Cost Leadership Essay

Strategy and complex body partThe purpose of business-level strategies is to create differences between the firms rank and those of its competitors. To position itself otherwise from competitors, a firm must decide whether it intends to perform activities differently or to perform different activities.Cost leadership strategytiger airways has chosen the former it exploiting a cott leadership strategy. It has an integrated set of actions interpreted to produce services with features that are acceptable to customer at the last-place cost relative to that of competitors. Tigers costs structure foolows the shirt-haul low-priced model of Ryanair. It targets a broad customer segment and concentrates on conclusion ways to lower its costs relative to competitors by constantly rethinking how to release its primary (inbound and outbound logistics) and support activities to strangle costs even further. alike most other carriers, Tiger airways uses a number of method to reduce costs.Kee ping labor cost lowTiger airways does not perish much on advertising or marketing. Its flight booking is alone through its online portal or call center. It does not engage way of life in ticket distibution in order to minimize the cost in particular that of labor.Tiger airways in any case reduces labor costs by using a streamline fleet that reduces the training and retraining expenses. Employees are generally salaried according to their performance and generally less than traditional airlines. Tiger airways also tries to keep its employee size at a minimum requirement. Retraining opportunities are limited. This leads to shortage of qualified pilots in high-demand periods. Moreover, the company does not have a cadet pilot programme (CCP) like many other airlines such(prenominal) as SIA thus tiger airways does not have pipeline of pilots for the airless future.No frills services and revenuesTiger airways has managed to price its tickets at comprtitive prices by providing no fri lls services. That means, tiger airways also recognizes that the willingness to spend might vary among its consumer base and actively tap onto that. In the financial year ended 31 manifest 2010, 26% of tiger airways groups revenues comes from ancillary revenue, which was at $127.6 one thousand thousand as compared to the total revenue of $494.6 million. Tiger airways charges for many optional scantys. These extra can related to alternative services like method of salary when buying ticket. It also charges for extra services like luggage compensation and seat fee. Tiger airways also offers food and beverage for purchase as part of the tiger bites buy-on-board programme at above-market prices.