VivaColombia: The Challenge of Growing a Low-Cost Airline in Latin America

VivaColombia: The Challenge of Growing a Low-Cost Airline in Latin America Description

The case describes the emergence and business model of VivaColombia, a low-cost Colombian airline. The airline was established in 2008, although it did not begin operations until May 2012. Since its inception, VivaColombia has grown within both the domestic and international markets. It provides passenger transportation services to major and intermediate cities in Colombia and to major cities in international destinations. In 2015, VivaColombia had nine Airbus A320 aircraft serving 21 routes in Colombia and six international routes in North, Central, and South America. It had over 500 employees. In 2015, it carried over 2.9 million passengers on domestic and international flights, with sales of $US119.2 million and profits of more than $US971,000. Although VivaColombia's board of directors was satisfied with the results achieved to date, they disagreed about how to proceed. Some board members believed that VivaColombia should consolidate its domestic operations. They were concerned about the large number of customer service complaints that had accompanied its rapid growth. In addition, two low-cost international carriers were planning to enter the Colombian market, which the board feared would jeopardize VivaColombia's position in the domestic market. Other board members thought VivaColombia should take advantage of the opportunity to expand into Brazil, a major Latin American market, presented by Aerocivil, Colombia's civil aviation authority, which had authorized VivaColombia to operate the BogotA?, Colombia-Sao Paulo, Brazil route. Students must decide whether the company should expand into Brazil or consolidate operations in the domestic market.

Case Description VivaColombia: The Challenge of Growing a Low-Cost Airline in Latin America

Strategic Managment Tools Used in Case Study Analysis of VivaColombia: The Challenge of Growing a Low-Cost Airline in Latin America

STEP 1. Problem Identification in VivaColombia: The Challenge of Growing a Low-Cost Airline in Latin America case study

STEP 2. External Environment Analysis - PESTEL / PEST / STEP Analysis of VivaColombia: The Challenge of Growing a Low-Cost Airline in Latin America case study

STEP 3. Industry Specific / Porter Five Forces Analysis of VivaColombia: The Challenge of Growing a Low-Cost Airline in Latin America case study

STEP 4. Evaluating Alternatives / SWOT Analysis of VivaColombia: The Challenge of Growing a Low-Cost Airline in Latin America case study

STEP 5. Porter Value Chain Analysis / VRIO / VRIN Analysis VivaColombia: The Challenge of Growing a Low-Cost Airline in Latin America case study

STEP 6. Recommendations VivaColombia: The Challenge of Growing a Low-Cost Airline in Latin America case study

STEP 7. Basis of Recommendations for VivaColombia: The Challenge of Growing a Low-Cost Airline in Latin America case study

Case Analysis of VivaColombia: The Challenge of Growing a Low-Cost Airline in Latin America

VivaColombia: The Challenge of Growing a Low-Cost Airline in Latin America is a Harvard Business (HBR) Case Study on Global Business , Texas Business School provides HBR case study assignment help for just $9. Texas Business School(TBS) case study solution is based on HBR Case Study Method framework, TBS expertise & global insights. VivaColombia: The Challenge of Growing a Low-Cost Airline in Latin America is designed and drafted in a manner to allow the HBR case study reader to analyze a real-world problem by putting reader into the position of the decision maker. VivaColombia: The Challenge of Growing a Low-Cost Airline in Latin America case study will help professionals, MBA, EMBA, and leaders to develop a broad and clear understanding of casecategory challenges. VivaColombia: The Challenge of Growing a Low-Cost Airline in Latin America will also provide insight into areas such as – wordlist , strategy, leadership, sales and marketing, and negotiations.

Case Study Solutions Background Work

VivaColombia: The Challenge of Growing a Low-Cost Airline in Latin America case study solution is focused on solving the strategic and operational challenges the protagonist of the case is facing. The challenges involve – evaluation of strategic options, key role of Global Business, leadership qualities of the protagonist, and dynamics of the external environment. The challenge in front of the protagonist, of VivaColombia: The Challenge of Growing a Low-Cost Airline in Latin America, is to not only build a competitive position of the organization but also to sustain it over a period of time.

Strategic Management Tools Used in Case Study Solution

The VivaColombia: The Challenge of Growing a Low-Cost Airline in Latin America case study solution requires the MBA, EMBA, executive, professional to have a deep understanding of various strategic management tools such as SWOT Analysis, PESTEL Analysis / PEST Analysis / STEP Analysis, Porter Five Forces Analysis, Go To Market Strategy, BCG Matrix Analysis, Porter Value Chain Analysis, Ansoff Matrix Analysis, VRIO / VRIN and Marketing Mix Analysis.

