Indigo Harvard Case Solution & Analysis

Outline the strategic decisions as taken by Indigo and suggest why they had to be taken

Indigo has been doing an exceptional job since its beginning. Since the Airline industry in India has been gaining boom in at tremendous manner so it was highly necessary for Indigo to come up with something really special which could simply stimulate the people of India to travel with Indigo. It has been a known fact that India is counted among the highly populated countries of the world that somehow forced the strategic decision-making body of Indigo to come up with low-cost strategic decision.  In the year 2006 India’s total population was around 1126 million people that was a gigantic figure and moreover it was expected to reach around 1628 million by the year 2050, probably the highest in the world. Now the majority of Indian people belongs to middle class category who might not be able to afford the costly airline tickets, therefore this decision had to be taken by the management of Indigo for the maximum penetration into the market specifically in little span of time.

Moreover, they took another important decision of operating locally since they weren’t experienced enough to go for international operations and another favorable element could be an immense potential in the Indian aviation industry. From the beginning, they haven’t announced any international expansion plans which reflected that the company had already recognized the immense potential in the Indian market. Since the beginning, they have been following the price penetration strategy which led them to touch the new height of exceptional profits and outstanding penetration in the market. Cutting cost by delivering a fantastic service was one of most important part of their strategic decisions. The idea for selecting only local routes was completely justified and part of the company’s strategies and whatever it does, it should be done professionally and with maximum efforts for optimistic outcomes.

What are the key success factors for a low fare carrier in the Indian and global markets?

There are several key success factors for the low fare carrier companies that are both the Indian and at the global level.  These low fare carrier companies not only in India but on a global level, work approximately in a similar way by eliminating elements like complementary food and other services. Moreover, these low fare carrier companies also reduce the amount (In Kg) of baggage allowed while traveling which reduces the weight of the plane and eventually result in low fuel consumption. These low fare carrier companies operate from the less congested airports which allow them to reduce the entire lead time and save a bulk amount of money. Moreover, low fare carrier companies maintained a single passenger class which allows them to make the seating arrangement for maximum peoples.

What environmental issues were faced by the Indigo and how were they addressed?

There were several environmental factors that had to be taken into serious consideration by the Indian Airline Industry. Airline industry in India has been a fast growing industry in which time to time new rivals are entering in a rapid manner.  Similarly, Indigo has to face some issues like political condition of India, fuel prices, purchasing power of people and presence of several rivals as an option for customers. Indigo, from the day one uses the exceptional price penetration strategy to win a price war with in the industry. They kept the low fares as compare to the competitor’s and started gaining a handsome market share in no time. External factors like government policies, terrorist activities, economic instability and other elements which cannot be controlled by Indigo. To overcome these issues, Indigo focus on making itself as stronger as it can. It focuses on offering best services to customers with in the low prices. Indigo’s planes and other related arrangements were exceptional which directly helps them to gain more and more market share.

Heavy load factor was also a serious matter of concern that was tackled professionally by Indigo. Indigo’s business model played an exceptional role here because it mainly focus on being as cost effective as it can. Indigo being the low fare carrier (LFC) operates from the non-congested airports where they can save time and cost both.  Indigo reduces the cost of holding the additional inventory which helps the company to reduce cost up to 40% -50% of the per available seat kilometer........................

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