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STRATEGY IMPLEMENTATION PROJECT

INTERGLOBE AVIATION LTD.


(INDIGO)

Group 7
Abhishek Sukhadia H058
Devansh Mehta
Poonam Pany
Akshaya Save
Saheb Sareen
Shivangi Tiwari
Tania Goel
Contents
Introduction ............................................................................................................................................. 3
Industry Overview .................................................................................................................................. 3
Historical Background of IndiGo ............................................................................................................ 5
Rationale for the Study ........................................................................................................................... 6
Hypothesis .............................................................................................................................................. 7
Research Methodology ........................................................................................................................... 8
Indigo’s Strategy ..................................................................................................................................... 8
Mission................................................................................................................................................ 8
Marketing Strategy.............................................................................................................................. 8
Operational Strategy ......................................................................................................................... 12
Human Capital Management ............................................................................................................ 13
Cost Structure & Profitability ........................................................................................................... 14
Price comparison of Indigo versus Other airlines ............................................................................. 15
Key Findings ......................................................................................................................................... 17
Conclusion ............................................................................................................................................ 18
Introduction
Since the arrival of Air Deccan, Indigo, SpiceJet and other low cost carriers, the face of Indian
aviation industry has changed drastically. Also with rising incomes, urbanization, changing life style
and lowering of air fares, it has become possible for an average middle class person to fly. Out of all
this, Indigo has been able to stand out from its competitors since its inception. Indigo Airlines banked
on unique and innovative strategies, winning the loyalty and confidence of not only customers, but
also other stakeholders like the Indian government. Maintaining an optimal growth pace, Indigo
Airlines also ventured into international markets and became the only low-cost airline in India with
permission to fly internationally.

Indigo has consistently maintained a good market position and is the first Indian airline company to
turn profitable. It’s unique business strategy and focus on cost control has helped them achieve this
together with on-time performance. Within last 6 years of operation in Indian market it has gained the
highest market share of ~40% (DGCA 2017). 1 It is also recognized as the 4th most punctual airline
globally in 2018 and has the largest fleet size in India. In terms of its customer service it has achieved
the lowest complaints per passenger in the Indian airline market. Thus from the perspective of
studying strategy implementation, Indigo seems to be a good company to understand. Various data
from secondary research were collected and analyzed to test the hypothesis of the research.

Industry Overview
The civil aviation sector has surfaced to be the fastest growing sector in the nation. It is on the path to
become the world’s largest domestic civil aviation market in the coming fifteen years, as per Mr.
Jayant Sinha, Union Minister of State for Civil Aviation, GOI. India aviation industry brings in huge
growth due to large and growing middle class population, its growing aspirations, rapid economic
growth and better disposable incomes.

The expansion in the industry has been driven by factors such as2:

 Advanced information technology (IT) breakthrough

 Low-cost carriers

 Foreign Direct Investment (FDI) in domestic airlines

 Modern airports

 Growing emphasis on regional connectivity.

1
DGCA 2017 Report
2
Indian Aviation Industry, IBEF 2018
By 2020, India will become the 3rd largest aviation market in the world. Also the Indian Aviation
Industry will be holding around 69% of the total share of the airlines traffic in the region of South
Asia. Indian airports are predicted to handle: 100 million passengers including 60 million domestic
passengers Cargo in the range of 3.4 million tonnes per annum.2

According to the DGCA (Directorate General of Civil Aviation) and MOCA (Ministry of Civil
Aviation), the Indian domestic air traffic is expected to cross 100 million passengers by 2017 from 81
million passengers in 2015. Indian domestic airlines also carried 23 million passengers in during the
period of January-March 2016 as compared to 18.5 million during the same period last year. This
period thereby registered a growth of 24.03%3.

Porter’s 5 Forces for Aviation Industry

The Porter’s 5 forces is used as an effective measure of understanding the competitive forces and
overall industry structure of the market. It is a crucial measure in enabling a strategic decision making
process. The Porter’s 5 forces shape the industry competition. The five forces are as follows:

 Competitive Rivalry: Air India, Air Asia, Spice Jet Airways, Go Air are its main competitors.
Indigo is relatively a new comer in the airline industry. The other players have dominance
over multiple routes and the advantage of numerous aircrafts as well.

 Bargaining power of the suppliers: The supply of aircraft is monopolized by a few firms.
Hence the supply power is concentrated in the hands of a few suppliers. Airlines get into long
term lease agreements or contracts with the aircraft manufactures. Hence the switching cost of
the suppliers is very high. Due to the strict regulatory norms enforced by DGCA, the
availability of commercial pilots is very restricted in India.