Texas Business School Approach to Global Business Solutions

In the Texas Business School, VivaColombia: The Challenge of Growing a Low-Cost Airline in Latin America case study solution – following strategic tools are used - SWOT Analysis, PESTEL Analysis / PEST Analysis / STEP Analysis, Porter Five Forces Analysis, Go To Market Strategy, BCG Matrix Analysis, Porter Value Chain Analysis, Ansoff Matrix Analysis, VRIO / VRIN and Marketing Mix Analysis.

We have additionally used the concept of supply chain management and leadership framework to build a comprehensive case study solution for the case – VivaColombia: The Challenge of Growing a Low-Cost Airline in Latin America

Step 1 – Problem Identification of VivaColombia: The Challenge of Growing a Low-Cost Airline in Latin America - Harvard Business School Case Study

The first step to solve HBR VivaColombia: The Challenge of Growing a Low-Cost Airline in Latin America case study solution is to identify the problem present in the case. The problem statement of the case is provided in the beginning of the case where the protagonist is contemplating various options in the face of numerous challenges that Vivacolombia Domestic is facing right now. Even though the problem statement is essentially – “Global Business” challenge but it has impacted by others factors such as communication in the organization, uncertainty in the external environment, leadership in Vivacolombia Domestic, style of leadership and organization structure, marketing and sales, organizational behavior, strategy, internal politics, stakeholders priorities and more.

Step 2 – External Environment Analysis

Texas Business School approach of case study analysis – Conclusion, Reasons, Evidences - provides a framework to analyze every HBR case study. It requires conducting robust external environmental analysis to decipher evidences for the reasons presented in the VivaColombia: The Challenge of Growing a Low-Cost Airline in Latin America.

The external environment analysis of VivaColombia: The Challenge of Growing a Low-Cost Airline in Latin America will ensure that we are keeping a tab on the macro-environment factors that are directly and indirectly impacting the business of the firm.

What is PESTEL Analysis? Briefly Explained

PESTEL stands for political, economic, social, technological, environmental and legal factors that impact the external environment of firm in VivaColombia: The Challenge of Growing a Low-Cost Airline in Latin America case study. PESTEL analysis of " VivaColombia: The Challenge of Growing a Low-Cost Airline in Latin America" can help us understand why the organization is performing badly, what are the factors in the external environment that are impacting the performance of the organization, and how the organization can either manage or mitigate the impact of these external factors.

How to do PESTEL / PEST / STEP Analysis? What are the components of PESTEL Analysis?

As mentioned above PESTEL Analysis has six elements – political, economic, social, technological, environmental, and legal. All the six elements are explained in context with VivaColombia: The Challenge of Growing a Low-Cost Airline in Latin America macro-environment and how it impacts the businesses of the firm.

How to do PESTEL Analysis for VivaColombia: The Challenge of Growing a Low-Cost Airline in Latin America

To do comprehensive PESTEL analysis of case study – VivaColombia: The Challenge of Growing a Low-Cost Airline in Latin America , we have researched numerous components under the six factors of PESTEL analysis.

Political Factors that Impact VivaColombia: The Challenge of Growing a Low-Cost Airline in Latin America

Political factors impact seven key decision making areas – economic environment, socio-cultural environment, rate of innovation & investment in research & development, environmental laws, legal requirements, and acceptance of new technologies.

Policy Making Impact on VivaColombia: The Challenge of Growing a Low-Cost Airline in Latin America

Government policies have significant impact on the business environment of any country. The firm in “ VivaColombia: The Challenge of Growing a Low-Cost Airline in Latin America ” needs to navigate these policy decisions to create either an edge for itself or reduce the negative impact of the policy as far as possible.

Data safety laws – The countries in which Vivacolombia Domestic is operating, firms are required to store customer data within the premises of the country. Vivacolombia Domestic needs to restructure its IT policies to accommodate these changes. In the EU countries, firms are required to make special provision for privacy issues and other laws.

Competition Regulations – Numerous countries have strong competition laws both regarding the monopoly conditions and day to day fair business practices. VivaColombia: The Challenge of Growing a Low-Cost Airline in Latin America has numerous instances where the competition regulations aspects can be scrutinized.

Import restrictions on products – Before entering the new market, Vivacolombia Domestic in case study VivaColombia: The Challenge of Growing a Low-Cost Airline in Latin America" should look into the import restrictions that may be present in the prospective market.

