To: prof. chen
From:
Subject: allegiant airlines C1
Date: October 9, 2022
allegiant airline future sustainability is highly unlikely due to rising easiness of competitors to substitute the services the airlines offer, as well as low customer loyalty, stagnate growth and rising wages and fuel costs. We recommend that allegiant cut their future airplanes purchases by 5% and use that money on their customer satisfaction services while keeping the travel prices the same, they can leverage their high ROA and ROI to cut their earnings slightly and invest in future growth, route openings as well as combating the rising wages and fuel prices. We believe that these changes are necessary for future sustainability and profitability even at the cost of short-term revenue decline or loss.
Allegiant airline’s business strategy focuses on leisure travelers and they have a strong cost advantage over their competitors, allegiant do not even like to call themselves an airline company but rather a traveling company, allegiant cost advantage rise from their small but relevant business choices such as booking smaller airports that are miles away from the city and bigger, busier airports for cheaper rates, removing storage space to make the aircrafts easier and faster to clean thus making them ready to be deployed and be in the air faster.
Allegiant is sustainable short term but face hard challenges in the future that leave their long-term sustainability in doubt, allegiant have been suffering stagnate growth and short staffing for a while now, and they can save money by buying older airplanes they also have a much shorter life span than new aircrafts. Older airplanes also have less safety features that are included in newer models. Allegiant suffered many emergency landings due to mechanical failures between XXXXXXXXXXalone (appendix A)
We recommend that allegiant the weakest two sides to their porter 5 forces, threats of substitute and buyer power. Due to wages and gas prices hikes the company will find it very difficult to keep offering the same prices with no major change in their business model, and due to their low customer loyalty and satisfaction any new substitutes offering the same value will get a big chunk of their market value, most of allegiant customers fly with them because there are no substitutes and they do not have a choice, a business wants to have their profitability in their hands and not in the hand of the market that can a
uptly change at any moment. Having very low customer satisfaction can lead to them seeking alternatives and wherever there is demand supply will show up in the term of another airline (appendix B)
Allegiant have an impressive revenue and ROI (appendix C). and we recommend that they start investing in customer satisfaction to garner customer loyalty and lower the threats of new entrants and substitutes, allegiant should buy newer airplanes and add them to their fleet, those airplanes should fly the most frequent routes and will offer higher safety and ease of mind to consumers, the new airplanes are also much more efficient and can drastically lower fuel consumption during the times of the gas crisis and will save allegiant some money. Having routine maintenance can help prolong the lives of the airplanes including the older ones, the company should fight the urge of cutting costs on maintenance since it is the most important part and a few minutes check can save lives and millions of dollars for the company by keeping the airplanes operatable and in tip top conditions
Appendix A:
Appendix B:
Appendix C:
1
MARKETING MANAGEMENT 4
From:
To: Pam Codispoti
The Chase Sapphire Reserve card needs to be better friendly with the points system. It acquired its customer based on unique scheme of point allocation. The flexibility and ease of using card should be stressed on. The digital freedom, given by Chase, made them stick to the card but their lesser points on spending have proven to be turnoff. The value drivers, which attract the customer in this dynamic credit market, need to be redefined as that multi-purpose benefits can be extracted from the usage.
Part I
Success of Chase at Retaining Chase Sapphire Reserve Customers into their Second Year with Reasons and Suggestions
Chase Sapphire will be successful in retaining its customers because in order to retain customers there is a need to be competitive for instance the schemes applied by American Express can be used by Chase to stop its customers from shifting to competitors.
i. Chase need to launch attractive offers for reserve accounts: The money back offers are no longer that attractive to customers (MacDonald & Evans, XXXXXXXXXXThe customers are looking for options, which can be new and unique. Collecting cards of different
ands is just too old fashioned and they want to get rid of ca
ying multiple cards in their pockets.
ii. Refe
al offers for owners of the card: The refe
al offer need to be re-launched so that cu
ent customers feel motivated to recommend Chase Sapphire card to others. Earlier this offer helped in increasing the customer base. Also the some tempting changes in points scheme can also be made, which is not possible to achieve for competitors and encourages the customer to spend more (Graham, XXXXXXXXXXLower signup bonus makes it difficult to sell and does not give incentives to the cu
ent card owners to be loyal to the
and.
iii. Transferability of bonus offers: The points, which are accumulated on card, need to be used through multiple channels. The freedom to use them as per convenience and on outlets, which are of customer’s interest, will be more valuable for Chase Sapphire. For instance, the points can be used to book tickets for different air partners. These schemes are not well available with Amex and it is the time, when such offers can turn the game. The credit card customer base is huge fan of travel points and taking advantage of customer preference will provide multiple advantage to Chase. More partners will like to collaborate and along with them, they will
ing their customers even to enroll for the card.
