Wizz Air Report

This report provides a comprehensive analysis of Wizz Air, including an overview of the company, Porter's Five Forces analysis, and analysis of inbound logistics, outbound logistics, and operations. It also explores how Wizz Air can use information technologies and innovative ideas to improve their business processes.

Wizz Air Report

Table of Contents
INTRODUCTION...........................................................................................................................1
MAIN BODY...................................................................................................................................1
Overview of company-................................................................................................................1
Porter's Five Force Analysis-......................................................................................................2
Analyzation of inbound logistics, outbound logistics and operation-.........................................5
Two support activities within Porter's Value Chain-..................................................................6
Identification of key values adding activity-...............................................................................7
Summarizing and Reflection-.....................................................................................................7
CONCLUSION................................................................................................................................9
REFRENCES.................................................................................................................................10

INTRODUCTION
Wizz Air is the low costing airline which had its headquarter in Budapest. Company is
operating its business acorns 44 countries successfully. The total revenue of company is high as
compared to the other airlines situated within the country. The above report has been prepared on
the Wizz Air which reflects the competitive external and internal environment of company.
The above report includes introduction and background information of the Wizz Air
along with several discussing several goods and services for the airline. The report further
carried forward with the analyzation of competitive environment for company through
application of Porter's Five Forces analysis. Analyzation of inbound logistics, operation and
outbound logistics and any of the two supporting activities in the Porter's Value Chain for Wizz
Air. The report ends with identification of key value adding activity. Summarizing and reflecting
further that how company can use information technologies and utilize innovative ideas for
improving process of businesses.
MAIN BODY
Overview of company-
Introduction:
Wizz Air is corporate as the Wizz Air Hungary. It is the minimum cost airline. They had
their headoffice in Budapest. Many cities within Europe are served by this airline along with
several destinations across Middle East and the North Africa. This is one of the biggest fleet for
Hungarian airlines. Currently serving more than 44 countries. As per data of 2019, they have
transported over 39.8 million passenger to various countries (Vatankhah and Darvishi, 2018).
The total revenue earned by company is £1,948.0 million. They employees over more than 3000
employees into their airlines.
Background:
Wizz Air has been constituted in the September 2003. Leading investors of company is
Indigo partner, private Americans equity organization. First flight has been flown on 19 May
2004 from the Katowice International Airport. The current CEO of airline is Jozef Varadi,
former CEO was Malev Hungarian Airlines. Wizz Air is registered in Pest Country that is
Hungary. Further they had gain solidified growth and became Eastern and the Central Europe's
biggest lower cost airlines. On November 2015 they had successfully completed initial public
offerings. They also started trading on the London Stock Exchange (Zhang and et.al., 2018). In
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2017, they had also further planned to launching British division that is known as Wizz Air in
UK. It had also announced overall brand rejuvenation and new aircraft leverage for responding
to the maturing need of travellers, taking the place within Europe's main airline. They had move
to the most vibrant, sophisticate feel & fresh. Few of other more initiative are being taken that
are priority boarding, seat allocation, increased fare system among many another. In 2016, it was
also named as Value Airline of the year through Air Transport World, which is directional
industry magazine.
Products:
It is value-oriented airlines which focus on the innovation all way to journey of
consumer. Main aim of airline is for let flying cheap for citizen of CEE, they also try for render
newer experience of travel to all of their travellers in EU. The Latest technology has been
implemented so that they can ensure Wizz Air's experience for both value of money in terms of
money. Simple service model is offered by airlines to consumer which is ticket-less travelling,
time & cost-efficient secondary airport, one class all-leather seats configurations and further
catering on the demands for the additional costing (Zhao, 2016). Their best-in-class technology
in aircraft is to be maintained by most reputable organizations that are named as Lufthansa
Technik. It help Wizz Air to gain consistently high level of services to the travellers.
Porter's Five Force Analysis-
The Porter's Five Force is the analytical framework or tool which is formulated in 1979
by Michael E. Porter. This model is introduced for developing by system for evaluating positions
of organization across the industry and for considering type of vertical and horizontal threat
company is might be facing. The horizontal threats is for gaining competitive threat, that is new
organization while entrance into marketplace the and achieving huge share. Whereas the threat
let company to gain competitive advantage that can be bargaining power of suppliers or buyers.
Within airline industry, buyers had bargaining power as they could instantly and quickly switch
from single carrier to other by utilizing third-parties several tour-booking applications and
websites. The level of competition within industry is huge. The big airlines generally flies to
similar place from the same airport for the similar pricing. Several amenities which are offered
by airlines or lack of amenities, that are same and seats within the coach are cramped no matter
which airline is being chosen. The rivals of Wizz Air across airline industry includes Ryanair,
Flybe, easyJet, Traveloka, Pegasus Airlines, Vueling Airlines and Norwegian Air Shuttle. As the
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air travel experience of the consumer is significantly same no matter which airlines are to be
opted by them further. The airlines are consistently facing a threat of loosing their passengers to
the competitors (Zinovieva and et.al., 2016). Wizz Air had managed the competitive threats
through its extensive marketing campaigns and low price ticket which helps them to attract wide
range of traveller to their airlines and thus brand awareness of company has also been established
within the marketplace. So they can sustain in market for long term and achieve their overall
goal and objective further.
