Essay: Strategic Positioning For Air India Express Analysis.

Air India Express is divided into registered offices both in Mumbai and Kerala. The company's operational management is commenced on ‘29 April 2005’, and the flag carrier states the encounter of cancellation, last-minute delays, and pending refunds. Therefore, the airline profit has been based on the expansion in the upcoming future. Hence, in this current period, Air India Express attempts to continue the company's growth in sustaining the regional competition. Further, in this paper, there has been a brief evaluation of strategic positions and choices that can analyze the long run of Air India Express. External and internal factors have been assessed to clarify the company's competitive advantage and a potential structure for analyzing the inherited strategic action. As per the audited account, the Airline board of the company posted net profit in 2018. Considering that, Air India Express plans the expansion in 2 tier cities and enables launching the regional operation air flight between Madurai and Delhi. Therefore, addressing the competitive opportunities and threats will be easier for analyzing the operation of having a clear road map.

The strategic position and the low-cost airlines have stated that the market analysis has focused on the growth in the last ten years. The significant growth of the Indian market has been softened towards the fuel rates. Therefore, the operation cost and the penetration of the greater share of the ‘low aviation fuel’ have shown a greater market share. Thus, the external and internal environment analysis has been processed to expand the LCC.

To analyze the external factors of the market, political analysis is required to summarize the political stability in the current period. The political stability index in 2020 was -0.90 points, which states that the expansion of low-cost Airlines can be stable (Statista 2022). Further, the economic analysis of the market portrays the GDP rate, and in 2020, it shrank by 7.4%. On the other hand, in 2021, the GDP rate was 8.7%, and therefore, it states that the expansion can be fruitful in the market. The interest rate of the Indian market in 2020 was 6.20% and compared to 2019; it was 4.80%. Thus, it can be stated that the economic stability of the Indian market is stable for better expansion.

Further, the social factor or the social analysis of the Indian market claims to be projecting a reach of 180 USD. In 2021, the per-capita income was 140 thousand, indicating the crude indicator of prospering the country (O'Neil, 2022). Therefore, it can be stated that the new services and the management of the expected competition have a significantly adverse impact on the Airline's revenues. Counting on the technological impact, the research and development of the Indian market is nearly 0.70% of gross domestic product. On the other hand, India's social network users were 530 million in 2020. Thus, it can be analyzed that the technology development is advanced, which expands low-cost airlines.

The legal analysis of the Indian market states that the market's regulations have to be abided thoroughly for better expansion in the long run. Thus, the consumer right act, 1986 has referred to the rights to be protected against hazardous goods and services. Moreover, the copyright act, 1957 confers literary work protection and conferred sound recording work management. Hence, it is stable for the Air India express to have a confined expansion for fruitful benefit. Further, the environmental protection act, 1986 states that environmental protection and not hamper the surroundings (Code 2022). A regulation must be maintained to carry the operation process in the different zones. Apart from that, standardization has to be maintained for analyzing the emission or the discharge of environmental pollutants. Thus, through the entire analysis, it has been observed that the firm's further expansion is stable for better production.

Internal Factors Analysis

The internal analysis of the market claims to be addressing the strengths, weaknesses, and opportunities of the firm while expanding in the mentioned market. While investigating the company's expansion, it has been noticed that the basic purpose of the firm is to launch a low-cost transporter for objectifying the convenient providing connectivity to the routes of Delhi and Madurai. However, the stakeholder of Air India is the Government itself as it has approved the entire sale to be expanded widely. Thus, maintaining cultural diversity by adopting the expansion strategy is important because the force stands for reliability, safety, efficiency, and high standards (Ramezanian, Mohammadi and Moattar 2019). All the cornerstone of the services has to be maintained for proper stability globally.

While depicting the importance of the strength and weaknesses of Air India express, it mainly focuses on the internal factors. The most important strength of the Airline suggests being the cheapest tickets which avail to be durable for the passengers. The entire crew has been well aware of the local languages considered a profitable wing. On the other hand, the weakness of the Airline happens to be the interference of the Government. The entire statistic of the airline changes, which disrupts the production. Apart from that, while analyzing the external factors, opportunities and threats have been modified for better access in the long run. Therefore, the most effective opportunity of the Air India states the demand of tourism globally and the regulation of the airlines leads towards faster growth. A well-groomed crew is responsible for increasing the best services for the pricing strategies. Lastly, the airlines' threats must be addressed for forecasting better changes. It states that the profitable routes have to be taken away and preferred towards the private airlines (Rahman, 2022). The negative interference of the Government has been discouraged, which promptly affects the profit margin. Thus, it has been depicted from analyzing the market's current scenario, the strategic positioning of Air India, which shows a significant percentile of operation cost. According to the world rate, the Airline has offered penetrative fares (mainly low), representing a greater market share. It expects that the competition of expanding the low-cost airlines has been increasing with an additional capacity of the carriers. Therefore, it has been registered that nearly 17.7% of the international market has been expanding the business in India due to a stabilized exterior situation. The sudden emergence of the low-cost carrier has preferred the enhancing competition for Air India and considering the hybrid strategies' efficacy. Hence, it illustrates the main focus to the regional routes and calculates the good move to have a clear view of the international operation.

A company can adopt various types of strategic choices to expand the business within the previous market and international markets. In this case, Ansoff product/market growth matrix can be used for Air India to understand the company's choices regarding business expansion. There are generally four types of strategic choices that the company can obtain using this matrix.

