1. How did the construct of LCC emerge in India? Which factors encouraged the growing of LCCs? Ans 1. :

The history of air power industry dates back to 1930 when the Tata group launched the Tata air hoses. Though at that clip the entry of private houses were restricted but after the liberalisation the entry of private owned air hoses operators and LCC emerged in the Indian market. By 1994 the authorities approved the entry of private participants in the market.

LCC emerged as the chief concentration on developing the economic system was on substructure and the development of the transit and in peculiar the air power industry therefore giving more broad option to private participants and spread outing the same industry with low cost carnival and bearers as a ticket bing the same as first tier ticket of railroads therefore promoting people to go by air making their finish in lesser span of clip. LCC even lead to more foreign direct investing influxs. higher corporate travel. higher family incomes. sustained concern growing and lending to the authorities even in may ways for developing of the national economic system.

2. What factors should SpiceJet see before strategizing its operations in India. Use tools such as CPM ( Competitive Profile Matrix ) . EFE Matrix ( External Factor Evaluation ) . & A ; IFE ( Internal Factor Evaluation ) which serves to place assorted factors and forces that are critical in explicating appropriate schemes needed to carry through the organization’s aims. You can larn this tools from referred books or from online?

ANS2:

Spiceject works on a low cost theoretical account and it has to be really careful in affair of operating costs. This theoretical account here is to remain for a long term period since it can straight vie with other agencies of conveyance. There are certain tools to be discussed below which will give us clear image of preparation of schemes which can be implemented by Spicejet?

Comprehensive scheme preparation model is a tool of strategizing with 3 different phases Stage 1:
The Input Stage
Phase 2:
The Matching Phase
Phase 3:
The Decision Phase

a ) Internal Factor Evaluation
Matrix ( IFE )

B ) External Factor Evaluation
Matrix ( EFE )

degree Celsiuss ) Competitive Profile Matrix
( CPM )

All the 3 tools mentioned signifiers portion of the Input phase which is to be discussed: Indigo JetKonnect GoAir This matrix helps to give evaluations from client and industry point of position sing certain critical success factors of import for the company in the long tally based on certain evaluation EFE MATRIX

KEY EXTERNAL FACTORS| WEIGHTS ( 0. 1-0. 5 ) ( Low to high ) | RATING ( 1-5 ) ( High to low ) | WEIGHTED SCORE| External Opportunities| | | |
M & A ; A. Stake sale| 0. 1| 4| 0. 4|
External Threats| | | |
Competition from other low cost carriers| 0. 5| 2| 1|
Total| 0. 6| | 1. 4|

EFE Matrix discuss the external chances for the company to catch and the possible menace which it needs to get by with based on certain evaluation graduated table IFE MATRIX

Key internal factors| Weights ( 0. 1-0. 5 ) ( Low to high ) | RATING ( 1-5 ) ( High to low ) | WEIGHTED SCORE| Internal Strengths| | | |
High burden factor| 0. 4| 1| 0. 4|
On clip service| 0. 5| 2| 1|
Internal weakness| | | |
High runing cost| 0. 5| 4| 2|
Low service quality| 0. 1| 3| 0. 3|
Total| 0. 15| | 0. 7|

IFE Matrix discuss the internal strengths for the company to construct upon and internal failing to work upon based on certain evaluation graduated table

3. What schemes could be adopted by SpiceJet to get the better of the factors that inhibit the success of the LCC concern theoretical account? You can concentrate on * Distinguishing the Offer
* Undertaking Operating Costss
* Entering into Strategic Alliances
* Pull offing Employee Remuneration Costss
* Motivating Employees

ANS:3

) 1 ) To get down with LCC model ab initio began on a successful note and promised to come out unharmed but it faced its ain set of jobs and challenge is immense in front with chief trouble being wages to staffs and high cost of Aviation Turbine Fuel. 2 ) Keeping long term position in head LCC has immense potency to retroflex theoretical account of South-west air hoses but they ought to hold certain schemes in topographic point

a ) Distinguishing the offer:

1 ) Spice Jet can latch on to the distinguishing theoretical account w. r. T rivals 2 ) They can offer clip to clip price reduction services alternatively of giving price reductions on a regular basis to pull off their costs. 3 ) Major distinction is bound to be in footings of pricing since its low cost air hose extra service theoretical account will non be successful since service has its extra costs and low cost theoretical account along with focal point on service can non travel manus in manus since we have seen air hoses fighting in the yesteryear who adopted both the theoretical accounts. 4 ) So distinction is a large but of import hurdle for Spice Jet to get the better of competition from Indigo and Jet Lite.

B ) Undertaking operating costs and pull offing wage of employees:

1 ) Operating costs are one of the of import factor in air power industry many air hoses have failed because of non being able to pull off its operating costs. 2 ) Kingfisher is the unrecorded illustration in forepart of the industry it is fighting because of being unable to command their operating costs 3 ) High monetary values of ATF are the cost which the air hose can non avoid so Spicejet can command other costs like cut downing wage of air hose staff. Spice jet gives the highest wage in the industry and in these tough times they can cut down the same.

4 ) Besides the lease is really high since they go for the purchase of aircraft through rental. 5 ) Since their ticket monetary value is merely low relatively they can increase their monetary value. 6 ) Besides airdrome charges are low relatively in Tier-ii metropoliss so they can cover that as their landing/parking infinite

degree Celsius ) Motivating employees:

1 ) In these tough times striking good relationship with employees is really indispensable 2 ) This industry has a relatively high abrasion rate 3 ) Salary has to be high but harmonizing to industry tendency and demand so it can assist air hose to equilibrate cost vitamin D ) Strategic Alliance:

1 ) Aviation industry outside India has some really large participants and they are into net incomes 2 ) Indian air power sector can take cue from them and seek to alter their dwindling fluctuations 3 ) Spice jet can seek to acquire rank of Star Alliance. one of the biggest strategic confederation groups. 4 ) This will assist them to distribute their wings across different continents and they can develop the ability to benchmark against the high industry criterions 5 ) This could add to quality. which in bend could bring forth gross and cut down the costs.