Theoretical and Experimental Research of Lucky Imaging Technique - Case Study Example

Operations management University Student Id Course Date Introduction The Yunnan Lucky Air is usually an aviation company that provides airline services in China. Moreover, the Lucky Air Company was established in the year 2005, whereby it started providing airline services to the people at a low cost via the agents. However, because of the rise in internet services, the Yunnan Lucky Company was much focused on business activities since many people are mostly in need of on-door services. Moreover, the Lucky Air Company was looking for more competitive advantages by providing information technology services. There is need to note that airline market is very competitive and with the competition in the market, there is need to be committed to offering well scheduled and quality services. In offering the services, there are costs that are incurred known as fixed costs where in this case an airline need to possess an aircraft either bought or leased (Chang-xi, 2006). Some of the costs added to fixed costs; full crew, staff working hard to booking, giving tickets, boarding and handling baggage of the flight, fuelling and other supplies to consider. Summary of the case The Lucky Air Company had a total growth of 104.3 million dollars in the low-cost airlines, whereby it served the domestic routes from the Kunming up to the south-western parts of China. Moreover, Yunnan was a major tourist destination in China since it had a beautiful landscape as well as a multi-ethnic culture. Also, the Lucky Air Company attracted more than 1.2 million tourists to the Yunnan area because of providing airline services to the travellers. However, by comparing the Lucky Air Company to the other main competitors such as the Air China and also the China Southern Airlines, the Lucky Air conducted its operations under the small scale and also modelled its strength at a low-cost. The Lucky Air Company grew together with its parent which was the Hainan Airlines. The airline industry in China was highly regulated; thus the industry limited the flexibility of the other new airline companies. However, despite the regulation of the new airline companies by the Chinese airline industry, the low-cost new airline companies still went on growing inclusive of the Lucky Air Company. For instance, in the year 2007, there were around 11 airline businesses that were of low-cost in China, and also other two more airline companies were waiting to be approved officially. Moreover, the Lucky Air Company is still looking for more competitive advantages by being much concerned on the electronic commerce. Also, the operations of the Lucky Air Company on the Information Technology have been backed up by the Hainan Airlines which has the most advanced website in the airline industry of China. However, even though the airline electronic commerce had not much developed in China, the Lucky Air Company was much focused in positioning itself at the top most edge of the technology to accrue similar benefits which are realized by the Southwest Airlines. Moreover, the executives of the Lucky Air Company had to make a decision pertaining various issues such as their customers and also market. However, in case the company`s executives make a mistake of choosing a wrong expansion strategy for the electronic commerce, this could cost a lot the Lucky Air Company. The airline industry of China had accrued a lot of benefits from the drastic economic growth of the country and also from the significant rise in the peoples` income. Also, the administration of the Civil Aviation in China has been anticipating for an average growth rate of around 15% in every year. For instance, in the year 2007, the total number of passengers was almost 387 million which was an increase of 16.8% compared to the previous year. Also, an estimation of around 349 million passengers was using domestic flights for traveling, whereas 38 million passengers used international flights when traveling. Moreover, since the majority of the passengers used to travel for their leisure and also for vacations; hence they usually catered for their airfares. What are Yunnan Lucky Air’s best options? The Lucky Air Company had a significant model for the business which was similar to that of the Southwest Airlines of the United States. Moreover, since the Lucky Air Company is usually viewed as a domestic airline in the Chinese airline industry, it operates in small scale hence it tends to be more economical and also more efficiency to its customers. For instance, in the year 2007, the Lucky Air Company was more capable of increasing its number of passengers by applying the tactic of low- cost. Also, the other domestic airline companies still provide low-cost fares to their passengers. However, because of a large number of competitors in the Chinese Airline Industry, the Lucky Air Company has made a decision to take a risk by doing investment on the electronic commerce. 