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Tiger Airways Internal and Exterior Environment

Keywords: tiger airways internal evaluation, tiger airways external

Low cost carriers (LCC), also known as budget/discount airlines, offer generally low fares but eliminate most traditional traveler services. You will find five low priced carriers functioning in Australia specifically Tiger Airways, Jetstar, AirAsia, Virgin Blue and Pacific Blue.

The purpose of this article is to perform an evaluation of Tiger Airways internal and exterior environment and make recommendations concerning the way the Tiger Airways might maintain or improve its competitive advantage through its business strategy. The word strategy comes from the Greek 'strategos' interpretation 'basic'. 'Stratego' means 'to plan the destruction of one's opponents through effective use of resources' (Mintzberg et. al 1995). Business strategy is the link between environmental requirements, organisational capacities and key stakeholder dreams (Hubbard et. al, 2008). This report also presents the hyperlink between micro and macro environment of Tiger Airways, resources and functions of Tiger Airways. Based on each one of these factors the report is divided into five main parts.

The first section can be an introductory section. The second section of the report represents the evaluation if interior environment of Tiger Airways. This section critically evaluates the resources, capacities, organisation system, composition, people and culture of Tiger Airways. The third section details the external environment evaluation and industry evaluation based on Michael Porter's five causes model. This section also discusses about the macro-environmental tendencies. The fourth section presents some recommendations regarding the strategies that the organisation should adopt to keep up or improve its competitive edge. The fifth section concludes the business strategy report. This section restates the goal of the report, and then provides an overview of details covered in the statement.

Internal Environmental Analysis

Tiger Airways Australia is part of the Tiger Aviation band of companies which form the Asia Pacific region's low fare airline group. Tiger Airways was founded in December 2003 and required to air, flying low priced services, in Sept 2004. Tiger Airways is Singapore based budget air travel and wholly had by Tiger Airways Holdings Limited. Tiger Airways Australia commenced procedures on 24 November 2007 as a local flight from its main base at Melbourne, Victoria. After that the flight has continuing to increase its occurrence in Australia.

Tiger Airways objective is to handle the needs of budget-conscious travelers looking for a reliable and low-fare service in the Asia Pacific region. In late 2004 Tiger appointed a fresh CEO, Tony Davis who was simply recently the Managing Director for bmibaby and helped bring a wealth of experience in traveling onward a low-cost flight business. Tony's visit was the catalyst for change in Tiger.

Resources Established View Model

Henry (2008) mentioned that the resources based view emphasises the inner capacities of the organisation in formulating technique to achieve a lasting competitive gain in its market and industries and claims that resources and capacities of an company plays a key role in the evaluation of organisational composition. While studies by Porter (1991; 1996), Foss & Knudsen (2003, cited in Tywoniak, 2007) declare that resources structured view didn't address appropriately the question of explicating the techniques by which the huge benefits was created and resources founded view theory does not focus resources. It offers lack of fine detail and therefore difficult for organisation to implement. Followers of the RBV have also been criticized for terribly defining the key constructs of the idea.

Customer value

Value for LCC is not as the value in legacy airlines

Source: Predicated on Hubbard et. al 2008, Strategic Management: Thinking, Analysis and Action, 3rd edn, Prentice-Hall, Frenchs Forest.

However Tiger Airways' strategy which targets providing low fare, high rate of recurrence air travel without compromising traveler safety. Basically this RBV model does not completely applies at Tiger Airways. Tiger Airways access into the local aviation market has helped the local tourism market and has lead to greater option of discount fares. Using its functions that are shown in Body 1. 1 Tiger achieve a competitive gain and customer value. In place of RBV, Porter's setting school of thought theory best suits at low priced carrier industry since it concentrates on different kinds of strategies what exactly are called generic strategies (cost control, differentiation and concentration). Tiger Airways offers passengers not only the lowest airfares on the market, providing very helpful opportunities for affordable travel for many individuals but safe, reliable and convenient air travel. Using its resources, features and strategic planning of low cost market structure Tiger Airways achieves a competitive benefit.

Business Model

Tiger Airways' business design is based on successful low-cost airlines, such as Ryanair which was created to maintain convenience, low operating cost and setting (Tiger Airways, n. d. ). Tiger is making revenue through the provision of additional products and services such as baggage upsize, chair selector, and sport equipments check-in.

Simple Product- Airbus A319 and A320, solitary class configuration,

Low Working Costs- Low pay, low airport fees, short floor waits anticipated to simple boarding procedures, online sales, short cleaning times.

Positioning- value proposition, price very sensitive people, leisure travelers, students, short-haul, high consistency, direct sales by internet, competition with other LCC's

Business Design of LCC

Source: based on Jiang, H 2007, Competitive Strategy for Low Cost Airlines

SWOT Analysis

Being a fresh Airline in Australia Tiger Airways' talents, weaknesses, opportunities and threats influenced the inner and external environment of the industry.

Figure 1. 2 SWOT Research of LCC

Strengths

Low cost operations

  • Only low fare air travel of Singapore
  • Fewer management level could do effective, targeted and intense management
  • Simple proven business design that consistently delivers the lowest fares in the industry
  • Penetrate &stimulate to potential market
  • Multi-skilled staffs means productive and incentives workforce

Weaknesses

  • "Too basic" facilities for passengers
  • No frills ()
  • Market remains price delicate, as service is becoming commoditized and available to new entrants
  • 3 years operation (early level of life routine)
  • Government interference
  • Security regulations

Opportunities

  • Better usage of planes
  • Changes in technology
  • Differentiation from old LCC models with the addition of customer support or procedure as full service airline with low fare
  • Dominant/monopoly position in many routes will offer some pricing power
  • Flight timings frequency

Threats

  • Rise in fuel prices
  • Strong competition
  • Accident
  • Change in Aviation regulations and government policies
  • Entrance of other LCCs
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