Spice Jet Consultancy Report

2010

2/8/2010

NITIN LAHOTI

Spice Jet Consultancy Report

2010

Table of Contents
Executive Summary...................................................................................................3 NITIN LAHOTI NNobody Introduction................................................................................................................4 E-mailExternal Environment.................................................................................................5 IIs Nike_lahoti@rediffmail.com Internal Assessment...................................................................................................6 TTalented Organizational Purpose..............................................................................................8 IIn this world as Strategy Analysis and Choice.....................................................................................9 Current Strategy.......................................................................................................11 NNitin Lahoti Conclusion................................................................................................................11 Bibliography................................................................................................................12 Annexure-1...............................................................................................................13 Balance Sheet.......................................................................................................13 Annexure-2...............................................................................................................14 Profit and Loss Account.........................................................................................14 Annexure-3...............................................................................................................15 Space JET Matrix.........................................................................................................15 HASE III The Internal – External (IE) Matrix.........................................................................16 Annexure-5...............................................................................................................17 The Grand Strategy Matrix....................................................................................17 Annexure-6...............................................................................................................18

SPICE

P

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Annexure-4...............................................................................................................16

QSPM

NITIN LAHOTI

Spice Jet Consultancy Report
……………..18

2010

…………………………………………………………………………………………………………

Executive Summary
This project is on how strategies are important to face the competition in global market. We have done this project on India’s low cost airlines Spice jet. We will come to know the strategies which are in use by Spice jet because spice jet is providing lowest air fares to people. We have done External analysis with help of EFE matrix, PESTEL, Porter’s Five Model, Industry life cycle and Internal Analysis with help of VRHN Resources, Profit Resources, Supply Chain Management and IFE matrix. After analyzing internal and external factors we give a look to vision and mission of company and see the current strategies to achieve this mission and vision. Company is doing very well and some strategies are very good like, flying at 38,000 feet at place of 34,000 for savings of fuel and tie ups with Star Navigation, Russell Adams and Tech Log. These tie-ups are providing technology benefits to company. Company can also go and expand their business to Nepal, Burma and Bhutan. So that company can give benefits to more customers and do progress.

Introduction
NITIN LAHOTI

Spice Jet Consultancy Report

2010

Spice Jet is a second largest company who is having a low-cost airline. Earlier it was known as Royal Airways, and this Royal Airways was known as Modiluft. And this was the first private company which had kept their step into Indian Aviation Sector. And in the year 2005 it change its name to Spice Jet. There was a objective for launching of a lower cost fares with a very high consumer value, with this the company had enjoyed the market share of 8%. () Spice jet had its own 11 Boeing 737 to 800 aircraft. And currently it is operating 83 flights daily which are connected to the 14 destination and it is highest in India for the utilization of aircraft. In the year 2008 the Spice jet is awarded as emerging company of the year. It is ranked among the top 10 airlines in Asia. ()

The External Environment
A. The External Factor Estimation Matrix (EFE)
This sector is largely affected by the tourism sector as well as the policies of Indian government. We have counted some key factors like the growth of tourism sector; number of passenger is anticipated to increase and increasing wealth and lifestyle of Indian middle class as key opportunities. We marked these opportunities and given them more weight age because the growth rate of tourism increase the number of passenger and increase in the wealth of Indian middle class ultimately help this sector because increase purchasing power allows them to travel frequently through airlines(Industry & Services : Infrastructure)(). While we have counted overregulation of industry by government, international terrorism and attrition rate of industry as major threats. We have included these as major threat because overregulation of the industry is not good for sector, attrition rate is very high and trained pilots are scarce. International terrorism has come up as a very big threat for the industry in the recent years ()()()

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Spice Jet Consultancy Report
.

2010

B. Analysis of External factor Estimation (EFE)
As we already pointed out some key opportunities and threats for the airline industry. After this we put them weightage and rank as per our understanding. At the end we counted the whole score for Spice Jet and it comes up as 2.1. The ideal score is said about 2.5 and more. It indicates us that SpiceJet is not utilizing the external environment properly but this score is also not too far from the ideal so we can say that if it tries a little more it can match to ideal.

