Strategic Analysis of Corporate Failure: The Case of Jet Airways

This report provides a strategic analysis of the corporate failure of Jet Airways, examining the factors that led to its downfall. It begins with an abstract outlining the research's focus on identifying the reasons for Jet Airways' failure, utilizing books, articles, and analytical frameworks like SWOT, PESTLE, and Porter's Five Forces. The report traces the airline's history, including its growth, expansion, and eventual suspension of operations. Key reasons for failure, such as poor management, fluctuating oil prices, and budget constraints, are explored. The analysis delves into the application of the aforementioned strategic tools to assess the company's internal strengths and weaknesses, external opportunities and threats, and the broader industry environment. The report concludes by drawing lessons from Jet Airways' experience for strategic planning and corporate management, aiming to provide insights into how the airline could potentially re-enter the market with new services. The report also includes an introduction, table of contents, and acknowledgements.

Strategic Analysis of
Corporate Failure

Abstract
Corporate failure refers to the companies operations which are following its inability in
order to make the profit or bring enough revenue in order to complete its expenses. Thus, the
entire research is based upon the strategic failure of Jet Airways and for that researcher uses
authentic books and articles in order to identify the main reason of failure. The research also
highlights the History of Jet Airways which consist of growth and expansion and then provide
main reasons of company's failure. The research provide five main reason of corporate failure i.e.
poor management, fluctuate prices of oil, insufficient budget etc. Moreover, research also used
theories such that SWOT, PESTLE and Porter five force in order to identify the corporate failure
of Jet Airways. Thus, through this research, researcher analyse the ways through which Jet
airways will also come back in market with range of new services.

Acknowledgement
I would like to express the deepest appreciation to my professor who gave me a chance to
work on this, as he continuously and convincingly conveyed a spirit of adventure in regards to
research and scholarship. Without the guidance and persistent help this dissertation would not
have been possible.
I would like to thank my tutor, teacher and professor who help me to work on this
dissertation and whenever I face any challenges regards to the topic, I feel free to contact my
tutor. Without his guidance I could not perform the work in good manner.
Last, I would like to thank my parents who support me to complete the project and
always motivate me to research on new topic. In addition, I also thank my friends who also
provide me new data related to my topic so that I can perform the work in more better way.

Table of Contents
INTRODUCTION...........................................................................................................................1
History of Jet Airways and Start Ups..........................................................................................3
Success in short time..................................................................................................................10
Failure reasons of Jet Airways...................................................................................................11
Porter five force analysis of Jet Airways...................................................................................18
SWOT Analysis.........................................................................................................................22
Pestle analysis............................................................................................................................25
Lesson from Jet Airways for strategic planning........................................................................30
REFERENCES..............................................................................................................................36

Title : Corporate business failure in Organization : A case study of jet airways
INTRODUCTION
The term Corporate Failure imply discontinuation of company's operations that leads to
reap the sufficient profit as well as revenue to pay the business expenses. Moreover, it is
generally happens due to poor management, incompetence and bad marketing strategies as well.
On the other side, it is analysed by Elsayed and Elshandidy, (2018) that low profitability, high
gearing and low liquidity are consider some common examples of corporate failure and it can be
shown only by analysing company's financial trends because it is related to each others. In this
competitive era, it is also analysed that to stay competitive in the market, the company adopted
different strategies an provide innovative solutions that may affect the overall business in
positive way. Moreover, if the company is fulfilling its commitment and also provide its best
product and services to their customers then it will leads a firm to grow at further level of
success. Though there are many reasons which creates failure and this includes lack of planning,
leadership failure etc. In the same way, these failure leads to damage the brand reputation of the
business and that is why, it affect the goodwill of the company as well.
Therefore, before implementing the corporate strategy, it is quite essential to make
strategic decision because the crucial role in strategic decision making process has strategic
analysis and it also brings important information related to evaluation and development of
environment inside and outside of the company that reveals different opportunities which has to
be consider while taking strategic decision making (Hamilton and Micklethwait, 2016).
Moreover, there are so many reason of corporate failure and as a result, it may affect the overall
performance of the company in negative way such that there are many reason of failure and such
that economic distress which is consider one of the major cause of corporates failure and decline
in the economy also leads to reduce in different activities which may affect the overall
performance. On the other side, management is consider another biggest issue that affect the
overall working of the business. Even mismanagement implies improper management control
over the working of employees and other business activities. It also refers to the lack of
managerial skills and experience that affect the overall business performance. Hence, it is
analysed that there due to lack of leadership and management, the company start declining and
this in turns, leads to damage the overall brand reputation of the company as well.
