Creating Blue Ocean Strategy in Air Indus (PVT) LTD PDF

CREATING BLUE OCEAN
STRATEGY
FOR
AIR INDUS (PVT) Ltd.
CREATING...
NOT COMPETING
University of Management & Technology

Creating Blue Ocean Strategy for Air Indus (PVT) Ltd. 2
PREFACE
This project is done to accomplish the requirement for completion of my practicum for final
semester of BS (Aviation Management) at University of Management & Technology. After
screening out on ample of subject matters, I ultimately decided to go with topic "Creating a
Blue Ocean Strategy for Air Indus (PVT) Ltd." as my study compels me to think that there is
a strong need of incorporating Blue Ocean Strategy in Aviation industry in Pakistan. The
topic was appreciated by my supervisor & I started to work on it with keen determination &
hard work.
I was bestowed with abundant of information through different sources that included reading
& research material.
Due to time constraints & mental & academic limitations, much is yet to be explored as I
only did a small effort to put forward this maiden project done for aviation industry of
Pakistan with respect to topic of Blue Ocean Strategy in airlines.
I'm hopeful & positively looking forward for more contributions to this piece of work.
I hope this incessant utilization of time & continuous efforts would turn into a continuous
marathon of improvement until it reaches to summit of its perfect successions In sha Allah.
Sobia Fayyaz
ID: 12003001-030
Final Project,
Bs Aviation Management,
2012-2016
Department of Aviation
University of Management & Technology, Lahore.
Dated 30 May, 2016

Creating Blue Ocean Strategy for Air Indus (PVT) Ltd.
A Project By
Sobia Fayyaz
12003001-030
Supervisor: Capt. Saqib Mehmood Sheikh
A Research Project
Submitted to the Aviation Department
In Partial Fulfilment of the Requirement of the
Bachelor of Science in Aviation Management Degree

Year 2012-2016

SUPERVISOR
Flt Lt (r) Saqib Mehmood sheikh

Aviation Faculty & Industry Trainer
Current : University of Management and Technology

Consultancy
Previous : Pakistan Air Force
Education: PAF College, Sargodha
Saqib M. Sheikh is an Ex-Pakistan Air Force fighter

pilot who enjoys 15+ years experience of working on
both theoretical & practical aspects of managing safety
& quality in organizations.
Summary
Flying Career
He is holder of best pilot trophy in Operational Conversion Unit, PAF & was selected for
Fighter Conversion Training in USA. Moreover, he was also selected for Basic Flying
Training in Saudi Arabia.
Achievements in Academic Career

 'Gold Medalist' in MBA (HR)
 'Gold Medalist' in Bachelors
 'Top in Academics' in Fighter Conversion Unit (FCU), PAF
 'Top’ in Academics' in Operational Conversion Unit (OCU), PAF
 'Sword of Honour' (Runner up) - PAF Academy Risalpur
Teaching Experience
He is serving as senior instructor in UMT since 2012, teaching Managing Human Resources
in Aviation, Airline Management, Aviation Safety Management, Human Factors in Aviation,
& Air Traffic Management.
Consultancy
As a qualified ISO 9001:2008 & OHSAS 18001:2007 Auditor and Safety Management
Systems Professor, he also offers consultancy for implementation & auditing of Quality,
Health & Safety Management Systems across Aviation organizations.
Trainer
He is a CAA certified DGR Instructor & Trainer in areas of Ramp Safety, Human Factors,
Safety Management Systems & Aviation Security.

Volunteer Experience
He is a qualified Parachutist, Special Services Group (PTS) & also certified in courses that
include Sea Survival Course, Jungle & Mountain Survival Course & Arabic Language
Course, PAF
Experience
He has provided his services in many institutions. His experiences are as follows:
 Senior Faculty, Department of Aviation

University of Management and Technology
2012 – Present (4 years) Department of Aviation
 Aviation Trainer - Ramp Safety, SMS & Human Factors

Consultancy
January 2015 – Present (1 year 6 months) Lahore, Pakistan
 ISO 9001:2008 & OHSAS 18001:2007 And ISAGO

Consultancy
February 2015 – Present (1 year 5 months) Lahore, Pakistan
 GD (Pilot)
Pakistan Air Force
June 1998 – October 2008 (10 years 5 months)
Education
He completed his FSc. (Pre-Engineering) from PAF College Sargodha. He then did his BSc.
(Double Maths & Physics) from University of Peshawar & then completed his MBA (HR)
from UMT. His MS (Management Sciences) is in progress from UMT.
Certifications
 Diploma in American (Aviation) Language, San Antonio- Texas
United States Department of Defense
Starting May 2003
 Certified Trainer (CWO)

Qatar Airways
 ISO 9001:2015 Transition Course

PIQC Institute of Quality
Starting 2016
 Safety Management Systems

Civil Aviation Authority of Pakistan
 Certified DGR Instructor

Civil Aviation Authority of Pakistan

RESEARCHER
Sobia fayyaz
Student (Aviation Management)
Current : University of Management and Technology

Student
Education: BSc. (Aviation Management)
Sobia is a confident, judicious & a creative student. She

is in a continuous mode of struggle to impart her role
through knowledge & dedication for cause of human
development as individuals & organizational
development on whole in all the concerning areas of
respective field.
Summary
Achievements in Academia
She has been a bright & energetic student attaining many achievements. In order to commend
her academic progress in all semesters, she has been awarded 7 Rector's & Dean's merit
awards by Office of Controller Examinations, UMT based on her results.
Experience
She has been working as a Traffic Assistant for Gerry's Dnata at Allama Iqbal International
Airport, Lahore during the course of her studies.
Education
She completed her Matriculation (Computer Science) from Kips School, Lahore & did her
Intermediate (Commerce) from Punjab Group of Colleges, Lahore. Further, she enrolled in
BSc. (Aviation Management) at UMT.
She has always shown keen interest in subjects of Management, Marketing, Accounting &
many other Aviation related subjects such as General & Corporate Aviation, Aviation
Weather, Air Traffic Management, Human Factors in Aviation, Airport Planning &
Management etc, a few of which she scored highest in.
Extra Courses
 Flight Operations Officer Course
Star Aviation
Starting April 2013
 Passenger & Cargo Handling Services Courses

Gerry's Dnata
May 2014 - August 2014

This page is intentionally left blank

ACKNOWLEDGEMENTS
All the Praises for Allah Almighty, the Lord of the Worlds, The Most
Gracious & Ever Merciful.
I would have never been able to complete this practicum without the help of Allah (SWT)
first, & then with assistance of all my mentors as their kindness & motivation has always kept
my spirits high. I feel proud being a part of this prestigious department of Aviation at UMT
growing under the leadership of guru Sir Capt. Imran Saeed who is no less than a beacon
light to all. It is due to encouragement of my teachers that my focus was keenly dedicated &
determined towards this work of mines. Everything I learned here would help me lead to
paths of success forever In sha Allah.
Next, I’d like to articulate my gratefulness to my Supervisor Capt. Saqib Mehmood Sheikh to
whom I'm very thankful for supervising my work. His guidance throughout the project was
inestimable.
I’d like to thank few interviewees who shared their knowledge with me & gave me a great
insight while in my surveys & questionnaires.
At last, I’d like to extend thanks to my family & friends for their continuous support.
Dated: 14-04-2016


CONTENTS
Preface
Acknowledgements
Executive Summary
PART - 1
General Perspectives
Chapter 1: Introduction
1.1 Purpose of Study........................................................................................19
1.2 Research Object.........................................................................................19
1.3 Limitations............................................................................................19-20
Chapter 2: Research Methodology

2.1 Research Questions...................................................................................22
2.2 Research Methodology.............................................................................22
2.2.1 Primary Data.....................................................................................22
2.2.2 Secondary Data.................................................................................22
2.3 Literature Review.....................................................................................23
Chapter 3: Theoretical Perspective

3.1 Blue Ocean Strategy..................................................................................25
3.1.1 History & Background........................................................................25
3.1.2 Definitions..........................................................................................25
3.1.3 Why Blue Ocean Strategy in Brief......................................................27
3.1.4 Eight Points of Blue Ocean Strategy..................................................27
3.1.5 The Rising Imperative of Creating Blue Oceans...........................28-31
3.1.6 Analytical Tools & Frameworks...................................................32-36
3.2 Formulation & Application of Blue Ocean Strategy.............................37

3.2.1 Reconstruct Market Boundaries...................................................37-38
3.2.2 Focus on Big Picture....................................................................39-42
3.2.3 Reach Beyond Existing Demand...................................................42-44
3.2.4 Get Strategic Sequence Right.......................................................45-51
3.3 Executing a Blue Ocean Strategy.......................................................52-53

3.3.1 Overcome Key Organizational Hurdles.......................................54-55
3.3.2 Build Execution into Strategy......................................................56-58
3.3.3 Conclusion: The Sustainability & Renewal of Blue Ocean..............59
Strategy

Chapter 4: Research Findings

4.1 Companies using Blue Ocean Strategy...............................................61-67
4.2 W. Chan Kim & Renee Mauborgne - Interviews...............................68-69

PART - 2
SOUTWEST AIRLINES
Chapter 5: Blue Ocean Strategy & Southwest Airline
5.1 Blue Ocean in Airlines

5.1.1 Business Competition in Airlines Today..............................................73
5.2 Southwest Airlines & Blue Ocean Strategy

5.2.1 Introduction to Southwest Airlines......................................................74
5.2.2 Inception of Southwest Airlines...........................................................75
5.2.3 Years Profile........................................................................................75
5.2.4 Initial Situation....................................................................................75
5.2.5 Target Market......................................................................................76
5.2.6 The Southwest Model...........................................................................76
5.2.7 Competitive Environment....................................................................77
5.2.8 Southwest Competitive Advantage...............................................77-100
5.2.9 SWOT Analysis..................................................................................101
5.2.10 Fitting Southwest Strategy Into Blue Ocean Strategy..............102-109

PART - 3
Air Indus (PVT) Ltd. & Blue ocean strategy
Chapter 6: Air Indus (PVT) Ltd.
6.1 Air Indus In Brief.....................................................................................113

6.1.1 Introduction & Scope.................................................................113-114
6.1.2 Mission Statement.............................................................................116
6.1.3 Vision................................................................................................116
6.1.4 Fleet..................................................................................................117
6.2 Where they Fly

6.2.1 Routes...............................................................................................117
6.2.2 Schedules..........................................................................................119
6.3 Products & Services

6.3.1 On Ground Services.........................................................................119
6.3.2 In-flight Experience..................................................................122-123
6.3.3 Cargo...............................................................................................125
6.3.4 Catering...........................................................................................126
6.3.5 Charters...........................................................................................128
6.3.6 Indus Miles......................................................................................128
6.4 Planning Travel with Air Indus

6.4.1 Online booking...............................................................................129
6.5 Contact....................................................................................................131
Chapter 7: Pakistani Aviation Industry
7.1 Industry in Brief

7.1.1 Then & Now....................................................................................133
7.1.2 IATA Reports...................................................................................133
7.1.3 National Aviation Policy (NAP 2015).............................................134
7.1.4 Old Carriers; New Strategy.............................................................134
7.2 Why Air Indus?

7.2.1 With Reference to External Factors...............................................135
7.2.2 With Reference to Internal Factors.........................................135-137
7.3 Blue Ocean Strategy in Pakistani Aviation Industry

Success or Failure?..................................................................................137
7.3.1 IATA Global Passenger Surveys & Pakistani Context............137-148
7.4 Public Pole........................................................................................149-150

Chapter 8: Recommendations
8.1 Air Indus - The Present Environment
8.1.1 Air Indus SWOT Analysis...........................................................152-158
8.2 Air Indus - The Future.............................................................................158

8.2.1 The Corporate Governance........................................................158-159
8.2.2 SWOT Analysis After the New Strategy......................................159-162
8.2.3 More Simplified..........................................................................162-163
8.2.4 Corporate Resources........................................................................164
8.2.5 Strategic Objectives & Goals....................................................165-166
8.2.6 Still Advantageous.....................................................................166-167
Chapter 9: Conclusion
9.1 In a Nutshell.............................................................................................169
9.2 Further Research.....................................................................................170
References
References................................................................................................171-182

EXECUTIVE SUMMARY
This project deals with general concept & perspectives of Blue Ocean Strategy, its
implementation & affects on Pakistani Airline Industry where airlines can be able to create
their Blue Ocean Strategy & generate huge profits by fulfilling customer needs & wants with
value innovation process.
Due to advancements in technology & continuous research prospects, global milieu has
become much vibrant & crowded. Everyday changes, both in internal & external
environment, have given a boost to higher rivalry & companies are searching for such
strategies in which projections for handsome profit & augmentation are offered.
I chose this topic because due to globalization, business opportunities are more to be explored
but in a non-traditional way by targeting markets & customers of every segment & different
taste in one way or the other, keeping profit & growth prospects sustainable.
I've always been desirous to work for one such project where I can drive latest ideas in order
to help industry boom & therefore, I have, by sources of primary & secondary data research
& analysis & low-cost transport market study, have applied theory of Blue Oceans to airline
industry taking in consideration example & pathway of one of the major incumbents of Blue
Ocean Strategy in airline industry i.e. "Southwest Airlines."
The best part about project is that it's based on a new horizon of industry, a latest concept that
just emerged a few years back & people today badly need to understand & implement it for
good.
I came across many new things & my knowledge increased while I was working on project. I
felt way too much motivated by end of the day. It has helped me enhance my critical thinking
with analytical skills to the extent of possibility.


PART - 1
GENERAL PERSPECTIVES

CHAPTER 1: INTRODUCTION
Purpose of Study
Research Object
Limitations

1.1 Purpose of Study
The economy of a country is immensely influenced by activities of transport sector as it's a

dynamic multifaceted zone especially when it comes to aviation sector which is known to be
engine of an economy due to the fact that it encompasses 3 major entities generating huge
revenues;
 Airports
 Airlines
 Aircraft manufacturing companies.
Air transportation & the infrastructure to shore up its activities, both aeronautical & non-
aeronautical, are factors with considerable constructive fiscal & societal influences on areas
where these respective activities, to accomplish tasks, are taking place. These impacts have
gone beyond the straight impacts of airports own operations & brought more opportunities of
remunerations to local business interests & consumers & enlarge their competitiveness in
marketplace.
The purpose of this writing is to discuss Blue Ocean Strategy with contrast to Airline
Industry in Pakistan & suggest ways by which Air Indus can create its Blue Ocean with help
of a brief study on what is Blue Ocean Strategy & examples of how some low cost airlines,
round the globe have reaped giant profits only by fitting in Blue Ocean concept in their
strategy.
1.2 Research Object
In order to let airline executives to realize ways of how to earn more profit in present
competitive market, the aim of project is to make clear Blue Ocean Strategy in-depth.
Strategy will be described & the factors of its success will be examined & analyzed specially
for an Airline Industry.
Furthermore, this will assist in understanding strategic management & competitive
environment & hence increasing plane of efficient & effective understanding in Pakistani
Airline Industry.
1.3 Limitations
I've done this project in partial fulfilment of requirement of my degree of Bachelors. There
might exist some limitations in my work due to the fact of my academic competence being
limited to scope of an outlook of a bachelor’s student & considering time hurdles that
incurred.
So, based on both theoretical & practical outlooks, this project will be more a framework to
introduction & initiation of a new foundation of an existing strategy concept rather than a
complete in-depth study, showcasing clear view of process, effects & success of strategy.
Data is collected from authenticated sources such as books & official websites, so there is
less room for doubt when it comes to legitimacy, validity & reliability of information.
Next, I interviewed common public about what matters to them most when it comes to
travelling by air. There were different opinions on this but conclusions were drawn using
most frequent responses of all in order to confirm application of this strategy in airlines to
bring both successes to aviation industry & satisfaction to customers.
Ultimately, this project will be a first class foreword for future study & more awaiting hidden
opportunities for airlines.

