1.

1 Summarise the evolution of the strategic management Approaches:

Various strategic management Approaches:

Top down Approach
Strategic direction, strategy and planning take place at or below the highest level of
the organization in a top-down approach. For example, the board of directors of a company
can establish and meet its objectives in the form of strategic plans. From the strategic plans,
the management of the company establishes the strategies and action plans necessary to meet
the strategic objectives and delegates them to line management and supervisors.

Bottom up Approach
In a bottom-up organizational strategy, the company develops its strategies, objectives
and directions based on ideas, feedback and solutions provided by all levels of the company,
including promoting employee involvement with decision-making, problem-solving and
strategic planning.

Various strategic Approaches by Indigo Airline which makes them market leader
today:

About the company:

Indigo, headquartered in Gurgon, India is the largest airline with the market share of 47% as
of august 2019. It was setup in early 2006 by Rahul Bhatia which operates in India’s
domestic air travel market as a low cost carrier with focus on offering low fares, being on
time and delivering a courteous and trouble free expertise.
Low-cost and single class models

Indigo stuck with its policy of offering one class of simple service on a single type of plane.
Indigo has chosen to stay with the world's popular single-passage craft, the Airliner A320.

Sell and rent back planes

It keeps selling and renting back its planes. Indigo uses its six-year sale and leaseback
agreements, in order that airline is unceasingly ever changing its aircraft. This prevents the
necessity for overall checks and major repairs.

It's all about customer focus:

Indigo’s success model mostly depends on consistent low fares, regular on-time performance
and lowest flight cancellations. However, the airline's biggest edge over others is
its target client focus.

Use of smart technology

Unlike manual systems utilized by different airlines, Indigo planes are equipped with a digital
link system for transmission of short, straightforward messages between craft and ground
stations via radio or satellite named craft Communications Addressing and coverage System
(ACARS). Before each Indigo flight departs associate degree automatic message is triggered
from the craft to its operation's management centre - and in real time an equivalent point in
time gets recorded within the code. Similarly, the instant the flight lands associate degree
automatic message is triggered from craft to manage centre. Hence, the on-time performance
is diligently monitored for each flight in real time.
1.2 Critically evaluate the importance of strategic management for
hospitality& Tourism industry:
 It guides the business in a certain way. It describes the objectives of the organization and
sets realistic targets, in line with the vision of the company.
 It helps the company to be proactive, not reactive, to get it to analyze competitors '
behaviour and take the required action to compete on the market, rather than to become
spectators.
 It serves as the basis for all the company's main choices.
 It aims at preparing the organisation, playing a pioneering role in exploring
possibilities and also helps in finding methods of reaching those possibilities.
 It guarantees the company's long-term survival and copes with competition and the
vibrant environment.
 It supports the creation of key skills and competitive benefits that help to survive and
grow businesses.
 The fundamental objective of strategic management is to achieve the Company's
sustainable strategy. The development and implementation of such policies that
generate value for the business are feasible. It aims to assess possibilities and threats,
take account of the strengths and weaknesses of the firm and develop survival,
development and extension policies.
1.3 Critically analysis the performance of tourism and hospitality
organisation from the Perspective of Strategic Management Theory:
Strategic performance of Indigo Airlines:

Customers: 1000 Flights average departure limit crossed.

Ranked 1 for OTP (one time performance) for FY18 is 83.1 percent.

50 served destinations.

200 million numbers of Customers served since its inception.

"Best Low Fare Domestic Airline" and "Best Low Cost International Airline Out Of /
Into India" awards by ‘India Air Passenger Association’.

‘Best Low Cost Airline ' Award won for the eighth consecutive year at the 2017
SKYTRAX World Airline Award.

Shareholders: Total profitability of 22.4 billion Rs. Consecutive ten years of

profitability.

46.7%: Cash balance growth reaching Rs 137.08 billion as of 31 March 2018.