Export restrictions on products – Apart from direct product export restrictions in field of technology and agriculture, a number of countries also have capital controls. Vivacolombia Domestic in case study “ VivaColombia: The Challenge of Growing a Low-Cost Airline in Latin America ” should look into these export restrictions policies.

Foreign Direct Investment Policies – Government policies favors local companies over international policies, Vivacolombia Domestic in case study “ VivaColombia: The Challenge of Growing a Low-Cost Airline in Latin America ” should understand in minute details regarding the Foreign Direct Investment policies of the prospective market.

Taxation & Regulation Impact on VivaColombia: The Challenge of Growing a Low-Cost Airline in Latin America

Corporate Taxes – The rate of taxes is often used by governments to lure foreign direct investments or increase domestic investment in a certain sector. Corporate taxation can be divided into two categories – taxes on profits and taxes on operations. Taxes on profits number is important for companies that already have a sustainable business model, while taxes on operations is far more significant for companies that are looking to set up new plants or operations.

Tariffs – Chekout how much tariffs the firm needs to pay in the “ VivaColombia: The Challenge of Growing a Low-Cost Airline in Latin America ” case study. The level of tariffs will determine the viability of the business model that the firm is contemplating. If the tariffs are high then it will be extremely difficult to compete with the local competitors. But if the tariffs are between 5-10% then Vivacolombia Domestic can compete against other competitors.

Government Scheme & Subsidies Impact on VivaColombia: The Challenge of Growing a Low-Cost Airline in Latin America

Research and Development Subsidies and Policies – Governments often provide tax breaks and other incentives for companies to innovate in various sectors of priority. Managers at VivaColombia: The Challenge of Growing a Low-Cost Airline in Latin America case study have to assess whether their business can benefit from such government assistance and subsidies.

Consumer protection – Different countries have different consumer protection laws. Managers need to clarify not only the consumer protection laws in advance but also legal implications if the firm fails to meet any of them.

Political System & Stability, and its Impact on VivaColombia: The Challenge of Growing a Low-Cost Airline in Latin America

Political System and Its Implications – Different political systems have different approach to free market and entrepreneurship. Managers need to assess these factors even before entering the market.

Freedom of Press is critical for fair trade and transparency. Countries where freedom of press is not prevalent there are high chances of both political and commercial corruption.

Corruption level – Vivacolombia Domestic needs to assess the level of corruptions both at the official level and at the market level, even before entering a new market. To tackle the menace of corruption – a firm should have a clear SOP that provides managers at each level what to do when they encounter instances of either systematic corruption or bureaucrats looking to take bribes from the firm.

Independence of judiciary – It is critical for fair business practices. If a country doesn’t have independent judiciary then there is no point entry into such a country for business.

Government attitude towards trade unions – Different political systems and government have different attitude towards trade unions and collective bargaining. The firm needs to assess – its comfort dealing with the unions and regulations regarding unions in a given market or industry. If both are on the same page then it makes sense to enter, otherwise it doesn’t.

Economic Factors that Impact VivaColombia: The Challenge of Growing a Low-Cost Airline in Latin America

Social Factors that Impact VivaColombia: The Challenge of Growing a Low-Cost Airline in Latin America

Technological Factors that Impact VivaColombia: The Challenge of Growing a Low-Cost Airline in Latin America

Environmental Factors that Impact VivaColombia: The Challenge of Growing a Low-Cost Airline in Latin America

Legal Factors that Impact VivaColombia: The Challenge of Growing a Low-Cost Airline in Latin America

Step 3 – Industry Specific Analysis

What is Porter Five Forces Analysis

PESTEL stands for political, economic, social, technological, environmental and legal factors that impact the external environment of firm in VivaColombia: The Challenge of Growing a Low-Cost Airline in Latin America case study. PESTEL analysis of " VivaColombia: The Challenge of Growing a Low-Cost Airline in Latin America" can help us understand why the organization is performing badly, what are the factors in the external environment that are impacting the performance of the organization, and how the organization can either manage or mitigate the impact of these external factors.

Step 4 – SWOT Analysis / Internal Environment Analysis

Step 5 – Porter Value Chain / VRIO / VRIN Analysis

Step 6 – Evaluating Alternatives & Recommendations

Step 7 – Basis for Recommendations

References :: VivaColombia: The Challenge of Growing a Low-Cost Airline in Latin America case study solution