The Internal Assessment
A. The Internal Factor Estimation (IFE)
The Internal factor analysis is done to analyze how well the company is using its resources. The objective behind this analysis is to find out what is the company’s key strength which it can convert in competitive advantage and what are the company’s weaknesses where it has to improve. We have identified some key strength which SpiceJet has in present. The foremost strength of this company is its promise for the lowest fare at any route where it exists. It is also important from this prospective that it has grown up its image in the mindset of customers as the cheapest airline. This company also has the tie-up with India’s leading bank State Bank of India (SBI) for ticketing. Its management team is also proving as strength for them as they have international experience of managing low cost airlines (),(),(),(),().

NITIN LAHOTI

Spice Jet Consultancy Report
.

2010

After going through many web resources and articles we have recognized some prime

weaknesses of the company. The main weakness of the company is their aircrafts; due to this they are unable to give good service to customers. They are not concentrating on advertising and we can say that there advertising is inadequate. Also they have to come with some new idea of cost efficiency to increase revenue because company is not making sufficient profit from existing strategies ()

B. Analysis of Internal Factor Analysis Matrix (IFE)
After pointing out all the strengths and weaknesses of the company we given them appropriate weightage and ranking. At the end we got the whole score as 2.5. The ideal score for this matrix is also 2.5 and more. It means that company is exploiting its strengths and trying to improve its weaknesses. But it still can improve because the ideal is more than 2.5 and company’s score is 2.5 so there is a scope for improvement and it is done by utilizing the strengths properly.

The Organizational Purpose
A. Vision
Spice Jet's vision is to ensure that flying is not only restricted to CEO's and business travelers.

B. Mission
• To become India’s preferred low-cost airline, delivering the lowest air fares with the highest consumer value, to price sensitive consumers.

Strategy Analysis and Choice
A. Competitor Analysis

NITIN LAHOTI

Spice Jet Consultancy Report

2010

There are 2 major competitors for spice jet. Kingfisher is a competitor because it is a market leader with 21.1% share and can shift customers(). Indigo airline is a competitor because it is also a low cost airline with a little more market share than spice jet.
1. Kingfisher Airlines: It is the major competitor of spice jet. It is the market leader of Indian

aviation industry as per market share. This is also counted in major competitor because by introducing new offers and schemes it is making luxury flight affordable to middleclass which is the key customer segment of spice jet(.kingfisher.com) ()..
2. Indigo: It is the direct competitor of spice jet because both are low cost airlines. Indigo is also

targeting middle class of Indian society through cheap fares. It has a market share of 14.1% which is more than spice jet 12.4%().

A. Internal-External Matrix (IE)
The IE matrix is an important strategic tool which is use to explain the working situation and the strategic position of the company. It includes both the external as well as the internal aspects which affect the company; based on the scores IFE and EFE we decide the company’s spot in the Matrix. The matrix is divided into nine grids and the position of the company in the grid will devote their strategy. The X-axis denotes IFE matrix score while the Y indicates EFE matrix score. Spice Jet with the score 2.50 in IFE matrix and 2.10 in EFE matrix, falls in 5 th grid which shows that it needs to hold, sustain and maintain their position in the competitive market. They should gradually look for opportunities for growth and market enhancement. Hence the company should give attention to more on product development and market penetration for in market profit maximization. As we already mentioned that in Indian market, there is a huge competition and very low margins available. So they can concentrate over few new routes where no or low competition exist like northeast India and neighbor countries of India.