2. What factors should its executive team Lucky Air consider? There are various factors that the executive team needs to consider to ensure that lucky air is competitive in the airline industry. Some of these factors can include technology as it is an important factor in the success of the airline. Many firms in the airline industry are keeping pace with the changes in technology with the aim of achieving improvement in market share. The firms that are failing to keep pace with the industry changes are likely to become irrelevant in the market hence losing their market share. The digital revolution has established an information age which brings about relevant pricing, high communication levels and also high production levels of the airline services provided by the Lucky Air Company. Moreover, the electronic commerce in the western nations is becoming a great asset for business activities in the entire world, and therefore it has assisted the Lucky Air Company to gain an advantage over the other competitors in the airline industry. However, the usage of the internet technology in China is much limited hence there is great potential for this company to penetrate deeply into the remote areas in the country. Also, this factor relies on the fact that the internet services provided by the airline sector are quite minimal; thus the Lucky Air Company can gain a competitive advantage through investing on electronic commerce. However, even though it is only 1% of the total population of China who make use of the internet conveniently, this kind of situation will change very soon because of the high speed the electronic commerce is gaining influence. Moreover, the airline companies can develop their cost efficiency through the skilful usage of internet. The main competitive advantage of the Lucky Air Company over the other competitors in the airline industry is that it is usually linked to the Information Technology support (Haojun and Qifeng, 2010). Also, the Lucky Air Company utilizes its 15%of the total net income in doing investment on the Information Technology. Also, the Lucky Air Company still provides information concerning destinations, new updates and also flights. The executive team of the Lucky Air transporters should also consider providing discounts to the tourists in the hotel services as well as in the travel services, although the government is always against fare reduction. Also, the company should also provide high discount rates, promotional channels, product mixes to the students who are going for their holidays. Moreover, through analysing the current situation of the airline industry in China, to sustain the competitive advantage in the airline industry, Lucky Air Company is supposed to improvise its appropriate business strategy. Therefore, this means that due to the changing trends in the airline market, the company cannot sustain a positive effect on the market if it does not have its operation mode. However, since the electronic commerce is a main contributor towards the future success, it would be therefore advisable to the company to come up with a business strategy which is focusing on the e-commerce. The executive team in the Lucky Air Company should put into consideration the establishment of management for the customer relationship. Also, the executive team should also obtain as well as sustain a customer product Review which is much detailed to monitor any change in the customer`s preferences and needs. The executive team should also introduce the option of self-service for the customers in the company to minimize time wastage during various processes (Haojun and Qifeng, 2010). Also, the corporate team should still put into consideration establishing a corporate account which would assist the company in keeping track of the travel records of their employees and also enable them to have access to the destination packages. Furthermore, the executive team should also consider the promotion of the Loyalty Program Membership which would assist the company in sustaining its customer interaction as well as promoting its brand loyalty. Concerning the short term strategy in Lucky Air Company, the main benefit which the company would accrue is actually by integrating the electronic commerce. Therefore, the executive team of the company should consider prioritizing more on doing investment on the electronic commerce since it would greatly determine its future benefits. However, unless the Lucky Air Company makes its business strategy from this perspective, then definitely the company would be unable to survive in the airline industry. The executive team for this company should consider the expansion of its operations to include the international destinations (Ding, 2014). However, the electronic commerce in some cases is usually faced by threats regarding frauds and also errors. The executive team is therefore required to consider these threats and also come up with a plan on how the company would exploit its resources. The executive team of the Lucky Air should also make use of the internet to obtain essential information concerning computers, competitors, prospects and also markets. Importantly, the executive team should still base its strategy on the marketing concept which revolves around development as well as the introduction of the marketing programs (Berenguer, et al., 2008). Also, the marketing concept holds a belief that everything plays a significant role in the marketing process and also greatly recognizes various complexities in the marketing activities. There are usually four main components in the airline industry which are; the fuel, taxes, landing fees and the aircraft leasing which has greatly challenged the operations of the Lucky Air Company. However, although the company gains a competitive advantage of being linked with the Hainan Airlines, it still requires upgrading its strategy regularly. Moreover, the Lucky Airline Company just like the other firms in the airline industry is always faced with numerous challenges which include; government regulations, price reduction and also heavy taxes among the others. Also, the executive team of the company should consider the distribution of its ticket sales for every flight. 