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Six Sigma Case Study: KLM Royal Dutch Airlines

July 3rd, 2017

Since the deregulation of airlines in the United States in the 1970’s, we have witnessed countless mergers, take-overs, and joint ventures form. From TWA and American Airlines to United and Continental, airlines seem to continuously fold into one another. However, one airline continues to be a true inspiration of endurance and stability. Across the pond, we will analyze the success of KLM Royal Dutch Airlines. Learn how the airline uses Six Sigma principles to continue its famous title as the “World’s Oldest Airline”.

Introduction to KLM

KLM Royal Dutch Airlines is the national airline for The Netherlands. Beginning operations in 1919, KLM founded itself in the province of Noord-Holland near the city of Amsterdam. At the time, Amsterdam’s Schiphol Airport was a fraction of the size it is today. Likewise, the airline’s focus was on transporting passengers and freight to nearby cities, such as Brussels, London, and Paris. However, it wasn’t until after World War 2 did the airline really take off.

Hub-Focused Business Model

When you think of airlines, you first thought is, of course, the airplanes. Yet, for KLM, it’s the airport. Amsterdam Schiphol Airport is now one of the largest and busiest airports in the world thanks to the guidance of KLM’s business model. Most airlines in the United States operate numerous hubs, fly to hundreds of destinations, and have upwards of 1,000 airplanes. KLM, on the other hand, focuses on one specific hub; Amsterdam. By maintaining one hub city, the airline operates what is known as a hub-spoke model. That is, instead of operating numerous flights from various cities, most all flights originate and depart from Amsterdam. This business model follows the idea of constant improvements towards efficiency which Six Sigma promotes .

Revolutionary Aircraft

Next, instead of focusing strictly on passengers, KLM looks towards cargo. While all airlines to an extent ship cargo to their destinations, most do not offer separate cargo services. The Royal Dutch Airline, on the other hand, took this opportunity to do so. In order to offer affordable and profitable cargo services, KLM revised their long-haul operations with the Boeing 747-400 combi. This modified Boeing aircraft uses nearly half the fuselage to ship cargo. Typically, all cargo rides underneath the main deck of aircraft. However, with the 747-400 combi, airlines can store more, larger cargo near the back of the airplane. This decision to invest in a new aircraft follows the DMAIC process . The airline wants to ship more cargo but does not have the space to do so. What is the most economic decision? For KLM, it’s to invest in a new aircraft that focuses on both cargo and passengers.

Although there are numerous variables that have led to the success of KLM, all revert to the principles of Six Sigma. When you focus on providing a superior service that works within your limitations, your organization can flourish and grow naturally. As the Dutch national airline continues to operate, it will face new challenges with each achievement. However, by sticking to the methods of Six Sigma, KLM can continue to be the oldest airline in the world!

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Industry: A Case Study of Royal Jordanian Airlines

This paper explores Impact of information technology on profitability of airlines industry “a case study of Royal Jordanian Airlines, The data collected from the financial statement of Royal Jordanian Airlines is analyzed by using financial and statistical tools. The tools and techniques issued in this study are discussed here. It is very difficult to cover several of aspects of financial management of Royal Jordanian Airlines; hence, focus has been given to study the profitability, capital structure & working capital management. The financial measures of performance are well adequate to monitor returns on IT. This is important as IT specialists always require special measures for IT performance, the current results show that IT do affect the aggregate financial performance measures. Which make them suitable for IT investments assessments?

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Hear Your Customers: An Airline Case Study Analysis

In today's business landscape, customer feedback is crucial for organizations looking to improve their services and stay competitive.

Here are the 5 key takeaways from listening to the airline customer :

• Data-driven decision-making is crucial in the airline industry for understanding customer needs and expectations.
• Social media can be a valuable source of real-time feedback for airlines to improve customer satisfaction and build better relationships.
• Collecting customer feedback through surveys and other mechanisms can help airlines identify areas for improvement.
• Analyzing customer comments using hierarchical sentiment analysis can help airlines better understand what is important to customers and where to allocate resources.
• By improving the customer experience, airlines can increase customer loyalty and revenue, leading to a better bottom line.

This is a guest post by Bill Inmon, a renowned author, lecturer, and consultant in the field of data warehousing and business intelligence. In this article, Bill Inmon analyzes a case study of an airline and explores the importance of listening to the airline customer. This article aims to provide insights into the benefits of a customer-focused approach and offers practical tips for airlines looking to improve their customer experience.

Table of Contents

• Data-Driven Decision-Making in the Airline industry

Airline Case Study Analysis

The future of data in air travel, the unified stack for modern data teams, get a personalized platform demo & 30-minute q&a session with a solution engineer, introduction.

The airline industry is complex, with multiple facets to manage and improve upon to satisfy passengers. From baggage handling to flight delays and cancellations, the airline manager has a finite budget and almost infinite demand for attention. So, how does one allocate limited resources to improve the customer satisfaction index of the airline?

A good place to start is by asking customers what they think should be improved. The internet provides a productive starting point for listening to the voice of the customer. There are many sites where people can express their experiences with the airline in the public domain, allowing anyone to see what they have to say.

By understanding what the customer is saying, airline management can deploy their resources where they will do the most good. In this article, we will explore how airlines can empower a better customer experience by using social media, data-driven metrics, real-time feedback

The Importance of Data-Driven Decision-Making in the Airline Industry

Data-driven decision-making has become increasingly essential in the airline industry to help airlines better understand their customers' needs and expectations. The airline industry generates an enormous amount of data from various sources, such as customer data, social media, and customer feedback, which can be used to improve their overall experience.

Through the analysis of customer data, airlines can gain insight into customer behaviors, preferences, and patterns. This information can help airlines understand what customers need and expect, allowing them to tailor their services to better meet these expectations. For instance, airlines can use data to determine which routes are most popular among customers, which amenities are preferred, and which inflight entertainment options are most enjoyed.

