Strategic Management Report: Arik Air's Market Analysis and Growth

This report provides a strategic analysis of Arik Air, a leading Nigerian airliner, examining its market positioning, business strategies, and challenges. The analysis covers Arik Air's current market limitations, its positioning as a premium service provider, and the effects of its existing plans. The report delves into Arik Air's corporate and business strategies, including market leadership in Nigeria, route expansion, and differentiation strategies. A SWOT analysis highlights the airline's strengths, weaknesses, opportunities, and threats. The report applies the BCG matrix, positioning Arik Air as a cash cow, and uses the Ansoff matrix to explore market penetration, product development, and market development strategies. The conclusion emphasizes growth opportunities in foreign markets, the need for strategic alliances, and the associated global market risks. The report references several academic sources to support its findings.

Strategic management

Introduction
• Arik Air is the leading airliner for Nigeria
• They are having national as well as international routes
• Currently they are facing issues in terms of efficiency
(Geraldine 2013)
• Market limitation is another major challenge for them

Market positioning
• Currently, Arik air is positioned as premium offerings
• Positioned on the basis of extensive route network
• Gaining leadership by providing more area access to the
passengers (Adeola and Adebiyi 2014)
• Not catering to larger low cost carrier segments

Effects of existing plans
• Market potentiality is limited for Arik air with limited business
areas
• Larger customer segments are not getting catered
• Business growth is negligible and stagnant
• Not immune to the global threats (Heinz and O’Connell 2013)

Relationship between business strategies
• The corporate strategy of Arik air includes maintaining the
market leadership position in Nigeria (Ganiyu 2017)
• This also includes covering the entire African region
• Increasing the route network in the existing market

Cont.
• Offering from larger number of airports across Africa
• Business strategy of Arik air also includes having more routes
in popular destinations in Africa and a few outside
• Market focus is being initiated by them in catering the
premium customers
• Differentiation is also used to have distinctive service process
but in intensive approach

Cont.
• Inducting more fuel efficient jets to reduce the cost of fuel
• Designing the physical evidences in distinctive manner
• Having both wide and narrow body aircrafts for different
routes and requirements
• Getting more of the global trend in terms of service process

SWOT analysis
Strengths
• Extensive market presence in the African region
• Market leadership position in Nigeria
• Access to larger capital funding
• Existing network with European regions such as London

Cont.
Weaknesses
• Limited market presence within the African boundary
• Not globally known
• Not being advanced as their global contemporaries
• Less inventory in hand

Cont.
Opportunities
• Entering in the emerging economies will increase the business
• Initiating low cost carrier services will increase the market size
• Focusing more on profitable routes only

Cont.
Threats
• Emergence of economic slowdown in Africa and globally
• Entry of new global airliners in the Nigerian market
• Increase in the cost of jet fuel
• Emerging trend of low cost carrier

BCG analysis
• Arik air is only having single offering, flight hauling service
• According to the BCG matrix, it can be positioned as cash cow
• Market share is high for Arik air but current growth rate is low
• Thus, market share is also not increasing further