CHAPTER 2: RESEARCH METHODOLOGY
Research Questions
Research Methodology
Primary Data
Secondary Data
Literature Review

2.1 Research Questions
Competition in markets is getting tough day by day. Which strategy will benefit more in this
time of need is a critical question for almost all industries. Questions that assisted me in
understanding significance of Blue Ocean Strategy include:
 Do competitors in market well know about both approaches?
 Has the application of Blue Ocean Strategy always helped to gain competitive
advantage?
 Are both strategies equally important?
 Is there much evidence available in Airline industry to justify that adaptation of Blue
Ocean Strategy would help airlines to profitable growth?
 Is there any need for Pakistani Airlines to create Blue Ocean pool & if yes, then how
considering situation of both industry as a whole & airline individually?
2.2 Research Methodology
2.2.1 Primary data

The raw data gathered directly is known as primary data. It has not gone through any
secondary processing & so this data is particular to my research.
My personal observation & interviews with general public for purpose of obtaining primary
data & getting an in depth understanding of different aspects of people gave me basis for
need of adaptation of Blue Ocean Strategy by Pakistani Airlines.
2.2.2 Secondary data

The type of data that has previously been collected by someone else & has gone through
secondary processing is known as secondary data.
Blend of secondary data I used is massive & includes
 websites
 books & articles
 case studies
 presentations
 information gathered through qualitative & qualitative techniques by others
Because information has been taken from legitimate sources, much of it is dependable, carry
out with my purpose, scope & nature of project.

Essence
The unified blend of both let me work for most part of project & helped me think on how
airline can operate by adopting Blue Ocean Strategy. Data helped me draw a conclusion &
thus answering all questions & addressing the need of time.
2.3 Literature Review
This refers to wordings used to reconsider key points of contemporary facts & procedural
approaches on a specific subject. I used literature review to gather secondary information
from books, articles, presentations & from over internet sources.
Relevant sources were used in order to collect legitimate facts & figures fortifying legality of
project.

CHAPTER 3: THEORETICAL PERSPECTIVE
Blue Ocean Strategy

History & Background
Definitions
Why Blue Ocean Strategy in Brief
Eight Points of Blue Ocean Strategy
Rising Imperatives of Creating Blue Ocean Strategy
Analytical Tools & Frameworks
Formulation of Blue Ocean Strategy

Reconstruct Market Boundaries
Focus on Big Picture
Reach Beyond Existing Demand
Get Strategic Sequence Right
Executing a Blue Ocean Strategy

Overcome Key Organizational Hurdles
Build Execution into Strategy
Conclusion: The Sustainability & Renewal of BOS

3.1 Blue Ocean Strategy
3.1.1 History & Background

“Blue Ocean Strategy” was a new strategic approach created & proposed in 2005 by W.
Chan Kim & Renee Mauborgne.
The scheme of concept was

 to escape competition in congested industries
 to generate & capture new demands
 simultaneous pursuit of low cost & differentiation
3.1.2 Definitions
They categorized market into 2 parts
Red Oceans
Represent all industries in existence today, known as Market Space, having defined rules,
competitors, & market limitations.
Blue Oceans
Represent all industries NOT in existence today, known as Opportunity, having no defined
rules, no competitors & no market limitations.
W. Chan Kim Renee Mauborgne

Source: (w. chan kim and renée mauborgne - Google Search)

Comparative of Red Ocean & Blue Ocean

Source: (red ocean strategy versus blue ocean strategy - Google Search, 2016)

3.1.3 Why Blue Ocean Strategy in Brief

In today's crowded markets with shrinking profit margins, building a blue ocean is a need.
Factors such as prices, technology, innovation, globalization, & market shares are dynamics
directing corporations to opt this Strategy. Generating a new demand & reaping all the good
profit by escaping rivalry is what Blue Ocean Strategy aims to fulfil.
Source: (Mauborgne, 2005)
3.1.4 Eight Points of Blue Ocean Strategy

Blue Ocean Strategy has been summarized in following 8 points, in order to show how is it
different & why has it been so effective.
1. Grounded in Data
Based on a decade-long study of 150+ strategic moves over a century in 30+
industries.
2. Pursues Low Cost & Differentiation

Pursuits both low cost & differentiation simultaneously.
3. Empowers all the way through by Use of Tools & Frameworks

Proposes systematic frameworks & tools to escape competition.
4. Generates an Uncontested Market Space

Makes competition irrelevant by rebuilding market limitations.
5. Systematic Process
Provides a clear four-step procedure so as to allow development of Blue Ocean
Strategy.
6. Maximizes Opportunity; Minimizing Risk

Commercial practicability of ideas is verified & refined by idea index thus
maximizing chances of growth & minimizing risks.
7. Execution into Strategy

Comprehensible concept which leads to effective path of constructing execution into
strategy.
8. A Win-Win Outcome
Helps aligns 3 strategy propositions namely value, profit & people in order guarantee
win-win outcome for stakeholders, employees, company, & buyers.
Source: (Essence of Blue Ocean Strategy | 8 Key Points of Blue Ocean Strategy, 2016)

3.1.5 Rising Imperative of Creating Blue Oceans

Several driving forces lead to the need to creating Blue Oceans a few of which are
 Accelerated commoditization of products & services
 Brands becoming more alike
 Shrinking profit margins
 Norms & regulations
 Supply is exceeding demand in almost all industries which has intensified problems of
global competition
 Globalization
 Increasing price wars
 Niche markets disappearance
Due to these factors, competition is getting tough & a new market with more demand is
needed in order to survive & grow by earning good profit & the only way out for companies
is creation of Blue Ocean in order to complement the need of demand.
THE IMPACT OF CREATING BLUE OCEANS
The Profit & Growth Consequences Of Creating Blue Oceans

Source: (the profit and growth consequences of creating blue oceans - Google Search, 2016)

VALUE INNOVATION
Blue Ocean Strategy's focus is to make competition irrelevant by formation of a new

uncontested market due to which it is known as 'Cornerstone' of Blue Ocean Strategy.
Value-innovation: The Cornerstone of Blue Ocean Strategy (Kim & Mauborgne, 2005)
Source: (Value-innovation - Google Search)
When a firm's price, utility & cost structures are aligned in best possible way only then
Value innovation is achievable.
No trade-off is made between low-cost & differentiation in Blue Ocean unlike Red Ocean
Strategy.

RED OCEAN vs BLUE OCEAN STRATEGY
Red Ocean Vs Blue Ocean

Source: (red ocean vs blue ocean - Google Search, 2016)
The distinct characteristics of competing in both oceans. is clearly shown in diagram above.

THE SIX PRINCIPLES OF BLUE OCEAN STRATEGY
Following figure depicts 6 principles & risk they attenuate that lead to victorious formulation
& evaluation of new strategy.
The Six Principles of BOS

Source: (commercial viable blue ocea strategy - Google Search, 2016)

3.1.6 Analytical Tools & Frameworks

Blue Ocean Strategy should be on subject of risk minimization rather than risk taking in order
to be effective.
Focus must be shifted from competitors to alternatives & from customers to non-customers in
order to shift to Blue Ocean Strategy.
Next page & onwards are comprehensive analytic tools & frameworks, created by Kim &
Mauborgne that can be applied by a company to create its blue ocean by bringing a structure
to company's strategy.

STRATEGY CANVAS
Kim & Mauborgne developed a fundamental analytic tool & an action framework known as
Strategy Canvas that detains existing strategic landscape & further progress in a graphical
representation for company.
Strategy Canvas
Competing factors are the ones that an industry fights on & invests in whereas offering level
is degree to which buyers receive value.
It's used for 2 reasons
 Helping users to observe dynamics on which rivalry is based on & where competition
presently invests.
 To impel users to exploit their actions by readjusting their centre of attention from
competitors& customers to alternatives & non-customers respectively.
Source: (Strategy Canvas | Blue Ocean Strategy Tools and Frameworks, 2016)

FOUR ACTIONS FRAMEWORK
Four Actions Framework

This framework poses 4 questions to dare an industry's strategic logic & is used to rupture
trade-off amid low cost & differentiation.
Factors:
 "Eliminate”: decrease costs used for competition.
 “Reduce”: limit the product & services to successful ones only.
 “Raise”: identify the standards of customers’.
 “Create”: discover what will generate a new demand.
All above factors merged together direct to creation of Blue Ocean.
Sources: (Four Actions Framework | Blue Ocean Strategy Tools and Frameworks, 13 )
(Mauborgne, 2005)

ERRC GRID
Kim & Mauborgne created the a simple matrix like tool named Eliminate-Reduce-Raise-
Create (ERRC) Grid that steer businesses to concentrate concurrently on the following
different factors given in the diagram during the creation of a new blue ocean.
ERRC Grid
This grid loops together with Four Actions Framework by driving companies to address
questions asked in Four Actions Framework in order to construct a new value curve. It
benefits companies in 4 ways:
 Drives to pursue low cost & differentiation simultaneously

 Invoking sky-scraping degree of engagement in its application by being easy &
comprehensible by managers at all positions
 Helps companies find out all implied assumptions they unconsciously make in
competing by steering them to scan each factor industry competes on
Source: (Eliminate-Reduce-Raise-Create Grid (ERRC Grid) | Blue Ocean Strategy Tools and Frameworks,
2016)

Three Characteristics of a Good Strategy
The strategic profile or value curve is central part of canvas, in graphical form of company’s
relative performance across factors of competition. A good strategy has 3 characteristics
 Focus
Companies who emphasize & focus only on a few main important factors of their
company & exploit their core competence are able to achieve good profits & repute
than their traditional competitors operating in red ocean strategy, who only invest in
an industry’s competitive factors, making impossible for themselves to beat their
competitors working in the Blue Ocean.
 Divergence
Similarities do exist between certain factors of companies working in both red & Blue
Ocean Strategy. For that reason reactive strategists have a propensity to share same
strategic profile on strategy canvas. By implementing four actions framework factors,
they discriminate their profiles from industry’s typical profile.
 Compelling Tagline
Good strategies have a unambiguous & gripping tagline. It must convey an obvious
message & also market an offering openly, or else consumers trust & interest would
vanish. Indeed, an excellent approach to check strength & efficacy of a strategy is to
see whether if it encloses a potential & valid tagline or not.

3.2 Formulation of Blue Ocean Strategy

To function a victorious Blue Ocean Strategy, some risks are to be reduced by adhering to a
few principles. Each company can adapt numerous diverse Blue Ocean Strategy. It's due to
this reason that target is to hit upon more personalized Blue Ocean Strategy. For identifying
market substitutes & adapting best Blue Ocean Strategy, Kim & Mauborgne suggest
companies to tag along 6 steps to reconstruct market boundaries.
3.2.1 Reconstruct Market Boundaries

In order to create blue oceans, the 1st principle is reconstruction of market boundaries where
test is to discover all opportunities effectively that can help create a Blue Ocean.
There are 6 basic approaches to remaking market boundaries for creating Blue Oceans. These
paths challenge 6 basic suppositions that keep all those companies locked in competing in red
oceans who have based their strategies on these 6 suppositions.
Diagram on next page shows all those 6 assumptions that Red Ocean follows whereas on
other hand all those approaches necessary to remaking market boundaries in a Blue Ocean.

Six Paths Framework
Kim & Mauborgne developed Six Paths Framework, allowing managers to cope up with risks
companies struggle & reconstruction of market boundaries permitting them to recognize
chances of possibilities that exist.
Six Paths Framework

Source: (Six Paths Framework | Reconstruct Industry Boundaries | Blue Ocean Strategy Tools and Frameworks,
2016)

3.2.2 Focus on Big Picture

Drawing a strategy canvas:
 envisages up to date position of company in market
 lends company a hand to diagram its future strategy
 draws managers’ attention on big picture rather than becoming immersed in numbers
We now know that strategy canvas fulfils 3 goals:

1. with the help of factors that affect competition, the canvas demonstrates strategic
profile of an industry
2. by identifying factors that rivals invest in, canvas depicts strategic profile of current &
potential competitors
3. by depicting company how it invests or might invest in factors of competition, canvas
depicts the strategic profile
We also know that strong strategy has 3 complementary qualities:

 focus
 divergence
 a compelling tagline.

Visualizing Strategy
Kim & Mauborgne created a structured four-step process for visualizing strategy that aims
people to push their strategy towards Blue Ocean Strategy.
Strategy Visualization
Additionally, the shift of strategic finest practices across units is also promoted by this
process. Moreover, this visualization can enlighten channel of communication between
individual business units to a great extent ultimately transforming Red Ocean pool to Blue.
Source: (Four Steps of Visualizing Strategy | Blue Ocean Strategy Tools and Frameworks, 2016)

Pioneer Migrator Settler Map
Pioneer Migrator Settler Map is a map that assists in visualizing, planning & predicting a
company's growth & profit, developed by Kim & Mauborgne.
Pioneer Migrator Settler Map (Kim & Mauborgne 2005)

Pioneers- business offering unmatched value & are potent sources of profitable growth. All
pioneers are blue oceans.
Migrators- are in middle of pioneers & settlers offering enhanced but non-innovative value.
Their offerings are just superior to most in marketplace.
Settlers- are badly stuck in Red Ocean with no contribution in future possible growth. Their
value curves go with basic shape of industry.
The measures that help portray present position of a company include revenue, profitability,
market share, & customer satisfaction. These measures can't figure out future of companies
because changes in business environment are too abrupt & dynamic. How well a business has
performed historically is today depicted by market share of company. The path to profitable
growth is companies shift towards pioneers by balancing their future portfolio.
Source: (Pioneer-Migrator-Settler Map | Portfolio Mapping | Blue Ocean Strategy Tools and Frameworks, 2016)

Overcoming the Limitations of Strategic Planning
Strategic planning ought to:

 be more spoken than solely written
 address on subject of building big picture
 have an ingenious element rather than being analysis-driven rigorously
 be motivational, invoking commitment
3.2.3 Reach Beyond Existing Demand

Augmenting the size of a new blue ocean is a matter of concern that gets us to 3rd principle of
this Strategy: Reach beyond existing demand, an approach that attenuates risks allied with
creation of a new market.
Companies must defy 2 conventional practices here.

 Fixating on current customers
 Driving for customized to serve different buyers all with different needs
To accomplish this principle, thinking about non-customers comes first than thinking about
customers; commonalities are prior to differences; & de-segmentation before pursuing
customized segmentation is essential.

Three Tiers of Non-Customers
Companies struggle to expand their present customers in order to mature their market share
which helps to better meet customer preferences due to finer segmentation & new offerings.
Due to fulfilment of preferences of finer segmentation, companies most of the time end up
generating narrower target markets.
In order to exploit blue oceans, it's essential for companies to act on a reverse course. Rather
than fixating their attention on customers & customer differences, they need to pay attention
to non-customers & build buyer value on dominant customer commonalities instead of
differences allowing them to reach beyond existing demand.
Three Tiers of Non-customers (Kim & Mauborgne 2005)

Three tiers of non-customers that can be twisted into customers are:
 “Soon-to-be” tier corresponds to future clients who are waiting for a better product.
A blue ocean will be formed by focusing on what non-customers want as they'll
confer superior advices than real customers using product or service.
 “Refusing” tier indicates non-customers to whom the product offered is either not
reasonable or not according to wants. This problem should be fixed so that company
may be able to enlarge market, bringing in many of new customers.
 “Unexplored” shows non-customers who didn't ever think concerning company's
offerings because their requirements are being fulfilled by other markets.
Source: (Three Tiers of Noncustomers | Convert Noncustomers into Customers | Blue Ocean Strategy
Tools and Frameworks, 2016)

First-Tier Non-customers:
What these non-customers feel like leaving your industry? Pay attention for commonalities
across their responses & not on differences between them.
Second Tier Noncustomer

What these non-customers reject using your industry's products or services? Pay attention for
commonalities across their responses & not on differences between them.
Third Tier Noncustomer

These non-customers have never been under attacked by any player for reason that their
needs somehow have been assumed to belong to other markets for always.
Go for the Biggest Catchment
 Companies should fixate on largest catchment.

 Companies should investigate across all tiers of non-customers to check whether if
overlapping commonalities exist in between them or not in order to see if you can
enlarge scope of hidden demand you can allow to run free.
 Reaching beyond existing demand should be amongst first steps when creating future
strategies.
 Companies should be attentive when competitors do exceptionally well in pulling
towards mass of non-customers to themselves with help of a value innovation as
several of company's existing regulars may get attracted to competitors.
 Companies ought to profit in order to craft a sustainable win-win upshot.

3.2.4 Get Strategic Sequence Right
The 4th principle: Get the strategic sequence right, is looked upon when challenge of building
a strong business model comes in order to certify company that it makes a handsome profit.
Strategic progression of authenticating blue ocean ideas, to make certain their commercial
practicability valid, will be discussed in this section. Companies can reduce business model
risks by understanding correct strategic sequence of ideas with their accurate assessment at
each sequence stage.