Social media platforms have also become valuable sources of customer data for airlines. Airlines can monitor social media platforms to gain an understanding of how customers perceive their brand and services. Social media provides airlines with real-time feedback on customer experiences and opinions, allowing them to respond promptly to issues and improve customer satisfaction. In addition to providing real-time feedback, social media can also help airlines build better customer relationships. By responding promptly to customer inquiries, complaints, or feedback, airlines can show that they value their customers and are committed to improving their experience.

With that, airlines can use customer feedback to understand customer needs and customer expectations. Airlines can collect feedback through surveys, focus groups, and other feedback mechanisms. This data can help airlines identify areas for improvement, such as customer service, onboard amenities, and in-flight experiences.

By using data to better understand customer needs and customer expectations, airlines can create a better customer experience, increase customer loyalty, and build better customer relationships leading to increased revenue and a better bottom line.

Recommended Reading: Where Is Your Customer Data Located?

Late in 2018 Forest Rim Technology (FRT) went to the Internet and plucked about 2,000 comments from the Internet, using several sites. FRT chose two very popular American airlines as the basis for gathering customer comments.

As an example of what a typical comment looked like, the following was taken from the Internet:

• Location : United States
• Rating : 10
• Date : 2018-11-20 00:00:00
• Description : ✅ Trip Verified | I am so thankful to be coming home this week to work at Corporate, and to spend Thanksgiving with family and friends. A big shout out to XXXXXXXXX as I booked my ticket in reverse from Columbus to Tampa leaving today except I’m in Tampa! They were able to get me home today still on the next direct flight and fixed my ticket for the following Tuesday. They even let me keep my incredible price of $199.96 round trip. This is why I fly XXXXXXXXX regularly. It pays to be a loyal flyer!

The comments were gathered and fed into Forest Rim Technology’s textual ETL. From textual ETL a standard database was created. The database was then fed into a tool for visualization.

As part of the processing, the object of each sentence was identified. The object of the sentence was then classified upward for two levels of abstraction. For example, if the comment mentioned the word – “dollars” – the database contained three entries – “dollars”, “price”, and “cost sensitive”. Or if the customer mentioned “hypertension”, the database was loaded with “hypertension”, “illness”, “medical condition”. By organizing and classifying these words in a hierarchically classified manner, it is possible to do an analysis at different levels of perspective.

In addition, the words that operate on the objects being discussed can be examined with regard to their sentiment. For example, the words “…I hated …” led to the conclusion that there was a negative feeling toward the object being discussed. Or the words “…we really adored …” led to the conclusion that there was a positive sentiment toward whatever was being discussed.

In addition to understanding sentiment, there is the possibility of merely finding out what was on the customer’s mind, regardless of sentiment. This is useful to the airline executive in a thousand ways once you know what is important to the customer (in either a positive or a negative sense), you know where to place your dollars to the greatest effect. Stated differently, without knowing what is important to your customer, as an executive you are flying blind. The executive might well spend a lot of resources optimizing something that is of importance to only a few customers. By hearing the voice of the customer, the airline’s executive knows where the customer's “hot spots” are.

So, two important aspects of the study were – a hierarchical analysis of the objects of sentiment and a disclosure as to what subjects are of importance to the customer.

At a High Level

At a high level, the study found that customers attention and sentiment looked like this:

Some of the high-level categories mentioned by the customer were:

• Product : An airline flight, baggage handling, frequent flyer club, etc.
• People : Stewardesses, pilots, gate agents, etc.
• Process : Boarding, seating, service, etc.
• Place : Airport, gate, location, etc.
• Price : Tickets cost, food cost, etc.
• Financial activity : paying for the ticket, credit card, etc.

Not surprisingly the airline flight itself was the most important thing to the passengers who expressed their thoughts. And surprisingly the price of the ticket was not a great concern.

In addition, the positive comments were a little above the negative comments. In general, this indicates a generally happy customer base.

Looking at data at a high level allows the executive to get a clear overview of everything on the customer’s mind and the prioritization of what’s important.

At a Lower Level

In the analysis of what the customer was saying, given that the object of sentiment is organized hierarchically, it is possible to drill down on what was said about each major topic. In this study, the major concern of the customer was the product of the airline itself.

 The next figure shows that drill down from the product to the components of the product:

The drill down shows that when examining the product, the number one concern of the customer was on the trip itself. This includes seating, arrival time, and other aspects of the journey. In a distant second place were reservations, then the airline rewards program. And consistent with the high-level analysis is the fact that there were more positive comments than negative comments.

Of course, ANY subject can be drilled upon. This article focuses just on the drill down of the product.

But it is possible to continue the drill-down process to see exactly what people were saying about the trip.

At The Detailed Level

The drill down from the product to its detailed objects displays what the customer is saying down to the detailed level. The detailed level shows the actual words that were found in the customer comments. The next figure shows the detailed drill-down of the product:

The detailed drill down shows that the number subject on the mind of the customer was the flight itself. The flight included every aspect of the flight – boarding, baggage, seating, service, and arrival.

When going down to the detailed level, it is often instructive as to what NOT is found there, as well as what is found there. For example, arrival time is not found in the detailed level. This means that the airline is delivering to its customers on time.

The full case study is available for free by contacting Bill Inmon, at [email protected] .

With emerging technologies such as AI and machine learning, the possibilities for improving the airline customer experience are endless.

One way airlines can continue to use data to create a positive experience is by collecting and analyzing more customer data. This can include data on customer preferences, travel habits, and purchasing behavior. By using this data, airlines can better understand their customers' needs and expectations, and tailor their services to meet those needs.

Airlines have the opportunity to use real-time data analysis for a more personalized customer experience. By monitoring data in real time, airlines can respond quickly to any issues that arise during the customer journey, such as flight delays or lost luggage. This can help to minimize the impact on customers and improve their overall experience.

