COVENTRY UNIVERSITY SCHOOL OF ENGINEERING
Postgraduate Engineering Programmes Programmes
Module Assignment
Prepared by
Mr. Lionel Martis
Submission Date 2nd JUNE, 2008
Module
Entrepreneurship Entrepreneursh ip and Innovation Innova tion fo f or Engineers
Module Leader : Mr. NIGEL DENTON
Index Introduction to Innovation and Entrepreneurship..........................................................3 Andy Denton..................................................................................................................4 Don Vincent...................................................................................................................5 Similarities and Differences...........................................................................................6 Introduction to Kingfisher Airlines................................................................................7 Vijay Mallya...................................................................................................................8 Audit of Kingfisher Airlines..........................................................................................9 SWOT analysis.............................................................................................................13 Industrial life cycle.......................................................................................................15 Competitor analysis......................................................................................................17 Porter’s 5 Forces...........................................................................................................19 Bowman’s Clock..........................................................................................................21 Strategies adopted by Kingfisher Airlines...................................................................24 Challenges for Kingfisher Airlines..............................................................................26 Strategy suggested for Kingfisher Airlines............................................................. Airlines............................................................. .....28 Ansoff’s Matrix............................................................................................................30 Conclusion....................................................................................................................32 References....................................................................................................................33
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Introduct Int roduction ion to Innovati nnov ation on and Entrepreneursh Entreprene urship ip
“Innovation gives the venture the competitive advantage that results in wealth creation.”
Innovation may be in the product produ ct or service itself, or in the business processes used to d eliver it. Innovation can be developing deve loping and implementing ideas for restructuring the organization, cost cutting, better level of communication within the organization or for introduction of new technology. technology. This approach could co uld help the company progress in a successful manner. Ref: (www.quickmba.com/entre/definition)
“Entrepreneurship refers refers to an activity which leads to the creation and manag ement of a new organization designed to pursue a unique innovative opportunity.”
According to an Austrian economist Joseph Schumpeter, wealth is created when innovation results in new demand and the function of the entrepreneur is to combine co mbine various input factors in an innovative manner to generate value to the customer with the hope that this value will exceed the cost of the input factors, thus generating gene rating superior returns that result in the creation of wealth. Ref: (www.quickmba.com/entre/definition)
Andy Denton Andy Denton left school at the age of 15 and joined college. At college he opted for a three year course in engineering motor vehicle but this didn’t benefit him much, the only knowledge he acquired about vehicles was during his schooling period. Andy has worked in successful large firms such as Aston Martin, Ford and Vauxhall, but he quit from the following firms within a short period due some tiffs with the managements. Denton then started operating from home itself, his business dealt with the recover y and stolen cars. Andy now intends to enter into tuning motor sport vehicles.
Characteristics Characteristics of Andy Denton: Grasp opportunities: Andy is always been very keen to grab more and more opportunities
available to him be it when wh en he was working in large firms or when he started operating form home. Sense of independence: Andy never liked been bossed or pressurized from his managers, he
always preferred to have a sense of independence and freedom so that he could utilize his potentials to the maximum. Need for achievement: Andy always dreamt of entering into the world of tuning motor sport
engines and finally after a long ride in his career he is planning to open a new unit un it which deals with the tuning of motor sport engines. eng ines. Risk taker: Andy had been left jobless once he quit from all the large firms, but he never
lost hope and took the risk of starting his own small business which shows that he had the ability to take risks. Ability to cooperate: Andy always preferred to work in teams despite the tiffs with his
manager at Vauxhall, “I like to work as a team” states Andy. Andy.
Don Vincent Don Vincent is 51 in age. He quit schooling and directly went to work. Initially he started his career as a clerical accountant and moved to London. He then worked as a financial accountant. Later Don ran a franchise of Ford, the business seemed to be going very good
initially but suffered later on when the parent company reache d into a declining stage. Don had become financially very weak at that instant his wife came to his rescue and they started a water cooler company known as the “Fresher water coolers” by borrowing money mone y from the bank. This firm started with some initial minor difficulties but flourished within no time.