 Bargaining power of customers: The customer market is very fragmented because of


availability of choices and competitive pricing amongst the airlines. Loyalty is very weak as
the switching costs from one airline to the other are very low. The growth opportunities are
also very high because e of the market variability.

 Threat of new entrants: The threat of new entrants is very high. It is not easy to avail licenses
and the cost of setting up is also very high. The fuel prices are very high. All these factors
contribute the high cost of entrance into the market.

 Threat of substitute products or services: Railways are the closest substitutes although the
advantages of flying by airplane are still very high. The only other substitutes are the other
low paying aircrafts.

3
http://www.makeinindia.com/article/-/v/make-in-india-sector-survey-aviation
Historical Background of IndiGo
IngiGo was founded by Rahul Bhatia of InterGlobe Enterprises and Rakesh Gangwal, a United States-
based NRI. InterGlobe holds 51.12% stake in IndiGo, and Caelum Investments, Gangwal’s Virginia-
based company, Caelum Investments, 48%.

Major Milestones and History4

 2005: 100 Airbus A320-200 aircraft order was placed by IndiGO with plans to begin
operations in mid-2006 and to take consignment of all the 100 aircraft by the end. However, it
completed the initial order prior to schedule when the 100th aircraft was received on
November 4, 2014.

 2006: Its first Airbus A320-200 aircraft started operating August onwards with services from
New Delhi to Imphal via Guwahati. As the year moved towards the end, the airline had 6
aircraft, and 9 more aircraft were received in 2007 taking the count to 15.

 2010: By covering 17.3% of the market share, the state-run flag carrier Air India which was
the third airline in India was replaced by IndiGo, Kingfisher Airlines and Jet Airways were
still the market leaders.

 2011: With its growth, the orders for Airbus took a rise.180 Airbus A320 aircraft, 30 regular
A320 and 150 A320neo, a new generation version of the A320 was scheduled for delivery
from 2016.

 After being granted the license to operate international flights, it launched its first ever
international flight from New Delhi and Dubai. The international flights freight expanded
with flights from New Delhi and Mumbai to Bangkok, Singapore, and Kathmandu. The base
for Indian cities for international frieghts expanded further to Bangalore, Chennai, Kochi,
Kolkata, Kozhikode, Thiruvananthapuram, and Visakhapatnam.

 2012: Completing its six years, IndiGo came on top with 27 % market share surpassing Jet
airways. Being a low-cost carrier (LLC), it offers only Economy Class seating and does not
provide on any of its flights in-flight entertainment or free meals (though it does have a buy-
on-board in-flight foods and beverage programme).

 2013: Just behind Indonesian airline Lion Air, IndiGo soon became the second fastest
growing LLC in Asia,. In August 2013, it was ranked among the 10 biggest low-cost carriers
in the world by the Center for Asia Pacific Aviation.

4
https://www.seatmaestro.com/airlines-seating-maps/indigo/history/
 2015: the largest single order ever as number of aircraft in Airbus history was placed for 250
Airbus A320neo aircraft worth $26.5 billion,. The order also added IndiGo the option to
convert some A320neo to A321neo, which have more seats and fly on longer routes.

Rationale for the Study


Does Indigo have Sustainable Competitive Advantage?

Various metrics like net sales, profitability and market share has been used to determine the
sustainable competitive advantage. Indigo has been compared with its competitors. In terms of market
share, over the last 6 years, its market share has grown from 21% to 40%. Thus becoming a market
leader within a very short span despite being a new player. The same trend can be observed in net
sales revenue. In terms of profitability, their profit has been consistently higher than the industry
average and was the first Indian airline company to become profitable. Indigo has maintained this
status over the past 6 years in spite of volatile crude prices. Thus the data clearly shows that the
Indigo has a sustainable competitive advantage. They are able to implement their strategies
efficiently.

Thus from the learning perspective, it would be justified to learn the strategy of Indigo. Hence this
company is selected for the project.

Figure 1 Indian Aviation Industry Domestic Market Share as per DGCA, 2017
Figure 3: Comaprison of Net sales of Indigo, Jet Airways and Spicejet (2008 - 18)

Figure 2: Profitability of top 3 Airline Companies

Hypothesis
As a result of preliminary analysis done by the team across various sectors, we found Indigo’s
strategy to be a lucrative option for this project. Further deep diving into Indigo’s strategy gave us an
insight that their competitive edge is due to a robust cost-effective strategy and thus we formed out
hypothesis that is:

“Successful Implementation of Cost Leadership Strategy has helped Indigo achieve a Sustainable
competitive advantage”
Research Methodology
In order to test the hypothesis, we did quantitative as well as qualitative research. While we had a
survey floated in order to conduct primary research on consumer preference in terms of airlines
options available for travel.