3. What lessons should they draw from Lucky Air’s experience and that of low-cost airlines elsewhere? Some lessons can be drawn from the experience of Lucky Air and other airlines that are experiencing low costs in operations. For instance, the commitment to ensure improvement in the quality of the services offered can be learned from the experience of lucky air. Also, commitment to offering the service is done early in advance so determining the cost is unpredictable. Fixed costs are a mandatory cost that likely to be incurred be it working or not working. Air transport cost is not a simple thing with the challenges of recovering the fixed costs incurred where the marketing environment is very competitive. They need to be aware that fixed costs contributions are not done at all since airfares are pressed down to marginal costs by competition which is atomized by many potential customers. The government has tried to meet some of the fixed costs and also direct subsidies (Annett, 2008). Again powers of institutional monopoly are being enjoyed in granting concession or silences which allow the airlines to charge over marginal cost hence exploiting customers. In an attempt to fight monopoly power forms airlines can design a way to differentiate their commodities among other many products. Companies operating in the aviation industry need to engage international market in focusing on increasing services which are protected by restrictive air-service covenants. Offering bonuses to loyal customers in the distance both long and short ones and motivation aspects like visiting relatives and friends, leisure and business can draw customers. Since every competitor wants more customers always there is need to change all services offered to customers with time so as to be different from your competitors. In an attempt to win through completive market an approach to lower production cost below competitors’ one needs to be adopted which encompasses focusing on fares an element of the competitive matrix. Lowering airline cost has a short-term impact on attracting customers from competitors and generating new ones to cover the previous cost with a hope of forcing competitors from the market for a longer term and benefit some degree of monopoly power. To retain the monopoly power needs to hold legacy all through by remaining uncompetitive on routes involved. Investing in air transport earns returns if only planning and collection of fares for flights are done in advance. Manufactures of airframes and airports work hard to thrive and put industry at a higher level of competition every day. The benefits of developing strategies aimed at lowering the costs of operations can be learned from the Lucky air as it was working towards lowering its costs. Low-cost carriers encompass lowering fares by use of a range of broad distinguishing strategies. The strategies help remove a few elements of their costs in production functions and also reducing levels of many remaining costs. They also offer limited services and also charge separately for the services they offer which may be different in different low-cost airlines. Low costs carriers experience operational advantage especially short-haul ones that do not operate with online services. These services allow maximum utilization of quality aircraft fleet and crew with no congestion. Avoiding repositioning cost related to mixed distance travels which reduce cost (Ding, 2014). In the attempt to lower cost low-cost carriers has to keep cost minimum charging on-board services, removing sales commissions, having fast turnaround times of aircraft, hitting hard bargains with other supplies and airports are adopted. Focusing on the core business of investing help in lowering expenses and increase revenues. Conclusion The carriers in the airline market that can be in a position to ensure low costs in operations can be in a better position to achieve competitive advantages. Effects of low-cost carries on fares and the markets served are offering low fares than incumbent airlines which leads to important traffic generation. This affects traffic volumes of the incumbent airlines hence losing many customers. Reducing fares is aimed at remaining competitive in the competitive market, but as a result, it lowers revenues earned. Low-cost airlines have caused structural changes where fares are falling, overall demand rise and traditional carriers having no market share. Lastly, it has caused effects on one route as a result of adjacent competitive routes which significantly involve nearby airports. Low-cost airlines have caused tremendous changes in airline market making it affordable. References Annett, R. (2008). Drop Zone Burma: Adventures in Allied Air-Supply 1943-45. Pen and Sword. Berenguer, I., Shijun, C., Liang, L., Jing, L., & Wang, N. (2008). E-commerce at Yunnan Lucky Air. MITSloan Management Case Studies (08-076) Chang-xi, Q. I. N. (2006). Radiation Curing Technology Applications in LCD Industry [J]. Information Recording Materials, 1, 013. Ding, P. S. (2014). A Grammar of Prinmi: Based on the central dialect of Northwest Yunnan, China. Brill. Haojun, Y. Z. L. Y. H., & Qifeng, S. J. R. C. Y. (2010). Theoretical and Experimental Research of Lucky Imaging Technique about Extended Objects [J]. Laser & Optoelectronics Progress, 5, 011. Read More