Characteristics of Don Vincent: ver y adaptive towards any opportunities that come Grasp opportunities: Don has been very across his way be it owning a franchise of Ford or starting a new water cooler c ooler company. company. Risk taker: Even when Don was in heavy financial crises he started a new business with the
help of his wife which turned out to be worth the risk. Self confidence: Don was unaware about the water cooler business but still he stepped into it
with a self confidence of achieving ach ieving success in the business. Need for achievement : Don always wanted to own his own business though he was
financially broke after owning a franchise of Ford; he didn’t step back but else borrowed money from the bank and started a new business along with his wife. Business skills: His role as a financial accountant helped Don develop an analyst skill which
proved to be a key factor that drove him to become be come an entrepreneur.
Simil Similar arity ity and Dif fer ferenc encee In terms of individual potential and achievements ach ievements Don and Andy both are of equivalent caliber. But in terms of attitude towards their employees both of them marginally differ. differ. Andy would prefer requesting his employees to carry out a job; on the other hand Don contradicted this approach. In my view both are right on their own part, the approach of requesting employees would motivate the employees and on the other hand in an comparatively bigger organization like Fresh water following this approach wouldn’t be feasible because of the larger organizational structure.
Introduction to Kingfisher Airlines Airlines Kingfisher Airlines Airlines is a wholly owned subsidiary of United Breweries Holdings Limited (the second largest brewery group in the world), the UB Group's investments holding company. Kingfisher Airlines has been allocated the IAT IATA airline code of 'IT'. The UB Group is one on e of India's largest conglomerates with a turnover of US $2 billion a nd is the largest Indian manufacturer of beverage alcohol-beer and liquor. With With the foray of UB Group’s birds into the Indian aviation industry, Kingfisher Airlines has become a force to reckon with. The Airline already has a number of firsts to its credit. Kingfisher Airlines Limited is an airline company based in Bangalore, India. This airline was introduced in the market to target the domestic luxury segment.
Kingfisher Airlines Airlines was introduced into the Indian airline market by the Indian Business Tycoon Dr Vijay Vijay Mallya (the owner of United Breweries Limited). It was introduced on 9th May, 2005. It operates in 37 destinations with 218 flights a day d ay.. It has a fleet size of o f 71 and also the first Indian domestic airlines to introduce the Airbus A380.
Kingfisher is one of only six airlines in the world to have a five-star rating from Skytrax, along with Asiana Airlines, Malaysia Airlines, Qatar Airways, Airways, Singapore Airlines and Cathay Pacific Airways. Kingfisher airlines have been awarded “The best new airline of the year 2005”. Presently kingfisher airlines has acquired Air Deccan (one of the major profitable domestic low cost airline) hence penetrating into the lower segment of the market too.
Ref: (www.thehindubusinessline.com/2007/06/01/stories/2007060106400100.htm)
Vijay Vijay Mally al lya a Vijay Mallya is 51 years old was born in India. Vijay Vijay Mallya has amassed an enormous fortune from inherited and growing. With an estimated current net worth of around $1 .5 billion, he is ranked by b y Forbes (2007) as the 692th-richest person in world. UB group chairman Vijay Vijay Mallya, a trained pilot himself and an avid aviation enthusiast, has delivered an ultimate product to the Indian aviation industry which is called as Kingfisher Airlines, names after the popular liquor brand of the UB group (Taking a very different approach again). Ref: (www www.how-to-make-more-money.com/V .how-to-make-more-money.com/Vijay-Mallya_biography.html ijay-Mallya_biography.html )
Character hara cteristic isticss of Vijay Mallya Mall ya g rowing market, Vijay Vijay Mallya Grasp opportunities: Since the Indian aviation industry is a growing positively noticed the opportunities of expansion in this industry hence launched Kingfisher Airlines. Risk taker: Vijay Mallya did know the strong competition he would have to face from the
old player Jet Airways which could shatter his dreams but he never went on a back foot, instead he took the risk of launching Kingfisher Airlines Airlines with a focused aim of conquering con quering the industry. Need for achievement: Vijay Mallya is very much known for his different approaches in any
industry which helps him outplay the others. To capture every possible industry has been his goal from the start of his business career.
