Westjet Case Study
West Jet
Business Level Strategy: Look at external when evaluating this
Focused cost leadership
need to asses business level strategy is suitable to the macro environment and the industry
Evaluation:
There was the budget conscious consumers and the existing players weren't facilitating this segment of the market. There was an opportunity there to facilitate them. There was low switching cost in the industry and they were very focused on price. Substitutes consisted of car buses and train at lower prices and if the price wasn't low enough then they use won't travel at all. This segment wasn't being catered towards at all.
Buyer power: very high as of low switching costs and price sensitivity.
Suppliers: cost leadership west jet are coming over the power of the main airports by fling out of cheaper smaller less mainstream airports, which fits in with its cost leadership strategy.
Barriers to entry: high set up costs as the hub and spoke system incurred very high costs but they entered in a different way so they were over to overcome the hurdles so it mad perfect sense.
Geographic focus: did it make sense? Yes smaller area, less risk in keeping themselves in just the western part of the area.
Functional level strategy: does it make sense with business level strategy?
Efficiency: does it make sense, definitely always trying t reduce costs.
Competitive Level strategy: Looking at competitors and environment they are in
market penetration: does it make sense?
Engaging in greater efficiency maximize everything they do where they are already doing it
Spreading the costs over even more passengers, generating in further economies of scale which in turns generate barriers of entry to competitors. the west area of Canada is projected to grow from 30-40%. they have first mover advantage and the south west model can be imitated as they imitated them. Already a competitor could set up in the western part of Canada.
Need to tap into the
Business Level Strategy: Look at external when evaluating this
Focused cost leadership
need to asses business level strategy is suitable to the macro environment and the industry
Evaluation:
There was the budget conscious consumers and the existing players weren't facilitating this segment of the market. There was an opportunity there to facilitate them. There was low switching cost in the industry and they were very focused on price. Substitutes consisted of car buses and train at lower prices and if the price wasn't low enough then they use won't travel at all. This segment wasn't being catered towards at all.
Buyer power: very high as of low switching costs and price sensitivity.
Suppliers: cost leadership west jet are coming over the power of the main airports by fling out of cheaper smaller less mainstream airports, which fits in with its cost leadership strategy.
Barriers to entry: high set up costs as the hub and spoke system incurred very high costs but they entered in a different way so they were over to overcome the hurdles so it mad perfect sense.
Geographic focus: did it make sense? Yes smaller area, less risk in keeping themselves in just the western part of the area.
Functional level strategy: does it make sense with business level strategy?
Efficiency: does it make sense, definitely always trying t reduce costs.
Competitive Level strategy: Looking at competitors and environment they are in
market penetration: does it make sense?
Engaging in greater efficiency maximize everything they do where they are already doing it
Spreading the costs over even more passengers, generating in further economies of scale which in turns generate barriers of entry to competitors. the west area of Canada is projected to grow from 30-40%. they have first mover advantage and the south west model can be imitated as they imitated them. Already a competitor could set up in the western part of Canada.
Need to tap into the