Key Decisions and Issues
1. Key industry to focus on – airlines, ferries or both
2. Which geographical market to enter and when
Key Tradeoffs of the Alternative Approaches
Airline Market
World Indigo chose to focus their attention on the short-haul airlines because of the following reasons:
1. Bigger market for the company’s CG 101 Communication Gateway
2. More revenue
3. Provides future opportunities for the company
4. Short-haul airlines market was a global market
5. Minimal competition with giant companies like Boeing and Airbus
One of the challenges that the company faced was the varying government regulations of the airline and wireless industries. World Indigo had difficulties in getting FAA certifications for them to install their CG-101 nanocell in aircrafts. The new guidelines and policies of the FAA are expected to benefit World Indigo in the future. In Singapore, the company was able to acquire support from the Civil Aviation of Singapore, which signed a bilateral agreement with the United States.
Ferry Market
The ferry market was considered by the company because it is less restrictive. However, the ferry market is smaller compared to the airline market. The ferry market segment in Europe and Asia is promising for World Indigo. The potential competitors of the company are presently focusing on the cruise ship market but they can also target the ferry market as well. The ferry industry is another possible opportunity for the company.
Global Operations
The company had operations in the United States and Russia. Singapore was chosen because it is the center of knowledge-based economy is Asia. The environment and government support in Singapore is beneficial for World Indigo. Singapore was also chosen as a springboard for the company to reach other Asian markets. However, the company is also challenged in terms of different government regulations, industry players, and business styles in the airlines and wireless industries. Another challenge is the aircraft manufacturing big players’ plans to implement their own systems for mobile phone access aboard their aircraft.
Competition
The company faces stiff competition from big companies like Boeing and Airbus. Although these companies’ efforts are currently focused on long-haul flights, there is a possibility that they will soon be looking at the short-haul flights market. In addition, the company is also being challenged by small start-ups like Starling Advanced Communication.
Partners
The company is forming partnerships with different companies.
Decision Time
One of the most pressing issues that the company is facing is the global expansion strategy. The company needs to decide which industry and geographical markets to enter. The company’s strategy to focus on short-haul flights market avoided direct clash with Boeing and Airbus. However, these giant companies’ success in long-haul flights market poses potential threat for World Indigo. In addition, the company has limited resources that must be put to a more strategic, stable, and well-planned project.
Recommendation
World Indigo faces different challenges in the short-haul flights market. These challenges include varying government regulations, difficulty in obtaining FAA certifications, and stiff competitions both from big and small companies. The ferry industry offers opportunities for the company. The ferry industry is smaller compared to the airlines industry but one advantage is the industry’s minimal restrictions. In addition, there is also a promising opportunity for the company in the ferry industry. Operators and ferry companies show interest about World Indigo’s services.
It is more advantageous for World Indigo to focus first on the ferry industry because of the minimal competition and restrictions. The ferry industry is a promising market and World Indigo could establish its presence in a faster and stable way. The company should focus their attention on the different promising markets in the ferry industry. Focusing on the ferry industry could provide the means for World Indigo to become established and generate positive cash flow while negotiating in the more complex airline market.
Credit:ivythesis.typepad.com
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