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On the other side, in this modern era, every company desire to use advance technologies
for company's smooth functioning and therefore, technological cause is consider another reason.
With the advancement in technology, there are so many new modes introduces in the market
such that airline industry also uses the same for their online booking process which is better than
traditional ones. But on the other side, if the industry fails to comply with the same, the chances
of failure of the firm may also increases. Therefore, in the same, there are so many other causes
negative impact or reason of failure of corporate as well. Thus, it is clearly reflected that
understanding business failure presents an enormous theoretical challenge which should be
concerned with the professionals. Therefore, the existing research provide a deep knowledge
related to corporate failure of Jet Airways which leads to suspended its overall operations by
applying different models and theoretical concepts. As currently, Jet Airways did not provide its
services to their customer and this is all because of poor management strategies and lack of
effective leadership styles and these all in turn, affect the brand reputation of the company.
As per the view of Jacobson and Von Schedvin, (2015) corporate failure is not about the
environment but is all about the failure of alignment between organization and its environment
realities. In the same the existing research also shows what are the different causes of corporate
failures in the context of Jet Airways that affect the overall business in just opposite way that
leads to suspended its entire business operations. Though it is also true that majority of the
entrepreneurs fails and it is all because of poor management and low level of strategies
implementing. Therefore, it is clearly reflected that due to taking wrong decision and poor
management may affect the overall business into negative way. Thus, the current dissertation
also helps to determine exact reason that affect the overall business operation of Jet Airways and
that is why, it leads towards failure too (Morris, 2018). On the other side, excessive complexity
and defective communication also cause failure of corporates because mismanagement implies
improper management control over the working of employees and other business activities as
well. Moreover, it also refer to the lack of managerial skills and experience in the terms of
strategic capabilities and leadership that results in failure of enterprise.
The dissertation is based upon Jet Airways, which is India based company who was
provide good services to their customers at low and reasonable rates. Unfortunately, due to some
reasons, government suspended its all operations. Earlier, Jet Airways is known as a market
leader in the domestic airline industry in India and it started it services from 1995 onwards as a
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sole trader but as it become leader in airline industry, it is owned by he government and this
turns as a public listed company. Its parent company is SBI led Bank Consortium who owned
51% and Ethihad Airways owned 12% and public shared are 13%. Its headquarter is in Mumbai,
Manaharashtra in India and there were around 16 thousands employees who were working under
this. Further, from 2000 onwards, company's success is started and this in turn also help the
business to become a dominant leader by providing a range of services to their customers at low
rates as compared to other competitor. Thus, entire report will also provide range of knowledge
that support to determine the main reasons of failure and also ascertain ways through which Jet
Airways also come back in market.
In addition to this, the entire report is based upon how Jet Airways leads towards the
failure such that what are the reason that affect the overall operations in negative way. Moreover,
current dissertation also describe the start up of Jet Airways that may includes the History and
initial problem faces by the firm while establish the firm. Thus, the report will highlight what are
the reasons of failure and how it may affect the overall business into another way. This stage also
includes different models that helps to determine the actual environment and that is why, report
uses SWOT analysis to identify the strength, weakness, opportunity and threats. Including this,
report also uses PESTLE analysis which helps to identify the external environment of the
company and by applying Porter five force model, report will analyse industry analysis. Further,
it also describe how Jet Airways step by step connected entire world to India but what are the
reason that may affect Jet Airways to suspended its overall operations from 2019 onwards.
Lastly, report describe the lesson learnt from Jet Airways for a strategic planning and the lesson
learn after corporation management from Jet Airways.
History of Jet Airways and Start Ups
Jet Airways is consider Indian International Airline whose headquarter is in Mumbai but
recently from 17th April, 2017, it suspended all its flight operation. In 1993, Jet started as an taxi
service operator and then become India's biggest airline by offering top class international
services. In the same year, they would not actually start flying until everything is under
controlled when they lease four Boeing 737-300 on demand air taxi airline. Its first flight was
from Bombay to Ahmedabad. Company also granted scheduled airline status on January 14,
1995 and then it become a deemed public company on July 1, 1996. Thus, from January 19,
2001, Jet Airways was reconverted into a private company and further from 2004, it become
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public company as well. Even, it also carried over million passengers to 12 destination in its
first year. The quoted firm started 20% equity partnership with Kuwait Airways and Gulf Air and
after some time it takes an exit later (History of Jet Airways, 2018).
At the time of incorporation of the company, the shareholders were P.V.V. Chalam and
Mrs. Anita Goyal and these shares were also transferred to Tail Winds on May 12, 1994. in this
case, Mr. Naresh Goyal actually holds the Tail Winds with a RBI approval. Therefore, with the
pursuant to an application made by the company in which the owner of Jet Airways wanted for
international collaboration proposal for the investment for the investment in Tail Winds in
proportion of 60% by Naresh Goyal, while 20% by Gulf Air and 20% by Kuwait Airways.