NITIN LAHOTI

Spice Jet Consultancy Report
B. TOWS Matrix

2010

In the TOWS matrix we use company’s internal strength, weakness and external opportunities, threats to make strategy. As we already mentioned strength, weakness, opportunities and threats under IFE and EFE matrix so now we directly move to make strategy and don not mention these again. We have made some strategies for company to use opportunities and strength to eliminate weakness and threats. The complete strategy formulation by TOWS is given in Annexure 3. SO strategies: This strategy is made by using company’s strength and opportunities for him. In this strategic state the company should give attention to take advantage of both the strength and opportunities. The company can go ahead from strengths, operating resources to become market leader of the market for its products and services. As company is known among customer as the cheapest airline of India as well as India has a huge market potential so we like to give advice that Spice Jet should act aggressively and start services on some more route, it can also enhance its market by starting in Bangladesh, Nepal and Burma.. By doing this they can take first mover advantage because there is no low cost airline existing on this route. WO strategies: This strategy is made by using weakness and opportunities for company. Strategy under this section more emphasize over minimizing and eliminating the weaknesses through opportunities. This is important because a company can categorize opportunities in the external environment but its own weaknesses which avert the firm from taking benefit. Spice Jet’s major weakness is its cargo efficiency and its carriers which are on lease. Spice Jet can do one thing is that there are FDI investors available to give financial aid so it can return its low efficient leased carrier and purchase new high efficient carrier. It will also help it in cost controlling.

NITIN LAHOTI

Spice Jet Consultancy Report
ST strategies:

2010

This strategy is made by combining strengths of the organization which can deal with threats. The objective is to make best use of the strength while curtailing the threats. This still does not indicate that a company can meet or eliminate threats in the external environment directly. A company can only try to lessen the threats by through its strengths. There are many threats where we cannot do much but for few we can make strategy. There is a shortage of pilots in India so they can make a contract with pilot training institutes for pilots. To stop attrition rate they can sign a long term contract with pilots so they became legally bound and cannot leave company. Because of high competition in the segment there are a very little margins, for more margins they can start giving added services like showing movie in flight or describing the outer scenario as on where we are flying etc. These services can be charged or given for free but these services can give Spice Jet a competitive advantage. WT strategies: These strategies are made up by combining weakness and threats. In broad sense, the aim is to minimize both weaknesses and threats. A company must have to eliminate a big disaster It is very difficult to make strategy with weaknesses and threats in account. But we tried to come up with some possible solutions. As we already mentioned that this is airport infrastructure is not good and it is affecting service of Spice Jet. Spice Jet can highlight this in its advertising that despite the poor infrastructure and facilities we are providing cheaper and good services. It can be helpful to get customer’s attention and sympathy. The biggest threat is the intense competition and price war so the best way to eliminate this is horizontal integration. They should act aggressively and acquire ‘Go Air’

C. SPACE Matrix

NITIN LAHOTI

Spice Jet Consultancy Report

2010

The Strategic Position And Action Evaluation or SPACE matrix is a tool to determine strategy by analyzing financial strength, industrial strength, environmental stability and competitive advantage. There are 4 quadrants in the matrix which suggests different strategies. Analysis: ES average is -15/4 = -3.75 IS average is 13/4 = 3.25 CA average is -11/4 = -2.75 FS average is 13/4 = 3.25 Vector Coordinates: X-axis: IS-CA 3.25 - 2.75 = 0.50 Y-axis: FS-ES 3.25 – 3.75 = (-) 0.50 As we can see the score on X-axis is 0.5 and Y-axis is -0.5. It falls under fourth quadrant of space matrix which is competitive strategy quadrant()(). The strategies which Spice Jet can consider are market penetration development, product development, forward and horizontal integration. We would like to recommend that it can consider going international by starting in Bangladesh, Nepal, Srilanka and Burma. This market development will give it a big competitive advantage because only 2 private companies in India are allowed on international routes. None of them is low cost airline so a big opportunities to grab. Also it will cost lesser because these are neighbor countries of India.

D. Grand Matrix
The Grand strategy is used as a instrument to produce the strategies based on two parameters i.e. competitive position and the market share. From the IFE and EFE matrix analysis we found that Spice Jet is not competitively well positioned in the high growth market. Spice Jet does not utilizing its competitive advantage properly. So they lie in the 2nd quadrant of growth matrix. It consists of many strategies like market development, market penetration, product development, horizontal integration, divestiture and liquidation.