Vijay Mallya likes to be his own boss b oss rather than working in Sense of independence: Vijay someone’s shoes. The freedom to play and create a market of his own makes him a successful Tycoon. Vijay Mallya makes his own stand in the market but all Ability to accept change: Though Vijay his groups have be very much adaptive to the changes in both the external and internal environment. Ref: (www.gaebler www.gaebler.com/entrepreneur .com/entrepreneur-characteristics.htm -characteristics.htm)
Audit of Kingfisher Airlines This audit deals with the present situation in various areas of the organisation.
1. Strategic Planning
•
Target Market: The Company has targeted a niche market for its operations. The
company operates in the luxury segment of the Indian aviation industry and leads the competition with its world class services at competitive prices •
Master strategy to stay ahead of the competition : The Company has adopted
aggressive strategy of customer acquisition through world class services which have increased their market share and made them a preferred choice within the customer c ustomer base. •
Transparency within the organisation: The employees are aware of the company’s
policies and the top management encourages the employees to develop their skills to help them become the best in the industry •
Potential opportunities for business development: The Company has overtaken its
competitors in order to extend their services in the low cost segment along with the existing premium class and this has provided them with an opportunity to develop and extend their operations more profoundly.
2. Organisational Structure
•
Relationship between individuals and functions : There are specific people for
specific jobs in the company and the company has hired some of the most experienced people in the industry to help them move towards their goal of becoming a leading player in the Indian aviation industry
•
Job description: There are clearly defined roles in the top and the middle
management and these are complimented by the ground level employees in
the company. The company has a sound organizational structure which is backed up by a strong parent pa rent company. company.
3. Human Resource Management
•
Recruitment: Recruiting quality people is a major plus point of the company. They
hire the best people in the industry and pay them handsomely so that they contribute to the company’s goals and ambitions to the best of their capabilities. The crew members of Kingfisher are paid more than their counterparts c ounterparts in any other airline company in India. •
Training: The Company provides its employees with suitable training and
development opportunities to help them grow and a nd develop their skills which are unmatched in the industry. This aspect of their training has helped their employees in creating a sound impression on their customers and they have become a highly admired airline company in India. •
Performance appraisal: The employees are paid good salaries and performance
based incentives to motivate them even more.
4. Marketing & Sales Promotion
•
Market Segment : The Company operates in the premium segment of the Indian
domestic segment offering world class flying experience to its customers. The company is entering into the low cost sector along with the existing premium segment. •
Mode of Marketing & Sales: The Company does extensive marketing through
celebrities, sponsorship of sports events etc. The sales are mainly done through offices and websites and through SMS booking. •
Market Research: The Company has done an extensive market research before
entering into the aviation industry and they have specifically targeted a niche market wherein they are concentrating on the premium segment. They are also entering into the low cost segment through acquisition acqu isition of smaller competitors.
5. Pricing of Products
•
Pricing Strategy : The Company offers world class services at the most competitive
prices. Their services are rated as the best in the Indian aviation industry and their pricing strategy aims at acquiring customers from their competitors by providing state of the art services at very competitive prices. •
Break-Even Analysis : The company carefully analyzes its load factors in order to
optimize their investments in the operations and to break even because they are operating in a very dynamic industry and it is very crucial for them to have a measure their costs so that they can optimize the profitability of their operations.
6. Location
•
Accessibility to Market: They have a good accessibility to their target market
through modern fleet of aircraft and the best trained staff in the industry. industry. They are
backed up by a strong parent company so they can afford to spend considerable sums of money to establish themselves as a major player in the Indian domestic airline industry. •
c ustomer’s trust with with their services Availability of customers: They have earned their customer’s over time and have willing customers ready to use their services again and again and this has given them an edge over their competitors.
7. Planning for Growth
•
Advance Planning: They are entering into the low cost sector along with their
existing operations in the premium segment and this offers excellent chances for future growth as they will have a monopoly monop oly in the industry through a well targeted product mix wherein they will have a major share of both segments.
•
industry, Recurring Crises: Despite their best efforts to become the best airline in the industry, they have not been able to make considerable profits ever since their introduction in the industry. industry. They are lagging behind the nearest rival but they are still trying their best to cope up and become a market leader.
Ref: (www.prenhall.com/scarbzim/html/smallbus.html )
SWOT SWO T Analys nal ysis is A scan of the internal and external environment is an important part of the strategic planning process. Environmental factors internal to the firm usually c an be classified
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