25%: Public shareholding reached.

Employees: AON Best Employer – India Accolade won for the second year in a row.

‘Excellence in Learning & Development ' Award presented to Indigo’s Faculty of

Training by the Human Resources Management Society.

Community: 24,500: Rural Women benefited from our collaboration with AFARM,
Bandhan and others to raise annual household income.

20,000: Children benefited from our SRFF project to develop a comprehensive education
system covering more than 60 government schools.

10,000: Street vendors to sell scaled products made by 2,600 craftsmen from recycled
materials, such as seat covers, uniforms and more.

Country: Turboprop Operations: introduced in Tier II and III cities.

900 +: different city pairs linked to a convenient direct or one stop service.

150 +: number of aircraft being operated.

Financial Performance: Total revenue rose from Rs. 193,695.70 million to Rs.
239,677.43 million, an increase of 23.74 per cent over the previous financial year.
Operational Performance: As of 31 March 2018, the Company conducted scheduled
services to 50 destinations, including 8 international destinations, with a fleet of 159
aircraft consisting of 32 A320neo, 121 A320ceo and 6 ATRs.

The Company continued to be the leading airline in terms of on-time performance, with
an average OTP of 83.1 per cent at four main metres, for the financial year ended 31
March 2018. During the year under review, the company had a technical dispatch quality
of 99.85 per cent and a flight cancelation rate of 0.92 per cent. The Company was
awarded 20 routes serving 10 additional destinations under the Regional Connectivit y
Scheme during Phase II of the bidding process.

Financial/Strategic performance of Air India Airlines:

I. Revenue

In 2016-17, total revenues increased to RS.239, 004.8 million, from Rs.221.971.0

million (Rs.17, 033.8 million).

Operating revenue increased to Rs. 230,036,7 million between 2017-18 (increase of Rs.
11,766,0 million) and passenger revenues from Rs. 160,201,2 million last year (increase
of Rs. 110,239,7 million).

II. Expenditure

In contrast with last year's estimate of Rs. 263,332,5 million (up Rs. 27,925,8 million)
the total spending incurred during the year was Rs. 210,258.3 million In 2016-2017.

Operating expenditure rose from Rs. 220, 486, 8 million to Rs. 246, 617, 4 million in
2017-18 (up Rs. 27, 130, 6 million).

Staff cost increased by 13.6 per cent between 2016-2017 and Rs 29,126.4 million from
Rs 25,645.9 million.

The cost of fuel rose in 2016‐2017 to Rs 73,626,9 million from Rs 63,453,3 millions by
16.0 percent.

Air India has been nominated for the 2014 International Quality Crown Award (IQC) in
the Diamond category by the Selection Committee for Business Initiative Directions
(BID).

For the third year in a row Air India has won the award for commitment to quality and
excellence and according to the QC100 Full Quality Management System IQS
Regulations and Criteria.
2.1 Summarise the Evolution of the Strategic Marketing Approach
In the last 50 years, strategic planning has developed as a field of study. Strategic
management was seen in the 1950's and 1960's from a general management viewpoint
with emphasis on the leadership role. The emphasis was therefore on management,
interpersonal relations and organizational mechanisms, processes and structures. The
top-down strategy was used by businesses with top management at the centre of
decision-making. During this period, the plan management process was not formalized
and explicit, but rather more subtle and informal. The organizations implemented their
strategic planning approach in the late 60's, 70's and early 80's, with an emphasis on
research and structured preparation, and with special teams assigned to create strategies.
Typologies and concepts related to business and corporate strategies, with the strategy
formulation at the heart of such conceptualizations, have led to the evolution of the
domain during this period. In the 1980s, scholars focused more on strategy
implementation as a process. In the late 1980s, strategic management arose as a field of
study to use the works of academics in the strategic management sector in hospitality
sectors, which centred on the growth of the organisation's culture and its role of deciding
its position. Most of these efforts were intended to confirm contingency, strategic
planning and competitive strategies theories.