SEQUENCE OF BLUE OCEAN STRATEGY
Kim & Mauborgne suggest companies to design strategy in sequential order of buyer utility,
price, cost & adoption in order to build a viable business model, mitigating risks by
understanding idea clearly & ensuring profit for company. A deficiency in any point would
result in zero blue ocean potential to carry on with next step.
Sequence of Blue Ocean Strategy

Strategic price set must both appeal customers & also help retain them. Repute should to be
earned from very first day & quickly multiply to its possible extends which is ultimately
essential to steer clear of replications. Imitation is dejected when incomparable utility is
pooled with strategic pricing. In order to secure profits, cost is extremely important. Cost
structure should be such that it permits profitability & it is difficult for rivals to copy.

BUYER UTILITY MAP
This assists managers to reflect from a demand-side viewpoint. It schemes all those levers
that companies can tow to offer incomparable value; with numerous experiences a product or
service give to buyers. It is then easy for managers to recognize all utility spaces that an
offering can successfully fill up.
The Six Stages Of Buyer Experience Cycle

It has 2 dimensions:
 Buyer Experience Cycle (BEC):

Experience can be broken down into a cycle of 6 stages each including a broad range
of different experiences.
 Utility levers:
Ways companies release utility for customers are referred to as utility levers.
Customer productivity is most commonly used lever in unlocking utility.
o Simplicity
o Risk
o Convenience
o Fun & Image

Diagram below shows how companies can spot most persuasive hot spots to release
exceptional utility.
Uncovering Blocks to Buyer Utility
Source: (uncovering blocks to buyer utility - Google Search, 2016)
Every new idea is located on different spaces of map to check how & whether if, new
offering aims to generate a distinctive utility offer from existing offerings. Moreover, it helps
in removing hurdles to utility that resist converting of non-customers into customers.
Source: (Buyer Utility Map | Buyer Experience Cycle | Blue Ocean Strategy Tools and Frameworks, 2016)

PRICE CORRIDOR OF THE MASS
From Exceptional Utility to Strategic Pricing
Kim & Mauborgne created this for managers to unlock mass of target buyers by determining
right price. When deciding price, managers ought to assess trade-offs that customers take into
account while making buying decision plus the degree of legal & resource protection that will
oppose competitors from replicating their idea.
The Price Corridor of the Mass

Managers should consider & understand price sensitivities of buyers in order to determine
strategic price as buyers will be comparing new offering with existing ones from different
competitors.

THE PROFIT MODEL OF BLUE OCEAN STRATEGY
From Strategic Pricing to Target Costing
In business model, target costing addresses the profit side. To maximize profit potential,
actions should be started with Strategic Price, subsequently deducting profit margin from
price to determine Target Cost & Pricing Innovation.
The Price Model of Blue Ocean Strategy

Source: (the profit model of blue ocean strategy - Google Search, 2016)

From Utility, Price, & Cost to Adoption
Blue ocean idea terrorizes status quo & 3 main stakeholders of company resist change;
company employees, business partners in & general public. Company must first educate them
before moving forward with any idea.
Employees
Companies should make a strenuous attempt to communicate to employees’ new idea that it
has decided to go with so that employees should know that company well knew about threats
caused by its execution. With coordination & support of employees, companies should search
methods of neutralizing threats so that all & sundry wins.
Business Partners
Partners who fear that company’s position will be threatened by new idea is especially more
damaging than employee resistance. Partners should also be taken into trust when going with
idea.
General Public
New idea may seem threatening to general public in terms of conventional social or political
practices. In order to avoid shattering resistance & effects, company should first educate
public on different aspects of idea proposed. Public should be engaged in an open discussion
about the need for adoption of new idea. Both merits & demerits should be explained.

3.3 Executing a Blue Ocean Strategy

After development of a good business model based on Blue Ocean, company must implement
it but the challenge of execution exists. Blue Ocean intends to rupture status quo of company.
Knowing how to win over 4 hurdles while executing a strategy brings us to 5th principle of
Blue Ocean: Overcome key organizational hurdles but to accomplish this, companies need to
discard the supposed perception on effecting change.
Greater change requires greater resources & time in order to bring results. This is what
conventional wisdom asserts. This perception is helped to change by 'tipping point leadership'
that allows to triumph over 4 hurdles on fast pace keeping costs low while winning
employees’ breaking status quo.

TIPPING POINT LEADERSHIP
Such a leadership is used in Blue Ocean to turn over conventional perception & triumph
over 4 obstacles quickly & cost effectively while captivating employees’ breaking off status
quo.
It's centred on changing individuals, acts, & activities that practice a disproportionate
influence on performance.
Source: (Tipping Point Leadership | Blue Ocean Strategy Tools and Frameworks, 2016)

3.3.1 Overcome Key Organizational Hurdles

FOUR HURDLES TO STRATEGY EXECUTION
Next challenge of execution is more easily said than done especially for a strategy like Blue
Ocean as it is different from traditional practices. There are 4 main types of hurdles in
strategy execution:
Cognitive hurdle:
Awakening employees by making them realize strong need for a strategic shift as change
is usually resisted by people because they would not want risking everything.
Resource hurdle:
Bigger change requires bigger investment of both resources & time for successful
execution.

Motivational hurdle:
Motivation of key players in order to progress quickly & persistently to succeed a
rupture from status quo.
Political hurdle:
Powerful oppositions who tend to seek their interests only & before anyone could stand
up, he is shot down.
To win over hurdles, companies ought to discard supposed perception about effecting change
by focusing on Tipping Point Leadership that is explained in next topic.
Source: (Four Hurdles to Strategy Execution | Blue Ocean Strategy Tools and Frameworks, 2016)

3.3.2 Build Execution into Strategy

Everyone in organization, from top managers to front line workers, must be aligned with
strategy & support it. In order to fabricate commitment & trust; stimulating deliberate
cooperation, company should construct execution into strategy from very start off & reach
fair process in execution phase of strategy.

BUILD EXECUTION INTO STRATEGY BY FAIR PROCESS
Managerial expressions of procedural justice (Psychology of Justice) are referred to Fair

Process in execution & let’s see why it matters.
Build Execution into Strategy by Fair Process

Source: (the profit model of blue ocean strategy - Google Search, 2016)
The Power of Fair Process

Intellectual & Emotional Recognition Theory:
 Feel of being recognized for intellectual worth inculcates will of sharing knowledge
into employees.
 By using fair process, employees will engage in voluntary cooperation.
 Non-appreciated treatment towards employees would hinder them to share ideas.
 Employees may also begin to reject other’s intellect as well.
Practice of Fair Process in strategy-making builds individuals trust & inspires them to work
in the best interest of company.

THE THREE E PRINCIPLES OF FAIR PROCESS
Fair process constructs execution into strategy by stimulating individuals’ deliberate will to
cooperate & work for company.
There are 3 elements defining fair process: engagement, explanation, & clarity of
expectation. Individuals’ at all levels in company search for three Ε principles of fair process
given by Kim & Mauborgne.

3.3.3 Conclusion: The Sustainability & Renewal of Blue

Ocean Strategy
Creating Blue Oceans is a dynamic process. Once a company is successful in creating it,
imitators start to appear. How soon or late will imitators emerge or how difficult is Blue
Ocean Strategy to imitate? These kinds of questions are to be addressed here.
Barriers to Imitation
This strategy has substantial barriers to imitation. Customarily, this strategy will go for 10-15
years with no challenges & the answer to question of this sustainability can be seen in
following diagram.
Source: (barriers to imitation blue ocean - Google Search, 2016)
When to Value-Innovate Again

 Companies should examine value curves on strategy canvas & dominate Blue Ocean
as long as possible.
 They should reach highest economies of scale & market coverage by strengthening
operational improvements & geographic expansion.
 When their value curve begins to converge with those of competitors, they should try
reaching for a new Blue Ocean.

Chapter 4: Research Findings
Companies using Blue Ocean Strategy
W. Chan Kim & Renee Mauborgne - Interviews

4.1 Companies using Blue Ocean Strategy
This strategy is founded after decade-long study of 150+ strategic moves over a century
across 30+ industries.
I'd now further explicate research conclusion by briefing companies which used Blue Ocean
in order to earn huge profits & grow without competing.
An unquestionable testimony of Blue Ocean success lies in box in diagram below:
The profit & growth consequences of creating Blue Oceans (Kim & Mauborgne, 2005)
Source: (commercial viable blue ocea strategy - Google Search, 2016)
Kim & Mauborgne sorted out common plus different factors that directed to Blue Ocean
creation & separated the competitors of both oceans.
Let's see some companies who used Blue Ocean ideas in order escape competitive wars & be
successful.

Source: (Blue Ocean Strategic Moves | Examples & Case Studies | Blue Ocean Strategy, 2016)
Delivers data, news, analysis, & videos, featuring stories from Businessweek & Bloomberg
News through Bloomberg Terminal, its core revenue-generating product.
Source: (Bloomberg.com, 2016)
Canon Inc. is a Japanese company specialized in making of imaging, optical products, &
medical equipment.
Source: (Canon Inc., 2016)
Cemex is 2nd largest building materials enterprise manufacturing & distributing cement,
ready-mix concrete & aggregates worldwide.
Source: (Cemex, 2016)

Canadian entertainment company & largest theatrical producer in world which fixated on
adults instead of children & revolutionized circus industry by integrating components of both
circus & theatre.
Source: (Cirque du Soleil, 2016)
Curves International fitness is a franchise with 10,000 locations globally having state of the
art facilities for weight loosing.
Source: (Curves International, 2016)
Apple Inc. is an American that designs, develops, & sells computer software, electronics, &
online services.
Source: (Apple Inc., 2016)

Ford Model T was 1st automobile produced by Ford Motor Company. It was put at half price
in market as compared to its rivals.
Source: (Ford Model T, 2016)
iTunes is a media player & library, online radio broadcaster, & mobile device management
application.
Source: (iTunes, 2016)
JCDecaux Group is largest outdoor advertising corporation in the world known.

Source: (JCDecaux, 2016)

NetJets was 1st private business jet charter & aircraft management company selling part
ownership or shares of private business jets.
Source: (NetJets, 2016)
Novo Nordisk is a pharmaceutical company with production facilities in 8 countries, &

offices in 75 countries.
Source: (Novo Nordisk, 2016)
New York City Police Department is largest municipal police force in US, having errands in
law enforcement & investigation within 5 boroughs of NYC.
Source: (1 Police Plaza, 2016)

Private, non-profit 4 year college located in Pennsylvania, providing working adults with an
affordable education with flexible classes & personal attention.
Source: (Peirce College, 2016)
One of the largest electronics company focused in areas of healthcare, electronics & lighting.
Source: (Philips, 2016)
Quicken is a personal finance management tool developed by Intuit, Inc.

Source: (Quicken, 2016)

American company which designs, markets & sells luxury apparel, accessories, fragrances &
home furnishings.
Source: (Ralph Lauren Corporation, 2016)
Source: (Southwest Airlines, 2016)
World's largest low-cost carrier based in US.


4.2 w. chan kim & renee Mauborgne - interviews

While my research, I came across certain interviews of Kim & Mauborgne by various
interviews. There were a few questions that I felt important to share in over here in this
project in order to let audience know about this strategy by perspective of its originators.
 When Kim was asked about the attributes business leaders should look for when
selecting a market & how can one best identify a blue ocean, he answered that Blue
Ocean can be formed in any industries. A new market space is created rather than
selecting a market. He pointed out their series of methods, tools & frameworks,
discussed above as identifier that can help companies locate opportunities.
Source: (Forbes Welcome, 2016)
 In an answer to a question that what happens when a company is in a blue ocean but
it becomes a red ocean after a few years, Kim said that blue ocean has considerable
barriers to imitation that are hard to replicate for years & years. He explained that it's
possible for Blue Ocean to turn into Red Ocean & this is the reason why Blue Ocean
strategy demands companies to continuously examine their value curves & keep
renewing their Blue Ocean offerings by taking successive strategic moves in time. It's
not based on providing one-time solution. He concluded saying that creating Blue
Oceans is a dynamic process rather than a static one.
Source: (Forbes Welcome, 2016)
Following questions are mostly related to top management in company, asked by another
interviewer from authors.
 Kim was asked about importance of embracing this idea by executives. He said that
this strategy is about creating unchallenged market space. He said that there's little
room for growth in bloody Red Ocean competition. Blue Ocean has limitless
possibilities for gainful growth & so it's vital for leaders to adopt it in order to
accomplish aim of the business - 'profit'.
 When he was asked relating first steps that can aid executives to see light about this
new strategy, he answered saying that majority thinks they are in Blue Ocean when
they are essentially not so first important part is to help make them recognize that they
are in Red Ocean. Next step he said is to divert people focus away from rivalry &
fixate it on non-customers which he termed as one of the best ways that could help to
get too many of Blue Ocean ideas.
 Kim was asked to give suggestions for insuring organization-wide acceptance or

buy-in for a blue ocean strategy, he said that eagerness should be invoked by helping
people recognize limitations of Red Ocean & accepting Blue Ocean. Further he
explained saying a goal should be set in order to generate Blue Ocean by showcasing

examples of companies who have accomplished success by adopting this strategy. An

inclusive dialogue plays best part according to authors. Being a part of company &
having its ownership makes employees feel more committed towards successful
execution of ideas.
 Kim was asked the best examples of blue ocean company in any industry, he
explained with example of an airline industry saying that airlines mostly collapse
either due to bankruptcy or remain stagnant in Red Ocean but as far as Southwest
Airlines is concerned, it has depicted an excellent example of Blue Ocean Strategy.
He further explained that Southwest didn't focus on its competitors rather beat it
alternatives e.g. it provides an air travel experience at cost of car travelling.
Source: (W. Chan Kim and Renée Mauborgne: Make the Competition Irrelevant, 2016)


PART - 2
SOUTHWEST AIRLINES

Chapter 5: Blue Ocean Strategy & Southwest

Airlines
Blue Ocean in Airlines

Business Competition in Airlines Today
Southwest Airlines & Blue Ocean Strategy

Introduction to Southwest Airlines
Inception of Southwest Airlines
Years Profile
Initial Situation
Target Market
The Southwest Model
Competitive Environment
Southwest Competitive Advantage
SWOT Analysis
Fitting Southwest Strategy Into Blue Ocean Strategy

5.1 Blue Ocean in airlines
5.1.1 BUSINESS COMPETITION IN AIRLINES TODAY

By now we studied Blue Ocean Strategy from general perspectives of its application in
different industries but now, to be more specific & clear of "How can Air Indus make a
strategic move & create its own blue ocean in Pakistani airline industry?", we would be
discussing about how Southwest has so successfully operated on this strategy for years.
There are 2 sorts of oceans. Airlines today try surpassing competitors to snatch a bigger share
of demand & generate huge profits. Due to everyday increase in air travel demand, market is
getting jam-packed due to which profit ratios & growth prospects are reducing. Aggressive
competition is twisting Red Ocean of respective industry bloody. So in order to obtain
opportunity for highly money-making growth, companies are focusing more on exploiting
their core competencies by bringing in significant changes to strategies.
Majority of Blue Oceans are twisted from within Red Oceans. Competition is irrelevant in
Blue Oceans due to the fact that rules & regulations of competition are waiting to be set. Red
Oceans will all the times be a reality but with supply higher than demand in airline industry;
competitors fighting for shrinking profit markets, will not be adequate to maintain high
performance. Airlines be obliged to go beyond competing to grab enough revenue &
augmentative opportunities by forming Blue Oceans for themselves. Unluckily, airlines are
not much aware of creation of Blue Oceans in such lucrative industry but since very
beginning, strategy has been designed such as that the competition has been based upon Red
Ocean strategies where competitors have been fighting for one common profit. This has,
though in good meaning, lend us a hand to better comprehend & understand of how to
struggle with expertises in Red Ocean, what fiscal structure is more beneficial to competitors,
why strategic shift is important, & how can one sustain market profitably. A few discussions
about Blue Oceans in airline industry are present yet there is little useful direction on which
ways to build them. With no analytic frameworks to mould Blue Oceans & doctrines to
successfully control threats & risks, creating Blue Oceans has only been a desirous dream
that is seen as much unsafe for airlines to practise as strategy. Practical frameworks &
guidelines for efficient creation & capture of Blue Oceans in airline industry have been
explained further.
Several Low Cost Carriers today have based their competition on Blue Ocean Strategy & are
obtaining enormous profit pools, most successful of which are Air Asia & Southwest
Airlines. For this project, we will be considering Blue Ocean Strategy & features of
Southwest Airlines, in order to help Air Indus create its Blue Ocean & reap successful profits
& ultimately benchmark itself. So let's just go through a brief introduction about Southwest.

