Bankole, thanks for your comment… and reveiling the consulting firm involved 🙂
You touched on a very good point. The main issue was the lack of adjustment in the operating model. However, Swissair could only hold minority stakes in European airlines due to regulatory restricitions. As a result, their influence in those airlines was limited and made it more difficult to implement changes to the operating side.
Thanks for your post – I enjoyed reading about the operating model of low-cost airlines. Seems like Spirit Airlines has tightly aligned their operating model to their value proposition through maximizing plane utilization and space utilization in their planes. While I assume passengers do not mind little space for a short-haul flight (for a cheaper ticket), it’s more challenging to implement this business model for long-haul flights.
Thanks for your post! I found it especially interesting to read about how they created competitive advantages in a highly competitive environment with many companies entering the industry and going after the same customer base. I am wondering whether and how they will be able to adjust their business or operating model to actually become a profitable company. It’s going to be an interesting company to follow over the next few years!
I am a huge Instacart fan! Moving here, I realized that it’s not easy to get around in an American city without a car and grocery stores are usually a bit outside of the centre. Instacart has conveniently solved this issue for me. On a broader level, with a higher percentage of women in the business world, this business model becomes very appealing as working moms are likely to be happy to pay a premium for convenient online ordering of groceries.
However, how sustainable is a business that operates on very low margins in an environment with low barriers to entry? As far as I know, the company is not profitable yet and not all orders make a profit.