Overall, this in turn leads to 100% of the Equity share capital of Jet Airways company. Hence,
from 1993, the company started offering services services of 42 destination that further
comprising 34 Boeing as well as 737 aircraft and eight ATR 72-500 aircraft facilities too.
Moreover, after collaboration with the international aircraft, the owner of Jet Airways, Mr.
Naresh Goyal wants to acquire 20% equity shares from each of Gulf Airways as well as Kuwait
Airways in order to become 100% owner of Tail Winds because currently he owns only 99.99%
of the equity share capital only.
In next year, the company start to expand its business and then it carried 1.7 million
passengers and in the same year, they had only seven aircraft in which three are rented from
Malaysia Airlines. In 1996, Jet Airways take a huge order of more than 300 million dollars from
US and also purchase their four 737-400 and six 737-800 which means that it had a expand its
capacity to carry around 2.4 million passengers in a year. Thus, it provides a good market share
of 20% and also known as second only national carrier India Airlines. Thus, it shows the huge
expansion and reflect that it has ability to proceed for further expansion as well (History of Jet
Airways, 2019).
Therefore, after its rapid expansion, in 1997, the government of India ruled that no
foreign companies were allowed to own part of India's domestic airline and in the same time, the
owner of Airline Naresh Goyal purchased remaining 40 percent of Jet. Further in 1999, during a
Paris Air show, jet Airways also announces an order around $550 million for purchasing further
ten Boeing and as a in 2001, it grown to 30 aircraft which was operating 195 flights daily with 37
destination in India. But after that, the company faces loss for the first time after its
establishment because of poor performance of that year. But suddenly in 2003, government of
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India allowed jet Airways to run at international level and that is why they chose its first
international flight from Chennai to Colombo. After running at international routes, in 2004, the
company also listed itself as public company and it also listed on local stock exchange to raise
funds for their expansion (History of Jet Airways, 2018). Thus, it offered 20% of the company to
investor and the owner Naresh Goyal become a billionaire. Therefore, this clearly reflect that the
firm operates at international level by providing the best services to their customers, but due to
poor performance and financial problems, the company have to faces big loss to suspended its
flights from 2019 onwards.
The growth and expansion of Jet Airways is started from 2005 onwards. In which the
company has filed its own draft Red Herring Prospectus with the Security and Exchange Board
of India (SEBI) in order to enter into the capital market with the company's initial public
offerings. In this same year, company offer around 1.72 crore share in which the equity share of
Rs. 10 each for the cash at the price which must be decided for the book- building process.
Moreover, the Jet Airways also signs a lease agreement with the South African Airways and as a
result, Jet Airways launches its first inter- continental flight by linking the Mumbai with London
by the non- stop day flight from May 23, 2005. in the same year, company also executes a
purchase agreement with the Boeing company, USA in which it also introduce an inflight safety
Manual in Braille. Further, the success also start when the company signs a pact with Gulf Air
and quoted firm also win Avaya GlobalConnect Customer Responsiveness Award. Jet Airways
IPO also subscribed the 4.25 times on the first day of the offer in which there were 7.32 crore
bids were actually received on the very first day. Therefore, insurance company also accounted
for the 0.61% of the total bids that also raise the success of the company.
In addition to this, in 2006, January, Jet Airways announced its goal to acquire Air Sahara
but unfortunately the deal is fell down in June. But in 2007, the same deal was back on track it
was marketed between low cost carrier and full service airline it was renamed as JetLite and after
that it wholly owned subsidiary by jet Airways. In 2006, the company also signed a special code
sharing agreement with the American Airlines which is one of the world's largest carrier for
India and US flights. Moreover, in 2006, Jet Airways signs a contract with CAE for Boeing 777
and simulators of Airbus A330. In next years, Jet Airways also signed the Memorandum of
Understanding with Lufthansa Technik AG, Germany for component works and also signed
Personnel Assignment Services and Maintenance Management Services as well. Then to build a
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brand image at international level, Jet Airways India Ltd also announced its flight from Chennai
to Toronto, via its hub in Brussels. In 2007, an organization also win an award of Most
Innovative Product Launch for its first class Suites onboard its Boeing. Thus, it is analysed that
from 2000 onwards the company name is recognized in top Airlines.
Further at 2008, the company laid off its more than 1900 employees because of
intervention from Ministry of Civil Aviation and in the same time, it has its new rival Kingfisher
Airlines. The company also launches the daily flights between Mumbai and Bangkok and then it
also won Galileo Express Travelworld Best Domestic Full Service Award for the Sixth year .
