Spirit Airlines Strategic Choice and Evaluation

Strategic Choice and EvaluationThe next phase associated with dodge formulation is the strategic analysis and choice phase of the process. According to Pearce & Robinson (2013), avocation managers examine and choose a bank line scheme that al natural depressions their crinkle to conserve or create a sustainable competitive advantage (p. 238). Therefore, a business such(prenominal) as intent skyways should evaluate their current outline and de marginine areas of cash advance in order to maturate the business in a way that aligns with their familiarity mission.The respiratory tract industry hosts a numerate of significant external factors that influence business strategies and alternatives. The purpose of this paper is to valuation and present alternative strategies for sapidity Airlines approaching ingathering as a come with. Furthermore, the fol lowing paper impart seek to order the lift out value discipline for Spirit Airlines and in turn bring up a generic d odging and grand strategic for the nerve.Evaluation of AlternativesSpirit Airlines is universally cognize for its ultra-low- represent, low-fare air lane function that stick out affordable give way opportunities throughout the join States, the Caribbean and Latin America (Spirit Airlines, 2012). Maintaining a strategically low-cost structure straight off aligns with Spirit Airlines target market, which allows the company to offer low priced basic portions combined with a range of optional gos for corresponditional fees (Spirit Airline, 2012).The airline has earned a reputation for delivering cost impelling fares and reliable on-time service with a no frills. In order to urinate maximum growth, enhancements to the existing low cost strategy must be implemented to create a greater advantage in the market. Spirit Airlines has identified opportunities for growth with the release of the latest 10k Annual report. By the airlines profess admission, the company is suffering wi th a failing reputation and insufficient client serviceinteractions (Spirit Annual Report, 2012).In addition, Spirit Airlines recognizes that its current conditions, if not corrected, give withstand a significant impact their competitive stance in the industry. The airline industry is risquely competitive with respect to routes, fees and services and although Spirit is easy known for dismount fares, the fares al sensation provide not protect the company from the risk of future failure. The murder of broad term strategic goals will not only correct inefficiencies with the existing strategy, it will as well as concentre on necessary improvements to benefactor Spirit achieve its growth potential.Pearce & Robinson (2013) identifies the implementation of long term intentions as tools procedured to correct significant issues for the long run. Therefore, the solution will not only impact the present, but the future as well. According to Pearce & Robinson (2013), Strategic manag ers recognize that short-run profit maximation is rarely the best approach to achieving sustained corporate growth and lucrativeness (pg. 191). An evaluation of Spirit Airlines current issues with guest service and competition warrants the use of value disciplines and sensitive strategies.Value DisciplineBest value disciplines are standardised to generic strategies however value disciplines place significant emphasis on superior customer value, using a selected discipline. The value discipline is comprised of triple values operational excellence, customer intimacy or output leaders (Pearce & Robinson, 2013). Previously it was established that Spirit Airlines would need to improve customer service interaction to experience growth in the future and gain sustainability among competitors in the market. Of the three value discipline identified, customer intimacy is the strategy that would countenance the most benefit for the organization. Spirit Airlines currently uses the operat ional excellence strategy, as the company focuses on providing its best value products at all times.Spirit Airlines product sottish consists of low fares, easy online booking, on-time service, deluxe welt butt ending and an expanding route selection. Spirit is able to offer these amenities at a low cost due to their reduced unit direct cost and different cost cutting strategies. For example, Spirit Airlines reduces overhead expenses in the area of selling as it utilizes its website and direct-to-consumer marketing to drive ticket gross sales (Spirit Airlines, 2013).The main focus of the airlines strategy is to deliver on its product base at competitively low prices by reducing overhead. While Spirit Airlines has perfected their operational excellence discipline, there is room for improvement in the customer intimacy strategy. According to Pearce & Robinson (2013), Customer Intimacy strategy continually tailors and shapes products and services to fit the increasingly redefined definition of customer service (p. 205). This strategy is precisely what Spirit Airlines is lacking in their current business puzzle strategy. Spirit Airlines contends that customer loyalty and intimacy are a large risk for the organizations future success and their reputation (Spirit Airlines Annual Report, 2012).Customer intimacy strategy as it pertains to Spirit Airline will seek to relegate the companys reputation by aligning customer service activities with the business model, thereby responding quickly and professionally to customer needs. Additionally, the implementation of this strategy will drive the airline to place emphasis on the profitability of a loyal customer relationship as opposed to the revenue of a ticket sale.Generic StrategyGeneric strategies enable the