Emerging technologies such as AI and machine learning can also be used to further improve the airline customer experience. For example, AI-powered chatbots can be used to provide customers with personalized assistance, such as booking flights or checking in for a flight. Machine learning algorithms can be used to analyze customer data and provide personalized recommendations for flights, hotels, and other travel services.

AI and machine learning can also be used to optimize airline operations, such as flight scheduling and maintenance. By analyzing data on flight patterns, weather patterns, and maintenance needs, airlines can make more informed decisions that improve efficiency and reduce costs.

In conclusion, data-driven decision-making is crucial for the airline industry to enhance the customer experience, improve operational efficiency, and ultimately increase the bottom line. By leveraging customer data, airlines can gain a better understanding of customer needs and expectations, and use this information to inform their decision-making processes.

Additionally, Metrics and real-time data analysis can help airlines measure the effectiveness of customer experience initiatives and identify areas for improvement. As emerging technologies such as AI and machine learning continue to evolve, airlines can explore new ways to further enhance the customer experience through data-driven insights.

In summary, the airline industry must continue to embrace the power of data-driven decision-making to create a positive experience for customers and drive success. With the help of data integration solutions, airlines can continue to leverage data effectively to meet the evolving needs and expectations of their customers.

Recommended Reading: How Elevate.inc Used Data Integration to Improve Customer Experience

Tags: big data, Customer Data,

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Royal Bhutan Airlines - Drukair Case Analysis and Case Solution

Posted by Peter Williams on Aug-09-2018

Introduction of Royal Bhutan Airlines - Drukair Case Solution

The Royal Bhutan Airlines - Drukair case study is a Harvard Business Review case study, which presents a simulated practical experience to the reader allowing them to learn about real life problems in the business world. The Royal Bhutan Airlines - Drukair case consisted of a central issue to the organization, which had to be identified, analysed and creative solutions had to be drawn to tackle the issue. This paper presents the solved Royal Bhutan Airlines - Drukair case analysis and case solution. The method through which the analysis is done is mentioned, followed by the relevant tools used in finding the solution.

The case solution first identifies the central issue to the Royal Bhutan Airlines - Drukair case study, and the relevant stakeholders affected by this issue. This is known as the problem identification stage. After this, the relevant tools and models are used, which help in the case study analysis and case study solution. The tools used in identifying the solution consist of the SWOT Analysis, Porter Five Forces Analysis, PESTEL Analysis, VRIO analysis, Value Chain Analysis, BCG Matrix analysis, Ansoff Matrix analysis, and the Marketing Mix analysis. The solution consists of recommended strategies to overcome this central issue. It is a good idea to also propose alternative case study solutions, because if the main solution is not found feasible, then the alternative solutions could be implemented. Lastly, a good case study solution also includes an implementation plan for the recommendation strategies. This shows how through a step-by-step procedure as to how the central issue can be resolved.

Problem Identification of Royal Bhutan Airlines - Drukair Case Solution

Harvard Business Review cases involve a central problem that is being faced by the organization and these problems affect a number of stakeholders. In the problem identification stage, the problem faced by Royal Bhutan Airlines - Drukair is identified through reading of the case. This could be mentioned at the start of the reading, the middle or the end. At times in a case analysis, the problem may be clearly evident in the reading of the HBR case. At other times, finding the issue is the job of the person analysing the case. It is also important to understand what stakeholders are affected by the problem and how. The goals of the stakeholders and are the organization are also identified to ensure that the case study analysis are consistent with these.

Analysis of the Royal Bhutan Airlines - Drukair HBR Case Study

The objective of the case should be focused on. This is doing the Royal Bhutan Airlines - Drukair Case Solution. This analysis can be proceeded in a step-by-step procedure to ensure that effective solutions are found.

• In the first step, a growth path of the company can be formulated that lays down its vision, mission and strategic aims. These can usually be developed using the company history is provided in the case. Company history is helpful in a Business Case study as it helps one understand what the scope of the solutions will be for the case study.
• The next step is of understanding the company; its people, their priorities and the overall culture. This can be done by using company history. It can also be done by looking at anecdotal instances of managers or employees that are usually included in an HBR case study description to give the reader a real feel of the situation.
• Lastly, a timeline of the issues and events in the case needs to be made. Arranging events in a timeline allows one to predict the next few events that are likely to take place. It also helps one in developing the case study solutions. The timeline also helps in understanding the continuous challenges that are being faced by the organisation.

SWOT analysis of Royal Bhutan Airlines - Drukair

An important tool that helps in addressing the central issue of the case and coming up with Royal Bhutan Airlines - Drukair HBR case solution is the SWOT analysis.

• The SWOT analysis is a strategic management tool that lists down in the form of a matrix, an organisation's internal strengths and weaknesses, and external opportunities and threats. It helps in the strategic analysis of Royal Bhutan Airlines - Drukair.
• Once this listing has been done, a clearer picture can be developed in regards to how strategies will be formed to address the main problem. For example, strengths will be used as an advantage in solving the issue.

Therefore, the SWOT analysis is a helpful tool in coming up with the Royal Bhutan Airlines - Drukair Case Study answers. One does not need to remain restricted to using the traditional SWOT analysis, but the advanced TOWS matrix or weighted average SWOT analysis can also be used.

Porter Five Forces Analysis for Royal Bhutan Airlines - Drukair

Another helpful tool in finding the case solutions is of Porter's Five Forces analysis. This is also a strategic tool that is used to analyse the competitive environment of the industry in which Royal Bhutan Airlines - Drukair operates in. Analysis of the industry is important as businesses do not work in isolation in real life, but are affected by the business environment of the industry that they operate in. Harvard Business case studies represent real-life situations, and therefore, an analysis of the industry's competitive environment needs to be carried out to come up with more holistic case study solutions. In Porter's Five Forces analysis, the industry is analysed along 5 dimensions.

