Adaptability to Forces
Adaptability to Forces
Technology
A host of external factors influence a firm’s choice of direction and, ultimately, its organizational structure and internal processes. These external environment factors can be either in the remote environment or in the industry environment. To avoid obsolescence and promote innovation, companies must be aware of technological changes that influence the industry. Creative technological adaptations can suggest possibilities for new products, for improving existing products, or in marketing techniques. Technological forecasting can help protect and profitability of companies (Pearce & Robinson, 2005).
The airline industry is one of the most competitive and strategic industries in the world. Functioning on a business cycle and run by individual companies, there are many factors that influence what differentiate one airline from another. One main factor to gain a competitive advantage in the industry is to use information technology to its fullest extent. By using IT, companies can provide better services to their customers at a cheaper price. Spiking fuel costs, low-cost competition, and changing business models have forced everyone in the airline industry to consider how best to use technology to optimize efficiencies and cut costs.
Most airlines consider technology as an add-on to their business instead of considering it a tool central to the success of the business. Utilizing technology appropriately can help airlines improve productivity, customer satisfaction, and ultimately competitive advantage in the industry. Airlines can develop innovative services for passengers, as well as offer customer benefits worldwide, including savings, offers and rewards. Low cost airlines that have overcome the technology barrier is leading the market trend (Rothfeder, 2005).
Technology plays a large part in ensuring passengers experience a comfortable, smooth, and happy flying experience. There are various instances where using technology has been the critical factor. For instance; Lufthansa, and Japan Airlines utilized technology to install wireless Internet networks on its plane. This proved to be very attractive to business travelers who could be productive by working on-flight. Airlines like Jet Blue also offer free Wi-Fi at the airport gates for their passengers (Peter, 2005). Airlines need to conduct frequent environment scanning to identify new technologies available in the market and understand how it can be used to their advantage. Utilizing the multitude of benefits of the Internet can make the difference between success and failure for airlines. Japan Airlines (JAL) developed their e-business strategy to position itself at the leading edge of e-commerce to gain competitive advantage. Its first initiative was to develop a Web-based ticket information and reservation system that allows customers to make, confirm and cancel reservations, as well as to view information on flight schedules, space availability, and arrival and departure information (IBM, 2004)
The airline industry is responding to intense pressure with innovations and improvements to the way it operates. They have been forced to reshape their products, costs, and strategies to stay in business. International Air Traffic Association (IATA) is leading a program called �Simplifying the Business” that leverages technology to reduce the cost of complex industry processes, including passenger ticketing, cargo invoicing, check-in and baggage handling. Using electronic ticketing, self-service kiosks and Radio-Frequency Identification (RFID) technology will substantially reduce the operations cost and increase customer satisfaction (airport-technology, 2008).
Jet Airways can adapt to the changing industry needs by utilizing technology to their advantage. They can develop a variety of strategies to leverage technology in their business. Some of the strategies could be to use technology 1) to speed up check-in process at airports, 2) to offer online check-in, 3) collaborate with travel reservations sites like Travelocity to offer ticketing services, and 4) implement an online risk management solution to reduce fraud in their online payment process. Since Jet Airways new strategy is to expand in international sector, it is imperative for the airlines to understand how they can support their strategy through technology.
Competition
The essence of strategy formulation is coping with competition. Competition in an industry is rooted in its underlying economics, and competitive forces exists that go well beyond the players in the particular industry. The corporate strategy of a business should be to find a position in the industry where the company can best defend itself against these competitive forces. Knowledge of these sources of competitive pressure provides the groundwork for strategy development