Bargaining Power of Buyers-
Buyers had an immense power over the airlines due to cost and effort which are needed
for switching from single carrier to the other is minimum. The emergence and increase in
popularity of third party's website for booking of ticket and applications for smartphone it is the
major issue to the industry. Nowadays most of the travellers not contact the airlines, such as
Wizz Air, tickets are directly books. The passenger access to application or sites which compare
the rates among all the flight, enter the trip itineraries, and then select the less expensive deal
which let them to travel to their preferred destination (Martinez and et.al., 2019). The Wizz Air
could respond to this force of market by conducting market research and providing more direct
flight at low price to several destinations which are mostly searched by the travellers. Other than
that they can also further strengthen relationship among credit card organization and striving to
offer best reward program, thus wide range of consumer can be attracted towards the Wizz Air
significantly.
Threats of New Entrants-
The potential threat to market specify a threat to the Wizz Air. Barrier to entry within
airline industry are remarkably huge. Operating cost is massive, the regulation of government
which must be navigated by company are exceedingly complex. There is no single airline to be
founded within 21st century which had even 2% of market shares. Thus, the company can also
have threats from new entrants who are entering into the marketplace. They can further compete
with rivals within the marketplace through rendering effective services to their consumer at
minimum price so that interest of consumer can be gained by them. Wizz Air already low pricing
for the services which is given by them to their consumer. The more emphasis is to gain by
airline for their consumer so that they can build strong reputation within marketplace.
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Bargaining Power of Suppliers-
The airlines suppliers list is very wide. It is asymmetry place where bargaining power
directly into the hand of airline. Bargaining power for Wizz Air is generally strong, as they had
achieved the largest base with more than 66 destinations. Generally, Wizz Air suppliers had
strong incentive for keeping relationship on the good terms (Upadhaya and et.al., 2018). And
thus if there is any problem within the relationship of supplier they will get through with another
one. Suppliers, is unlikely to be found another buyer for being capable of substitution sale
volume which are depicted by the Wizz Air.
Threats of Substitute-
Substitute within the Porter's Five Force Model is no a good and services which compete
straight with organization's offering but act as substitutes for them. Thus, flight from the
Budapest to England is not be consider as the substitute for Wizz Air with similar start and end
point. Example of the substitutes are making trip by car, train or bus. Unless trip is of short
duration, that are travelling from the Los Angeles to Las Vegas, no method of the travel rate as
viable substitute for air travels (Santana, Valle and Galan, 2019). New York to the Los Angeles
flight will take 6.5 hours, but along with that trip by car and bus will take 41 hours and whereas
train can also not get an individual there quickly. Until the new technology comes the air travel is
fastest and the most convenient way for an individual who needs to travel long distance ahead.
Somehow Wizz Air can face little threat from the substitute method of the travel.
Hence, Wizz Air could take advantage of economies of the scales which is beard by
company across industry, fighting with new entrants by the cost advantage. They must focus on
rendering the innovation into their services and maintaining the low price for the services which
is offered by them to their guest and thus they can differentiate their services from that of new
entrants (Martinez and et.al., 2019). They can further spend huge amount on marketing so that
they can develop strong brand reputation. Wizz Air could have various suppliers for its different
geographic location. So the efficiency in supply chain can be further maintained by them. They
must focus on rendering great quality services to their passengers so that they can gain huge
loyalty base for their consumers.
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Analyzation of inbound logistics, outbound logistics and operation-
Porter's Value Chain is framework that enables for identifying internal activity of travel
business which add value and further create competitive advantage. The several categorize
within this framework helpful in identifying activities that create product and service offered by
company (Mahtani and Garg, 2018). Operation of travel businesses are formed of support and
primary activities that help in enhancing value of the goods. Further adding value to the goods
translate high margins. Framework adopted from the Poon in 1993 that how a value can be
included to tourism sector that would be considered for developing this analysis.
Primary activities- The Wizz Air had adopted the cost leadership strategy for gaining the
competitive advantage, this analysis will helpful for them to focus on how airline manage to keep
the costing low and then further gain huge margins as well.
Inbound Logistics:
Wizz Air had maintained second lowest cost unit in Europe utilizing suppliers who will
be supplying the airline with cheap rate. Airline mainly utilize airports in Eastern Europe as their
home bases where aircraft for staying overnight, which had translated into the cheaper rates for
airports. The most airport used by the airlines are also secondary airport which is helpful in
converting the cheap rates (Kvedaraviciene and Kazlauskait, 2019). The young fleet of the
aircraft being used by company which indicates that they are using modern and the fuel efficient
aircraft, helps them in saving money. They also have credit agreement for suppliers that allows
for the cost reduction. Wizz Air had a short-term hedging policies for EUR/USD exchange rate
and fuel to reduce the short-term volatility into the earnings.