In the 1990s, globalization led to network strategies, and the researchers developed their
literature through strategic alliances. Further initiatives from a resources-based
viewpoint have led to the conceptualization, with competitive advantage, of the
company's internal competences. The shift to inner skills also resulted in a shift towards
knowledge and learning at the core of the strategic competitive advantage in the late
1990s. The progress continues from the 2000s onwards with an emphasis on corporate
social responsibility.
2.2 Critically evaluate the importance of Strategic Marketing in
Tourism &Hospitality Industry:
 Strategy helps to develop goods and services with the best potential for benefit.
 Marketing strategy helps to identify areas affected by corporate development and
thus helps to establish a strategic plan to meet the needs of the customer.
 This helps to set the right price for the goods and services of the company on the
basis of information collected by market research.
 Strategy guarantees successful collaboration of agencies. This allows a company to
make maximum use of its assets in order to send a message of sales to its target
market.
 The marketing strategy aims to set the advertising budget in advance, and it also
establishes a mechanism that defines the reach of the campaign, i.e. the revenue
generated by the advertising plan.

COMPARISON AND CONTAST BETWEEN INDIGO AND AIR INDIA

Marketing Strategies of Indigo Airline:

Segmentation, targeting and positioning of Indigo Airline’s marketing strategy

Indigo Airlines uses its benefit segmentation approach to meet the changing needs
have developed and developing countries. It targets people primarily by offering low
rates, as air travel is considered an expensive choice for travel. Through targeting
different markets judiciously considering demand supply constraints, Indigo has emerged
as the best player in the industry within 10 years of its inception using a differentiated
targeting strategy. As far as brand image is concerned, it has positioned itself as a value-
based carrier offering hassle-free travel experience.

Distribution strategy of Indigo Airline’s marketing strategy:

Indigo flies to 40 destinations and, on a daily basis, 680 flights have helped the company
to grow as a market leader. Indigo outsources in-flight catering / food products from an
outside manufacturer. These are provided to consumers on a payable basis.

Brand equity of Indigo Airline’s:

Indigo is the number one airline brand in India. Since its inception, Indigo has been
successful in creating a strong brand image, and even in its commercials, it has become a
low-cost carrier and "every time on time" of arrival. Numerous awards were received for
being a low-cost carrier from 2007-2015 on a continuous basis.
Competitive analysis of Indigo Airline’s marketing strategy:

The Indian aviation industry is crowded with a number of companies and each company
is struggling with its profitability ratio and is redesigning its strategies to survive in a -
competitive market. Indigo, on the other hand, was aligned with the "low cost, wasted
value" rule. Indigo has steadily increased its fleet size, most recently by receiving the
A320NEO delivery in Feb. ' 16.

Market analysis of Indigo Airline’s marketing strategy:

India aims to become the world's third biggest aviation industry by 2020, with a rapid
growth fuelled by various factors, such as low cost carriers, advanced IT-enabled and
new airports. India is the first aviation industry in the world. Through introducing certain
of these, companies such as Indigo are driving the growth of the sector.

Customer analysis of Indigo Airline’s marketing strategy:

Indigo Airlines ' customers include mainly employed and middle-income professionals.
The majority of customers are between 20-45 years of age.

Marketing strategies of Air India:

Segmentation, targeting, positioning of Air India Airline’s marketing strategies:

In order to create a distinctive image in the minds of customers, mascot is used as a

stimulus to create a brand image of hospitality and rich heritage, thus using a value -

based positioning strategy.

Distribution strategy of Air India Airline’s marketing strategies:

It serves 90 domestic locations and more than 60 international locations across the four
continents. The company is a member of the world's largest aviation association, i.e. Star
Alliance, providing global reach, seamless service for foreign travellers in a trouble-free
manner.