5.2 SOUTHWEST AIRLINES & BLUE OCEAN STRATEGY
5.2.1 Introduction to Southwest Airlines

Southwest Airlines Co. is a U.S. based airline & largest low-cost carrier globally founded in
1967 by Herb Kelleher. It has a workforce of almost 49,583 employees & operates 3,800+
flights per day on multiple destinations. It's one of the airlines to carry most domestic
passengers.
It operates only Boeing 737s, being largest operator of 737s worldwide as of January 2016,
with 700+ in service.
Founded March 15, 1967

Commenced Operations June 18, 1971
Frequent-Flyer Program Rapid rewards
Airport lounge Indus Lounge
Fleet size 717
Destinations 97
Company slogan *Fly With Difference*
Head Quarters Dallas, Texas, United States
 Gary C. Kelly (Chairmen, president, CEO)
 Colleen Barrett (President Emeritus)
Key people  Herb Kelleher (Co. Founder, Former CEO, Chairman
Emeritus)
 Rollin King (Co-Founder, Former Executive)
Employees 49,583 (2015)

Website www.southwest.com

5.2.2 Inception of southwest Airlines

Blue Ocean is about focusing more on being an alternative rather than a competitor to many.
It emphasizes on need to focus more on new customers & less on current ones.
Southwest is amongst incumbents of successful Blue Ocean followers. It targeted the market
which couldn't afford air travel expense rather preferred travelling by land. Southwest marked
itself as an alternative to land transport & avoided to compete with other airlines. It offered
increased flight frequency at extremely low fares with an on-time quality service.
Customers started to benefit from high travelling speeds at affordable prices & Southwest
took over market in no time creating its pool of Blue Ocean with no competition but huge
profit.
Southwest rejoiced 39th successive year of profitability in an extremely competitive industry.

It has been operating in clock, earning huge profits & customer satisfaction, when other
airlines have just been struggling in past so many years.
5.2.3 YEARS Profile

1. 1967: Company set up by Mr. Kelleher
2. 1971: First Flight in June
3. 1972-2001: Nation's best performing stock
4. 1997-2001: Most admired airline worldwide
5. 1986: Highly advanced training centre for flight crew
6. 1988: Best on time record, baggage handling, fewest complain
7. 1994: Ticketless travel
8. 1998: Fuel hedging strategy
9. 2002: Ranked 1st for customer service satisfaction
10. 2003: Airline of year
11. 2004: Gary Kelly became CEO, online boarding pass
12. 2005: America's top 10 most admired company
13. 2006: 1st in customer satisfaction
14. 2007: Listed as “100 Best innovative organizations" by Business Ethics
15. 2008: Purchased AirTrans Airlines
Source: (Lang, 2016)
5.2.4 Initial situation

In the very beginning, Southwest ran into some financial troubles. The first challenge was to
either sell one of its airplanes or lying off some employees. They decided to sell plane & in
return, employees were asked to minimize turnaround time to 15 minutes. Goal was achieved
& strong bond between managers & employees created till today.

5.2.5 target market

Southwest targeted following market segments
 cost & value concerned people
 business executives at small level
 short haul distances
 frequent flyers
5.2.6 the southwest model

Company operational in airline business ought to sustain its competitive advantage & that's
what Southwest has been doing since start. Its business model is based on low-cost pricing,
exceptionally efficient operations, focus on customer experience, dynamic forecasting, &
motivated employees. Through this practice, it has been able to achieve numerous
competitive advantages allowing it to stay in competition this successfully.
Since its inception, the following simplified model is being used by airline to be successful.
Source: (southwest small logo - Google Search, 2016)

5.2.7 COMPETITIVE ENVIRONMENT
Low Cost • vs. Skybus

Airline • vs. Frontier
Value
Airline • vs. Jetblue
• vs. Continental
Traditional • vs.American Airways
Airline • vs. US Airways
• vs. United
Source: (Strategic Management Case Discussion on Southwest Airline, 2016)
Southwest offers a blend of all elements of its competitors in one way or the other. It provides
value being low cost offering a homely environment. It's one in all experience for customers.
5.2.8 SOUTHWEST Competitive ADVANTAGE

Southwest has been profitable globally for over decades. Its competitors among industry have
been facing a reduction in passenger capacity time & again but Southwest remains to be on
top forever.
What is it which keeps Southwest on top every time? Answer to this lies in its strategy of
keeping things simple & in an on-going cycle ultimately reducing costs, maximizing assets,
& helps to keep up with customer expectations.
Southwest follows 4 major strategies:
 Low-Cost
 Differentiated
 Employee-Driven
 Future-Minded

Given below are some competitive dimensions followed by Southwest.
 Operational Costs & Efficiency

 Customer Service
 Company Culture & Relations
 Technology
OPERATIONAL COST & EFFICIENCY
Air travel made cheaper
First of all Southwest recognized that flights being too

expensive is main hurdle due to which people prefer
travelling by other means of transport rather than on
airplanes. It offers much low prices in contrast to its
competitors. Southwest has shaped its business model
around low operating costs for low priced solutions. It
reduced its prices to a very greater extent as compared
to any other airline, making air travel affordable for
people of each & every class.
Source: (southwest air travel cheaper - Google Search, 2016)

Labour costs
Achieving higher labour

productivity is most crucial
factor of victorious low-fare
airline business model.
Because airlines workforce
generates more output per
employee, Southwest has an
incredible cost advantage over
other airlines.
Aggressive Fuel Hedging to cut down large Fuel Costs
The 2nd largest expense after labour is fuel cost in airlines. The best solution to control
airlines fuel costs is by fuel hedging. Controlling fuel costs can help company precisely
guesstimate budgets & anticipate profit. As air travel is becoming a commodity business due
to increased competition, the solution to airline’s success is being competitive on price.
Raising ticket prices was no way to earn gap. Southwest has a lead in being successful in
executing its fuel hedging strategy. It has a proven & easily adaptable service model. It can
be seen that it has survived every industry downturn in ease, maturing its profitability
immensely in no time.

Point-to-Point Flying
Southwest doesn't relies on hub-&-spoke flying i.e. in which planes are networked into
connecting airports before flying to the final destinations which increases ground time of
planes due to services. Hubs also make a single point of failure in ways that try getting to
final destination on time when there’s poor weather at hub. The interdependent system goes
upside down as flights don't arrive at respective destinations in time.
Southwest flies on point-to-point system i.e. plane lands, turnarounds & flies back to where it
flew from. Its flying is non-stop between destinations which helps in minimizing ground time
of planes & maximizing time of planes in air & we know that more time the aircraft is on
ground, the more loss it brings to company & more time the aircraft is in air, more profit it
brings to company. Southwest's on-time performance is higher than of its competitors.
Single Type of Fleet

Southwest operates on just Boeing 737 series
which saves it a millions in maintenance costs as
single type of fleet abridging scheduling,
operations & flight maintenance. Training costs
are lesser. Without any costly disruptions &
reconfigurations, one plane fits all concept
empowers it a distinctive flexibility to operate
aircrafts throughout network easily. Utilization of
crew more efficiently is also possible due to same
fleet.

Use of Secondary Airports

Southwest operates on secondary
airports reducing delays & thus
providing exceptional service to
travellers. It has also been successful in
trimming down its airport operations
costs somewhat much better than its
competitors.
E-Ticketing
Southwest started its ticketless service in mid-
90s, & presently they are about 90-95%
electronic. Credit cards customers can go for
online transactions & now Southwest.com
bookings account for about 50 plus significant
percentage of total revenue.
Minimum Cabin Crew Assigned

Southwest assigns minimum number of cabin
crew on each flight in order to keep costs low
& serve more. It helps them utilize their
human resource capabilities in most useful
way possible.

Focused on Short Haul Travel

Southwest focus on short haul travelling
is the basis on which airline was built
upon. It has been successful generating a
profit for over 4 consecutive decades
based on potential of large customer
market for short haul travelling. Shorter
the flight times, more flights per day
airline can operate. While Southwest's
competitors could only operate 2-3
flights daily, Southwest has been
successful operating 10-12 flights per
day. It focused on key elements of
maximizing utilization & minimizing
ground time in order to be successful.
High Frequency of Flights

Due to short haul services, it's very possible for Southwest to operate more number of flights
to destinations than any other airline. Higher frequency of airline also gave flexibility to
customers to choose their travelling hours at part of their ease.
COMPANY CULTURE & RELATIONS
Culture of the Company with Respect to Employees

Since its inception, Southwest has a strong culture that can't easily be imitated at any cost
which is a big competitive advantage. This culture is the seed of its founder Herb Kelleher
who worked hard & embedded in airline a culture that focuses on protection of employees far
more than any other organization. 'Employees come first' was a very exclusive message by
any company ever. Founders concern & care for his employees created a fun filled, friendly
& extremely creative working environment. It was believed & realistically seen that
contented employees work with more efforts making company successful. Southwest’s
employee retention rate of 92.3% proves this & the concept that employees who love their
company will make customers be keen on that company, too. Employees here enjoy some of
most finest compensation packages & best benefits in industry.
Employees Loyalty directed to Exceptional Customer Service Experience

Southwest aimed its employees to be labelled to customers as a superlative workforce in all
aspects. It has mostly been differentiated by other airlines on basis of low cost. Exceptional
treatment of employees with customers helps it brand its employees automatically on a
exclusive position in market. Positive attitude of employees towards customers has brought in
much customer satisfaction & profitability.

Culture of Sharing Goals

There's a keen focus on shared knowledge, shared goals, & mutual respect at Southwest. This
can be seen the way airline monitors performance. Airline believes that metrics based on
functional liability gives birth to chaos & quarrels in departments for pitfalls. Southwest
makes use of team metrics for monitoring performance. All departments work mutually to
improve all activities or operations within airline. Teams escort to a more unified company
where all people struggle together, succeed together, & in case of failure, avoid blaming each
other. This eradicates chances of internal chaos between individual employees. Culture in
companies start at top. Herb & other top managers have burned fuel day & night in order to
help a unique & fun loving culture evolve & sustain, bringing in employee contentment &
customer satisfaction.
Branding:
Creating itself a brand is most important thing a company can do. Southwest brands itself to a
congregation of entities. Southwest's success depends on its aptitude to lucratively brand
itself to following 3 parties. Airline spends a significant amount of capital ensuring that it's
being branded in goods ways to extent of the possibility.
The Right Recruits

Most valuable competitive advantage of Southwest has been its deep attention on hiring a
competent force. It prides being a people-oriented airline that functions with approachable
workforce. It hires people who personify airline's brand messaging & who have a zeal for
serving people. Airline has rigid hiring policies & practices to ensure right blend of
employees.
Employee profit-sharing program

Every employee at Southwest has a small share in airline which makes all liable to be eagerly
dedicated towards company just as its solely theirs & any loss or success would directly
impact them.

A Relatively Happy Workforce

World's most unionized carrier is Southwest with 87% of its workers in union but there has
never been a strike. Moreover, its workforce is one of the highest paid.
Leadership
Another very important key to success factor of Southwest is their strong leadership. Strong
leadership has always proved to lead to financial success. Leaders at Southwest have all
qualities that it takes to be a strong leader. Their strong visions & motivation has lead
company towards success.
Herb Kelleher - Founder (Southwest Airlines)

Gary Kelly - Chairman & CEO (Southwest Airlines)




Gary Kelly, Southwest's C.E.O., dressed as Woody from “Toy Story” at the airline's
Halloween party.
Fun LUVing creative attitude


CUSTOMER SERVICE
No Meals, Just Snacks

Only beverages & snacks have always been on
flights; no meals. Due to low fares & short
haul travel, there has never been a strong need
to introduce meals on flights as customers are
more concerned with price than any other thing
& only snacks would do much for them for a
short travelling. This also allows airline to tidy
& stock swiftly, resulting in low turnaround
time & reduce costs.
Source: (no meals just snacks southwest - Google Search, 2016)
No assigned seats
In Southwest there are no assigned seats. If new airplane is brought in with dissimilar
configuration of seats, then there's no need to adjust seating arrangement & issue new
boarding passes, avoiding chaos & ruptures in flow of operations. Passengers simply board &
sit where they like & sit.
No Frills, No Fees
It only sells one-way fares which helps in trimming down costs. Moreover, it inculcates into
travellers the feel that they're getting value for money. It doesn't have fuel surcharges, neither
charge for ticket changes etc.
No Extra Baggage Charge

Southwest has resisted trend of charging bags.
Southwest's “second bag flies free” policy is an
excellent marketing strategy which has brought
operational benefits too. Luggage is important
to passengers & it saves time for the reason
that when people are charged for check bags,
then they seek to carry extra in cabin, which is
to be checked at gate before departure. Time
just before departure is very crucial for on-time
performance.
Source: (no assigned seats southwest - Google Search, 2016)


Rewards
Southwest offers Rapid Rewards points that customers can benefit from in future. It has
partnered with Chase Bank & proposes travellers a Southwest Chase® Visa credit card that
enables passengers to earn & redeem points for future flights which ultimately helps in
bringing new customers, & expands business from existing customers. Southwest has
positioned itself as a company dedicated to serving customer needs & wants.
Source: (Image: Southwest Rapid Rewards - Susie Lim - Creative Director, 2016)
Source: (Image: Southwest Heart, 2016)

Source: (Image: Southwest Rapid Rewards - Susie Lim - Creative Director, 2016)
Source: (Image: How to Make Airline Rewards Work for You – Traverse, 2016)

TECHNOLOGY
Use of technology is extensive in airline in order to fulfil its many different objectives & let
operations run efficiently.
Acquisition of Upgraded Fleets

New Boeing 737-800s were brought in 1st quarter of 2012 keeping in view customer capacity
& increase in demand which means more profits. 737-800s have better fuel efficiencies &
can reduce unit costs. Moreover, due to large size of aircrafts, additional seats can be
introduced in same number of planes; reducing flights & capacitating demand, ultimately
helping cover fuel costs & chip in to company’s operating margins.
No Complementary In-Flight Electronic Entertainment Services

Southwest does not offers much in-flight electronic entertainment to its customers rather a
fun LUVing attitude is practiced by crew on flight to let lively atmosphere take place. Now it
has introduced free live TV for passengers. Absence of electronic media helps Southwest cuts
costs by a significant degree.
Source: (no in-flight entertainment southwest - Google Search, 2016)
Rock artist Gavin DeGraw performing on a Southwest flight



Aggressive Promotions
Another differentiation strategy of airline is aggressive promotion that it does to promote
airline. It conveys its messages in form of easy & lucid advertisements that help in making
potential customers aware of airline & its policies. Moreover, a lively environment is kept at
company, airports & within airline in order to enhance their attractiveness & foster
innovation.
New Aircraft Look Promotions

Source: (southwest aggressive promotion - Google Search, 2016)
Facebook Marekting Series (Southwest)


Promoting GOLFWEEK creating a Marketing Alliance between 2 companies using Adams

and the sport of golf as vehicles to court more business travellers
Featured on Southwest's homepage, airline's marketing team is hitting tropical destinations

hard

Limited Travel Agents by the Use Technology

The primary airline to create home page on Internet was Southwest which is an immense cost
cutting tool. If cost of making a reservation online costs Southwest $1, same reservation costs
$10 via travel agent. Various marketing strategies are being used by it, keeping costs low by
cutting down travel agents.
Southwest's reservation page, alongside other non-Southwest flight

Southwest app includes several functions


Southwest Self Reservation


LONG TERM FORESIGHTEDNESS
Focus on Future in Order to Keep Improving

Since beginning, Southwest holds a unique position in industry. Making profits by cutting
costs with employee satisfaction have been the strongest phases.
Southwest’s focus on its future is one of another major strategy that it follows advanced by a
flexible business model that supports undetermined violent changes. Everything is done in
best interest of company & decisions are made keeping long term benefits of company in
mind. AirTrans acquisition by Southwest depicts the ways it is expanding its services &
growth by fixating on escalating its offering, rising its share, absorbing competition on first
hand, & preparing for future growth. Such strategies hold immense importance in order to
survive competition both today & tomorrow. It keeps searching for opportunities of lower-
cost solutions increasing capacity & revenue. It eradicates anything that increases costs.
There are many reasons that Southwest has sustained to mature this successful in industry by
breeding corporate strategy & via competitive advantages, & supreme company culture.
The Acquisition of AirTRAN


