Strategic Management Assignment

Assignment B (STRA02-7/DLO2 05/2025

Total: 20 marks
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I acknowledge using [AI tool/technology name] and [URL/link] to generate.... Prompt: I entered the following prompt/s...
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Example 1

I acknowledge using Google Gemini [https://gemini.google.com/] to generate an outline for my assignment.

I entered the following prompt:

Provide an outline for a 500-word essay on the impact of climate change on rural communities in South Africa.

I used the output at the initial stage of the assignment process to help plan my answer structure. I modified the outline generated, discarding several suggested paragraphs and replacing them with my own ideas based on the additional research and reading I completed and referenced below.

SECTION A (20 MARKS) FLYSAFAIR

Read the case study below and answer the question that follows.

Inside FlySafairs disruptive innovation strategy

Self-professed digitally-obsessed low-cost airline FlySafair has no plans to pump the brakes on its technology and innovation efforts, given the competitive edge it can gain. This is according to CIO Eswee Vorster, speaking in a wide- ranging video interview with ITWeb.

This year marks 10 years of low-cost carrier FlySafair in the skies. Vorster says that FlySafairs digital strategy approach centres on technology, data and processes. It's really around efficiencies, ultimately. We do it in two ways firstly, we look internally towards the operation itself. How can we work better? How can we streamline processes? It's not always those big things that you have to do when you speak digital; there are small enhancements that we focus on, but a lot of the efficiencies that were trying to gain when it comes to digital are operational-focused.

The second important part is passenger-facing. Today's travellers are more tech-savvy than ever, which is exciting. This is not to introduce complex solutions but [something that is] hassle-free. It's about giving the customers tools, data and easily usable information, which is a key driver for our digital strategy. On the operational front, Vorster explains that this mainly concerns processes, which is why the airline has been exploring robotic process automation (RPA) over the past year. RPA aims to see all those repetitive, mundane tasksare automated to save time. We've rolled out just under 10 processes so far within the organisation. With RPA, weve seen theres definitely a cost-saving element, but time-saving is of the essence. This is so that we can apply our resources the people working on those mundane tasks to focus on other core elements within the airline. We've seen RPA as a big success driver for us until now.

Clickatells 2022 Chat Commerce Trends Report: Travel Edition found that 87% of consumers would like to use mobile messaging to interact with airlines, and 77% said they are willing to use a mobile payment link with travel brands. It noted that commerce within mobile messaging is becoming the preferred way for consumers to transact, accounting for 71% of retail traffic and generating 61% of online shopping orders.

FlySafair is among the airlines that have embraced the trend of interacting and transacting with customers via digital channels, including its website, mobile app and now WhatsApp. While there have been many highlights in bringing these services online, there have been some challenges, reveals Vorster, noting the FlySafair crazy birthday promotions among the challenges.

At the start, he comments that the airline focused on the core element, which has been its website as the storefront and selling point. Weve been obsessed with our website since day one on the e-commerce side. This is one of the things Ive been involved with, to get it off the ground and flowing. Its an absolute learning experience as you grow. Aviation tends to have a legacy technology environment, so the systems are still old. It's really hard to innovate around that, but we set ourselves the goal that the one thing we will do is be a disruptive innovator in the tech space, and that became part of our DNA as we grew through the years.

Weve moved forward in terms of where we are. We must replace and upgrade some of our core operational systems, which is a different beast. Vorster estimates the FlySafair mobile app, launched a few years ago, has reached about
1.6 million to 1.7 million downloads. We're pushing that very hardand not just as a sales channel. Its about managing your journey, getting updates on where your bag is and informing customers consistently throughout their journey.

Something refreshing that we've done recentlywe've launched a WhatsApp chat commerce channel. Passengers can check in online and track their journey through WhatsApp. Almost everybody in South Africa has WhatsApp, right? If you've booked with me, I can automatically give you the information at your fingertips in an application you use, so things like that are quite exciting.

Tech drives scalability

With all the recent noise around artificial intelligence (AI), Vorster says FlySafair is curious to see what the fuss is about and how AI can be leveraged in the aviation industry. It comes back to mining data, machine learning and those types of things it's very exciting out there. Some of it is still unknown, but we are testing the waterand will see what it entails. We see technology as a competitive edge. It's not just something we need to do; we are extremely passionate about technology and what we want to put out there. Also, for the business, scalability is important. It's a disruptive industry;

things can go well one day and not so much another, and you need to be able to adapt to that. Scalability and the speed with which you want to move with technology is something we drive. It's a core focus for us on a high level within the organisation.

Whether FlySafair customers can expect to connect to Wi-Fi while in flight, Vorster notes there needs to be a strong business case for it. First and foremost, were a low-cost carrier, so that means were trying to keep our operational cost as low as possible so that we can give our passengers prices as low as possible no frills and no fuss. If we start implementing Wi-Fi on planes, ticket prices will ultimately go up because well have to incur the cost of Wi-Fi. I know it would be cool, but for now, its not on our radar, to be honest. Some regional flights are longer; we might start looking at something there in the future, but the domestic flights arent long. Is there a business case for Wi-Fi locally? Im not too sure.

FlySafair's fleet size is 34 aircraft, with 28 Boeing 737-800s and six Boeing 737- 400s. The airline is based at O.R. Tambo International Airport. FlySafair's current destinations include nine domestic South African destinations, four neighbouring country destinations, and two island destinations in Mauritius and Zanzibar.
Source: Adapted from: Mzekandaba, S. 2024. Inside FlySafairs disruptive innovation strategy. [Online] Available from: https://www.itweb.co.za/article/video-inside-flysafairs-disruptive-innovation- strategy/GxwQDM1D2VP7lPVo [Accessed: 2024-10-22].

Refer to the FlySafair case study above before answering the questions that follow.

Question 1 (20 marks)

Central to the internal analysis for effective strategy development, specifically a resource-based view (RBV), the following three broad resource categories will ensure distinctive competencies and, therefore, competitive advantages:
1. tangible assets,
2. intangible assets and
3. organisational capabilities.

1.1 As part of the process for successful strategy formulation, show how FlySafair has applied the three categories of resources. Include any one example of each resource from the case study to justify your answer.
(3 x 4 = 12)

1.2 Explain to the management of FlySafair the importance of these three resource categories (tangible assets, intangible assets, and organisa- tional capabilities) and provide one practical example of how each can be leveraged for competitive advantage. (3 x 2 + 2 = 8)