Operations:
Wizz Air had to manage reduced cost of making reservations by optimized utilization of
internet. Automated system of making reservation means that organization do not need require
for spending money for running additional office and further employing extra staff. For booking
the tickets on phones, Wizz Air utilizes the premium phone number that cost £1.1/ Min for
covering cost of their operating for the all call centres (Konishi and et.al., 2017). The employs
staff which live an hour away from the base that means the company is employing individual
who lives in Central-Eastern Europe, in which average wage is low. Thus, the company has
highly motivated workers, at low cost.
Outbound Logistics:
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Another way of keeping low cost base is by breaking down services into small elements
for avoiding additional expenses. For example, basic service of flight do not include any
luggage, meal and airport check-in. If a consumer need to enjoy this privilege, they had pay
additional fee for it. The additional services are sold by airlines for maximizing the margin that is
ancillary products (Ivančić and et.al., 2017). This business model render the consumer
availability of goods development suiting the requirements, that adds value for consumer and
maximize margin for airline. The single class configuration has been utilized by the airlines for
maximizing seat capacity in single family type of aircraft that reduce cost of servicing. Wizz Air
is further also concentrating on the short turnaround times (TAT) that ensures plane are in air at
most time for reducing cost of air facilities. This significantly saves money of airlines, but along
with add value to consumer as per the time efficient nature.
Two support activities within Porter's Value Chain-
Technology and development:
As per the advance era the more and more technologies are to be implemented into the
airlines so that they can effectively render great services to their passengers. Wizz Air can have
technical integration within the distribution, marketing and human resource activities so that they
can easily achieve their overall goal and objective for airlines (Ilkhanizadeh and Karatepe, 2017).
They can introduce automation software, data analytics and technology-supported consumer
services. The research and development department of Wizz Air had classified into this category.
Thus, by implementing the new technologies and innovation let their consumer to be connected
with them further and can render satisfactory services to their passengers with low costing.
Human resource Management:
The human resource department can analyze various aspects of HR that can includes the
selecting, recruiting, hiring, performance management, rewarding and personnel activities.
Effective management of HR let Wizz Air to reduce competitive pressures based on the
commitment, motivation and skill of their workforce (Crescenzi and Gagliardi, 2018). Airline
could also gain their objective of cost minimization by optimization of cost for hiring and the
training with related return on it. They had a huge dependency on the talents of their employees
and thus it will enhance the effectiveness of the support activity of value chain. Hence, by
recruiting talented and skilled employees into the airline they can render the great services to the
passengers. So the overall goal and objective of Wizz Air can be achieved.
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Identification of key values adding activity-
Marketing and sales:
Wizz Air utilize their own premises for advertising slots for another companies. For
example- There is space for advertisements in the magazine of Wizz which is on each and every
flight, along with at the back of every seat which could be utilized by company for promoting
utilized by Wizz Air. This let them to increase profit, by high margin facilities for advertising.
They can promote themselves by using several methods (Castiglioni, Gallego and Galán, 2018).
Some methods which are cost effective can be included into the promotional material on the
social media that are Twitter, Facebook, LinkedIn and YouTube etc., which is utilized for PR to
add value through connecting with public. The Wizz Air promote by using more effective
traditional media, that is billboards and Televisions. They also focus on selling the electronic
ticket which helps company in reducing cost for printing the tickets and hiring extra staff for it.
Summarizing and Reflection-
There are more than 30 low cost airlines within Europe. In 2016, the fuel is accounted for
30% of expense for Wizz Air. The airline is dependent on terminal space, aircraft parking and
time slot for operating flight and charge with these services are main components of costing
airlines. The consumer has huge power for the strategy of price driven, due to this price is reason
why consumer are choosing the company. Great financial capability of airline, and its leading
position in CEE and huge competition would put the new entrant off from entering the
marketplace. Wizz Air is having very low cost unit, that state that the substitute for their airline
will not be attracted for the international travel (Bowen and et.al., 2018). Thus, further the airline
can gain huge competitive advantage among its rivals and achieve huge success within the
marketplace. With the advancement of technology within the airlines so that they can have
further more innovative idea and thus they can improve their business processes. The sale and
revenue of Wizz Air could also be enhanced if company is gaining huge competitive advantage
in the favour of their rivals. So the competitive position of airlines within the industry among its
rivals could be enhanced. By rendering the satisfactory services to their consumer at minimum
cost they can create a huge loyalty base for the customer. The technological advancement let
Wizz Air to significantly enhance their performance within the industry.
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CONCLUSION
From the above study it has been concluded that the external and internal environment
plays a major role in the growth and development of company. Implementation of technological
advancement into the airline helps them to perform good in market and gain overall goal and the
objective of organization as whole. By analyzing the competitors within the marketplace airlines
can effectively build strategies against them and thus they can effectively compete with them &
gain huge competitive advantage with regard to such companies. A distinctive market analysis
helps company to sustain in market for long term. The huge consumer loyalty base can be build
up by company within marketplace if they are providing satisfactory services and goods to their
consumer. The company can know about the needs and demand of consumer and thus as per
their preference services must be given to them significantly.
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REFRENCES
Books and Journals
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