Further, it also win an award of Best Cargo Airline of Central Asia. Beside this, in 2009, the Jet
Airways also launches its low cost service name as Jet Konnect which is further help to
maximize its overall business by raining the financial performance. Thus, by operating at
international level, jet Airways become one of the largest airline industry in India by acquiring
22 percent share of market. It is one of the first domestic airline in India who ban meat products
as well as liquid and then in 2012, jet Airways merged with JetLite and Jet Konnect and started
offering business class seats at low rate that helps to attract wide range of customers.
The success has not stopped in these years, but from 2010, IBM also linked a 10 year
business transformation and Information Technology services which had done a deal of $62
million with the Jet Airways. In successive year, company also wins a award from CNBC as a
Best Domestic Airlines&rdq. In 2011, Jet Airways also start taking a delivery of 100th Aircraft
and declared as a Best Domestic Airline by the government. Further, in 2012, it also earned
many titles and known as one of the top airline in India.in 2013, Jet Airways Jetpriviledge Inks
Partnership with the Mobile Store and join hands with HDFC bank in order to launch
JetPriviledge- HDFC Bank World Debit cards and then company enter into the Reciprocal
Frequent Flyer Partnership with Air New Zealand in which it provide a service to of daily flight
from Mumbai to Singapore.
Thus, it is clearly reflected that company has majority of strength and as a result, before
2019, it is consider one of the largest airline firm in India. But due to sudden financial losses, the
company also affect its overall negative impact. Due to this, the overall success of the company
is affected and it leads to suspended the operations as well.
For growth and expansion, Jet Airways uses variety of marketing strategies that helps
the firm to enhance the overall performance and also reach wide range of customers as well.
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Therefore, the marketing strategy of Jet Airways is quite good such that to expand its current
business, Jet Airways majorly focus on the social media in which it mainly used Facebook
because it earn good conversion rates. Hence, this Facebook application also redirects the traffic
to website and it also furnishes users with important information such that online booking, web
check in special offers and flight status etc. On the other side, Morris (2018) stated that Jet
Airways handle Twitter quite well as compared to Facebook and this tool is consider leveraged
to communicate instantaneously for attracting new customers. It is also analysed that company
may easily done marketing easily through Twitter because the post can be seen by those people
who are not followers and thus, the information is also provided to the range of customers
without any issues.
Hence, in the growth and expansion of Jet Airways, marketing also plays an important
role and as the company comes under growing industry. That is why, it is essential for the
business to use best marketing strategy in order to let people know about the services offered by
the company and they may also took an advantage of the same. Additionally, Jet Airways have
good pricing strategy and another reason of its growth in early time is adopting fair pricing
strategy. Jet Airways have three different classes of services and pricing policy which is further
based upon the individual service for that class. For instance, the services which Jet Airways
offered in 2000 is completely unique and its services itself makes the firm differentiated from
others. Such that ticket prices for first class passengers Is little bit higher because of extra
services and benefits that allotted to customers. While on the other side, the business class and
economy class are gradually lower as compared to first class and this is because of fewer
services offered only.
Not only this, Doumpos and et.al., (2017) stated that Jet Airways also offered
concessional fares to students, patients and senior citizen. Thus it is its marketing strategy that
force people to use Jet Airways only instead of others. Further, company also offered the some
additional benefits to its regular flyer in order to maintain loyalty towards a firm and this in turn
also maintain good relationship as well. Hence, it is analysed that marketing strategy is consider
as a key strength for the business and that is why, company focus on the marketing strategy
which helps the firm to raise the brand image at international level. Sometimes, company also
uses offers Visa card to its regular customers through the users my collect points after every
flight and then it will be redeemed at later date as well. That is why, Jet Airways also received an
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award of Most Respected Company in 2004 that clearly reflect, company operations and
strategies support a business for its growth and expansion. Hence, the growth and expansion of
the company is completely depend upon the marketing strategies which further assist the firm to
improve its financial performance too.
Jet Airway's Strategy and operations:
Jet Airway's strategy in 1990 was to position itself completely different from the Indian
Airlines so that it will become a dominant player in the Indian Aviation industry. In the study of
Woodward and Brindley (2019) it is analysed that Indian Airlines had a wide network of
destinations across India, along with range of extra services such that large and varied fleet of
aircraft, pick of flying and slots at airports. Though the industry provide good range of services
but still the performance of airline industry is not satisfactory. The planes and airports were
badly maintained and staff was completely different (quite rude with the passenger) and also,
operations were ridden with inordinate delays and cancellations. Despite this, the Jet Airways is
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