If Chase has Right Number of Products in Line and if they are Right Features
Yes, Chase has right products in line. It is required to re-evaluate the features of the product according to the target segment as post pandemic the needs of the consumers have changed. They are opting for contact less experiences, which can not only ensure safety but also help in widened usage of their Sapphire cards for better. The pandemic has demanded for increased credit limits with EMI options with no extra charges and convenient options.
Changes to Chase Sapphire Prefe
ed Card Given Chase Sapphire Reserve's Success
Both the cards are most popular cards of Chase Sapphire. Sapphire Reserve comes with luxury benefits and is choice of elite class. In order to
ing Sapphire prefe
ed card it is required to
ing semi luxury changes in value system can be introduced so that middle income group can be promoted to a semi-prime segment. It will not only affect the
and identity but also help them to use it as a status symbol.
No-Fee Chase Sapphire Product
No fee chase Sapphire product will practically will not be able to deliver the value. This is due to the reason that that there is cost involved in maintaining relations and creating an infrastructure. Moreover, the values provided by the no fee card will not be able to deliver satisfaction to millennials.
This card will restrict the transfer of benefit, which would ultimately a major turnaround for consumers. As per the comparison with other Chase Sapphire cards, it is anytime better to opt for annual fee cards as they have offers like cash back and more accumulation of points of transfe
ing them to travel options.
Part II
The Segment of Affluent Gen Z
In order to target Gen Z it is required that Chase aggressively strategizes its actions to capture the segment. Before going ahead, it is required to understand their characteristics so that the product can be made lucrative accordingly.
They are digital natives:
They are far away from paper work and digital tools are there companions (HBR, XXXXXXXXXXWith technological advancements, they prefer to keep information at their fingertips and demands best out of what they use.
They are financially minded and pragmatic:
They want true value of their money in economic terms and believe in conservative spending, as financial stress is too high on them.
They value individual identity:
Gen Z likes to associate with the
and, which is true reflection of their individual identity. This generation is beyond permeating demographic pyramid and believes in accepting transformational challenges.
Value Drivers
Quick Access to credit:
The Gen Z requires quick access to credit, as they do not like waiting. They are growth-oriented consumers who believe in converting credit funds into liquid cash and use it for variety of needs (Insider, 2019).
Flexibility:
They should have flexibility to use points for most of their purchases and in turn accumulate more on them. They do not mind spending more if they are saving on the other hand simultaneously.
Scope of funding with it:
The credit should allow them to take loans and convert their points into EMI options. Now, this might require more research to make it viable but working on this direction can be revolutionary.
Competitive at international platform:
The card should be recognized at global platforms as well, for their traveling, spending needs (Fo
es, XXXXXXXXXXChase Sapphire can rope in more banks collaboration to ensure it card is recognizable at every reachable outlet in the world.
Suitable Product Line to Capture this Market Segment
The existing product line with new and unique features will be designed to serve this new generation set of consumers (Yurder & Akdol, XXXXXXXXXXChase Sapphire has a
and value and with re-designing of the products, it has a better chance at capture the market.
References
Fo
es, XXXXXXXXXXBest Credit Cards For Millennials Of Fe
uary 2022 Retrieved from https:
www.fo
es.com/adviso
credit-cards
est/millennials
Graham, J XXXXXXXXXXFree trips can be in the cards. USA Today, 04B-04B
HBR, XXXXXXXXXXHow Chase Sapphire Made Credit Cool for Millennials Retrieved from https:
h
.org/podcast/2018/06/how-chase-sapphire-made-credit-cool-for-millennials
Insider, XXXXXXXXXXThe best credit card for millennials, based on their spending habits, rewards, and benefits Retrieved from https:
www.businessinsider.com/personal-finance
est-credit-card-for-millennials-young-adults-2018-5?IR=T
MacDonald, N., & Evans, B XXXXXXXXXXA theoretical examination of cash-back credit cards and their effect on consumer spending. Available at SSRN XXXXXXXXXX
Yurder, Y., & Akdol, B XXXXXXXXXXSocial Media as a Communication Channel. In Research Anthology on Strategies for Using Social Media as a Service and Tool in Business, 46-62
Aliegant feedback:
Chase feedback:
Also chase needs better citation articles.
Thanks.
Chase Sapphire: Creating a Millennial Cult Brand
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R E V : N O V E M B E R 2 6 , XXXXXXXXXX
Professor Shelle Santana, Senior Lecturer Jill Avery, and