• These are the threats that the industry faces due to new entrants.
• It includes the threat of substitute products.
• It includes the bargaining power of buyers in the industry.
• It includes the bargaining power of suppliers in an industry.
• Lastly, the overall rivalry or competition within the industry is analysed.

This tool helps one understand the relative powers of the major players in the industry and its overall competitive dynamics. Actionable and practical solutions can then be developed by keeping these factors into perspective.

PESTEL Analysis of Royal Bhutan Airlines - Drukair

Another helpful tool that should be used in finding the case study solutions is the PESTEL analysis. This also looks at the external business environment of the organisation helps in finding case study Analysis to real-life business issues as in HBR cases.

• The PESTEL analysis particularly looks at the macro environmental factors that affect the industry. These are the political, environmental, social, technological, environmental and legal (regulatory) factors affecting the industry.
• Factors within each of these 6 should be listed down, and analysis should be made as to how these affect the organisation under question.
• These factors are also responsible for the future growth and challenges within the industry. Hence, they should be taken into consideration when coming up with the Royal Bhutan Airlines - Drukair case solution.

VRIO Analysis of Royal Bhutan Airlines - Drukair

This is an analysis carried out to know about the internal strengths and capabilities of Royal Bhutan Airlines - Drukair. Under the VRIO analysis, the following steps are carried out:

• The internal resources of Royal Bhutan Airlines - Drukair are listed down.
• Each of these resources are assessed in terms of the value it brings to the organization.
• Each resource is assessed in terms of how rare it is. A rare resource is one that is not commonly used by competitors.
• Each resource is assessed whether it could be imitated by competition easily or not.
• Lastly, each resource is assessed in terms of whether the organization can use it to an advantage or not.

The analysis done on the 4 dimensions; Value, Rareness, Imitability, and Organization. If a resource is high on all of these 4, then it brings long-term competitive advantage. If a resource is high on Value, Rareness, and Imitability, then it brings an unused competitive advantage. If a resource is high on Value and Rareness, then it only brings temporary competitive advantage. If a resource is only valuable, then it’s a competitive parity. If it’s none, then it can be regarded as a competitive disadvantage.

Value Chain Analysis of Royal Bhutan Airlines - Drukair

The Value chain analysis of Royal Bhutan Airlines - Drukair helps in identifying the activities of an organization, and how these add value in terms of cost reduction and differentiation. This tool is used in the case study analysis as follows:

• The firm’s primary and support activities are listed down.
• Identifying the importance of these activities in the cost of the product and the differentiation they produce.
• Lastly, differentiation or cost reduction strategies are to be used for each of these activities to increase the overall value provided by these activities.

Recognizing value creating activities and enhancing the value that they create allow Royal Bhutan Airlines - Drukair to increase its competitive advantage.

BCG Matrix of Royal Bhutan Airlines - Drukair

The BCG Matrix is an important tool in deciding whether an organization should invest or divest in its strategic business units. The matrix involves placing the strategic business units of a business in one of four categories; question marks, stars, dogs and cash cows. The placement in these categories depends on the relative market share of the organization and the market growth of these strategic business units. The steps to be followed in this analysis is as follows:

• Identify the relative market share of each strategic business unit.
• Identify the market growth of each strategic business unit.
• Place these strategic business units in one of four categories. Question Marks are those strategic business units with high market share and low market growth rate. Stars are those strategic business units with high market share and high market growth rate. Cash Cows are those strategic business units with high market share and low market growth rate. Dogs are those strategic business units with low market share and low growth rate.
• Relevant strategies should be implemented for each strategic business unit depending on its position in the matrix.

The strategies identified from the Royal Bhutan Airlines - Drukair BCG matrix and included in the case pdf. These are either to further develop the product, penetrate the market, develop the market, diversification, investing or divesting.

Ansoff Matrix of Royal Bhutan Airlines - Drukair

Ansoff Matrix is an important strategic tool to come up with future strategies for Royal Bhutan Airlines - Drukair in the case solution. It helps decide whether an organization should pursue future expansion in new markets and products or should it focus on existing markets and products.

• The organization can penetrate into existing markets with its existing products. This is known as market penetration strategy.
• The organization can develop new products for the existing market. This is known as product development strategy.
• The organization can enter new markets with its existing products. This is known as market development strategy.
• The organization can enter into new markets with new products. This is known as a diversification strategy.

The choice of strategy depends on the analysis of the previous tools used and the level of risk the organization is willing to take.

Marketing Mix of Royal Bhutan Airlines - Drukair

Royal Bhutan Airlines - Drukair needs to bring out certain responses from the market that it targets. To do so, it will need to use the marketing mix, which serves as a tool in helping bring out responses from the market. The 4 elements of the marketing mix are Product, Price, Place and Promotions. The following steps are required to carry out a marketing mix analysis and include this in the case study analysis.

• Analyse the company’s products and devise strategies to improve the product offering of the company.
• Analyse the company’s price points and devise strategies that could be based on competition, value or cost.
• Analyse the company’s promotion mix. This includes the advertisement, public relations, personal selling, sales promotion, and direct marketing. Strategies will be devised which makes use of a few or all of these elements.
• Analyse the company’s distribution and reach. Strategies can be devised to improve the availability of the company’s products.

Royal Bhutan Airlines - Drukair Blue Ocean Strategy

The strategies devised and included in the Royal Bhutan Airlines - Drukair case memo should have a blue ocean strategy. A blue ocean strategy is a strategy that involves firms seeking uncontested market spaces, which makes the competition of the company irrelevant. It involves coming up with new and unique products or ideas through innovation. This gives the organization a competitive advantage over other firms, unlike a red ocean strategy.

