This week there are 3 questions about the Kiwi Air case. Please pick one of the questions and answer it. The group's answers, will help you with this week’s mini-analysis assignment :) Aim to give an original answer or angle, or pick an question/area that others have not chosen. (See p.1 of the course notes for the case)
3. Jack Morrison, The new CEO of KiwiAir has chosen a “three pronged tactical attack” or competitive strategy (see p.1 of case in Student Notes): (1) cutting costs, (2) enhancing the customer experience, and (2) out-performing the low-cost airlines. How will information systems help KiwiAir with this attack?
Information Systems helps KiwiAir with this "three pronged tactical attack" by (1) Cutting costs: Ticketless and paperless e-Travel - Customer would select and and pay for a preferred seat online and swipe RFID tag for baggage deposit and entering aircraft. (2) Enhancing customer experience: The 3 steps gave Simplicity, reduced time-cost and personalisation. Employees would have more time interacting with customers. KiwiAir also took over the multi-channel opportunities for direct marketing by centralising sales to website which allowed customers direct contact with the KiwiAir experience. (3) Out-performing the low-cost airlines: The innovation by the CEO that customers in Grade 1 to 4 were able to purchase any service available in any other grade by ordering and paying online. Thus the cut-price airlines were beaten by cost at no risk by KiwiAir
ReplyDeleteJack's "three pronged tactical attack" for KiwiAir helps them to cut costs by offering ticketless and paperless e-travel where customers would use RFID (radio frequency identification) to select and purchase their preferred seat and to swipe their ID for luggage, as well as entering the aircraft.
ReplyDeleteEnhancing the customer experience was simply reduce cost and personalisation, which meant more interaction of customers and KiwiAir staff. Thus KiwiAir's systems were all digitised to make a more responsive supply for customer service. Direct interaction with customers provided greater accuracy for KiwiAirs service, by allowing customer feedback on customer expectations.(As mentioned above they used a multi channel opportunity for marketing)
Jack also insisted that internal and external customers to be educated in KiwiAir's new business process, such as having good communication links to customers for a 6 month period. As well as helping customers using the new RFID technology.
In out performing the low cost airlines KiwiAir was able to compete by matching the demand of other airlines by aligning flight schedules with its competitors. Jack also integrated the grade ratings for customers which allowed customers to purchase any service available in Grades 1-4 up to one hour before flights. Jack's innovation lead to cut cost and beat other competitors.
Jack quotes its about focusing on information moving from one point to another efficiently and to have flexibility.
How will information systems help KiwiAir with the “Three pronged tactical attack” ?
ReplyDelete1. Cutting costs,
The majority of the cost cutting comes from employing people to scan people at check in or booking them in, by automating these processes KiwiAir has cut back on staff and invested in more efficient methods of check in equipment such as the new RFID tags, which give a simple swipe to check in and load your bags and another swipe to board the aircraft.
KiwiAir will use satellite tracking information systems, which will enable the company to decide on the most efficient routes to destinations that require the shortest distances, less fuel and determine what aircraft is best suited for a particular route, this would save costs over a medium – long time.
2. Enhancing the customer experience
The new online booking system which allows customers to select what pricing grade they want will also allow the customer to select the best seat for them on the plane, ensuring the customer is happy with where they are sitting. The new booking system makes it easier for customers to book flights and not go through some third party booking system or company, careating a more direct personalization with the customer and allows the company to target market its customers – the new booking system also allows booking right up until one hour before the plane leaves, meaning the customer is almost ensured a flight at the last minute, not possible when dealing with a third party booker.
Information systems will help gather relevant information on customers and their preferences that will in turn provide valuable feedback data to KiwiAir that will allow them to optimize the services they provide to the customer and help build a profile of what each and every customer wants.
3. Out-performing the low-cost airlines
By changing the information systems for the ticketing and booking systems to a more modern “ticketless and paperless e-Travel” system the customer will be able to select a seating plan that suits them.
With a grade 5 being premium seat and grades 1-4 being the cheaper option, customer can select what seat they want and the level of luxury they wish for a budget flight.
A system that is linked to the booking system can determine the number of people booked onto a flight, using this information the airline can determine the size of plane to use, since KiwiAir has such a large fleet of aircraft or if more profitable cancel the flight and rebook people onto another flight either earlier or later that will be more full.
By having this ability to choose what aircraft and the ability to cancel and rebook flights in advance of them been finalized the company can save money on fuel and running costs of using a semi empty plane this will mean they can offer a service to its customers that is cheaper than their competitors.
The implementation of the above has proven that the low cost airlines can be beaten with no serious risk or cost to a larger company such as KiwiAir, and that if a strategy is formed that includes business, information systems and organizational strategies and all these strategies align and support each other then the business can become profitable and will ensure success in a competitive market.
The Information Sytems that KiwiAir has in place will help by:
ReplyDelete1. Cutting costs: The service-supply chain being digitised and made accessible anytime and anywhere meant all system processes were more aligned with each other, reducing the chance of any problems occuring, which would be costly. The ticketless and paperless e-travel system would also mean less employees would need to be needed to check customers in.
By using an effective satellite-tracking information system, this has allowed KiwiAir to track real-time data such as critical resources. This means wastage is reduced by customising the supply of resources. Costs are aligned more tightly with resources.
The informatoin system KiwiAir had in place essentially reduced the number of steps required in the supply chain to carry out service-supply roles.
2. Enhancing customer experience: The ticketless and paperless e-travel(automated check-in) system using RFID tags means customers spend less time having to check in and less delays before flying. Service consultants would be on hand to help if needed also. KiwiAir employees are able to spend more time interacting with customers to meet their perceived expectations. This was facilitated with the use of the multi-channel for direct marketing via their corporate website. This reduced problems such as delayed payments and fee negotiations. It also allowed the customer to provide direct feedback for services, KiwiAir can then use the feedback to better improve their ability to meet customer expectations.
3. Out-performing the low-cost airlines: KiwiAir had various ticket grades available for customers to choose, allowing KiwiAir to target customers of all income levels. Tickets from Grade 1 to Grade 4 could be purchased online up to one hour before take off. The use of a fully integrated and seamless supply-to-service information system that is available and responsive at all times, as well as learning from others' failures in implementation of information systems has allowed KiwiAir to beat other competing low-cost airlines at no risk.