For secondary research, we primarily examined the following sources for gathering insights:

 Indigo’s official website

 Directorate Generate of Civil Avaition’s report

 Content on Euromonitor

 Bloomberg

 CapitalLine

 Annual Reports of Indigo

 IBEF Reports

We also went through a lot of white papers and websites citing key insights, analysis and studies on
the aviation industry and Indigo specifically as well.

Basis the research, we validated our hypothesis to prove that Indigo does have a sustainable
competitive advantage as a result of a robust cost leadership strategy.

Indigo’s Strategy

Mission

Providing “low fares, on-time flights and a hassle-free experience” to our passengers

Their mission statement itself summarizes the position they want to acquire in the market
place which resonance with our hypothesis.

Marketing Strategy

Tagline – “Go Indigo”

Part of building the IndiGo brand included its first TV commercial targeted toward first time or new
airline travelers. The idea was simply that IndiGo was easy to use. The company wanted to connect
with potential customers by highlighting IndiGo’s ticketless booking, low pricing, clean aircraft, fun
packaging of onboard snacks (there were blue and pink tins for cookies and nuts), ramps (no stairs),
and concern for customers (airsick bags with Get Well on them). It provided all the services they
believed made airline travel easier with IndiGo than with competitors. All passengers travel in
economy class. The founders believed that just because their tickets were cheap, customers shouldn’t
feel cheap when flying with their airline.

Segmentation, targeting and positioning

Benefit segmentation strategy is used by Indigo Airlines to cater to the changing needs of developed
and developing nations. It divides the market based on the cost benefits it wishes to offer. In terms of
cost benefits it looks at providing low cost air travel options to consumers. It also segments on basis
of the quality it wishes to offer. It wants to offer low cost, on time air travel.

It mainly targets people by offering the benefits of low pricing as Air travel is perceived as an
expensive travelling option. By targeting different markets judiciously considering demand–supply
constraints, Indigo within the span of 10 years since its inception has emerged as the best player in the
industry by using differentiated targeting strategy. As far as brand image is concerned, it has
positioned itself as value based carrier providing hassle free experience of travelling.

Brand equity

Indigo is the Number 1 brand in India in the airline industry. Since its inception Indigo has been
successful in creating a positive brand image, even in its commercials it pitches itself as a low cost
carrier and “every time on time” arrival. It has won several awards for being the low-cost carrier from
the year 2007-2015 continuously.

On- Time Performance Details and Customer Service

Indigo has the largest fleet size in the domestic market. Even after such a large fleet size, it has been
able to maintain the best on time performance (OTP- On-time performance can be defined as the level
of service success to remain on its schedule) amongst all other major players in the Indian market.
Indigo’s OTP for the month of June 2018 was 84.1%, a close second was Spicejet, 81.2% (fleet size
of 57, i.e., less than half of Indigo). Indigo has been successfully maintaining its OTP above other
players for a long period of time.

Passenger Aircraft Fleet Size


Air Asia 18
Air India 160
Go Air 36
Indigo 172
Jet Airways 121
SpiceJet 57
Vistara 21
Figure 4: Domestic Market Fleet Size

Figure 5: On time Performance of Indian Airlines

Indigo has achieved its On-Time performance, through its operational efficiency. It has embraced
technology such as ACRS [Aircraft Communications Addressing and Reporting System] to monitor
in real time its OTP with minimum human intervention.

Indigo’s On-time performance has helped it to enhance its customer service, as Indigo realized that
customer loyalty could be achieved through:

 on-time arrival and departure

 consistent services during boarding and off boarding

 good connectivity

To further enhance its customer service, Indigo undertook new initiatives such as separate check in
counters for customers carrying only hand baggage so that those customers could avoid standing in
long ques. It allowed customers to carry their own eatables. It also launched loyalty schemes. Further,
Indigo’s plan was to excel at providing neat and clean aircrafts and good on board services such as
attractively packaged food offering and an amicable air staff. Its high-class customer service helped it
in creating a unswerving brand image in the eyes of customers, with the minimum number of
complaints concerning its operations and its service.

