STEP FACULTY OF BUSINESS & MANAGEMENT

Logistics & Operations Management

Resource Person: Salman Qureshi

TIME ALLOWED: 30 Minutes

Student Name:

Marks: 100

Attempt all questions. All questions carry equal marks.

Q1: Keeping in mind the case study of Air Deccan. Explain which strategy the
management is trying to follow?
Ans: Strategy is basically a mean to meet the goals and mission designed by the company to
surpass its competitors. In this regard, Air Deccan has employed the following strategies:

Cost leadership strategy

Differentiation strategy

Focus strategy

Each of the above strategy is detailed as under:

1. Cost leadership strategy: Air Deccan achieved this strategy by considering middle
class passengers as their target market i.e. they have exposed themselves as the low
cost airlines service providers relative to their competitors in the industry. The constant
decrementing fares are attracting air travellers to go by air despite of going via railways.
This strategy worked out for Air Deccan since their target people are sensitive to high
prices. Due to low cost, they offers no free meal but passengers are facilitated with
buying eatables inside the aircraft; there are no assigned seats or system of checking
luggage within the airline, but they do offer an online booking of seats.
2. Differentiation strategy: A differentiation strategy is based on gaining the trust of
customers by offering the products or facilities in a unique manner. In this manner, Air
Deccan has surpassed the other airlines by considering the major need of providing air
service to the customers of remote areas who have no direct connection to the other
airports. They developed their air services even in those areas that have unavailability of
air services like Dehradun and Jabalpur.
3. Focus strategy: In this type of strategy, the company focuses on several segments,
interests and demands of customers and fulfill them in such a manner that they excel in

doing so. Air Deccan gave best outcomes in this regard as they concentrated on filling a
niche .i.e. by targeting areas that have no airlines provided, within and to other major
airlines. They achieved it by lowering the costs and differentiating their service in unique
manner as discussed above. This shows that their main focus was on middle class
customers and remote areas that lack the airlines facility.

Q2: At Business Level who is the competitor of Air Deccan. Why have they chosen it?
Ans: In airlines business, the major competitor of Air Deccan is Jet Airways. They chose it since
Jet Airways are offering same facility as they are .i.e. they provides air services from any place
to any other destination whether in major cities or remote areas. However, Air Deccan built a
competitive advantage over them by lowering the costs as compared to high costs of Jet
Airways. If Jet airways target were first class or business class passengers, then Air Deccan
targeted cost-sensitive middle class passengers. Air Deccan changed several aspects of Jet
Airways such as checking of luggage during flight, high cost and free meals to no checking of
luggage within aircraft, low cost and purchasable meal. In this way, they built competitive
advantage over Jet Airways by filling out the niches they produced for the common men.

Q3: How operation management is supporting the strategy of Air Deccan? Name few
steps taken at functional level by operations management.
Ans: Operation management basically covers up all the strategies being employed in meeting
the demands of the customers and thus making the business to run in its best desired
conditions. Air Deccan is being best supported by it as it targeted those areas and type of
customers that were under a niche in airlines service. Some of the main steps that were put
forward for operation effectiveness are:

Target customers: in this phase they focused on middle class business men and
common people who are sensitive to high charges.

Services provided: they provided necessary facilities in lower rates that are easily
acceptable by the customers like buying of food within aircraft; online booking of seats
(web service); no luggage checking during the flights etc.

Filling the niche: in this most important phase of their operational management, Air
Deccan marked those remote areas for their functionality that have no access to central
airlines and with least air facility provided.

The above mentioned steps when followed by Air Deccan resulted in more and more customers
who were at first reluctant to go by air, but after this facility being provided through them started
going via airlines.

Q4: Why is Air Deccan Considered a breakthrough case study as compared to the normal
operations of an airline? What are they doing differently? Compare.
Ans: Air Deccan is marked as an innovation in the business of airlines as it offered following
features in contrast to a normal airline:
1. As compared to other airlines, they are offering prices as low as those of railways. In this
way, cost conscious people will be more attracted to this Air Deccan air service, despite
of going through long hours railways journey.
2. In contrast to other airlines, they are targeting those places that have no connectivity of
their local airports to others. Air Deccan is fulfilling this need to connect such remote
areas and regularize their air services.
3. They are offering web-based system of booking of seats which removes the need of
going at the airports or calling them and facing extra commission charges in getting the
seats booked, as seen in other airways.
4. It provides the passengers with a full opportunity of buying snacks and drinks within the
aircraft.
5. It removes the need of re-checking the luggage during the flights which is faced by the
customers whenever they change a plane.

Q5: In the long run is Air Deccans strategy successful? What is the competitive
advantage Air Deccan has over others? How can they sustain it? Give ideas
Ans: Air Deccans strategies can be successful in the long run if they focus on maintaining their
following competitive advantages:
1) The cost strategy can be effective in the long run if other competitors does not start
offering at the same rates. For this, they need to upgrade their strategy at every new
point and must consider the ever-changing demands of the customers. Their costs must
be maintained with the advancing changes in the local or global marketplace.
2) If the other competitor comes into the same strategically designed plan, then they need
to modify their differentiation policy in such a way that they change or modify their
services etc. But in doing so, they must not lower their status or image to combat with
their rivals.
3) If Air Deccan is successful in niche .i.e. remote areas, then the danger arises of entering
of powerful competitors in the same business and they might opt for bringing some
better innovation. So, Air Deccan must revolutionize their strategy in future.
4) They must stick to their main strategy and avoid moving out in other mediums, thus
avoiding them from being distracted.

5) They have a core competitive advantage in airlines business since they are the firstmovers in this regard and thus earned the status and loyalty from their customers. In
order to maintain it, they need to upgrade their strategy rapidly in order to enhance their
market share and popularity.