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Why Jet Airways's Business Model is so successful?

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Jet Airways’s Company Overview


Jet Airways is a premier international airline based in India, known for its high-quality service and reliable performance. Since its inception in 1992, Jet Airways has consistently been one of the front runners in the Indian aviation industry. The company's primary hub is Mumbai's Chhatrapati Shivaji International Airport, operating over 300 flights daily to 74 destinations worldwide. Jet Airways' fleet includes a mix of the state-of-the-art Boeing 777-300 ERs, Airbus A330-200/300, Next Generation Boeing 737s and ATR 72-500/600s. The airline is renowned for its trained staff, well-maintained aircraft, and excellent in-flight services. Jet Airways has carved out a niche by providing an exceptional flight experience with superior customer service and operational efficiency. Business Model: Jet Airways' business model centers on providing high-quality air travel services to domestic and international passengers. The company operates in a highly competitive market and differentiates itself through its commitment to customer satisfaction, operational efficiency, and safety. Jet's strategy involves a mix of full-service flights (both domestic and international) and low-cost flights under the JetKonnect brand. The company also has code-sharing agreements with several international airlines, expanding its reach globally. Jet Airways focuses on maintaining high load factors, maximizing revenue through ancillary services, and prudent operating cost management. Revenue Model: Jet Airways' revenue model is primarily based on passenger and cargo operations income. Most of the company's revenue is generated through ticket sales from its extensive network of domestic and international flights. The airline also earns revenue from its cargo operations, transporting goods for customers across its network. Additionally, Jet Airways has diversified its income streams by offering ancillary services such as in-flight meals and beverages, excess baggage charges, and premium services like extra legroom seats, lounge access, and priority check-in. The company also benefits from its frequent flyer program, JetPrivilege, which significantly contributes to its ancillary revenue by offering various benefits to its members.

https://www.jetairways.com/

Country: Maharashtra

Foundations date: 1992

Type: Private

Sector: Transportation

Categories: Airlines


Jet Airways’s Customer Needs


Social impact:

Life changing: affiliation/belonging

Emotional: design/aesthetics, provides access, badge value, fun/entertainment

Functional: connects, quality, informs, variety


Jet Airways’s Related Competitors



Jet Airways’s Business Operations


Add-on:

An additional item offered to a customer of a primary product or service is referred to as an add-on sale. Depending on the industry, add-on sales may generate substantial income and profits for a firm. For example, when a customer has decided to purchase the core product or service, the salesman at an automotive dealership will usually offer an add-on sale. The pattern is used in the price of new software programs based on access to new features, number of users, and so forth.

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.

Advertising:

This approach generated money by sending promotional marketing messages from other businesses to customers. When you establish a for-profit company, one of the most critical aspects of your strategy is determining how to generate income. Many companies sell either products or services or a mix of the two. However, advertisers are frequently the source of the majority of all of the revenue for online businesses and media organizations. This is referred to as an ad-based income model.

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.

Archetypes of business model design:

The business model archetypes include many business personalities and more than one business model linked to various goods or services. There is a common foundation behind the scenes of each unit, but from a management standpoint, each group may operate independently.

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.

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.

Digital transformation:

Digitalization is the systematic and accelerated transformation of company operations, processes, skills, and models to fully exploit the changes and possibilities brought about by digital technology and its effect on society. Digital transformation is a journey with many interconnected intermediate objectives, with the ultimate aim of continuous enhancement of processes, divisions, and the business ecosystem in a hyperconnected age. Therefore, establishing the appropriate bridges for the trip is critical to success.

Codifying a distinctive service capability:

Since their inception, information technology systems have aided in automating corporate operations, increasing productivity, and maximizing efficiency. Now, businesses can take their perfected processes, standardize them, and sell them to other parties. In today's corporate environment, innovation is critical for survival.

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.

Low cost:

A pricing strategy in which a business provides a low price in order to drive demand and increase market share. Additionally referred to as a low-price approach. The low-cost model has sparked a revolution in the airline industry. The end-user benefits from low-cost tickets as a result of a revenue strategy that seeks various sources of income. Ryanair was one of the first businesses to embrace this approach.

Reverse engineering:

It is a legally sanctioned technique of duplicating a technology in which, rather than beginning from scratch, one starts with an existing product and works backward to determine how it works. Once the product's basic principle or core idea is established, the next stage is to replicate the same outcomes using other methods to prevent (legally prohibited) patent infringement. The cost of manufacturing is significantly lowered.

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.

Experience selling:

An experience in the sales model describes how a typical user perceives or comprehends a system's operation. A product or service's value is enhanced when an extra customer experience is included. Visual representations of experience models are abstract diagrams or metaphors derived from recognizable objects, actions, or systems. User interfaces use a range of experience models to help users rapidly comprehend what is occurring in the design, where they are, and what they may do next. For example, a software experience model may depict the connection between two applications and the relationship between an application and different navigation methods and other system or software components.

Membership club:

Belonging to a group, either individually or collectively. Certain memberships may charge a fee to join or participate, while others are free. Others have particular skill criteria that must be met before membership is granted. Members are entitled to specific benefits or advantages, but not all members may enjoy the same rights and privileges. Another method is taken by a members-only luxury lifestyle management business that offers concierge services such as vacation reservations, restaurant suggestions, and event access.

No frills:

A no frills service or product has been stripped of non-essential elements to keep the price low. Initially, the word frills referred to a kind of cloth embellishment. Something provided free of charge to clients may be a frill - for example, complimentary beverages on airline flights or a radio fitted in a rental vehicle. No-frills companies rely on the premise that by eliminating opulent extras, consumers may benefit from reduced costs. Budget airlines, supermarkets, holidays, and pre-owned cars are examples of everyday goods and services with no-frills branding.

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.

In-crowd customers:

Providing services to the in-crowd Consumers in mature markets need travel, leisure, and lifestyle businesses to customize their interactions with these customers significantly. For travel, leisure, and lifestyle businesses, their most valuable asset is their brand. The brand functions as a social network navigator as well as a separator between the in-crowd and the crowd. Potential brand ambassadors are the most influential members of a social network. In addition, brand ambassadors collaborate in the selective marketing of high-status goods and services.

Pay as you go:

Pay as you go (PAYG) business models charge based on actual consumption or use of a product or service. Specific mobile phone contracts work on this principle, in which the user may purchase a phone card that provides credit. However, each call is billed separately, and the credit balance is depleted as the minutes are used (in contrast to subscription models where you pay a monthly fee for calls). Pay as you go is another term for pay & go, pay per use, pay per use, or pay-as-you-go.

Lock-in:

The lock-in strategy?in which a business locks in consumers by imposing a high barrier to transferring to a competitor?has acquired new traction with New Economy firms during the last decade.

Product innovation:

Product innovation is the process of developing and introducing a new or better version of an existing product or service. This is a broader definition of innovation than the generally recognized definition, which includes creating new goods that are considered innovative in this context. For example, Apple launched a succession of successful new products and services in 2001?the iPod, the iTunes online music service, and the iPhone?which catapulted the firm to the top of its industry.

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