The Biggest Success Factors Of All Times:

Though Southwest has adapted a number of ways that differentiates it, a survey relating it has
shown that 'LOW PRICE' has been most important of all to public, & all other
complementary factors come after. Second important factor has been its 'CULTURE'.
Source: http://teamsparksouthwest.blogspot.com/
Source: http://teamsparksouthwest.blogspot.com/

Sources:
http://teamsparksouthwest.blogspot.com/
http://archive.wired.com/cars/futuretransport/news/2008/07/portfolio_0708
http://www.investopedia.com/articles/investing/061015/how-southwest-different-other-airlines.asp

5.2.9 SWOT ANALYSIS

Before we proceed further, first let's take a look on SWOT analysis of Southwest. SWOT
analysis stands for strengths, weaknesses, opportunities, & threats—& is a structured
planning method that assesses 4 aspects of any business.
Though being much successful, Southwest still have many challenges presently to overcome,
most important of which is sustaining its culture, searching for new opportunities to generate
profit & limiting entry of new LCCs in market.
Strengths Weakness
- Strong fleet operations - No class of seating
- Courteous & friendly staff - No long haul flights
- Strong management team - Growth into larger airports
- Dominant market position - One type of fleet
- Low turnaround time - Carry limited cargo
- Largest airlines in terms of highest - Declining profits & margins
passenger per year - Heavy dependence on Passengers
- One type of fleet (cutting costs)
- Strong brand image & best LCC known
- Highest domestic daily departure than
any other US airlines
- Ticketless travel
SWOT
Opportunities Threats
- International expansion - Intense Competition
- New markets for long haul flights - New entrants
- Market growth due to low prices - Regulation restrictions
- Benefit form AirTran acquisition - Fluctuations in oil prices
- New technologies leading to new - Environemntal concerns
offerings - Decrease in business travel due to IT
- Better utilization of internet for - High speed rails could endanger short
marketing haul flights
Source: (southwest airlines swot analysis 2016 - Google Search, 2016)

5.2.10 FITTING SOUTHWEST STRATEGY INTO BLUE OCEAN

STRATEGY
Now let's see whether if Southwest strategy fits into most important different dimensions of
Blue Ocean Strategy.
Points of Blue Ocean Strategy
First let's screen if Southwest fits into summarized points of Blue Ocean Strategy or not.
 Pursues Low Cost & Differentiation

Southwest pursuits both differentiation & low cost simultaneously.
 Creates Uncontested Market Space

Southwest made competition in airline industry irrelevant by reconstructing market
boundaries.
 Empowers through Frameworks & Tools

Southwest followed various systematic frameworks & tools proposed by Blue Ocean
Strategy in order to escape competition.
 Step-by-Step Process
Provides a understandable four-step process in order to allow formation of Blue
Ocean Strategy.
 Maximizes Opportunity; Minimizing Risk

Southwest has maximized its opportunities to grow using different means of
expanding its market growth through new viable ideas thus decreasing risks of its
loss.
 Execution into Strategy

Southwest, since its inception, had a simple & easy-to-understand strategy which
resulted in its easy implementation.
 A Win-Win Outcome
Southwest kept aligned 3 strategy propositions of value, profit & people ensuring
stakeholders, employees, company, & buyers a win-to-win outcome.

Value Innovation
This cornerstone comes when price, utility & cost structures are aligned in best possible way.
Southwest has given best example of this concept by decreasing costs & increasing buyer
value.
DECREASING COSTS
DECREASING COSTS
 one type of fleet
 no- one
classtype of fleet
segmentation
 no meals
- no meals
 no much in flight
- noentertainment
in-flight entertainment
 minimum cabin crew
-
INCREASING BUYER VALUE

 high employee productivity
 lower turnaround time
 customer delightfulness
 great quality of service
Value Innovation of Southwest Airlines

Strategy Canvas
Strategy Canvas detains up to date strategic landscape & future of company in a graphical
representation.
Strategy Canvas of Southwest Airlines

Notice how Southwest competes with model of car transport. The competing factors of
market & degree to which these factors are taken into consideration are visible enough to
show well Southwest has captured market.

Four Actions Framework & ERRC Grid
This breaks trade-off between differentiation & low cost, reconstructing buyer value by
eliminating, reducing, raising & creating factors which when merged together will direct a
company to create Blue Ocean.
(ERRC) Grid also steers companies to pay attention on eliminating, reducing, raising &
creating different factors during creation of a new Blue Ocean.
Both when loop together create new value curve benefitting companies.
ELIMINATE
 meals
 in-flight entertainment
 ticket in hard form
 use of primary airports
 assigned seats
 baggage charge
 travel agents
REDUCE RAISE
 prices  fuel hedging

 labour costs  short haul flights
New
 type of fleet  frequency of flights
Value
 cabin crew  domestic
Curve
destinations
 employee motivation
 upgraded fleets
CREATE
 applications for services

 exceptional culture
 great leadership style
 iconic brand
 passenger rewards
 joint venture with
AirTran
Four Action Framework & (ERRC) Grid of Southwest Airlines

Three Characteristics of a Good Strategy
The three characteristics can clearly be seen in strategy of Southwest:
 Focus
Southwest emphasizes & focuses only on main important factors & exploits its core
competencies to achieve good profits & repute than its competitors operating in Red
Ocean.
 Divergence
By implementing four actions framework & ERRC Grid factors, Southwest sets apart
its profile from industry’s typical one.
 Compelling Tagline
It has a strong & valid tagline that shows strength & efficacy of its strategy &
executes "more than just a flight experience".
Source: (southwest airlines - Google Search, 2016)

Six Paths Framework
This lets company to cope up with risks & reconstruction of market boundaries. Southwest
created its Blue Ocean Strategy using this framework too.
Industry
 It competed with companies in its own industry.
 It also competed with products & services produced in substituting industries e.g.
automobile industry.
 Its customers can make a decision between substitutes & alternatives due to it being
low cost.
Strategic Group
 Acquisition of AirTran by Southwest pursues similar strategy within industry.

 It understood which factors drive customers to trade up or down between choices.
 It's ranked on dimensions of Price & Performance.
Buyer Group
 Not only one customer but a series of “buyers” is involved directly or indirectly, in
buying decisions.
 It targeted a specific customer segment.
 It fixated on particular buyer group.
 It created Blue Ocean by targeting specific market & offering something different
from anything industry has seen before.
Scope of Product or Service Offering
 It provided what buyers wanted when they choose product or service.

 It analyzed all compulsory needs to complement customer seek.
Functional - Emotional Orientation
 It very well knew how to target customers on different appeals.

 It added emotion to offerings by use of different mediums in order to stimulate
demand.
Time
 Southwest created Blue Ocean by analyzing changes that business trends will bring to
value offered to customers & its impact on company’s business model, both in present
& future.
 It tries predicting future trends & works accordingly to meet future goals.

3 Tiers of Non-customers
Southwest has strived to retain & expand existing customer base in order to grow market
share by better segmentation & greater variety of offerings to cater market needs due to
which it ended up generating specific target markets for itself.
To exploit more of its Blue Oceans, it now needs to fixate on non-customers & construct
buyer value on dominant customer commonalities instead of differences to reach beyond
existing demand.
 Its current target market is already giving it giant revenues & satisfaction.
 It's very quickly targeting its soon-to-be customers that are half agreed to choose
specific offering by focusing on their immediate need.
 It also analyzes refusing customers by offering something completely latest that has
only been created to attract new segments.
 It's trying to explore new markets of customers in order expand market share.
Keeping the Strategic Sequence Right
Southwest's strategy is in sequential order of buyer utility, price, cost & adoption building a
feasible business model & mitigating risks.
1. There's an exceptional buyer utility in Southwest's idea.
2. Price of offerings by Southwest is easily accessible to public.
3. It has successfully attained cost target to profit at its strategic price.
4. There's been much low trouble for Southwest to carry on with idea due to an
exceptional business model.
Strategic price of Southwest appeal customers & help retain them. Repute has been earned
since its inception & has quickly multiplied which is ultimately essential to steer clear of
replications. Its imitation is dejected as its incomparable utility is pooled with strategic
pricing. To secure profits, cost is extremely important. Southwest’s cost structure permits
profitability & it's difficult for rivals to copy.
Tipping Point Leadership
Southwest has used tipping point leadership in strategy to turn over conventional perception
& triumph over 4 obstacles quickly & cost effectively while captivating support of
employees’ in order to rupture from status quo.
It has always been focusing on changing people, acts, & activities that have a great impact on
performance.

Four Hurdles in Strategy Execution
There are 4 main types of hurdles in strategy execution which Southwest has very easily cut
through:
Cognitive hurdle:
It has awakened employees by making them realize strong need for Blue Ocean in order to let
them work for company they love rather than being a resistance.
Resource hurdle:
It has been utilizing best of everything needed to run successfully.
Motivational hurdle:
It has motivated everyone in company since its inception in order to let company progress
quickly & persistently to succeed & avoid status quo.
Political hurdle:
Everyone works as a team & union workers have never been against interest of the company.


PART - 3
air indus (PVT) Ltd.

&
Blue Ocean Strategy

Chapter 6: Air Indus (PVT) Ltd
Air Indus In Brief

Introduction & Scope
Mission Statement
Vision
Fleet
Routes
Where they Fly

Routes
Schedules
Products & Services

On Ground Services
In-flight Experience
Cargo
Catering
Charters
Indus Miles
Planning Travel with Air Indus

Online booking
Terms & Conditions
Contact
6.1 Air Indus In Brief
Information in this chapter has been taken from Air Indus Official website in order to obtain
real facts & figures of Airline.
Source: (Welcome to Air Indus Airline (PVT) Ltd., 2016)
6.1.1 Introduction & Scope

Air Indus is backed by a Group of Companies that have made a repute in automotive,
engineering, & hospitality sectors. The portfolio of group encompasses chief projects that
Group has itself undertaken plus in association with reputed international entities.
Air Indus came into being when the key stakeholders of Group pondered that business in
aviation sector in Pakistan is under a rainy day. They exceptionally believed that there is no
such Pakistani based airline that has ever set any global aviation standards resulting in no
Pakistani airline being a World Class Airline.
Passengers were given sub-standard services with not so good quality & low safety standards
at high prices.
So stakeholders designed a transforming business model that they believed would change
face of aviation industry in Pakistan with stimulation of a World Class Airline in true
meanings serving on all possible routes of cities of Pakistan.

Air Indus was born

It was at this time the Government of Pakistan made certain adjustments in Aviation Policy.
Standards were improved & policies were made stricter in order to establish an airline in
Pakistan.
Its inception took several months of keen hard work & extreme determination of a capable
team shored up by investors to construct a ground-breaking & sustainable business model
satisfying all latest Aviation Policy requisites as a result of which Air Indus originated as 1st
private airline in Pakistan granted a license under most strict policy conditions & in a obvious
procedure.
The Chairman's vision is to revolutionize industry of air travel into a reality now. According
to airline, passengers will never be taken for granted instead will be welcomed with esteem,
will be given value & be served with utmost promising standard of customer care. Air Indus
states to be 1st Pakistani air carrier to target more domestic routes to offer variety, constancy,
reliability, & aid for travellers.
A warm welcome by Chairman & management team of Air Indus is extended to everyone
with a pledge that public will:
Air Indus in Brief

Founded 2010
Commenced Operations 28 July 2013
Hubs Jinnah International Airport (Karachi)
Frequent-Flyer Program Indus Miles
Airport lounge Indus Lounge
Fleet size 6
Destinations 10 incl. cargo
Company slogan *Fly With Difference*
Head Quarters Karachi, Pakistan
Key people Abdul Wahab (Chairmen & CEO)
Website airindus.com.pk
Source: (Air Indus, 2016)

Source: (air indus links pakistan - Google Search, 2016)

6.1.2 Mission Statement

Air Indus terms itself as a company devoted to make available:
• Safe;
• Punctual;
• Reliable;
• Affordable air travel &
• Convenient Schedules
services of premier &best eminence & quality.
In order to accomplish its vision, it has started a LCC with focus on both regional & domestic
routes to fulfil traveller needs within Pakistan. They also plan to serve on all major
destinations globally very soon.
It offers highest air travel services within Pakistan & overseas by offering flights that are
propped up with 4 crucial constituents of quality travel namely safety, schedules, services &
savings.
On both ground & in air, its inventive conception has extended a fresh chapter in industry of
commercial airline.
6.1.3 Vision
A vision of collective principles & ethics is something that that guide organizations
throughout varying markets & its trends & circumstances. Air Indus terms itself as an airline
dedicated to offer passengers an incomparable service.
To cater needs of travellers within Pakistan, Air Indus is focused to emerge as a LCC. They
also plan to serve on all major destinations globally very soon.
It offers highest air travel services within Pakistan & overseas by offering flights that are
propped up with 4 crucial constituents of quality travel namely safety, schedules, services &
savings.
On both ground & in air, its inventive conception has extended a fresh chapter in industry of
commercial airline.

6.1.4 Fleet
Air Indus fleet consists of Boeing 737-300 aircraft; all 148 economy seats. They are very well
maintained. In Pakistan, these contemporary & popular aircrafts are youngest of its sort.
Manufacturer Aircraft MSN

Boeing 737-300 27469
Boeing 737-300 27910
Boeing 737-300 24672
airindus.com.pk
6.2 Where We Fly
6.2.1 Routes
It aims to connect all main cities in country & give enhanced prospects of boom for industry
& commerce in Pakistan.
Destinations Air Indus has plan to serve within the country include Bahawalpur, Faisalabad,
Islamabad, Karachi, Lahore, Multan, Peshawar & Quetta.
It plans to serve in Gulf & Middle East after victorious operations of its 1st year & then will
sketch to serve on destinations in Far East, Europe & North America.
Source: (Air Indus, 2016)


6.2.2 Schedule
To cater both general & specific needs of customers, it has scheduled to serve on wide range
of destinations at convenient time slots. After doing well in its 1st year of operation, it plans
to fly to Gulf, Middle East, Far East, Europe & America.
6.3 Products & Services
6.3.1 On Ground Services

Air Indus believes that customer services must be matchless. The devoted personnel at Air
Indus will for all time help out & support by taking care of all customer needs.

Source: (Jobinpk.com, 2016)

Source: (Historyofpia.com, 2016)

6.3.2 In-flight Experience

Cabin Ambiance
To improve & make memorable customer experience, Air Indus has fashioned a new look
with sparkling & modern ambiance complementing calm & spacious cabin environment.
Cabins are designed to give more space with comfort. Cabin crew serves travellers with finest
welcoming services onboard.
Source: (Pakwheels.com, 2016)

Safety Comfort
Air Indus assures disable travellers a safe & cosy air travel. Safety briefings are given to
customers who wants them which includes safety measures & procedures, exit spots &
communiqué concerning most proper approach to offer support to passengers in compliance
to their needs.
During flight announcements, flight attendant will provide updates. Safety briefings are
delivered in Urdu & English. Seat pockets of aircrafts have safety briefing cards for
passengers.
Source: (Historyofpia.com, 2016)

Source: (air indus cargo - Google Search, 2016)

6.3.3 Cargo
Air Indus Domestic & International Cargo Service
Most important task that it claims as its major liability is to transmit freight on time. At
present, cargo services of Air Indus are restricted to domestic operations but it has plans to
extend services worldwide. It considers freight safety as its first priority & takes all safety
measures to make sure that cargo does not spoils or gets misplaced.
It claims to have high-tech cargo booking & tracking system to certify that customer cargo
has reached on time.
Airlines range of cargo services are designed to amplify output & profitability of customers at
very economical rates.
Special chartered flights at discounted rates are also provided on requests.

6.3.4 Catering
Air Indus intends to deliver most excellent when it comes to services. Drinks & meal onboard
are provided by trustworthy suppliers before being freshly ready for flights. All course meals
are designed by top chefs. The stimulating blend of savours, quality & aromas make meals
scrumptious. Premium class ingredients are used & there is no compromise on standards of
food safety when it comes to creating appetizing food. Due to different needs of each
customer, Air Indus provides an immense selection of snacks & meals. It aims to make
passengers fine dining experience to forever stay ever green in their minds.