Data analysed for June 2018 shows, the complaints made by customer to the total airline passengers
ratio was the lowest for Indigo. This is indicative of Indigo’s superlative service. Further, this can be
backed by the customer survey by trip advisors in 2013, which shows that Indigo is the most preferred
airlines in India.
Figure 6: Number of Complaints per 10k passenger comparison

Figure 7: Customer Loyalty (Ref. Trip Advisors)5

5
Trip Advisors report
Operational Strategy

Single type of aircraft

Indigo’s fleet consists of Airbus 320 aircraft while Air India, Jet Airways and Spice Jet use 10, 9 and
3 different makes of aircraft respectively. This results in greater flexibility and improved utilization of
crew. As the staff members were working on only one aircraft type, they could work faster: MRO
(Maintenance, Repair and Overhaul) staff did their maintenance checks faster, ground staff loaded
baggage faster, and cleaners cleaned the toilets quicker. Small efficiencies added up when they had
only 20-30 minutes to prepare an aircraft. Also, the need for only one type of crew (pilots, flight
attendants, ground force) cuts hiring, training and upgradation costs.

Single Class

Having only Economy class means that Indigo does not have to spend time, money and crew on
privilege passengers. They also don’t need to maintain expensive lounges at airports further reducing
costs.

Low average fleet age

Indigo has ‘Sale and Lease Back’ deals with aircraft manufacturers i.e. after six years of operation, the
manufacturers were contracted to take back the planes and Indigo could have brand new ones.
Choosing to go with one style of plane probably played a role in IndiGo’s ability to secure attractive
lease-back agreements. Since they ordered planes in bulk instead of in small orders, they probably had
some power over Airbus to negotiate such an arrangement. This keeps the average fleet age low. A
younger fleet means less maintenance costs.

Fuel

Domestic fuel taxes can be as high as 30 per cent. Fuel for Indian airlines accounts for about 45 per
cent of total operating costs. Indigo’s aircraft try to save fuel by using software to optimize flight
planning for minimum fuel burning routes and altitudes and also by making use of latest fuel saving
technology. Also in 2011, IndiGo was the first customer for Airbus to order the new range of fuel
efficient A-320 Neo planes. Neos help in saving 10-15% of the overall fuel cost.

Route Planning

Indigo operates over a lesser number of destinations than its competitors but with a higher frequency.
They have a higher number of connecting flights compared to their competitors. This means Indigo
can keep its aircraft in the air for a longer period of time and save up on airport charges. This also
means that customers don’t have to look for connecting flights with other competing operators. Indigo
is now also venturing into flying to smaller cities in India like Manglore, Nagpur. To implement this
strategy they have acquired 7 ATRs in the previous year. They have started operating to smaller cities
like Manglore, Nagpur, Kozhikode which sees sustainable footfalls.

Tightly framed maintenance contracts

Indigo has a Power by the Hour contract with International Aero Engines (IAE), which provides the
engines that put the onus of performance delivery on the manufacturer. Indigo has similar agreements
with Airbus as well as with the vendors for other critical components. These contracts probably come
at a premium but it means that Indigo does not have to pull out planes from service for repairs and
also does not have to maintain a large inventory of spares.

Other cost-cutting measures

 Turnaround time – An airline is charged for the duration its aircraft stays at the airport. Indigo
has a faster turnaround time (time taken between landing and the next take-off) of 30 minutes.
This also is in line with their on-time strategy.

 Employee Aircraft ratio – Lower employee aircraft ratio compared to its competitors keeps
employee costs low.

 Technology – Indigo invested in technology for measuring on-time performance in an


automated and tamper proof manner. Unlike other airlines that used manual systems, Indigo
aircrafts were equipped with Aircraft Communications Addressing and Reporting System
(ACARS). The system enables automated communication between the aircraft and ground
station – whenever a flight takes off or lands, the time is recorded in the software. Hence, on
time performance can be reported and tracked in real time.

Human Capital Management

Great Place to Work conferred on Indigo the “Best Company to Work With” award in the
transportation sector. This can be attributed to the following factors enlisted.

Indigo followed the typical way of training used in the Airline Industry i.e. the role specific training
programs. However, all the training programs were eventually merged into one central operation with
three segments:

1. Functional skills training center – Specific jobs and roles like pilot training, cabin crew
members’ training, ticketing attendant’s training, training of baggage handling crew etc.