implementation of long term objectives and cater a foundation for how the organization will best influence the market. Pearce & Robinson (2013) defines generic strategies as, A core idea about how a firm ca n best compete in the marketplace. (pg. 195). Generic strategy includes striving for low cost leadership within the industry, the promotion of differentiation methods to bring a unique image to the market and lastly, it impresses upon the importance of focus strategy in order to accommodate the needs of the market segment (Pearce & Robinson, 2013). Currently, Spirit Airlines utilizes the generic strategy of low-cost leadership to achieve and sustain their low cost position.According to the Spirit Airlines Annual Report (2012), Our operating costs per available seat mile is 10.09 cents, which is significantly lower than that of major network carriers, American Airlines, Delta, United, and US Airways, (p. 7). Spirit has thriving achieved this with a low-cost leadership strategy that ensures high aircraft utilization, operation of a modern single fleet type of Airbus, which is associated with lower maintenance costs and efficient flight scheduling (Spirit, 2012). The company is syste matically seekinginnovative cost savings ideas to improve processes and customer satisfaction.Continuous improvement of Grand StrategyA grand strategy is a long tern plan that provides an organization with basic direction for implementing its long term goals. Additionally, grand strategies are lordly as they provide a basic timeframe for achieving long term business objectives. The grand strategy is comprised of 15 strategic principles concentrated growth, market development, product development, construct, horizontal acquisition, vertical acquisition, concentric diversification, conglomerate diversification, turnaround, divestiture, liquidation, bankruptcy, joint venture, strategic confederacys, and consortia (Pearce & Robinson, 2013).Spirit Airlines uses the innovation strategy to allow customers the freedom to choose buy-up options that appeal to them. Thereby unbundling packages and do it more affordable to travelers. This innovative approach is utilized to grow the travel m arket and stimulate new economic activity while creating new jobs, (Spirit Airlines, 2013 p. 1). According to the Spirit Airlines Annual Report, the organization lacks marketing alliances that may vilify them in the future (Spirit Airlines Annual Report, 2012). Many airlines including American, Delta, United and US Airways rush marketing alliances with other airlines under which they market and advertise their status as a marketing alliance (Spirit Airlines Annual Report, 2012).The Annual Report state, These alliances, such as One World, Sky Team and Star Alliance, generally provide for code-sharing, frequent flier reciprocity, coordinated scheduling of flights to permit convenient connections and other joint marketing activities. Such arrangements permit an airline to market flights operated by other alliance members as its own. This increases destinations, connections and frequencies offered by the airline. Our lack of marketing alliances puts us at a competitive disadvantage (S pirit Airlines Annual Report, 2012 p 18). Since one of Spirits long term objective is to gain a better competitive position in the market, the addition of a strategic alliance grand strategy would be best suited for the organization.Strategic alliances as set forth by Pearce & Robinson (2013) are, Partnerships that exist for a defined period during which partners contribute their skills and expertness to a cooperative project (p. 231). In the case of Spirit Airlines, the use of alliances between other organizations related to the airline industry would work to together to gain a mutual benefit. For example, Sky Team provides comprehensive coming to an extensive global network with over 1,000 destinations for traveler to explore.SkyTeam partners with 19 airlines to provide travelers with a more flexible, convenient and beneficial travelling experience (SkyTeam.com, 2013). As part of Spirit Airlines long term objective a strategic alliance would expose the organization to a greater customer base, more routes and destinations. On the other hand, an organization like SkyTeam also benefits as travelers utilize their services to book travel reservations.RecommendationSpirit Airlines is currently has the final per seat operating cost of any other domestic airline company however they are still confronted with strong competition in the industry (Spirit Airlines Annual Report, 2012). Therefore, additional strategy enhancements are needed to grow the company. After careful consideration of all strategies and value disciplines, it is recommended that Spirit Airlines utilizes the customer intimacy strategy to build brand and customer loyalty. As antecedently mentioned, an overhaul of customer service would be necessary to aid in relationship building technique between Spirit and its customer base.Another strategy recommendation previously mentioned is the implementation of a grand strategy utilise to determine the course of action for many of Spirits long term goals. Specifically, a strategic alliance strategy is the most critical strategy, as it will allow the company to expand the product selection with the help of a strong mutual alliance in the industry. This strategy is a more cost effective approach than spending millions of dollars on marketing campaigns.Thereby keeping operation cost low and pass-through the benefit onto the travelers. Spirit Airlines has been successful over the years with their current strategy, but competitive position will always be a risk. Therefore, the implementation of this strategy will add competitive leverage.