Competitors analysis of Royal Bhutan Airlines - Drukair

The PESTEL analysis discussed previously looked at the macro environmental factors affecting business, but not the microenvironmental factors. One of the microenvironmental factors are competitors, which are addressed by a competitor analysis. The Competitors analysis of Royal Bhutan Airlines - Drukair looks at the direct and indirect competitors within the industry that it operates in.

• This involves a detailed analysis of their actions and how these would affect the future strategies of Royal Bhutan Airlines - Drukair.
• It involves looking at the current market share of the company and its competitors.
• It should compare the marketing mix elements of competitors, their supply chain, human resources, financial strength etc.
• It also should look at the potential opportunities and threats that these competitors pose on the company.

Organisation of the Analysis into Royal Bhutan Airlines - Drukair Case Study Solution

Once various tools have been used to analyse the case, the findings of this analysis need to be incorporated into practical and actionable solutions. These solutions will also be the Royal Bhutan Airlines - Drukair case answers. These are usually in the form of strategies that the organisation can adopt. The following step-by-step procedure can be used to organise the Harvard Business case solution and recommendations:

• The first step of the solution is to come up with a corporate level strategy for the organisation. This part consists of solutions that address issues faced by the organisation on a strategic level. This could include suggestions, changes or recommendations to the company's vision, mission and its strategic objectives. It can include recommendations on how the organisation can work towards achieving these strategic objectives. Furthermore, it needs to be explained how the stated recommendations will help in solving the main issue mentioned in the case and where the company will stand in the future as a result of these.
• The second step of the solution is to come up with a business level strategy. The HBR case studies may present issues faced by a part of the organisation. For example, the issues may be stated for marketing and the role of a marketing manager needs to be assumed. So, recommendations and suggestions need to address the strategy of the marketing department in this case. Therefore, the strategic objectives of this business unit (Marketing) will be laid down in the solutions and recommendations will be made as to how to achieve these objectives. Similar would be the case for any other business unit or department such as human resources, finance, IT etc. The important thing to note here is that the business level strategy needs to be aligned with the overall corporate strategy of the organisation. For example, if one suggests the organisation to focus on differentiation for competitive advantage as a corporate level strategy, then it can't be recommended for the Royal Bhutan Airlines - Drukair Case Study Solution that the business unit should focus on costs.
• The third step is not compulsory but depends from case to case. In some HBR case studies, one may be required to analyse an issue at a department. This issue may be analysed for a manager or employee as well. In these cases, recommendations need to be made for these people. The solution may state that objectives that these people need to achieve and how these objectives would be achieved.

The case study analysis and solution, and Royal Bhutan Airlines - Drukair case answers should be written down in the Royal Bhutan Airlines - Drukair case memo, clearly identifying which part shows what. The Royal Bhutan Airlines - Drukair case should be in a professional format, presenting points clearly that are well understood by the reader.

Alternate solution to the Royal Bhutan Airlines - Drukair HBR case study

It is important to have more than one solution to the case study. This is the alternate solution that would be implemented if the original proposed solution is found infeasible or impossible due to a change in circumstances. The alternate solution for Royal Bhutan Airlines - Drukair is presented in the same way as the original solution, where it consists of a corporate level strategy, business level strategy and other recommendations.

Implementation of Royal Bhutan Airlines - Drukair Case Solution

The case study does not end at just providing recommendations to the issues at hand. One is also required to provide how these recommendations would be implemented. This is shown through a proper implementation framework. A detailed implementation framework helps in distinguishing between an average and an above average case study answer. A good implementation framework shows the proposed plan and how the organisations' resources would be used to achieve the objectives. It also lays down the changes needed to be made as well as the assumptions in the process.

• A proper implementation framework shows that one has clearly understood the case study and the main issue within it.
• It shows that one has been clarified with the HBR fundamentals on the topic.
• It shows that the details provided in the case have been properly analysed.
• It shows that one has developed an ability to prioritise recommendations and how these could be successfully implemented.
• The implementation framework also helps by removing out any recommendations that are not practical or actionable as these could not be implemented. Therefore, the implementation framework ensures that the solution to the Royal Bhutan Airlines - Drukair Harvard case is complete and properly answered.

Recommendations and Action Plan for Royal Bhutan Airlines - Drukair case analysis

For Royal Bhutan Airlines - Drukair, based on the SWOT Analysis, Porter Five Forces Analysis, PESTEL Analysis, VRIO analysis, Value Chain Analysis, BCG Matrix analysis, Ansoff Matrix analysis, and the Marketing Mix analysis, the recommendations and action plan are as follows:

• Royal Bhutan Airlines - Drukair should focus on making use of its strengths identified from the VRIO analysis to make the most of the opportunities identified from the PESTEL.
• Royal Bhutan Airlines - Drukair should enhance the value creating activities within its value chain.
• Royal Bhutan Airlines - Drukair should invest in its stars and cash cows, while getting rid of the dogs identified from the BCG Matrix analysis.
• To achieve its overall corporate and business level objectives, it should make use of the marketing mix tools to obtain desired results from its target market.

Baron, E. (2015). How They Teach the Case Method At Harvard Business School. Retrieved from https://poetsandquants.com/2015/09/29/how-they-teach-the-case-method-at-harvard-business-school/

Bartol. K, & Martin, D. (1998). Management, 3rd edition. Boston: Irwin McGrawHill.

Free Management E-Books. (2013a). PESTLE Analysis. Retrieved from http://www.free-management-ebooks.com/dldebk-pdf/fme-pestle-analysis.pdf

Gupta, A. (2013). Environment & PEST analysis: an approach to the external business environment. International Journal of Modern Social Sciences, 2(1), 34-43.

Hambrick, D. C., MacMillan, I. C., & Day, D. L. (1982). Strategic attributes and performance in the BCG matrix—A PIMS-based analysis of industrial product businesses. Academy of Management Journal, 25(3), 510-531.