2. Customer service and Soft skills – Best in class at the low cost travel experience

3. Leadership training at all levels – Led the human resource appropriately and keep the
satisfaction level high. The CEOs “walk the talk” philosophy made him an approachable
leader.
Other best-in-class human-resource policies include:

 On-time salary

 Robust appraisal system

 Promotions

 Emphasis on training and development

Indigo also provides special emphasis on internal job postings and promotion from within the
company. In the upper management ladder, it hardly hired any managers from outside. In fact,
promotions of all the managers were from within the organization as a result of sound succession
planning. Each leader is nurtured in the company itself. Recognition of such high potential candidates
and their grooming leads to immense job satisfaction. These human-resource related policies resulted
in close to 0 per cent attrition at Indigo.

Cost Structure & Profitability

In a capital-intensive industry with high fixed costs, the only way for a company to improve is by
reducing its variable costs and making more efficient use of its resources. If we look at the two
airlines with the highest market share in Indian domestic market, i.e. Jet Airways and Indigo, we can
see the following6 –

Name Sales Operating Net Income Fuel CapEx (LTM) Operating


(LTM) Profit (LTM) (LTM) Expense Margin (LTM)

Indigo 230208.87 25195.86 22423.24 77601.36 -2372.38 10.94

Jet Airways 245106.90 -5427.80 -6364.50 74197.90 -2293.20 -2.21

The fuel expense and capital expenditure for both the airlines is similar, implying that neither of them
has undergone rapid expansion, and both are flying a similar number of flights. However, when we
look at other operation indicators of the airlines, it becomes evident that Indigo is performing much
better7 –

6
Bloomberg
7
Bloomberg
Name Sales Growth EBITDA Revenue Available Load Passenger
YoY (%) Margin (%) Passenger Km Seat Km Factor Yield

Indigo 24.84 12.84 9670 11370 85.1 366

Jet Airways 17.40 0.31 6306 7880 80 365

The Passenger Yield represents the average amount that a passenger pays to fly one kilometer.8 As we
can see, both airlines are generating the same revenue per passenger – yet, the Sales growth and
operating profit (EBITDA) growth for Indigo is significantly higher. This is because of the difference
in the Available Seat Kilometers, i.e. airline passenger capacity9 (supply side indicator) and the
Revenue Passenger Kilometers i.e. the number of revenue passengers multiplied by the total distance
traveled10 (demand side indicator). Indigo’s ASK and RPK are significantly higher, indicating a
higher demand for its service, which it is capable of meeting through its supply. In fact, since the ASK
is nearly 2000 higher than the RPK, it can afford to rapidly grow its market share without increasing
capital expenditure in the near future.

Price comparison of Indigo versus Other airlines

Around 75% of airline revenue is generated from passengers, majority of which are generated from
domestic travel. Using information available about Sales Turnover and Airline wise market share of
Domestic passengers, one can thus estimate the approximate price charged by each flight. This has
been done for FY 2015 to 2018 for Indigo and its major domestic peers, i.e. Air India, Jet Airway,
SpiceJet and GoAir.

8
Handbook on Civil Aviation Statistics, DGCA, 2016-17, http://dgca.nic.in/pub/HANDBOOK%202015-
16/Handbook_2015-16.pdf
9
https://www.investopedia.com/terms/a/availableseatmiles.asp
10
https://airlinegeeks.com/2016/01/17/airline-metrics-revenue-passenger-kilometers/
Month/Airline wise Market Share of
Domestice passengers Air India Jet Airwise Spice Jet Go Air Indigo Others
Jan - Jun 2018 13.10 14.30 12.40 9.10 40.20 10.90 % Market share
89.66 97.83 85.09 62.55 275.29 74.40 Number of passengers in lakhs
INR 24,044.90 INR 23,286.53 INR 23,020.89 Total Sales Turnover (in Rs Cr)
INR 18,033.68 INR 17,464.90 INR - INR - INR 17,265.67 Sales Revenue from Passengers (in Rs Cr)
INR 20,113.40 INR 17,852.29 INR - INR - INR 6,271.81 Price (in Rs)
Jan - Dec 2017 13.30 15.40 13.20 8.50 39.60 10.00 % Market share
155.81 179.98 154.32 100.31 463.72 117.90 Number of passengers in lakhs
INR 17,196.93 INR 21,552.35 INR 6,191.27 INR 3,496.30 INR 18,580.50 Total Sales Turnover (in Rs Cr)
INR 12,897.70 INR 16,164.26 INR 4,643.45 INR 2,622.23 INR 13,935.38 Sales Revenue from Passengers (in Rs Cr)
INR 8,277.84 INR 8,981.14 INR 3,008.98 INR 2,614.12 INR 3,005.13 Price (in Rs)
Jan - Dec 2016 14.60 16.30 12.70 8.20 39.30 8.90 % Market share
146.30 163.08 126.74 81.77 392.65 88.33 Number of passengers in lakhs
INR 20,037.32 INR 22,035.81 INR 5,088.07 INR 2,902.71 INR 16,139.91 Total Sales Turnover (in Rs Cr)
INR 15,027.99 INR 16,526.86 INR 3,816.05 INR 2,177.03 INR 12,104.93 Sales Revenue from Passengers (in Rs Cr)
INR 10,272.04 INR 10,134.20 INR 3,010.93 INR 2,662.39 INR 3,082.88 Price (in Rs)
Jan - Dec 2015 16.40 19.20 11.60 8.50 36.70 7.60 % Market share
133.35 155.53 94.25 69.28 297.43 61.07 Number of passengers in lakhs
INR 19,801.71 INR 20,132.13 INR 5,243.07 INR 2,946.56 INR 13,925.34 Total Sales Turnover (in Rs Cr)
INR 14,851.28 INR 15,099.10 INR 3,932.30 INR 2,209.92 INR 10,444.01 Sales Revenue from Passengers (in Rs Cr)
INR 11,137.07 INR 9,708.16 INR 4,172.20 INR 3,189.84 INR 3,511.42 Price (in Rs)