NITIN LAHOTI

Spice Jet Consultancy Report

2010

Among these we will like to suggest market development and horizontal integration. As we already mentioned that how they can develop their market by moving into India’s neighbour countries. They can also concentrate on mergers and acquisitions. They can think to merge with “Go Air”. Because it is a small developing low cost airline. Merger with this company can benefit Spice Jet because it will reduce competition as well as it will increase their market share which lead to strong financial position.

E. Financial Analysis
The balance sheet of the Spice Jet company indicates that the company is not have good financial position because the company has more current liabilities then current assets and in capital structure there is huge gap between long term loans and equity. Debt-Equity Ratio Debt-equity ratio indicates the long term solvency of the firm. In 2007 the debt-equity ratio was 4.96 and it decreased in 2008 to 4.53. This is not good for the company because the debt-equity ratio is too high. It indicates that firm is not having proper capital structure. The standard ratio for the debt equity ratio is 1:2. Current Ratio Current ratio indicates firm’s assurance to meet financial requirements. In 2007 current ratio of the company is 0.73:1 and in the year 2008 it was 0.85:1. This shows that company cannot pay the dayto-day expense and the current liabilities are greater than current liabilities which is not good for the company. The standard ratio for current ratio is 2:1. Fixed Asset Turnover Ratio

NITIN LAHOTI

Spice Jet Consultancy Report

2010

Fixed assets turnover ratio indicates the extent to which investment in fixed assets contribute towards sales. Fixed assets turnover ratio is increasing every year which is good for the company. In 2007 the ratio is 12.77 and it increased to 17.43 in 2008. Inventory Turnover Ratio Inventory turnover ratio indicates whether investment in stock is efficiently used or not. Inventory turnover ratio is also increasing every year which is good for company. The inventory turnover ratio is 111.8 in 2007 and it increased to 120.8 in 2008.

F. Quantitative Strategy Planning Matrix (QSPM)
The QSPM is a high level strategic planning approach for estimating the feasible set of strategies. This is an analytical way of strategy formulation where we compare our strategies on various factors. After analyzing the whole we came to 2 possible strategies for Spice Jet: 1. They should go international by launching services in Bangladesh, Srilanka, Nepal and Bhutan. 2. They should acquire some new players in market like “Go Air”. Weighing up the above stated strategies with assigned weight to the threats, opportunities, strength and weaknesses in front of the Spice Jet, and we have figure out that the strategic alternative 2 i.e. Expand in neighbor countries of India is better strategy than acquiring competitor because it got more attractiveness score. Strategy 1 has the attractiveness score of 4.47; whereas the strategy 2 has got a score of 5.63.

NITIN LAHOTI

Spice Jet Consultancy Report

2010

Current Strategies
In this time period where economy is slowly recovering from economic slowdown Spice Jet has some strategy which they are using now. Spice Jet is a low cost airline in an intense competition industry where profit margins are low. To survive in this scenario they are using some strategies, which are as follows1. They flight at a height of 38000 feet which increase their fuel efficiency by 10%. () 2. Spice jet is paying to oil companies and flight operators before due date, so that they can avail

discount and minimize their cost. ()
3. It has a tie-up with KLM Royal Dutch airlines for the maintenance support of its fleet. KLM is

the oldest airline in the world and is well-known for the maintenance of fleets. Through this Spice Jet is getting fuel efficiency which further allows them to offer lowest fares().
4. Spice Jet has launched its own Cadet Pilot Program to save itself from the shortage of Pilots.

But this strategy is not working up to expectation().
5. It has tie-up with Star Navigation, Russell Adams and Tech Log for state of the art

technology().
6. It also announces some promotional schemes to recognize itself in customers such as it

announced that on the occasion of 60th Republic Day it will give a 100% discount to defense personnel from 26 January 2010 to 26 March 2010().