Hill, C., & Jones, G. (2010). Strategic Management Theory: An Integrated Approach, Ninth Ed. Mason, OH: South-Western, Cengage Learning.

Hussain, S., Khattak, J., Rizwan, A., & Latif, M. A. (2013). ANSOFF matrix, environment, and growth-an interactive triangle. Management and Administrative Sciences Review, 2(2), 196-206.

IIBMS. (2015). 7 Effective Steps to Solve Case Study. Retrieved from http://www.iibms.org/c-7-effective-steps-to-solve-case-study/

Kim, W. C., & Mauborgne, R. (2004). Blue ocean strategy. If you read nothing else on strategy, read thesebest-selling articles., 71.

Kotler, P., & Armstrong, G. (2010). Principles of marketing. Pearson education.

Kulkarni, N. (2018). 8 Tips to Help You Prepare for the Case Method. Retrieved from https://www.hbs.edu/mba/blog/post/8-tips-to-help-you-prepare-for-the-case-method

Lin, C., Tsai, H. L., Wu, Y. J., & Kiang, M. (2012). A fuzzy quantitative VRIO-based framework for evaluating organizational activities. Management Decision, 50(8), 1396-1411.

Nixon, J., & Helms, M. M. (2010). Exploring SWOT analysis – where are we now?: A review of academic research from the last decade. Journal of Strategy and Management, 3(3), 215-251.

Panagiotou, G. (2003). Bringing SWOT into Focus. Business Strategy Review, 14(2), 8-10.

Pickton, D. W., & Wright, S. (1998). What's swot in strategic analysis? Strategic Change, 7(2), 101-109.

Porter, M. E. (2001). The value chain and competitive advantage. Understanding Business Processes, 50-66.

Porter, M. E. (1985). Competitive advantage: creating and sustaining superior performance (Vol. 2). New York: Free Press.

Porter, M.E. (1979, March). Harvard Business Review: Strategic Planning, How Competitive Forces Shape Strategy. Retrieved July 7, 2016, from https://hbr.org/1979/03/how-competitive-forces-shape-strategy

Rastogi, N., & Trivedi, M. K. (2016). PESTLE Technique–a Tool to Identify External Risks in Construction Projects. International Research Journal of Engineering and Technology (IRJET), 3(1), 384-388.

Rauch, P. (2007). SWOT analyses and SWOT strategy formulation for forest owner cooperations in Austria. European Journal of Forest Research, 126(3), 413-420.

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Royal Bhutan Airlines Drukair

• Harvard Case Studies

Royal Bhutan Airlines Drukair Case Study Solution & Analysis

In most courses studied at Harvard Business schools, students are provided with a case study. Major HBR cases concerns on a whole industry, a whole organization or some part of organization; profitable or non-profitable organizations. Student’s role is to analyze the case and diagnose the situation, identify the problem and then give appropriate recommendations and steps to be taken.

To make a detailed case analysis, student should follow these steps:

STEP 1: Reading Up Harvard Case Study Method Guide:

Case study method guide is provided to students which determine the aspects of problem needed to be considered while analyzing a case study. It is very important to have a thorough reading and understanding of guidelines provided. However, poor guide reading will lead to misunderstanding of case and failure of analyses. It is recommended to read guidelines before and after reading the case to understand what is asked and how the questions are to be answered. Therefore, in-depth understanding f case guidelines is very important.

Harvard Case Study Solutions

STEP 2: Reading The Royal Bhutan Airlines Drukair Harvard Case Study:

To have a complete understanding of the case, one should focus on case reading. It is said that case should be read two times. Initially, fast reading without taking notes and underlines should be done. Initial reading is to get a rough idea of what information is provided for the analyses. Then, a very careful reading should be done at second time reading of the case. This time, highlighting the important point and mark the necessary information provided in the case. In addition, the quantitative data in case, and its relations with other quantitative or qualitative variables should be given more importance. Also, manipulating different data and combining with other information available will give a new insight. However, all of the information provided is not reliable and relevant.

When having a fast reading, following points should be noted:

• Nature of organization
• Nature if industry in which organization operates.
• External environment that is effecting organization
• Problems being faced by management
• Identification of communication strategies.
• Any relevant strategy that can be added.
• Control and out-of-control situations.

When reading the case for second time, following points should be considered:

• Decisions needed to be made and the responsible Person to make decision.
• Objectives of the organization and key players in this case.
• The compatibility of objectives. if not, their reconciliations and necessary redefinition.
• Sources and constraints of organization from meeting its objectives.

After reading the case and guidelines thoroughly, reader should go forward and start the analyses of the case.

STEP 3: Doing The Case Analysis Of Royal Bhutan Airlines Drukair:

To make an appropriate case analyses, firstly, reader should mark the important problems that are happening in the organization. There may be multiple problems that can be faced by any organization. Secondly, after identifying problems in the company, identify the most concerned and important problem that needed to be focused.

Firstly, the introduction is written. After having a clear idea of what is defined in the case, we deliver it to the reader. It is better to start the introduction from any historical or social context. The challenging diagnosis for Royal Bhutan Airlines Drukair and the management of information is needed to be provided. However, introduction should not be longer than 6-7 lines in a paragraph. As the most important objective is to convey the most important message for to the reader.

After introduction, problem statement is defined. In the problem statement, the company’s most important problem and constraints to solve these problems should be define clearly. However, the problem should be concisely define in no more than a paragraph. After defining the problems and constraints, analysis of the case study is begin.