As we can see, while Indigo is by no means the cheapest flight, it is in the economical flights segment
rather than the luxury / premium segment. Hence it is able to attract the growing middle class and
expand its passenger base.

The result of these factors is obvious when one compares Indigo to its nearest competitor (in terms of
market share)11 –

Indigo v Jet Airways - 2017


60
40
20
0
-20 Sales EBITDA EBITDA Operating Net Net Profit
Growth Growth Margin Income Income Margin
-40
(%) (%) Margin Growth
-60 (%)
-80
-100
-120

INTERGLOBE AVIATION LTD JET AIRWAYS INDIA LTD

11
Data source for both charts - Bloomberg
Returns - Indigo v Jet Airways
30
20
10
0
Return on Invested Capital Return on Assets
-10
-20
-30
-40
-50

Indigo Jet Airways

Hence, we can conclude that Indigo is outperforming its peers when it comes to reducing costs,
optimum utilization of resources and profitability.

Key Findings
 Indigo has managed to position itself as the “premium” economical flight – as it keeps the
fare prices low but provides premium service in terms of a hassle-free experience and by
leveraging its “every time on time” arrival.
 By not having a ‘first class’ it has managed to avoid Tata Nano’s misstep – even though it has
positioned itself as economical, it is not considered to be in any way less than its peers and
treats all its customers with the same level of service. Hence it is not the “poor man’s” option,
rather it is the “street smart man’s” option – costs less and lands on time, even if it doesn’t
give a luxurious experience.
 Indigo has consistently performed in a way that meets the customer’s expectation and its own
branding – analysis of the OTP and ticket fares statistics show that it has never shown
volatility in the experience offered to customers. This kind of stability has added a reliability
to the Indigo brand, which it has capitalized on by grabbing an extensive market share. It also
contributes to the overall satisfaction experienced by the customers, as can be seen from the
statistics on complaints.
 The reason it has been able to meet these strategic goals over the past decade is because it has
developed effective operational, HR and cost strategies. The processes, systems and controls
built into these functions have allowed it to develop a competitive advantage.
 The hiring of upper management from within the company ensures that the culture of the
company doesn’t get diluted – as the company is still in growth stage and has not yet hit a
plateau in the Product Life Cycle, this is still an advantage for them.
 The operational efficiencies they have developed are not strokes of genius as such – but they
are very difficult to replicate unless they are built into the process and culture from the get-go,
which it has managed to do effectively.
 It has managed its costs in a way that it avoids certain fixed cost expenses (maintenance), and
reduced their overheads by increasing customer base.

Conclusion
The key findings and the related inferences conclude that Indigo does have a sustainable competitive
advantage as a result of a robust cost leadership strategy and differentiation strategy based on its
excellent customer service. Apart from the quantitative data support some other factors which
contribute towards IndiGo meeting its objectives are as follows:

- Innovative Marketing Tactics

- Successful Implementation of Operational Strategy

- Managing their internal stakeholders through robust human capital management

- Optimum utilization of resources