Recommendation
NITIN LAHOTI

Spice Jet Consultancy Report

2010

Strategic Recommendation
After analyzing the whole we came to a conclusion that Spice Jet is not performing up to its potential so we will like to suggest the company to expand their business in the countries like Nepal, Bangladesh, Burma and Srilanka [we are not including Pakistan because of its unstable relationship with India]. These are neighbor countries of India so it can get license from the government easily. The most important thing is there is no low cost airline exists on these routes so it will not have problem of little profit margins. Also it is very important that the political and economical conditions of these countries are improving. [After overcoming from the problem of LTTE Srilanka is one of the preferred tourist destinations(). Bharti Airtel has acquired Warid {a Bangladeshi telecom company} and also other Indian companies are eyeing over there so trade between countries will enhance transportation(). As we look at Nepal than it is always a preferred destination for tourism by Indians so by operating on these routes Spice Jet can generate Profits as well as it can further expand its business in rest of the world like Gulf and Europe.

NITIN LAHOTI

Spice Jet Consultancy Report

2010

Reference
Aviation. (2009, 11). Retrieved 02 05, 2010, from .ibef.org: http://www.ibef.org/industry/aviation.aspx Bharti Airtel acquires Bangladesh's Warid Telecom. (2010, 01 12). Retrieved 02 05, 2010, from .ibnlive.in.com: http://ibnlive.in.com/news/bharti-airtel-acquires-bangladeshs-waridtelecom/108604-7.html Chowdhury, A. (2008, 10 07). Spicejet to return 3 aircraft by year end. Retrieved 01 05, 2010, from .business-standard.com: http://www.businessstandard.com/india/news/spicejet-to-return-3-aircraft-by-year-end/336581/ corporate overview. (n.d.). Retrieved 02 05, 2010, from .spicejet.com: http://www.spicejet.com/CorporateOverview.asp Dubai crisis: Opportunity for Indian aviation sector. (2009, 11 30). Retrieved 12 11, 2009, from .economictimes.indiatimes.com: http://economictimes.indiatimes.com/News/NewsBy-Industry/Dubai-crisis-Opportunity-for-Indian-aviation-sector/articleshow/5285677.cms Indian aviation industry to suffer $1.5b loss, says IATA . (2009, 10). Retrieved 12 11, 2009, from .iplextra.indiatimes.com: http://iplextra.indiatimes.com/article/03UkajnffbfS1? q=Fiat India's struggling airlines. (2009, 08 06). Retrieved 12 11, 2009, from .economist.com: http://www.economist.com/research/articlesBySubject/displaystory.cfm? subjectid=348873&story_id=E1_TQTSJTRS Market share of scheduled domestic airlines. (2009, 11). Retrieved 01 05, 2010, from .dgca.nic.in: http://dgca.nic.in/reports/Market.pdf Outlook business. (n.d.). Retrieved January 21, 2010, from www.outlookindia.com: www.outlookindia/business.com Singhal, M. (2008, 05 14). SpiceJet plans to raise $100 mn for fleet expansion by year-end. Retrieved 01 05, 2010, from .business-standard.com: http://www.businessstandard.com/india/news/spicejet-plans-to-raise-100-mn-for-fleet-expansion-by-yearend/322913/

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Spice Jet Consultancy Report
SkyTeam partners and alliances. (n.d.). Retrieved 02 05, 2010, from .klm.com: http://www.klm.com/travel/in_en/about/company/skyteam_partners/index.htm