Source: (air indus catering - Google Search, 2016)
Source: (Image: Inflight food | Indus Air Karachi to Islamabad | Flickr - Photo ..., 2016)
%3A%2F%2Fwww.flickr.com%2Fphotos%2Fameerhamza%2F17524648589&docid=8oWyBHiyd6VcM&tbni
d=fTm0DmwerKwIhM%3A&w=70
0&h=472&bih=698&biw=1536&
0ahUKEwjz4LTUg5nMAhXCl5QKHderCvkQMwgbKAEwAQ&iact =8

6.3.5 Charters
When airlines can’t meet traveller needs then charter is convenient & efficient way to travel
by air. Aircraft charters, being a first-class service, answers transport troubles & issues.
For both short-term and long-term purposes, Air Indus can set up on-demand private charters
to grant a safe & hassle free air travel experience. It states that business travellers will be
delighted to find airline services safe, homely, convenient & both time & cost saving.
6.3.6 Indus Miles

After joining Indus Miles Frequent Flyer Program, customer enters an exclusive world full
with privileges & fanatical services by airline keeping their focus on customers' needs &
wants.
Following are the reasons that it gives, to bond to Indus Miles Frequent Flyer Program:
1) Free & easy membership as customer only needs to fill a specific form.
2) There are lots of ways to earn Indus Miles. It rewards customers each time customer
travels on it. Doesn't matter if customer does not travel much with respective Airline,
Miles still reward customer just the same. Air Indus is thankful enough to its business
Partners for services they offer to them. Miles are easily earned when customers book
a hotel, a car, go dining & in many more ways.
3) There are many other ways that customer can spend miles & achieve benefits.
With Indus Miles Frequent Flyer Program, customer can

 ask for an award ticket
 get discounted fares
 have an additional baggage allowance
 have priority boarding & priority check-in
 experience soothe of VIP lounges at certain airports
 get discounts at certain retail outlets

6.4 Planning Travel with Air Indus
6.4.1 Online booking

The easiest method to book flight on Air Indus is booking online through airlines website.
Customers can get most up-to-date special offers, discover airlines incredible low fares &
shun fees of booking agents.
To book a flight using airline website Internet Booking Engine, customers ought to follow 5
simple steps:
1. Check Availability
2. Select preferred flights
3. Confirm Flights
4. Enter Passenger Details
5. Confirmation & Payment
Source: (Pakwheels.com, 2016)


6.5 Contact

Chapter 7: PAKISTANI AVIATION INDUSTRY
Industry in Brief
Then & Now
IATA Reports
National Aviation Policy (NAP 2015)
Old Carriers; New Strategy
Why Air Indus?

With Reference to External Factors
With Reference to Internal Factors
Blue Ocean Strategy in Pakistani Aviation

Industry...
Success or Failure?
Global Passenger Surveys & Pakistani Context
Public Pole

7.1 INDUSTRY IN BRIEF
7.1.1 THEN & NOW

One of the most important sectors of a country's economy is transportation & aviation
industry is a major part of this segment. Communication & transportation sector in Pakistan
holds over 10% share in GDP. Other sectors of economy that aviation industry can have an
impact on include tourism, trade & socio-economic condition of country.
Historically, until the deregulation of aviation industry, Pakistan International Airline has
been dominant & enjoyed monopoly. It was ranked as one of the best airlines round globe
until incompetent leadership & poor management took over PIA.
Other airlines started to operate & get recognized only when PIA started to collapse due to
certain reasons. The downfall has been a nightmare to PIA but it has turned out to be no less
than a blessing to many other Airlines, both domestic & international, starving for giant profit
that PIA was gulping all alone due to its sole good identity & monopoly.
Emirates Airlines, Etihad Airways, Qatar Airways, Turkish Airlines, Kuwait Airways, Oman
Air, Gulf Airlines, & Saudi Airlines are amongst major international competitors to Pakistani
Airlines these days.
Domestic Airlines in rivalry include PIA, Shaheen Airlines; Air Blue & Air Indus. Exit of
Bhoja Airlines & Aero Asia has left market open for new fish to enter.
7.1.2 IATA REPORTS

According to IATA, Pakistan is amongst fastest growing domestic air travel markets with an
estimated augmentation of 9.5% annually, over 2 times quicker than world average annual
growth rate of 4.1% in coming 20 years.
2013-2014 Provisional Figures
Source: (Haq's Musings: IATA Says Pakistan Among Fastest Growing Domestic Air Travel Markets, 2015)

7.1.3 National aviation policy

The middle class in Pakistan is highly shifting choice of transportation to air travel. Air
travellers in Pakistan augmented by 8% to 17.9 million in fiscal year 2013-14 recording best
ever intensification in travellers in last 3 years. In order to capacitate passenger growth,
airport upgrades & new construction is taking place. Islamabad, Sialkot & Multan airports are
recent examples.
PIA is losing both its market share & money when air travel is in growing mode.
Competitors, both domestic & international, have benefited at expense of PIA.
Government of Pakistan declared a latest National Aviation Policy, NAP 2015, estimating
prospects of attracting new investments in this sector. Taxes & duties on investments in this
policy are reduced in order to let aviation sector promote in Pakistan ultimately expanding
markets, creating jobs & booming GDP.
7.1.4 OLD CARRIERs; NEW STRATEGY

Yes, it's indeed a pleasure to witness Pakistani aviation sector beginning to grow by increase
in investments, improvements in offerings & creation of employment opportunities but with
only a few Pakistani airlines, what possible options are left for perfections in industry?
Increase in demand & intense competition would lead carriers to highly pay heed to everyday
changing needs & wants of customers & any fail in this aspect would gradually result in
decline of industry overall.
The answer to this question is not emergence of new airlines but existing airlines taking up a
new strategy. Pakistani carriers are competing their rivals in traditional market that has been
in rivalry since beginning of this industry. Nothing new has ever taken place when it comes
to a big change i.e. changes that are long lasting. This long lasting change will only occur
when a enhancements in strategies of would take place.
Value-innovation is attained by simultaneous pursuing both low cost & differentiation. Both
value & innovation are required to accomplish this. Value without innovation is deficient to
attract a market. Innovation without value often shoots afar what users are set to pay for.
Pakistani airlines, specially low cost, need to exit traditional competition, strategically known
as Red Ocean & fit into latest concept of Blue Ocean which should be reflected in their
strategic planning & operations in order to offer services to markets that are right away low
cost, high-impact, & operationally executable. All airlines need to spin for a first-class
genuine professional team. Blue Ocean is the only way to provide low cost yet high quality
service to passengers especially in a region where we live.

7.2 Why Air Indus?
7.2.1 with reference to external factors

I particularly think that Air Indus is amongst the domestic carriers of Pakistan that can easily
create its Blue Ocean pool. Reasons to this are as follows:
Established Players
Other competitors in market have already established their good say & advocacy. They are
running into deep profits & have attracted a number of loyal customers since the downfall of
PIA. The decline of PIA has benefitted others in market to the extent of possibility due to
high profit margins & low competition for Pakistani Airlines. With such fierce oppositions, it
would take much time along with dire efforts for Air Indus to establish a very strong position
in market.
New Entrants; better change then to collapse
According to Express Tribune, Rayyan Air, Fly Pakistan Air & Vision Air are soon to enter
market, with Rayyan to offer charter services too. Competition will get more intense &
prospects for growth would ultimately decrease because of a number of choices that public
would have access to. Air Indus can never be sure what percentage of traffic would like to
choose their services. This uncertainty can lead to various falls.
Addressing Public Demand
Due to substitutes, people wouldn't have problem of travelling by air. Multiple Airlines
would be operating in near future & the developed perception of Shaheen Airlines & Air
Blue would automatically appeal customers more towards them. In scenarios like this, only
one thing that could help any airline stand out is offering something which industry & public
have not seen before. Something based on value innovation.
Increase in Operational Costs
Due to fluctuations in fuel prices, procurements costs & higher expenses of retaining human
resources, it's very important for Air Indus to control its costs by cutting off secondary needs
of passengers to the best possible verge. This would not only help airline to save revenue but
also attract more passengers as Air Indus could then easily lower its prices. More demand &
less expense would result in best combination.
7.2.2 With reference to internal factors

Till now we analyzed why Air Indus needs to change its strategy. Now we'll see internal
reasons that can logically depict why shift of strategy to Blue Ocean is vital for airline.
Following reasons have to do with the airline itself only.

New Existence
Air Indus is newest entrant in market. It has not yet developed to an extent like other
domestics carriers. A new baby in family can bring new joys very easily in its own ways
attracting many people & creating new perception.
Easy Shift of Long Term Strategy
Blue Ocean is all a game of changes in long term strategy. Air Indus, being a new born can
easily shift its strategy to Blue Ocean unlike other carriers. Big giants who are already
gobbling up major share of market would never like risking their efforts of over years just by
changing their strategy & especially when their businesses are already running into deep
profits. Only Air Indus is this feasible to take shift but this single shift would for always take
it to new heights where other carriers would not be able to reach easily within a few years
because the victorious win is then for over right away 15-20 years across.
Domestic Passenger Growth
Around 6.7 million Pakistani passengers use airlines to travel domestically every year. This
new increase in domestic demand can easily be capacitated by LCCs. With this number of
passengers & expected increase in demand, there is a big pool for huge profit margins for Air
Indus.
Low Funding
Blue Ocean Strategy, one like Southwest has adopted, doesn't requires much investment due
to low operational costs & cut down of expenses. Many costly factors are reduced or
eliminated in Blue Ocean so Air Indus would not have to invest much in order to start with a
brand new Strategy.
Same yet Different
Need for travelling can be easily capacitated by many multiple choices of airlines. Need for
travelling isn't need of time. The need of moment is something that is different based on a
keen focus of customers rather than fighting heavily with so many competitors. Everyone is
offering the common need i.e. same service but customer "delight" is somewhere waiting to
be tapped. Advocacy is best build when customers are delighted by offerings rather than
fulfilment of common need merely.
Sole Identity
Shaheen Air & Air Blue are running into their pool of competition at a high pace whereas it is
utmost essential here for Air Indus to create its own unique identity by following something
which could really make it "the only one" in industry so that it could stand up to its
competitors in a same yet different way. Adopting this model would lead it to a good
distinctive identity & advocacy build with time would itself create its goodwill.

Shortcut to Successful Perception
Shaheen Air & Air Blue have already established good public perception. It'd be a little
difficult for Air Indus to create wide perception about its goodwill as it already delayed in
starting its operations & many claimed it a bad start. In Red Ocean pool, it can't compete that
efficiently or it could take much enough time to be successful. The only way mindsets can be
influenced & altered is with the help of something extremely influencing & nothing else can
be done so successfully than to create a Blue Ocean, benefiting both itself & public.
Maximized opportunity; minimized risks
As we know, Air Indus would have no problem changing strategy. Why because it is still in
developing mode. It has to beat much in order to level other dominant carriers. Much of the
investment in terms of efforts, time & funding that other LCCs have invested in their airlines,
Air Indus would take years to come in line with them but adapting Blue Ocean Strategy
would avoid Air Indus the big wait & would help nurture best results in less time because of
no competition. This is a very good example of maximum opportunity & minimized risks.
7.3 Blue ocean in Pakistani aviation industry...
a success or a failure?
According to case studies & research, Blue Ocean Strategy wherever applied has been a
success reaping giant profits. It has never been a failure when applied properly. Many
organizations have unknowingly been working with fit of this strategy till it officially got its
name in 2005 by Kim & Mauborgne.
According to all my research & keeping in scene Pakistani psychological traits of public,
Blue Ocean Strategy for LCC would prove to be hit. Let us see how.
7.3.1 IATA Global passenger surveys & Pakistani context

IATA compiles different surveys every year round the globe in order to present a self-
sufficient data of air travellers from round the globe answering questions
 what travellers want

 how travellers behave
 why travellers make choices
 what travellers spend their money on
It covers whole thing regarding customer decisions & purchase. Recent most survey was
conducted in 2015 which has been detailed below. Let’s go through it & conclude whether if
Blue Ocean will be a hit or not as survey is completely based on market study of customer
preferences & choices.

Source: (IATA - Global Passenger Survey , 2016)
This image depicts age groups who have been interviewed & percentage ratio of interviews.
It can be seen that highest ratio of interview has been conducted from public in between ages
of 25-54 as people between these ages travel most, stretching from seasonal trips to business
commitments.

General
This image of survey clearly shows how customer make their decisions & what metrics do
they use when choosing their airline of choice. There are a number of things that travellers
consider when they decide to travel by air. It involves activities connected to both airports &
airlines.
Pakistani context
Passengers travelling on any Pakistani airline would probably go through all these activities
related to passenger travelling, from home till his destination. There’s not much for airline to
focus here.

General
World has changed into a global village & everything is hoped to be best. Marketing these
days is all focused on branding. Image above shows how important is value of branding &
which immediate factors impact most when it comes to branding; everything else comes
after.
It can easily be seen that on time departure & arrival is most important when brand
perception is concerned. People do not think about anything else but on-time performance of
airlines prior to all things.
Of course things would not sell when there would be nil marketing. First most attractive way
to attract customer in order to build brand is appearance of aircraft.
Customers feel pleasured & valued when given attention. This attention may be focus on
solving customer complain or taking feedback.
Pakistani Context
Coping up with on-time performance should be no big issue for any Pakistani LCC. Timely
departures should be ensured. Delays can be due to some uncertainties when in air but
departure should never be delayed.
An appealing aircraft appearance is one time investment only but can return much value to
airline. Minor adjustments keep occurring but big investment last year's.

Addressing customer issues & taking feedback is not so difficult. This can be done by
 use of social media portals

 use of airline websites
 complaint & feedback boxes
 customer paper reviews
 customer direct interactions

General
Now this image of Survey is most important which depicts what impacts the most when
customers are make their purchase decisions. Airline travel is most expensive means of travel
in major part of world where there are either a few LCCs to capacitate demand or small
dragons don’t meet psychological contentment of public due to which they prefer travelling
on either full cost carrier on any other means of transportation.
As image shows, ‘price’ is most important factor to public when deciding whether to avail
the offerings of airline or not. The ultimate goal of business is to earn profit & it will only be
earned when offerings will be utilized by public. Purchase of offerings heavily depends on
price. So price influences most when it comes to travelling by air.
Other important factors include flight timings that people are easy & willing to travel on.
Moreover, different frequent flight programs are of immense importance as it brings a
number of benefits to travellers.
Pakistani Context
We people live in era where low class & middle class people are more as compared to elite
class. Elite class people don’t worry much about prices but low class & middle class people
are more concerned about price.
Everyone is desirous to travel on aircraft but high prices are a big hindrance. This is the main
reason why people here choose to travel on other modes of transportation rather than airlines.

Pakistani LCCs can lower its prices in order to target this market very easily. Lower the
prices, more the customer attraction. This can create big profit pools for airline due to reasons
of Low Price & fulfilment of desire of public.
Additionally, due to stagflation, student class & leisure travellers highly prefer low cost
travelling.
Overall, low cost travelling especially by air is best combination people search for & appeals
them most.
Pakistani airline can easily schedule its flights on times when people are best willing to
travel. The best way to check which timings match most of demand is to see which flight of
day people prefer more to travel on.
Low air travel & Frequent Flyer Program; what could be more delighting to customers.
More the customers, more programs airline could introduce creating word of mouth
ultimately booming airline revenue.

General
Travellers today try to be as free as possible. They agree on carrying fewer things in hands.
Paper boarding pass are a big problem when it comes to safeguarding it. The fear of
misplacing it is always adhered to passengers & to some extent ruins their trip & in case it
misplaces or destroys, it creates a chaotic environment.
These days’ people prefer electronic mobile boarding pass. There are fewer chances for such
boarding pass to get misplaced. Plus people don’t always have to keep an eye on pass for
long period of time.
Pakistani Context
These days, use of I.T is no big issue. Certain applications & portals can be designed &
maintained to facilitate customers. Pakistani airlines can very easily manage data through
such tools.

General
It can be seen that eating & drinking have low percentage ratios in both long & short haul
flights. Watching movies, overall, has more ratios. The need of watching movie can be
fulfilled by 2 ways
 Customer has his own device
 one big screen for all on board
Pakistani Context
Due to fewer ratios of eating & drinking, it can easily be concluded that eliminating meals
from LCCs on short hauls would not result in loss. People prefer other things over eating &
drinking. It can be considered that people on long hauls flights may get hungry to some
extent. That too if passenger is all good after eating the meal on board else many refuse to eat
due to medical disorders.
Eradicating meal on long haul is not easy but on short haul flights it’s no difficult. Merely a
good snack with a drink can do much in order fill customer appetite to bearable extent.
Customers primary concern is price of offerings whereas meal falls somewhere in secondary
needs where customers are easy to compromise as low price has already saved them enough
to spend on something else rather than a mere meal that one isn't much confirmed whether if
meal would amuse him/her or not.

