Delta Air Lines (A): The Low-Cost Carrier Threat Harvard Case Solution & Analysis

Question 01

Why strategy failed? Critically analyze with reference to logical advantage, scope and activities with reference to this case.

The strategy for all the low cost carriers in the United States Airline market has failed considerably other than that of South West Airlines. The reason is simple, all the other players who have entered the low cost carrier market have been subsidiaries of major or the legacy airlines in the country that are well known for their services, flight, crew, etc.

Since South West has been gaining a lot of popularity, traffic and customers, therefore, other airline companies have also penetrated in this market with low cost carriers. The major reason for their failure is based on the fact that none of them has actually separated their parent company with the subsidiary and none of the subsidiary has been able to keep a check and balance on the operational activities of the subsidiary.

Most of the rivals have followed the footsteps of South West without actually realizing the method as to how to operate in a new segment of the same industry. Since customers have known Delta for being a high end prolific airline, therefore, changing its image with Delta Express as a low cost carrier was not accepted by the passengers.As a result, it failed in the high potential and competitive airline industry of the United States.

Along with this, the scope of the market has also squeezed up. The airline as stated in the case has become rather price sensitive. Most of the customers coming over to purchase ticket initially look at the prices;however, there are those people who still prefer quality over price. Nonetheless, the number has been quite limited in the recent times.

Moreover, as the case estates, all the companies that have explored the market of low cost carriers have failed in most of the occasions because the element of limited knowledge amongst the industry players and the customers to accept the services offered by the new company does not really convince the passengers who associate the company with superior quality rather than low prices.

The case basically depicts the fact that the airline industry of the United States is highly competitive; the rivals in the industry have been posing severe threat to the rivals in the market. The customer preferences are aligned with the overall brand image rather than the services offered to them.

Companies that have been offering subsidiaries have actually failed in the market because of being unable to sustain in the market with the revised or the new strategic plan. In the future, all the airlines that are planning to enter the market have to come up with a strategic plan, which can ensure sustainability in the market.

The market regulations have also been quite strict and the government has been keen to ensure that the services do not decline for any of the airlines operating in the market. Delta with its launch of Delta Express has to ensure services that meet the industry’s requirements.

Question 02

Operational efficiencies are essential but not sufficient. Discuss with reference to case Delta air case.

Operational efficiencies are very essential in the success of the organization; however they are not entirely sufficient to ensure the success of the organization. The same has been depicted in the case presented. Delta Airlines has been the market leader when it comes to the legacy airlines. The company has been operating in the market since early 1920s, and has made reasonable strategies and plans to ensure that it remains passengers’ top choice while travelling.

Moreover, Delta Airlines has been quite successful in managing itself because of the high quality operations and the management of the firm, which ensures that the services provided to the customers are top notch and above industry average. However, it is a fact that operational efficiencies are essential, but they are not sufficient to actually confirm the success of the airline in such a highly competitive market.

No airline can actually meet the demands, needs and wants of the highly competitive market in terms of providing the operational efficiencies. Being a part of such a highly competitive market, Delta has been constantly upgrading its operational efficiencies to engage more passengers, and to also provide improved services to the customers................

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