2010

Spicejet and Galileo sign Agreement for Exclusive Access to Low Fares. (2006, 07 6). Retrieved 01 05, 2010, from .spicejet.com: http://www.spicejet.com/newspage.asp? strNews=GalileoSignAgreement SpiceJet appoints Senior Managers . (2009, 03 24). Retrieved 01 05, 2010, from .spicejet.com: http://www.spicejet.com/newspage.asp? strNews=SpiceJetappointsSeniorManagers SpiceJet is the most preferred airline in India. (2009, 11 24). Retrieved 01 05, 2009, from .business-standard.com: http://www.business-standard.com/india/news/spicejetismost-preferred-airline-in-india/377482/ SpiceJet Ltd. (n.d.). Retrieved Jan 23, 2010, from Capitaline.com: www.Capitaline.com/spicejet SpiceJet offers 100% discount for Army men . (2010, 01 11). Retrieved 02 05, 2010, from .deccanchronicle.com: http://www.deccanchronicle.com/node/102239/print SpiceJet posts profit of Rs 109 cr. (2010, 01 22). Retrieved 02 05, 2010, from .businessstandard.com: http://www.business-standard.com/india/news/spicejet-posts-profitrs-109cr/383341/ SpiceJet wins National Award for Cost Management. (2009, 03 17). Retrieved 01 05, 2010, from .business-standard: http://www.business-standard.com/india/news/spicejet-winsnational-award-for-cost-management/352085/ Sulaimani, K. (2008, 11 12). Aviation industry no more a hot career. Retrieved 12 11, 2009, from .expressindia.com: http://www.expressindia.com/latest-news/aviation-industryno-more-a-hot-career/384656/ Tourism to open up in Sri Lanka's north after LTTE's defeat. (2009, 07 22). Retrieved 02 05, 2010, from .timesofindia.indiatimes.com: http://timesofindia.indiatimes.com/world/south-asia/Tourism-to-open-up-in-Sri-Lankasnorth-after-LTTEs-defeat/articleshow/4806082.cms United Aviation to train SpiceJet pilots. (2006, 11 20). Retrieved 02 05, 2010, from .business-standard.com: http://www.business-standard.com/india/news/united-aviation-totrain-spicejet-pilots/17733/on

NITIN LAHOTI

Spice Jet Consultancy Report

2010

Appendix
Balance Sheet:
Spice Jet Ltd (Rs in Crs)
Year Bottom of Form

Mar 09

Mar 08

SOURCES OF FUNDS : Share Capital Reserves Total Equity Share Warrants Equity Application Money Total Shareholders’ Funds 241.02 676.53 6.06 0 429.4 5 240.65 212.67 0 0 27.98

NITIN LAHOTI

Spice Jet Consultancy Report
Secured Loans Unsecured Loans Total Debt Total Liabilities APPLICATION OF FUNDS : Gross Block Less : Accumulated Depreciation Less: Impairment of Assets Net Block Lease Adjustment Capital Work in Progress Investments Current Assets, Loans & Advances Inventories Sundry Debtors Cash and Bank Loans and Advances Total Current Assets Less : Current Liabilities and Provisions Current Liabilities Provisions Total Current Liabilities Net Current Assets 565.73 126.88 692.61 13.65 12.39 308 165.09 499.13 95.76 28.2 0 67.56 0 185.28 0 33.27 455.54 488.8 1 59.36

2010
166.67 364.94 531.6 1 559.5 9

86.47 21.4 0 65.07 0 498.91 0.36

12.31 1.64 599.51 174.17 787.63

721.67 70.71 792.38 -4.75

NITIN LAHOTI

Spice Jet Consultancy Report
193.48 Miscellaneous Expenses not written off Deferred Tax Assets Deferred Tax Liability Net Deferred Tax Total Assets Contingent Liabilities
()

2010

0 0 0 0 59.36 19.13

0 0 0 0 559.5 9 42.15

Appendix
Profit and Loss Account
(Rs in Crores)
Top of Form Bottom of Form

Mar 09(12)

Mar 08(12)

Year INCOME : Sales Turnover Excise Duty Net Sales Other Income Stock Adjustments Total Income EXPENDITURE : Raw Materials 0 0 1,689.45 0 1,689.45 124.09 0 1,813.54 1,294.99 0 1,294.99 143.59 0 1,438.58