STEP 4: SWOT Analysis of the Royal Bhutan Airlines Drukair HBR Case Solution:

SWOT analysis helps the business to identify its strengths and weaknesses, as well as understanding of opportunity that can be availed and the threat that the company is facing. SWOT for Royal Bhutan Airlines Drukair is a powerful tool of analysis as it provide a thought to uncover and exploit the opportunities that can be used to increase and enhance company’s operations. In addition, it also identifies the weaknesses of the organization that will help to be eliminated and manage the threats that would catch the attention of the management.

This strategy helps the company to make any strategy that would differentiate the company from competitors, so that the organization can compete successfully in the industry. The strengths and weaknesses are obtained from internal organization. Whereas, the opportunities and threats are generally related from external environment of organization. Moreover, it is also called Internal-External Analysis.

In the strengths, management should identify the following points exists in the organization:

• Advantages of the organization
• Activities of the company better than competitors.
• Unique resources and low cost resources company have.
• Activities and resources market sees as the company’s strength.
• Unique selling proposition of the company.

WEAKNESSES:

• Improvement that could be done.
• Activities that can be avoided for Royal Bhutan Airlines Drukair.
• Activities that can be determined as your weakness in the market.
• Factors that can reduce the sales.
• Competitor’s activities that can be seen as your weakness.

OPPORTUNITIES:

• Good opportunities that can be spotted.
• Interesting trends of industry.
• Change in technology and market strategies
• Government policy changes that is related to the company’s field
• Changes in social patterns and lifestyles.
• Local events.

Following points can be identified as a threat to company:

• Company’s facing obstacles.
• Activities of competitors.
• Product and services quality standards
• Threat from changing technologies
• Financial/cash flow problems
• Weakness that threaten the business.

Following points should be considered when applying SWOT to the analysis:

• Precise and verifiable phrases should be sued.
• Prioritize the points under each head, so that management can identify which step has to be taken first.
• Apply the analyses at proposed level. Clear yourself first that on what basis you have to apply SWOT matrix.
• Make sure that points identified should carry itself with strategy formulation process.
• Use particular terms (like USP, Core Competencies Analyses etc.) to get a comprehensive picture of analyses.

STEP 5: PESTEL/ PEST Analysis of Royal Bhutan Airlines Drukair Case Solution:

Pest analyses is a widely used tool to analyze the Political, Economic, Socio-cultural, Technological, Environmental and legal situations which can provide great and new opportunities to the company as well as these factors can also threat the company, to be dangerous in future.

Pest analysis is very important and informative.  It is used for the purpose of identifying business opportunities and advance threat warning. Moreover, it also helps to the extent to which change is useful for the company and also guide the direction for the change. In addition, it also helps to avoid activities and actions that will be harmful for the company in future, including projects and strategies.

To analyze the business objective and its opportunities and threats, following steps should be followed:

• Brainstorm and assumption the changes that should be made to organization. Answer the necessary questions that are related to specific needs of organization
• Analyze the opportunities that would be happen due to the change.
• Analyze the threats and issues that would be caused due to change.
• Perform cost benefit analyses and take the appropriate action.

Pest analysis

PEST FACTORS:

• Next political elections and changes that will happen in the country due to these elections
• Strong and powerful political person, his point of view on business policies and their effect on the organization.
• Strength of property rights and law rules. And its ratio with corruption and organized crimes. Changes in these situation and its effects.
• Change in Legislation and taxation effects on the company
• Trend of regulations and deregulations. Effects of change in business regulations
• Timescale of legislative change.
• Other political factors likely to change for Royal Bhutan Airlines Drukair.

ECONOMICAL:

• Position and current economy trend i.e. growing, stagnant or declining.
• Exchange rates fluctuations and its relation with company.
• Change in Level of customer’s disposable income and its effect.
• Fluctuation in unemployment rate and its effect on hiring of skilled employees
• Access to credit and loans. And its effects on company
• Effect of globalization on economic environment
• Considerations on other economic factors

SOCIO-CULTURAL:

• Change in population growth rate and age factors, and its impacts on organization.
• Effect on organization due to Change in attitudes and generational shifts.
• Standards of health, education and social mobility levels. Its changes and effects on company.
• Employment patterns, job market trend and attitude towards work according to different age groups.

case study solutions

• Social attitudes and social trends, change in socio culture an dits effects.
• Religious believers and life styles and its effects on organization
• Other socio culture factors and its impacts.

TECHNOLOGICAL:

• Any new technology that company is using
• Any new technology in market that could affect the work, organization or industry
• Access of competitors to the new technologies and its impact on their product development/better services.
• Research areas of government and education institutes in which the company can make any efforts
• Changes in infra-structure and its effects on work flow
• Existing technology that can facilitate the company
• Other technological factors and their impacts on company and industry

These headings and analyses would help the company to consider these factors and make a “big picture” of company’s characteristics. This will help the manager to take the decision and drawing conclusion about the forces that would create a big impact on company and its resources.

STEP 6: Porter’s Five Forces/ Strategic Analysis Of The Royal Bhutan Airlines Drukair Case Study:

To analyze the structure of a company and its corporate strategy, Porter’s five forces model is used. In this model, five forces have been identified which play an important part in shaping the market and industry. These forces are used to measure competition intensity and profitability of an industry and market.

porter’s five forces model

These forces refers to micro environment and the company ability to serve its customers and make a profit. These five forces includes three forces from horizontal competition and two forces from vertical competition. The five forces are discussed below:

