Why Air France-KLM Group's Business Model is so successful?

Air France KLM-SA is an airline company. The company is engaged in passenger transportation. Its activities also include cargo, aeronautics maintenance and other air-transport-related activities, including catering. The company's two sub-groups Air France and KLM have a flyer program, Flying Blue, which enables members to acquire miles as they fly with airline partners or from transactions with non-airline partners. Its activities include Passenger Transport, Cargo transport, maintenance and Other activities. The company's network is organized around the hubs at Paris-Charles de Gaulle and Amsterdam-Schiphol. With these two hubs, the company links Europe to the rest of the world, with approximately 320 destinations in over 115 countries. Transavia, the company's subsidiary, has operations in the Netherlands and France directed at medium-haul leisure customers, as well as through its charter flights and tour operators.

Social impact:

Life changing: affiliation/belonging

Emotional: attractiveness, fun/entertainment, provides access

Functional: reduce cost, reduce effort

Cross-selling:

Cross-selling is a business strategy in which additional services or goods are offered to the primary offering to attract new consumers and retain existing ones. Numerous businesses are increasingly diversifying their product lines with items that have little resemblance to their primary offerings. Walmart is one such example; they used to offer everything but food. They want their stores to function as one-stop shops. Thus, companies mitigate their reliance on particular items and increase overall sustainability by providing other goods and services.

Cash machine:

The cash machine business model allows companies to obtain money from sales since consumers pay ahead for the goods they purchase, but the costs required to generate the revenue are not yet paid. This increases companies' liquidity, which they may use to pay off debt or make additional investments. Among several others, the online store Amazon often employs this business model.

Culture is brand:

It requires workers to live brand values to solve issues, make internal choices, and provide a branded consumer. Developing a distinctive and enduring cultural brand is the advertising industry's holy grail. Utilizing the hazy combination of time, attitude, and emotion to identify and replicate an ideology is near to marketing magic.

Customer relationship:

Due to the high cost of client acquisition, acquiring a sizable wallet share, economies of scale are crucial. Customer relationship management (CRM) is a technique for dealing with a business's interactions with current and prospective customers that aims to analyze data about customers' interactions with a company to improve business relationships with customers, with a particular emphasis on retention, and ultimately to drive sales growth.

Affiliation:

Commissions are used in the affiliate revenue model example. Essentially, you resell goods from other merchants or businesses on your website or in your physical store. You are then compensated for referring new consumers to the company offering the goods or services. Affiliates often use a pay-per-sale or pay-per-display model. As a result, the business can access a more diversified prospective client base without extra active sales or marketing efforts. Affiliate marketing is a popular internet business strategy with significant potential for growth. When a client purchases via a referral link, the affiliate gets a portion of the transaction's cost.

Customer loyalty:

Customer loyalty is a very successful business strategy. It entails giving consumers value that extends beyond the product or service itself. It is often provided through incentive-based programs such as member discounts, coupons, birthday discounts, and points. Today, most businesses have some kind of incentive-based programs, such as American Airlines, which rewards customers with points for each trip they take with them.

Customer data:

It primarily offers free services to users, stores their personal information, and acts as a platform for users to interact with one another. Additional value is generated by gathering and processing consumer data in advantageous ways for internal use or transfer to interested third parties. Revenue is produced by either directly selling the data to outsiders or by leveraging it for internal reasons, such as increasing the efficacy of advertising. Thus, innovative, sustainable Big Data business models are as prevalent and desired as they are elusive (i.e., data is the new oil).

Best in class services:

When a firm brings a product to market, it must first create a compelling product and then field a workforce capable of manufacturing it at a competitive price. Neither task is simple to perform effectively; much managerial effort and scholarly study have been dedicated to these issues. Nevertheless, providing a service involves another aspect: managing clients, who are consumers of the service and may also contribute to its creation.

Cross-subsidiary:

When products and goods and products and services are integrated, they form a subsidiary side and a money side, maximizing the overall revenue impact. A subsidiary is a firm owned entirely or in part by another business, referred to as the parent company or holding company. A parent company with subsidiaries is a kind of conglomerate, a corporation that consists of several distinct companies; sometimes, the national or worldwide dispersion of the offices necessitates the establishment of subsidiaries.

Direct selling:

Direct selling refers to a situation in which a company's goods are immediately accessible from the manufacturer or service provider rather than via intermediate channels. The business avoids the retail margin and any extra expenses connected with the intermediaries in this manner. These savings may be passed on to the client, establishing a consistent sales experience. Furthermore, such intimate touch may help to strengthen client connections. Finally, direct selling benefits consumers by providing convenience and service, such as personal demonstrations and explanations of goods, home delivery, and substantial satisfaction guarantees.

Performance-based contracting:

Performance-based contracting (PBC), sometimes referred to as performance-based logistics (PBL) or performance-based acquisition, is a method for achieving quantifiable supplier performance. A PBC strategy focuses on developing strategic performance measures and the direct correlation of contract payment to success against these criteria. Availability, dependability, maintainability, supportability, and total cost of ownership are all standard criteria. This is accomplished mainly via incentive-based, long-term contracts with precise and quantifiable operational performance targets set by the client and agreed upon by contractual parties.

From push to pull:

In business, a push-pull system refers to the flow of a product or information between two parties. Customers pull the products or information they need on markets, while offerers or suppliers push them toward them. In logistics and supply chains, stages often operate in both push and pull modes. For example, push production is forecasted demand, while pull production is actual or consumer demand. The push-pull border or decoupling point is the contact between these phases. Wal-Mart is a case of a company that employs a push vs. a pull approach.

Dynamic pricing:

This pattern allows the business to adjust its rates in response to national or regional trends. Dynamic pricing is a pricing technique known as surge pricing, demand pricing, or time-based pricing. In which companies establish variable prices for their goods or services in response to changing market conditions. Companies may adjust their rates based on algorithms that consider rival pricing, supply and demand, and other market variables. Dynamic pricing is widely used in various sectors, including hospitality, travel, entertainment, retail, energy, and public transportation.

Sustainability-focused:

Companies that manufacture fast-moving consumer goods and services and are committed to sustainability do ecological impact assessments on their products and services. While research-based green marketing needs facts, green storytelling requires imagination and location. Employees responsible for the brand definition and green marketers collaborate with product and service designers, environmental groups, and government agencies.

Experience:

Disrupts by offering a better understanding that customers are willing to pay for. Experience companies that have progressed may begin charging for the value of the transformation that an experience provides. An experienced company charges for the feelings consumers get as a result of their interaction with it.

Knowledge and time:

It performs qualitative and quantitative analysis to determine the effectiveness of management choices in the public and private sectors. Widely regarded as the world's most renowned management consulting firm. Descriptive knowledge, also called declarative knowledge or propositional knowledge, is a subset of information represented in declarative sentences or indicative propositions by definition. This differentiates specific knowledge from what is usually referred to as know-how or procedural knowledge, as well as knowledge of or acquaintance knowledge.

Solution provider:

A solution provider consolidates all goods and services in a particular domain into a single point of contact. As a result, the client is supplied with a unique know-how to improve efficiency and performance. As a Solution Provider, a business may avoid revenue loss by broadening the scope of the service it offers, which adds value to the product. Additionally, close client interaction enables a better understanding of the customer's habits and requirements, enhancing goods and services.