NITIN LAHOTI

Spice Jet Consultancy Report
Power & Fuel Cost Employee Cost Other Manufacturing Expenses Selling and Administration Expenses Miscellaneous Expenses Less: Pre-operative Expenses Capitalised Total Expenditure Operating Profit Interest Gross Profit Depreciation Profit Before Tax Tax Fringe Benefit tax Deferred Tax Reported Net Profit Extraordinary Items Adjusted Net Profit Adjst. below Net Profit P & L Balance brought forward Statutory Appropriations Appropriations P & L Balance carried down Dividend 947.23 155.08 382.46 573.91 80.83 0 2,139.51 -325.97 16.02 -341.99 7.26 -349.25 0 3.32 0 -352.57 30.89 -383.46 -23.8 -507.45 0 0 -883.82 0 704.24 140.37 277.03 418.17 8.32 0 1,548.13 -109.55 13.72 -123.27 7.82 -131.09 0 2.42 0 -133.51 42.72 -176.23 0 -373.94 0 0 -507.45 0

2010

NITIN LAHOTI

Spice Jet Consultancy Report
Preference Dividend Equity Dividend % Earnings Per Share-Unit Curr Earnings Per Share(Adj)-Unit Curr 0 0 0 0 0 0 0 0

2010

Book Value-Unit Currency

-18.07

1.16

()

NITIN LAHOTI

Spice Jet Consultancy Report

2010

Appendix TOWS Matrix
SO Strategy WO Strategy

1. Can start on some new route to grab huge 1. Can purchase new high efficient carrier with the market potential. help of FDI investors for cost efficiency 2. Initially these new carriers can be used for new service.

2. Company should come up with new scheme for route so new customer will feel happy with the those new markets.

ST Strategy

WT Strategy

1. It can launch new marketing campaign showing 1. Contract with pilot training institutes and pilots its services despite of bad infrastructure and to stop attrition. 2. Added services for competitive advantage. services.

NITIN LAHOTI

Spice Jet Consultancy Report
1) QSPM
QSPM (Quantitative Strategic Planning Matrix) for Spice Jet Key Factors Alternative 1- Acquire Competitors[Go Air] Weigh t Strengths Increasing Market share and customer reliability Funding for expansion already complete Good working performance Management with international experience of managing low cost airline Weakness Inadequate advertising Poor Service Only on the selected route 0.11 0.15 0.18 1 4 3 0.11 0.60 0.54 0.10 0.17 0.20 4 3 2 0.15 4 0.60 0.12 4 Attractivenes s Score
Weighted Attract. Score

2010

Alternative 2- Expand in Neighbour countries of India Weigh t Attractivenes s Score
Weighted Attract. Score

0.48

0.16

2

0.32

0.17

4

0.68

0.11

3

0.33

0.10

3

0.30

0.14

3

0.42

0.14

3

0.42

0.40 0.51 0.40

Sum Weight

1.00

1.00

NITIN LAHOTI

Spice Jet Consultancy Report
Opportunitie s 18% growth rate of industry in 2009 Increase in the income middle class Modernization of Airports Mergers and Acquisitions India’s increasing reputation Threats Over regulated from government Very high attrition rate Intense competition International terrorism and smuggling Little profits and high operating expenses Sum Weight Sum total Weighted Attractiveness Score 0.15 0.05 0.11 0.05 4 2 3 1 0.60 0.10 0.33 0.05 0.12 0.08 0.11 0.13 3 1 1 3 0.13 0.12 4 3 0.52 0.36 0.10 0.09 1 1

2010
0.10 0.09

0.08 0.16 0.06

2 4 1

0.16 0.64 0.06

0.11 0.07 0.13

4 2 4

0.44 0.14 0.52

0.36 0.08 0.11 0.39

0.09

3

0.27

0.06

2

0.12

1.00 4.47

1.00 5.63

NITIN LAHOTI

Spice Jet Consultancy Report
Grand Strategy:

2010

NITIN LAHOTI

Spice Jet Consultancy Report

2010

NITIN LAHOTI

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