Own Your Suppliers: Merging in Aircraft Parts & Benefits - Essay Sample

Introduction

It is an approach whereby a firm pursues full ownership or enlarged possession of its suppliers. As an illustration, the merging in aircraft parts has shown amplified prices of these fragments, which in turn has prompt companies like Boeing to start assembling many of its aircraft parts on the inside.

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Advantages

It is reliable whenever the company requires various resources hurriedly. It is a perfect choice in the instance where there is a smaller number of suppliers for the items as compared to the number of competitors for the same items. Helps a firm produce item that meets its standard and regulations.

Disadvantages

High internal production costs in instances where the suppliers are many, and they sell their items at lower prices. Instances of interrupted supplies are bound to occur whenever the company runs out of raw materials significant for the production process. It might be costly in the long-run since the company is expected to increase its personnel as well as raise budget to run its supplies sector.

Solution

Being in an industry with many competitors, such as Spirit, competition for the available resources from suppliers is a major problem to the Southwest. Therefore, the approach of acquiring full ownership of its suppliers will help reduce the problem of competition for supplies with its competitors.

Market Penetration Strategy

This approach is aimed at increasing the market share of the existing services in the current market through superior marketing paraphernalia such as increasing advertising expenses, or increasing public relations efforts.

Advantages

The usage of this strategy increases the customers' base greatly. The present marketers do not have a specific service, hence helps to enlarge the market share. The idea that the company uses the existing products and services makes it less costly.

Disadvantages

Extra funds are spent in advertisements making it cut in the ultimate profits. The idea of using already existing products might not yield much as some customers have already fixed their minds concerning certain products and services. Thus, channels more company time to the activities as such promotions require direct contact with the market.

Solution

With the expansion of the market development strategy being the major problem to the Southwest, market penetration serves as a convenient approach to venture into the customer base and increase the number of potential customers, which in turn leads to increased market share.

Service Development Strategy

In this strategy, the company pursues to escalate sales by modifying present services. To actualize service development, the company incurs huge research and development costs.

Advantages

The company can offer quality services as it has made adjustments from its previous routine. Service development boosts the customers' confidence in the new advanced services since more research has been done on it. The company does not require to change the current personnel since they only need some training on the new developments concerning the adjustments.

Disadvantages

Research conducted by the company uses more money. Moreover, the company will require to spend more on doing advertisements for its newly launched services - service development.

Solution

Customers' satisfaction ought to be a priority for airlines such as the Southwest because passengers always want to pay for products that are worth their money. It is there prudent for the airline to apply the approach of service development, especially basing on customers' feedback, to meet the passenger's needs.

References

Abratt, R., & Bendixen, M. (2018). Strategic Marketing: Concepts and Cases. Routledge.