoming time differences. As the customer is in the first instance interacting with an automated system, there is a set of service requests that can become 'self-service' F2. Ubiquity

Global information networks (fixed and mobile, cable, satellite) promise to offer worldwide, large-scale and low-cost, access to electronic commerce. F3. Global
It is often claimed that one of the largest changes brought about by the Internet is that it is global: companies get access to customers globally, customers get access to suppliers globally. F4. Digitisation

The Internet and the communication and computer systems connected to it are all processing digital and digitised information. Digital information can be easily stored, transmitted, processed, mixed, transformed, in short manipulated in many ways, independent of its source or carrier. F5. Multimedia

Closely related to digitisation is the aspect of multimedia, referring to the capability to deal with and deliver information in several ways: text, graphics, sounds, video, eventually tactile. F6. Interactivity

As opposed to EDI, which is for application-to-application data exchange, the Internet offers person-to-person and person-to-application interactivity. Even if one side of the interaction is automated, through a Web-server program, the interaction possibilities are wide ranging and can be extremely varied and engaging. F7. One-to-one

The Internet makes customer profiling fairly easy, by capturing and analysing customer characteristics. Technically, this can consist of storing some information about the customer on the customer's computer (e.g. a 'cookie'), which is retrieved when the customer returns to the site. This can be combined with more detailed information, partially solicited from the customer and partially collected by the merchant, e.g. the pattern of purchases. Many sites encourage potential customers to provide an e-mail address, personal data etc. F8. Integration

Customer service is greatly enhanced by integrating the functionalities of the transaction parties on the basis of standardized information flows. One-stop integration of functions-that is, integrating all the necessary functions for a transaction at a single point of access and with seamless flow of information between them, as illustrated by this example is, however, only one aspect of integration. Information integration is another opportunity to extract additional value by analysing...

Bibliography: 1) Business World: 23rd – 29th July,2007
5) Frontline: 18 – 24 June, 2007
6) India Today: 9 – 15 July,2007
7) Business World: 18 – 24 June,2007
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