Brand value of Air India's marketing strategy:

The Royal Maharajah, a lovable figure, symbolizes the rich culture of India. Air India
with such a rich heritage has always been considered to be out of league marketing
strategies to create a market buzz by breaking stereotypes. It has won many awards and
prizes over time, such as low carbon emissions, Best Airline in the World by Region
2017, and many others.
Competitive analysis of the Air India’s marketing strategy:

Competitive analysis in Air India has a market share of more than 16% through its
international operations. The cost structure plays a pivotal role in the operation and
competitive landscape of companies operating in the fuel sector, administrative costs,
rental of flight equipment, ticket sales & promotions, user charges, Pax services, flight
crew salary & expenses. Air India and its wholly owned subsidiary Air India Express
Limited (AIEL) are competing with companies such as Indigo, Jet Airways, Go Air, Air
Asia, Jet Airways, and Spice Jet etc. on the national and regional market while Etihad,
Thai Airways and Singapore Airlines are competing on the international market.

Market Analysis of Air India’s marketing strategy:

The airline industry faces bottlenecks on its own. Factors such as rising fuel prices, Long
Haul & Shot Haul permits, fifth freedom rights, government regulations, seasonal
demand volatility, and customer service are some of the factors affecting the company's
operations. As reported by DGCA (Directorate General of Civil Aviation), Air India
Airlines has a market share of 13.5 per cent in the Indian Aviation industry.

Customer’s Analysis of Air India’s marketing strategy:

The majority of Air India's customers come from Asia Pacific, Africa & Middle East and
are either followers or connectors.

Consumer groups consist of middle-income and upper middle-income groups, most of

which are between 30 and 50 years of age.

On YOY (year-on-year) basis, approximately 13834000 passengers travelled through Air