General
It’s clear from this that access to devices by public has eradicated need for providing
travellers with customized needs particularly on LCCs. Many people like to carry their
devices. People, especially youth, are more inclined towards their ease of use & customized
personal needs they have already feed in.
Pakistani Context
Though the image showcases much of other parts of globe rather than our region but it’s very
obvious that these days every single person is moving around with up to date entertainment
devices. More or less, every person is seen carrying personal belongings for their ease &
amusement.
Again airline would not have to invest in more. Yes in order to facilitate public that are out of
this scope, a little bit of entertainment, that serves all, can be provided for examples a main
screen TV.
Cheap yet joyous entertainment can also be provided by airline staff or introduction of games
or activities live on board can be introduced that involve fun & keep people busy.

General
This shows ratio of satisfaction customers feel after travelling by air, degree of
recommendation to travel by air & decision of re-selecting air travel again. People love
travelling by air. If people can choose to go again & again by airlines, just imagine what
cheap prices could it bring to airlines? The only thing that they need is access to low fare
travelling with safe & quality services.
Pakistani Context
The best conclusion for Pakistani LCC is to see number of passengers willing to travel again
& again by air. Only if low price strategies are combined with differentiated offerings
keeping costs low & focusing more on primary needs, customer delight can easily be
achieved. It might take time though but results would be everlasting.

General
Generally if we see world as whole, we can easily figure out what customers prefer today.
Above in image are mentioned few important things that customers demand when it comes to
travelling by air.
Pakistani Context
Following Blue Ocean Strategy & offering customers products & services that delight them is
best way that Pakistani carriers can satisfy customer before any other airline does.

7.4 PUBLIC pole

In order to see if adopting this strategy is need for Pakistani Aviation Industry or not, I took
some opinions of general public asking them which things appeal them most when travelling
domestically.
"First thing that I’d be assuring of is the safety that airlines would provide. “Safety first.”
After safety, costs that I’d incur by travelling on an airline would make me think about the
most. These days trains in Pakistan have been updated to good qualities that it saves round
5000 rupees as compared to travelling by air. Yes time is an issue but for a girl like me, who
has to see back at household expenses, I’d prefer travelling by modes that my pocket allows."
Rida Rashid
BS (Mass communication)
Student UMT
"Time & price both are most important to me when it comes to travelling. At times an air
travel is comfortable enough for me & at times even Daewoo is a good option. It all depends
on nature of my need. Air travelling cost more but due to time saving cuts me other costs of
travelling whereas bus travelling takes time but ticket costs low comparatively. I have no
experience on travelling on train till now."
Faisal Khan Niazi

BS (Textile Engineering)
Student UMT
"Being a business man, the most important thing to me is time & then price. I need to be at
multiple destinations due to my working commitments & so domestically I prefer travelling
by my own car or at times travelling by air. Expenses that occur while I'm on my own
transportation depend on me & my wants. Which things on & how am I going to manage my
spending? When it comes to travelling by air, I mostly travel by air for foreign lands. Safety
is automatically a consideration as far as air travel is concerned but air travel is both safest
& the most dangerous mode of travelling. Price is my next important consideration here. I
evaluate among available airlines in market but my domestic travelling by air does not
happen to be much as my own transportation complements my need within boundaries."
Hassan Ahmed Malik

CEO (International Migration Consultants)
Lahore
“Factor that I consider most while travelling is price. I live in hostel here in Lahore due to
my studies. I need to keep control over my expenses. I mostly use Daewoo to cater my need
for transportation as air travel is expensive & I don't like travelling by air due to cracking
sounds of its tyres. It aches me."
Sehrish Ather Chattha

Department of Physiotherapy
Student UMT

"I have a family of Ma sha Allah 4 children. My wife & I have many expenses to look after in
order fulfil our needs. Price is indeed most considerable factor for us. It might sound weird
but I'm afraid to travel by air but that does not eliminate my need for travelling by air plus
the excitement my kids are enthralled with. Whenever I have to travel by air, what I do is
estimate costs of travelling by checking ticket prices & guesstimating my budgets."
Malik Rashid
CEO (KF Technologies)
Essence:
Very clearly we can see that every person in pole opinion has a consideration for price factor.
It may vary from person to person when prioritizing these certain factors of price, safety &
time but mostly price is something that has greatest influence of all. It seems quite visible
from here that there is a need for low cost travelling in Pakistan.

Chapter 8: Recommendations
Air Indus - The Present Environment

Air Indus SWOT Analysis
Air Indus - The Future

The Corporate Governance
SWOT Analysis After the New Strategy
More Simplified
Corporate Resources
Strategic Objectives & Goals
Still Advantageous

8.1 air indus - the present environment

8.1.1 AIR INDUS SWOT Analysis
Let’s scan a SWOT analysis of Air Indus in present environment with present strategies
Opportunities
The incidents of existing airlines
After the incidents of Shaheen Airlines & Air Blue, people to some extent hesitate travelling
by Shaheen. It automatically has struck a negative image in minds of people.
o Shaheen Airlines (Karachi-Lahore flight NL -142)

On November 2015, tyre of a Shaheen Air flight burst when landing at Lahore Airport
injuring at least 10 people.
Source: (10 injured as Shaheen Air flight crash lands, 2016)
Source: (10 injured as Shaheen Air flight crash lands, 2016)

o Shaheen Airlines (Lahore- Dubai flight NL-766)

On 2nd June 2016, Shaheen Air flight tyres exploded just before departure at Lahore
Airport. No injuries were reported.
Source: (Dubai-bound Shaheen Air flight narrowly escapes crash at Lahore airport - The Express Tribune, 2016)
o Airblue (Jeddah-Islamabad flight PA 271)

Airblue's flight coming from Jeddah nearly missed an accident as its tyres ruptured
during landing at Karachi Airport, tilting aircraft to side. No loss was reported.
Source: (Airblue plane narrowly escapes accident as tyre bursts during landing, 2016)

o Airblue (Karachi-Rawalpindi flight 202)

On 28 July 2010, Airblue flight 202, Karachi to Islamabad, crashed in Margalla hills
taking away the lives of everyone on aircraft.
Source: (airblue 202 crash - Google Search, 2016)
These incidents to some extent have confused public. They have fewer choices when
choosing in between domestic LCCs. Though, people are travelling on these airlines but
advent of a new dragon ensuring low prices, safety & good service can gobble up all market
of Shaheen Airline & Airblue.
At present, it is a golden chance for Air Indus to target psychological perception of market by
showcasing good performance & aggressive marketing depicting all those essentials in order
to run smooth, efficient & safe flying that others are lacking in.
Low-cost Travellers
People living in Pakistan are mostly low-middle class. It's a big opportunity for Air Indus to
target all those travellers that are price conscious as first thing that they look for is cost on
their travelling.
Domestic Geographical Expansion

Air Indus has a big strength that it operates domestically only on destinations that are within
boundaries. It doesn’t have to focus over operations widely. It should exercise all its energy
& capacity focusing on domestic destinations only in order to take up big share of domestic
market & reap handsome profits. The next should be focused when sufficient domestic share
is with Air Indus.

Mergers
New airlines are entering Pakistani industry. Air Indus can strengthen its position more
through an alliance. It could easily then exploit this by acquisitions or mergers. This could
then give access to much feasibility for example easy routes into major hubs brand name etc.
Threats
Cost of operations
Operational
Rising labour & fuel costs are amongst most significant expenses which cannot be avoided.
These factors are biggest threats when it comes to controlling costs of airline.
Security
Due to security conditions of a country, demand for travelling decreases which ultimately
results in service reduction & reduction of employees. Attack on Pakistani airports & military
organizations in last few years have also caused many challenges to airline relating to
passenger security. These things negatively impact industry profits.
Political environment
Airlines in Pakistan face issues of political instability. This uncertainty has always been a big
challenge when it comes to airlines long term strategic planning as laws & policies several
times disturbed settlement of airlines.
Varied competitive factors

Another threat to airline is competition that comes from other modes of transportation as far
as domestic travelling is concerned. Low pricing, frequency & ease of travelling on time of
choice, transportation safety, security procedures & service can be things that customers think
about as being more reliable when travelling through own means of transport. This can
reduce airline travel.
Number & Size of Rivals

Everyday a number of airlines are entering Pakistani aviation industry many of which very
big in size which have no problem in operating flights at high frequency. This increase can
seriously endanger existence of small airlines specially ones that are already running on very
low operations.
Economic Conditions
Due to economic downturn & hyperinflation, many people keep travelling far below in to-do
list. They think of avoiding expenses that could occur while travelling. These things can
badly reduce air travel potential & demand.
Declining Customer Confidence
Due to airline incidents, both international & within the boundaries, people hesitate travelling
by air. Safety need is what matters most when travelling by air.

Incompetent Employees
Incompetency these days is diminishing & market has more unqualified employees in order
to fill gap on empty positions. A mere training by company & accustoming to culture is easy
for employees to get start with but this incompetency has no hope for a big good change &
leverage that company can take benefit from. Company can get best out of him only
according to his limitations. This is a big threat to overall industry.
Unchallengeable Factors
Disruptions of operations due to bad weather conditions & restrictions can many a times be a
big threat both when it comes to safety of aircraft in air & delay of flights to destinations.
This can be adverse when bad weather stays for long.
Strengths
Low Cost Business Model
Region we live in has less business class travellers. Secondly, due to economic conditions
people hardly prefer travelling on air transportation & ones who travel prefer travelling on
economy class. Many airlines in our region have either reduced number of business class
from planes or either operated low executive seats on these routes from very beginning. Air
Indus being low cost carrier already has this benefit that it operates only low fare travelling so
economy class is no issue for airline.
Safety Record
Air Indus luckily has not seen any incident till now. Though operations had been suspended
by CAA back in July 23, 2015 but no incident has taken place. This is a good strength point
for airline as no matter what but people do not regard it as an bad airline subjected to
incidents ever.
Easy to Shift
As we have already discussed earlier, in case of altering strategy it’s very easy for Air Indus
to shift to a new strategy as it has just started operations 3 years back unlike its other national
competitors. It would from very start be easily targeting low cost travellers.
Weaknesses
Lack of Professionalism
Following is given one a customer review about experience he had with Air Indus:
“On 23 June I had to travel by Air Indus to Karachi to attend funeral of my close relatives &
during the flight I seriously observed things which were not in accordance with general
standard procedures. First of all I wasn't aware of such Airline operating in Pakistan. Since
no other flight was available that night I had to purchase ticket for Air Indus. I even asked
receptionist that since when this airline is operating as I was reluctant to travel with non
famous operator. He replied though that since 2 years they are working. I boarded & during
that flight I observed that perhaps some relatives of Captain were also on board which were
strangely allowed to get entered into cockpit which I thing were not supposed to at all in any

case. I travelled quite a few times through other carriers but never observed such thing...
Today when I learned this, I thanked God that I'm safe now..."
Ali Tahir
Jul 01, 2015
Source: (CAA suspends Air Indus' operations for violating safety regulations, 2016)
It can be seen that permission for pilots family to enter cockpit is big issue. It could’ve
resulted in big incident threatening lives of all people on board. This should never be allowed
as it’s against laws. Cockpit is an extensively sensitive area where complex operations are
taking place time & again & any carelessness in cockpit could ultimately result in fatal loss.
Moreover, this statement would have prevented so many people from travelling on Air Indus.
A bad perception is extremely difficult to remove from minds of people.
Following is a statement by public under news posted on Dawn.com "CAA suspends Air
Indus' operations for violating safety regulations"
“Good move, but here are my questions, why so late? Why was Air Indus, Bhoja & Aero Asia
allowed to operate in first place? Why do our departments wait for a catastrophe before
waking up to learn gross irregularities in procedures?..."
Muneeb
Jul 01, 2015
Source: (CAA suspends Air Indus' operations for violating safety regulations, 2016)
Such statements by public are serious threat to worthiness & good brand name of airline.
Limited Strategic Development

Air Indus is operating in an environment which is getting competitive day by day. Industry is
also under immense influence of political environment. Competitors have more fleet & a
reputed established brand name & operate on major airports with major hubs. Air Indus
would have to adjust it strategy for long haul destinations in order to beat competition.
Weak Financial Position

Air Indus is financially not that strong as other airlines in market as recently it came into
public notice that airline had leased an aircraft but returned it back after it failed to fulfil
timely payments. Lack of funding is a big weakness of Air Indus.
Lack of Good Aircrafts

Suspension of Air Indus operations back in June 2015 due to aircraft not meeting required
safety standards show that their aircrafts need to be in worthy conditions to operate.
Lack of Public Awareness

Due to low promotion strategies & low brand name, people do not prefer Air Indus to such an
extent as they prefer other LCCs.
No Alliances
Airlines set up marketing alliances with each other. This puts strain on airline to keep up its
position with a smaller fleet.

No Service/Product Innovation
With advent of Air Indus, people had many hopes connected with new airline. Something
new was being expected than more just an airline but no new novelty lead to customer
dissatisfaction & they agreed on continuing services on same old airlines. It lacks modernism.
Technological Expertise
Lack of technological expertise is one of biggest weakness an airline can suffer from because
aircraft & systems are all based on technological advancements..
Fleet size
For now in order to capacitate low demand for airline, a small fleet size may be okay to start
with but with gradual increase in capacity, this fleet size can weaken bone of Air Indus.
8.2 AIR INDUS - THE FUTURE

Following topics showcases positive aspects of adopting Blue Ocean Strategy &
recommendations are given to help Air Indus operate successfully on this strategy.
8.2.1 Corporate Governance

Board of directors
This part of family should be wisely elected & appointed as these are members who mutually
watch over actions of any company hence board of governors should be assigned by Air
Indus keeping in mind all certain factors that can immensely, both directly & indirectly,
impact goodness of company.
Top Management
Executives of Air Indus should be elected annually at maiden meetings of Air Indus board of
shareholders & directors. Following few positions are most important to be filled in order to
run this part successfully:
Executive Officers:
 Chairman of Board
 Vice Chairman & Chief Executive Officer
 Director, President & Chief Operating Officer
 Executive Vice President - Customer Service
 Executive Vice President & Chief Financial Officer
 Executive Vice President - Chief Operations Officer
 Senior Vice President - Marketing
 Vice President - Governmental Affairs
 Vice President - Ground Operations
Members of Executive Planning Committee:

 All Executive Officers
 Vice Chairman & CEO
 President & Corporate Secretary

 Executive Vice President Customer Operations

 Executive Vice President Aircraft Operations
 Senior Vice President Corporate Communications
 Senior Vice President Enterprise Spend Management
 Senior Vice President Technology & Chief Information Officer
 Senior Vice President Law, Airports & Public Affairs
 Senior Vice President People & Leadership Development
 Senior Vice President Marketing
 Senior Vice President Planning
 Senior Vice President Finance & CFO
8.2.2 SWOT ANALYSIS AFTER THE NEW STRATEGY

Let us now examine SWOT analysis after fitting in airlines the concept of Blue Ocean
Strategy as strategy would enable it to a number of diversifications.
Opportunities
Geographical Expansion
Once airline starts to operate efficiently on pre planned schedule routes with new strategy, it
should be able to search for new destinations in order to give people more choices to travel.
At first, it should target just whole of Pakistan & give an extremely tough competition to
other airlines who are also focused on operating abroad. It's a good opportunity as Air Indus
would only have to think keeping Pakistani context & feasibilities into mind which are not
very difficult to meet as Pakistan already does not have so very good excellent domestic
airlines & people are not very difficult to please. Its good repute will help it operate in new
cities targeting more market. Good brand name, once established, would not cause much
marketing & public relations costs. Domestic success should then shift focus to international
destinations but best start is with domestic destinations.
Long Term Industry Growth

Blue Ocean Strategy is a long term Strategy concept & incumbents of this strategy have
golden opportunity of earning all revenues right away for 10-20 years. If applied correctly in
sequence, no competitors’ can cross it very easily due to established position in market.
Growth Opportunities for Smaller Airport Destinations

Due to Blue Ocean Strategy, many factors will eliminate & reduce ultimately resulting in rise
of other factors. Due to more frequency of flights, as a result of new strategy & only domestic
focus, Air Indus would have much greater growth opportunities for urban or less travelled
destinations.
Boom in Trade & Tourism Industry

Due to stability in trade & tourism industry, it's a big opportunity for Air Indus to follow Blue
Ocean strategy & fulfil needs of people of both industries providing low cost but good carrier
services. This will give easy access to people for travelling by air without getting tired.

Mergers
Different airline in market operating on success of a different concept would help Air Indus
to make mergers with other airlines, both seeking their interests & profiting.
Majority of Population with Average Income
One of the biggest opportunities that Air Indus would have is that we have majority of people
with low or average income. Biggest target of airline should be class of market which is
already waiting be a prey as people needs & wants are changing everyday & due to
commoditization of products or services & value of time, people are shifting towards ways
that bring ease.
Threats
Cost of Operations
Operational
Threat of fuel & labour costs would still exist but can be compensated easily by budgeting
money that has been saved by cutting costs of other things that Blue Ocean tools help us to
eliminate or reduce.
Security
Security situations in country, to some extent, are in good control but still fear & uncertainty
remains. Though operating on Blue Ocean that too domestically would not bring deep loss to
airlines as service reduction & reduction of employees will not be needed due to reason that
domestic travelling already does not need much number of employees till you extend
destinations, but still fear in people never let them breath in peace.
Political environment
Political environment always remains unstable here especially in our region. This uncertainty
for sure is a big challenge when it comes to airlines long term strategic planning.
Small Subsidiaries of Airlines Replicating the Same Strategy

A serious threat can come from other big carriers but not other means of transportation. Why
because airline offering safety, quality & timely operations at low cost is best blend people
would prefer to travel as far as domestic travelling is concerned but an airline can challenge
Air Indus by inaugurating its subsidiaries based on same strategy & big successful airlines
it’s not a issue mostly.
Employees Failing to Understand
Another threat to Air Indus that can prevail to some extent at its initial stages is its employees
failing to understand concept of this new strategy. For this, Air Indus would have to clear
everything unmistakably to workforce so that it does not causes any mishaps in future.
Unchallengeable Factors
Bad weather conditions & restrictions can never be challenged & will always remain a threat.
They can just be avoided by mitigation.

Strengths
Easy to Shift
As we have already discussed earlier, in case of altering strategy it is very easy for Air Indus
to shift to a new strategy as it has just started operations 3 years back unlike its other national
competitors. It would from very start be easily targeting low cost travellers.
Low Cost Positioning with Differentiation
Our society being low-middle class mostly, the strongest point that Blue Ocean Strategy
would enable Air Indus is to position it at a low cost positioning than its competitors with
value innovation. This would ultimately make a strong branding for airline.
Culture
Blue Ocean Strategy tends to motivate employees & develop in them professionalism with
love & loyalty for company. People working in teams develop a sense of togetherness &
people start to think collectively for every interest related to company than to individually
blame each other. This will keep company strong & help it fight any contingency efficiently
& effectively with lively & active work force.
Service Innovation
Blue Ocean Strategy would help Air Indus bring innovation to its service that is based on
"Value innovation" - Low cost but more buyer value. This is something new that Pakistani
Aviation Industry would see & complement public demand.
Reformations & Automation

Reformations & automation, both are necessary in order to cut costs maintaining competitive
advantage. Blue Ocean Strategy would enable airline to maximize specific customer market
plus reducing turnaround time & bringing delight to customers. Better if airline could
possibly replace paper boarding with an automated one that works on new self check-in
technology. It's a onetime investment but could pay for good. This would both reduce
boarding timing & avoid mess of long queues of travellers.
Sensible Expansion Strategy

Due to adoption of new Blue Ocean Strategy, airline would successfully be able to expand its
strategic operations to cities where there is less competition. This would help it keep its costs
low due to small airports low fees & attract customers of local area that travel long distances
to reach main airports.
Efficient Operations
Our airlines have seen problem of delay time & again. People have developed a bad
perception about airlines in this regard. Air Indus has a full good opportunity to position itself
as an efficient airline in mindsets of people by reducing its turnaround time & managing
timely departures & arrivals. This could very easily be possible with Blue Ocean Strategy as
it eliminates many secondary activities saving time of passengers & airlines.

Comparatively Less Impact of Legislative Factors

Due to only domestic operations & based on low cost strategy, changes in laws & regulations
of regulatory authorities or political instability would impact Air Indus but not as much as
these factors will influence big airlines. Legislative factors mostly effect International
network operations.
Varied Competitive Factors

Low pricing, increased frequency of flights & timely operations with safety & security would
act as strengths to Air Indus enabling to beat its other traditional competitors.
Strong Position
A big strengthening point for Air Indus after successful application of this strategy would be
itself setting rules, regulations & standards of competition in industry. Any replicator would
have to adhere to these laws in order to be successful which is usually not very easy to
follow.
Success Stays for Decades

Company adopting Blue Ocean since very start, without any competitors in pool generate
high revenues, are successful to establish strong customer loyalty with deep knowledge about
competitive environment. For a straight 10-20 years, original company, that has Blue Ocean
Strategy fit in its structure, reaps profit without any sharer.
Weaknesses
Limited Strategic Development

Air Indus is operating in an environment which is getting competitive. Industry is also under
immense influence of political environment. Many competitors have more fleet & a reputed
established brand name & operate on major airports with major hubs. To enter big markets,
strategy of Air Indus would have to be adjusted carefully for long haul destinations.
Lack of Funding
Air Indus is financially not strong which is as one of weaknesses of Air Indus until & unless
it's financial position is improved.
Deprivation of International Routes

Blue Ocean Strategy is based on low cost concept. This means Air Indus would not have to
think about international routes till it has strong control over domestic market.
8.2.3 MORE SIMPLIFIED?

Let's see on how Air Indus should start it. We know Value Innovation is created when costs
are cut down & buyer value is increased. To cut costs down elimination & reduction of
certain factors is essential whereas to increase value, creation & rising of certain factors is
important. Let’s see on simple scale based on these 4 factors that how can Air Indus with
present feasibilities.

More or less, elements that these factors would cover be similar to Southwest's ones.
Eliminate what ?
 Meals; only drinks & snacks

 In-flight entertainment
 Paper Work
 Baggage charge
 Booking though travel agents
 Flight delays
reduce What?
 Fare prices
 Labour costs (gradually)
 Type of fleet
 Cabin crew
 Turnaround time
Raise What?
 Efficiency
 Short haul flights
 Freq. of flights
 Domestic destinations
 service to undeserved markets
 Employee motivation
 Upgraded fleets
 Quality of services
 Marketing Strategies
 Finance
create What?
 IT applications
 Exceptional company culture based in fun & innovation
 Employee training programs
 Good managers-employee relationships
 Great leadership styles
 Promotional campaigns offering special offers & services
 Customer Satisfaction
 Iconic brand
 Passenger rewards
 Joint venture

8.2.4 Corporate Resources

Marketing
Marketing is done for selling. Air Indus would have to accomplish its heavy marketing.
Public awareness is only way to attract customers to shown airline offerings. Marketing has
different forms & all should be utilized as every class of people have an access to different
marketing awareness. Billboards, brochures, direct marketing, social utilities pages, websites,
banners, campaigns & different special offerings are few of best ways to start with.
Finance
Gradually with increasing traffic & substantial profit growth, Air Indus would have to invest
in its factors of both external & internal market in order to let things flow smoothly & be
successfully profitable.
Operations & Logistics
Air Indus already has online reservations & booking systems. It just needs to introduce new
applications & accessible ways that public can have good access to book seats & take
information. It should maintain a high gratitude ratio & low customer complaint ratio by
addressing customers’ needs.
Human Resource Management
Employee motivation is considered to be most difficult part of internal environment of an
organization. Air Indus should emphasize much on it. It will have to increase employee
loyalty towards airline. Satisfied employees would create satisfied customers, ultimately
creating good brand name.
There should be training programs to help employees work more efficiently with updated
knowledge & performance metrics should be used to check employee efficacy.
Compensation & benefits should also be appealing enough to nurture a great workforce.
Best thing Air Indus can do is induce employees & care for them to such a great extent that
they should will to work due to affiliation with company rather than for what they get in
terms of monetary worth. Only top management can help this thing prevail & stay integrated
till the end. It’s difficult but not impossible as we can see example of Southwest.
Information Systems
More enhanced Information Systems should be introduced with new advancements enabling
airline to work with more efficiency.

8.2.5 STRATEGIC OBJECTIVES & goals

Objectives
Air Indus should focus on following long & short term objectives to establish itself strong.
Short Term
2 years:
 Augmenting shares by certain %

 Leasing new aircrafts
 Increase utilization of aircrafts by certain %
 Increase route frequency for most travelled routes annually
 Increase route for new cities annually
 One-time performance improving by certain %
3 years:
 Continue to improve & be successful

 Improve technological knowledge by certain %
 Introduce new offerings to market annually
5 years:
 Continue increasing quality by certain %

 Continue developing innovative offerings by certain %
 Continue satisfying customers & rank no. 1 in market
Long TERM
5-10 years:
 Reduction in employee turnover

 Increase quality by a higher % than before
 Increase passenger traffic by higher % than before
 Decrease operating cost by certain %
 Increase online sale by very high %
 Continue to stay best amongst its customers
 Decrease any complaints & increase customer gratitude by certain %
 Increase fleet by certain %
 Try to move towards fuel hedging

Goals
Short - Term goals
Heavy marketing strategies can be implemented immediately at departmental level.
mid - Term goals

To improve operational efficiency, different programs can be implemented on annual basis.
long - Term goals
Strategic goals such as fleet expansion, mergers & market expansion should be planned
keeping in mind span of 5-10 years.
8.2.6 Still Advantageous ?

We don’t have carriers as superior as USA but Southwest still managed to triumph over all
carriers in domestic market. LCCs in Pakistani Aviation Industry, having an inferior quality
of competitors, can easily be challenged by any good airline that takes initiative to serve
customers more than expected.
Intrinsic needs
To satisfy customer, Airlines today need to understand intrinsic needs of customers, rooted
deep down back into minds of customers. People demand more & different every time. It’s
very important to satisfy psychological & safety needs of customers with a drastic change.
Need for Low Cost
As we have seen that price is most important for majority of travellers. Due to value of time
& health, people today demand a good time saving low cost means of transport that can
satisfy their needs & wants in best possible ways.
Need for Different Offerings
People want to shift & utilize onto new things & services that can bring joy. They have
almost forgotten what actually it feels like sitting with new offerings because experience is
always same. Nothing new is introduced to them beyond expectations for delight.
Set Standards
Blue Ocean Strategy would not only set standards for respective airline but for Pakistani
aviation industry on whole as its success would ultimately set good standards & remarks for
Pakistani Aviation industry.

High Profit Margin
Applying Blue Ocean Strategy would give high profit margins to Air Indus as overall demand
& competition for air travel will grow, benefitting other airlines too as they would also try to
cut competition.
Creation of Brand Equity
Pakistani Airlines don’t have good brand reputations. PIA once had good repute before its
downfall. Since then, no other airline has been successful to attain a branded position. With
success of this strategy, it’s very viable that Air Indus would be successful in creating a good
brand name.
Benchmark
Air Indus would create a benchmarking metrics by its success. This would not only inculcate
in other airlines urge to improve more but keep Air Indus spirits high to improve more with
time in order to sustain its position.
Essence
Instead of competing, Air Indus should position itself as an alternative to affordable means of
transport with improved check-in times & increased flight frequencies.

Chapter 9: Conclusion
In a Nutshell
Further Research

Now according to all gathered information, I’d draw conclusion to sum up my practicum.
9.1 In a nutshell
Competition in businesses is becoming hard as competitors are emerging; shrinking profit
margins. To obtain a big share of market, companies need to come up with new approach.
Red Ocean & Blue Ocean, both strategies have for all time co-existed. A company already
knows what is it to be like in Red Ocean as it’s a traditional approach.
According to its originators, Blue Ocean is mostly essential when supply exceeds demand.
On one hand, there are several competitors, both national & international, in Pakistani
aviation industry that are fulfilling demands of customers but on other hand, there is a market
whose demands are not being addressed for one reason or other. Airlines are suffering from
high price combats & constricting markets. This results in companies competing for high
profit in bloody pool of Red Ocean.
Solution to avoid rivalry in today's highly competitive environment is Blue Ocean Strategy.
Blue Ocean is a blend of tools, frameworks, theories & concepts that can help Air Indus
create uncontested market with no rules; generating deep profits. Company originally
adapting this strategy would focus now on customers’ value rather than competitors in
rivalry; value innovation being cornerstone of strategy.
There are many advantages this strategy can lead to. At first, rivals would not trust relevance,
legitimacy & benefits of this strategy but once respective company is successful with this
strategy, and it’ll be running into pool of irrelevant competition, imitators will try to enter but
original incumbent would be step a step forward making impossible for rivals.
One of the biggest benefit of creating Blue Ocean is that, company will be in a strong enough
as compared to its competitors as it itself will set standards, regulations, prices & rules of
competition which will ultimately be an obstacle in way of imitators.
Another benefit is that this irrelevant competition will help company stay successful for
decades. No new entrant would be able to come in competition for years & years.
Benefits of strong competitive advantages would also not lead rivals to jump into pool.
Moreover, these days SWOT of competitors can easily be done. Incumbent company will be
aware of what competitor is doing & will have an edge shooting down that very plan of rivals
by being pro-active as rules would already be set according to incumbent.
Opportunities of Blue Ocean are greater & more advantageous whenever there are fewer
prospects for success.
Concluding, I have seen all through my work that Blue Ocean is an excellent concept which
needs a boom & boost by being identified in Pakistani aviation industry. Though it’s a theory
based on observations, assumptions & on successful case studies, still it has shown
remarkable results wherever & whenever applied by various companies.

9.2 Further research

I’ve tried my best to put light on most important aspects of this violent industry of aviation.
I’ve tried to give best explanation to theory & concept in brief & tried applying it into real
life to an airline in need.
Further study on my research can be done as many questions may arise in minds of readers
that I may not have been able to think over or there may be other ways to improve or apply
concepts differently. This study can be done by people belonging to different areas of
managerial & applied sciences studies.

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CREATING BLUE OCEAN

University of Management & Technology

University of Management & Technology

Creating Blue Ocean Strategy for Air Indus (PVT) Ltd.

Supervisor: Capt. Saqib Mehmood Sheikh

University of Management & Technology

University of Management & Technology

Flt Lt (r) Saqib Mehmood sheikh

Current : University of Management and Technology

Previous : Pakistan Air Force

Education: PAF College, Sargodha

Saqib M. Sheikh is an Ex-Pakistan Air Force fighter

Achievements in Academic Career

University of Management & Technology

 Senior Faculty, Department of Aviation

 Aviation Trainer - Ramp Safety, SMS & Human Factors

 ISO 9001:2008 & OHSAS 18001:2007 And ISAGO

 Certified Trainer (CWO)

 ISO 9001:2015 Transition Course

 Safety Management Systems

 Certified DGR Instructor

University of Management & Technology

Current : University of Management and Technology

Education: BSc. (Aviation Management)

Sobia is a confident, judicious & a creative student. She

 Passenger & Cargo Handling Services Courses

University of Management & Technology

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University of Management & Technology

University of Management & Technology

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University of Management & Technology

Chapter 2: Research Methodology

Chapter 3: Theoretical Perspective

3.2 Formulation & Application of Blue Ocean Strategy.............................37

3.3 Executing a Blue Ocean Strategy.......................................................52-53

University of Management & Technology

Chapter 4: Research Findings

4.2 W. Chan Kim & Renee Mauborgne - Interviews...............................68-69

University of Management & Technology

5.1 Blue Ocean in Airlines

5.2 Southwest Airlines & Blue Ocean Strategy

University of Management & Technology

Chapter 6: Air Indus (PVT) Ltd.

6.1 Air Indus In Brief.....................................................................................113

6.2 Where they Fly

6.3 Products & Services

6.4 Planning Travel with Air Indus

Chapter 7: Pakistani Aviation Industry

7.1 Industry in Brief

7.2 Why Air Indus?

7.3 Blue Ocean Strategy in Pakistani Aviation Industry

7.4 Public Pole........................................................................................149-150

University of Management & Technology

8.2 Air Indus - The Future.............................................................................158

9.2 Further Research.....................................................................................170

University of Management & Technology

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University of Management & Technology

University of Management & Technology

1.1 Purpose of Study