In order to expand the business, according to the case study details, the first strategic choice that the company can take is to increase production or aeroplane capacity. This choice will be beneficial for the company in terms of achieving more customers on a monthly basis. This efficient and effective technique is also useful for maintaining the overhead expenses of airplane. The appropriate pricing strategy is one of the important factors for achieving competitive advantage (Ansoff Matrix, 2022). The company can focus on the distribution channel also, in order to increase the routes and location for the aeroplane availability. Enhanced supply chains have the capacity to expand the market and increase the accessibility of the Air India Express planes. In addition, Air India Express can collaborate with some of the reputable airlines in order to acquire a new region, which is useful in terms of brand recognition. It has been observed from the case that Air India Express has already acquired 65% domestic market of Indian Airlines. However, in order to expand the market share percentage as well as international markets, the company can also focus on increasing its investments. Higher marketing investment increases the chances of brand recognition as the new segmentate customers get to know about the existing products as well as the new products.

Opportunities and Threats

Regional expansion can be one of the important strategic choices because market segmentation for market development becomes easy. As it can be observed, the company is familiar with the domestic market. However, Air India has managed to acquire only 19% of the international market; therefore, it will be beneficial for the company to select specific regions for business expansion. Remote yet growing cities can be a target, and for international expansion, the company has many opportunities because the company already lacks international market shares (Seo and Park 2018). In order to develop the company into a new market, Air India can focus on increasing brand awareness. Previously Air India focused on increasing brand awareness in Dubai, which increased the ticket purchasing decisions of the customers in that region. Investment within the research and development is also important in terms of understanding the cultural differences of various regions where the company wants to expand its business. Air India can also initiate several programs and policies in order to educate the new target customers to regard their business policies. This increases the transparency between the customers of the new market and helps in increasing the revenue of the company.

Air India Express can invest in modifying the existing airlines and incorporate more technological facilities, attracting a greater number of customers. The consumption of the product can increase if the customers are offered more enhanced facilities from other airlines. It has been observed that previously Air India launched Maharajah, a luxury plane for customers who are able to afford it. However, the pricing strategy and expenses of that product were not afforded by the larger number of Indians, resulting in the failure of that product. Therefore, appropriate market research is required before launching a new product in order to understand the demand of the customers. The company can go through the NPD process (new Product Development), in terms of developing new products in accordance with the demands of the customers of the new market. In addition, focusing on product quality is also important because better quality airlines ensure more customer engagement and increase revenues for the company. The strategic partnership is another strategy that offers Air India opportunities to develop new products within a limited budget and other financial investments.

This strategy can be defined as the business growth strategy in which the company launches new products within the new market. The company can either develop new products within the existing product line or develop a new product line according to the demands of the customers. It has been observed that the customers' main demand is to gain appropriate travelling facilities within an affordable pricing range (Lohmann and Spasojevic 2018). Recently, according to the provided case study, for Air India Express, the core market has shifted from domestic to international destinations. Therefore, the company can focus on penetrating into the remote markets within an affordable price range so that the customers can afford to use this airline. This will also provide the company with a competitive advantage that will positively impact the bottom line of the company.

Market Analysis

The strategic choices can be applied by the company in order to organise the changes and innovative factors for acquiring a new market. In this scenario, the strategies can be divided into two types, which are deliberate and emergent strategies. In this way, the company will be able to manage the necessary changes that positively influence the company and increase revenue.

Deliberate strategies- These strategies can be established through thorough planning and research of the market. One of the important strategies that the company can focus on and take further actions is to reduce the expenses of the travelling fairs (Camilleri, 2018). In order to achieve that, the company needs to increase the airline capacity and reduce the overhead expenses. That results in the reduction of the overall expenses, and then the company can offer lower pricing ranges of travelling fairs to the customers.

In addition, the company can select specific regions for market expansions with the help of appropriate research and development of the market. This can also be referred to as the focus strategy, where the company tries to acquire a niche market as well as the customers of that market by lowering the price. In terms of differentiation strategy, the company can also plan to bring innovative changes and modifications to the products (Stobierski, 2022). In order to manage these changes, the company can develop several other strategic options, perform market research, review the company's existing performance and implement the decision strategies. In the final step, the company can look for the appropriate stakeholders to assist the company in developing the new product.

Emergent strategy- In this type of process, there is no proper action required because these types of strategies are taken without any appropriate measures. Reducing the ticketing prices is a sudden plan that can be taken by the company, for which the company do not need to organise any action plan.

It can be observed that the majority of the strategies require an organised or structured action plan, whereas some of the strategies need to be developed quickly to manage the necessary changes of the company.

Conclusion

Throughout the entire discussion, it can be concluded that Air India Express has merged to enact the importance of the low-cost carrier facility in two higher regions. It has been depicted from the analysis that the airlines expanded for the smooth operation had no such facing of tough times which attempts to affect the reputation. On the other hand, with the emergence of the Indian Government, the sustainability of the growth can be appreciated to be positive by addressing the regional competition as well. Thus, Air India can efficiently meet the annual production targets by reducing the threats and leaning upon the constructive positives. Lastly, it can be concluded that with a complete analysis of the external environment, it becomes an easier step for Air India to expand its business and regulate the operational management for better enhancement in the globe. In terms of strategic choices, Air India needs to focus on penetrating into a new market by increasing brand awareness. The company can create a successful venture by collaborating with other popular airline brands, which will also increase their brand recognition among the new customers. The main strategy that will be beneficial for them is to invest in technological implementation, which will also provide them with a competitive advantage from the new market.

References

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