• THREAT OF NEW ENTRANTS:
• as the industry have high profits, many new entrants will try to enter into the market. However, the new entrants will eventually cause decrease in overall industry profits. Therefore, it is necessary to block the new entrants in the industry. following factors is describing the level of threat to new entrants:
• Barriers to entry that includes copy rights and patents.
• High capital requirement
• Government restricted policies
• Switching cost
• Access to suppliers and distributions
• Customer loyalty to established brands.
• THREAT OF SUBSTITUTES:
• this describes the threat to company. If the goods and services are not up to the standard, consumers can use substitutes and alternatives that do not need any extra effort and do not make a major difference. For example, using Aquafina in substitution of tap water, Pepsi in alternative of Coca Cola. The potential factors that made customer shift to substitutes are as follows:
• Price performance of substitute
• Switching costs of buyer
• Products substitute available in the market
• Reduction of quality
• Close substitution are available
• DEGREE OF INDUSTRY RIVALRY:
• the lesser money and resources are required to enter into any industry, the higher there will be new competitors and be an effective competitor. It will also weaken the company’s position. Following are the potential factors that will influence the company’s competition:
• Competitive advantage
• Continuous innovation
• Sustainable position in competitive advantage
• Level of advertising
• Competitive strategy
• BARGAINING POWER OF BUYERS:
• it deals with the ability of customers to take down the prices. It mainly consists the importance of a customer and the level of cost if a customer will switch from one product to another. The buyer power is high if there are too many alternatives available. And the buyer power is low if there are lesser options of alternatives and switching. Following factors will influence the buying power of customers:
• Bargaining leverage
• Switching cost of a buyer
• Buyer price sensitivity
• Competitive advantage of company’s product
• BARGAINING POWER OF SUPPLIERS:
• this refers to the supplier’s ability of increasing and decreasing prices. If there are few alternatives o supplier available, this will threat the company and it would have to purchase its raw material in supplier’s terms. However, if there are many suppliers alternative, suppliers have low bargaining power and company do not have to face high switching cost. The potential factors that effects bargaining power of suppliers are the following:
• Input differentiation
• Impact of cost on differentiation
• Strength of distribution centers
• Input substitute’s availability.

STEP 7: VRIO Analysis of Royal Bhutan Airlines Drukair:

Vrio analysis for Royal Bhutan Airlines Drukair case study identified the four main attributes which helps the organization to gain a competitive advantages. The author of this theory suggests that firm must be valuable, rare, imperfectly imitable and perfectly non sustainable. Therefore there must be some resources and capabilities in an organization that can facilitate the competitive advantage to company. The four components of VRIO analysis are described below: VALUABLE: the company must have some resources or strategies that can exploit opportunities and defend the company from major threats. If the company holds some value then answer is yes. Resources are also valuable if they provide customer satisfaction and increase customer value. This value may create by increasing differentiation in existing product or decrease its price. Is these conditions are not met, company may lead to competitive disadvantage. Therefore, it is necessary to continually review the Royal Bhutan Airlines Drukair company’s activities and resources values. RARE: the resources of the Royal Bhutan Airlines Drukair company that are not used by any other company are known as rare. Rare and valuable resources grant much competitive advantages to the firm. However, when more than one few companies uses the same resources and provide competitive parity are also known as rare resources. Even, the competitive parity is not desired position, but the company should not lose its valuable resources, even they are common. COSTLY TO IMITATE : the resources are costly to imitate, if other organizations cannot imitate it. However, imitation is done in two ways. One is duplicating that is direct imitation and the other one is substituting that is indirect imitation.  Any firm who has valuable and rare resources, and these resources are costly to imitate, have achieved their competitive advantage. However, resources should also be perfectly non sustainable. The reasons that resource imitation is costly are historical conditions, casual ambiguity and social complexity. ORGANIZED TO CAPTURE VALUE : resources, itself, cannot provide advantages to organization until it is organized and exploit to do so. A firm (like Royal Bhutan Airlines Drukair)  must organize its management systems, processes, policies and strategies to fully utilize the resource’s potential to be valuable, rare and costly to imitate.

STEP 8: Generating Alternatives For Royal Bhutan Airlines Drukair Case Solution:

After completing the analyses of the company, its opportunities and threats, it is important to generate a solution of the problem and the alternatives a company can apply in order to solve its problems. To generate the alternative of problem, following things must to be kept in mind:

• Realistic solution should be identified that can be operated in the company, with all its constraints and opportunities.
• as the problem and its solution cannot occur at the same time, it should be described as mutually exclusive
• it is not possible for a company to not to take any action, therefore, the alternative of doing nothing is not viable.
• Student should provide more than one decent solution. Providing two undesirable alternatives to make the other one attractive is not acceptable.

Once the alternatives have been generated, student should evaluate the options and select the appropriate and viable solution for the company.

STEP 9: Selection Of Alternatives For Royal Bhutan Airlines Drukair Case Solution:

It is very important to select the alternatives and then evaluate the best one as the company have limited choices and constraints. Therefore to select the best alternative, there are many factors that is needed to be kept in mind. The criteria’s on which business decisions are to be selected areas under:

• Improve profitability
• Increase sales, market shares, return on investments
• Customer satisfaction
• Brand image
• Corporate mission, vision and strategy
• Resources and capabilities

Alternatives should be measures that which alternative will perform better than other one and the valid reasons. In addition, alternatives should be related to the problem statements and issues described in the case study.

STEP 10: Evaluation Of Alternatives For Royal Bhutan Airlines Drukair Case Solution:

If the selected alternative is fulfilling the above criteria, the decision should be taken straightforwardly. Best alternative should be selected must be the best when evaluating it on the decision criteria. Another method used to evaluate the alternatives are the list of pros and cons of each alternative and one who has more pros than cons and can be workable under organizational constraints.

STEP 11: Recommendations For Royal Bhutan Airlines Drukair Case Study (Solution):

There should be only one recommendation to enhance the company’s operations and its growth or solving its problems. The decision that is being taken should be justified and viable for solving the problems.

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Royal Bhutan Airlines – Drukair

Subjects Covered Marketing

by Ron Mulholland

Source: Richard Ivey School of Business Foundation

14 pages. Publication Date: Aug 10, 2012. Prod. #: W12124-PDF-ENG

Royal Bhutan Airlines – Drukair Harvard Case Study Solution and HBR and HBS Case Analysis

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