India with a growth rate of 7.5 per cent (DGCA report) in FY 2016-17 compared to the
previous FY and approximately 13 per cent of the total passengers travelled through Air
India.
2.3 Critically analysis the Marketing of tourism and hospitality
organisations from the Perspective of Strategic Marketing Theories:
INDIGO AIRLINES
PRODUCT
- The main product of indigo airlines is
that they provide low-cost passenger
air transport to middle-class and lower
middle-class consumers so that they
can also experience plane travel.
- In addition to the core product,
complementary product is also offered.
These are like Check in, Food on
board, Connecting flight when
travelling where the service is not
available, Complementary gifts along
with flying, In-flight entertainment
such as music, video games and
Frequent Flyer programs.
PRICE
- To be easy Indigo airlines succeeded
because of the cheap fares that opened
the doors to the middle-income group.
- In reality, this happens to be its
competitive advantage as travellers
compare prices.
- This makes it one of India's most
sought-after airline companies because
of its high-quality services as well.
- The control department plays a key
role in managing the company's costs.
- With falling prices and an increase in
the number of passengers every day,
Indigo faces tough competition from
Spice Jet and Air India.
- There are also regular discounts to
stop customers coming back.
AIR INDIA
- Air India is one of the leading
international and domestic airlines in
India.
- Air India only provides passenger
transport services, and is therefore
committed to providing its customers
with the best possible services.
- The passenger fleet of Air India
comprises mainly Boeing and Airbus
aircraft It has an extensive worldwide
network of routes linking India.
- This vast network makes it possible
for Air India to provide services in
major cities and business centres on
the world.
-It provides its passengers with a high
level of safety and maintains
performance standards to guarantee its
passengers repeat purchases of
service.
- Air India is one of India's leading
airlines with a competitive pricing
policy and its coverage.
- Being a highly coveted airline in
India, Air India prices airline tickets
so that middle-class families can easily
access them.
- Air India uses a two-part marketing
technique to make them competitive
by leveraging the purchasing
capacities of different segments of
people with different rates of earnings.
- There are no concessions to quality
of service, so the basic technique
adapted when setting prices depends
on the duration of the journey and the
time it takes to travel.
 PLACE
- Indigo airlines have online
reservations 24 hours a day, so that
they can keep customers from going to
a booking desk and waiting.
- They are also linked to a variety of
tour operators and tours. Another
interesting thing is that they are
associated in all of their travel plans
with many businesses.
- With its 78 fleet and up to 508 daily
flights, it serves 29 domestic and
international destinations As a result,
the plan is to provide more flexibility
on fewer routes than thinly spread
across many destinations.
PROMOTION
- No airline has worked harder to win
the local market better than Indigo
Airlines.
- The airline relies on its cost and
availability to promote its product
throughout the industry.
- Investments in ads are small because
they impact prices.
- Indigo, however, has created a few
TVCs on their own, as well as good
online publicity.
- The airline has implemented a policy
of connecting flights from one
destination to another so that
passengers do not need to book
another airline until they reach their
destination.
- The aim is, for instance, to connect
Kolkata and Raipur to the four flights
from Ranchi to Delhi, Mumbai, Patna
and Bangalore.
- Air India is present in all of India's
cities.
- As the primary choice of airline
travel, the Air India service base has
been increasing year on year.
- Air India has flights connecting
India with major cities and business
headquarters around the world.
- Tickets for Air India can be accessed
from their websites and other ticket
booking agencies.
- They have also linked up with
various agencies to sell their tickets,
thus increasing their service base and
capabilities.
- By promoting their Air India tagline.
Truly Indian, "Air India has made
huge gains by being able to promote
its brand.
- By being integrated with the
Government of India, it is establishing
a standard as a fully government-
controlled transport system.
- Air India has linked up with various
travel agencies such as yatra.com,
goibibo.com, etc.
- This has helped them to be easily
made available to their customers, and
in this way, customers can easily make
use of tickets.
 PEOPLE
- People who are directly and - Service quality, which is the primary
indirectly involved in the business are concern of Air India, has helped them
very valuable to indigo airlines, as maintain good ties with their
they will provide a lot of information. customers.
- Employees of a business are their - And this has been possible due to the
best resource because human capital fact that they have highly qualified
increases production and optimal use professionals working for Air India.
of people with a high level of - From pilots to cabin crew and
customer service expertise should be catering to supply chain operations,
employed to satisfy the clientele as Air India's skilled work base has
indigo offers customer service. allowed them to reach the top spot in
- The customer should be given first- the airline industry.
hand information on the timetable of
their flights in the event of any delays
or difficulties.

PROCESS
- The operation mix of indigo airlines
includes the reservation system, how
efficiently the flight information is
provided to passengers, the services
offered at the airport, the baggage
handling facility, the flight service and
the check-in process.
- Air India has incorporated all the
step-by-step processes so that
customers can make a smooth
transition in every step.
- Premium lounges at major airports
make it easy for travellers to wait for
aircraft.
- Online ticket booking platforms
make these processes convenient for
both passengers and Air India.
- In the event of any unfortunate
incident, such as a rescheduling or
cancellation, Air India ensures that
passengers do not encounter any
inconvenience; and that they have an
easy alternative.
 PHYSICAL EVIDENCE
- Ground: the ground setting can be
considered as a booking office, a
luggage facility system, a ground
handling system can be considered a
physical area for indigo airlines.
- In-flight: In-flight service is the
most important feature that can have a
direct impact on customers.
The actual in-flight atmosphere may
be like the facilities offered in the
flight, the cleanness of the plane, the
ambience of the aircraft.
- Air India has its physical evidence
through its airplanes, airport kiosks,
website, etc.
- It also has luxury lounges at airports
across major cities in India such as
Mumbai, Kolkata, Delhi and
Hyderabad.
- With a fleet of high-quality airlines
and a high level of services, Air India
provides its passengers with the best
travel experience.
- Customers are therefore able to make
multiple purchases.

4.1 Research academic sources to identify appropriate theories and

models of strategic management and marketing: