business strategy
Foundations of Business Strategy
Final Project – Case Gol Linhas Aéreas
To: Mr. Paulo Sérgio Kakinoff (CEO)
From: DBM Consultants
Subject: GOL Business Plan
Introduction
GOL Transportes Aéreos is one of the main players in the South American airline industry. The company was founded in 2001 in Brazil, and started based on a low costs strategy. In less than a decade, the company started to gain market share and became the second largest Brazilian airline company in terms of Fleet Size and Market Share. Nowadays the company has 16,119 employees,
115 aircrafts and 900 daily takeoffs during the week.
The main goal with this Business Plan is to seek to strengthen all GOL’s operation, improving its
EBITDA, Market Share and Revenue. By this, the goal is to help GOL to expand its operation, and therefore becoming the biggest company in the South American airline industry.
Industry Analysis
The Brazilian airline market has a some very important barriers to entry, such as the necessary high investment to start the company (aircrafts costs, for example), but mainly the route availability, since the Brazilian government limited the daily number of takeoffs and landings at key airports, which inhibits other companies from entry an already consolidated market.
In 2001, when GOL was created, the Brazilian airline industry was growing on a base of 2% a year, but in the last few years, had experienced growths of 20% a year. This market used to have only one big player, TAM Airlines, which still is the biggest company in the region, but since 2001 GOL has grown as big true competitor. GOL knew how to get the attention of those new clients, and grew very fast. The difference on strategy on these two companies was very clear, as TAM focused on improving the quality of the services and on maintain its customers, and GOL went for the “low cost, low fare” and technology advance.
TAM and GOL had been controlling around 90% of Brazilian market share, but
Final Project – Case Gol Linhas Aéreas
To: Mr. Paulo Sérgio Kakinoff (CEO)
From: DBM Consultants
Subject: GOL Business Plan
Introduction
GOL Transportes Aéreos is one of the main players in the South American airline industry. The company was founded in 2001 in Brazil, and started based on a low costs strategy. In less than a decade, the company started to gain market share and became the second largest Brazilian airline company in terms of Fleet Size and Market Share. Nowadays the company has 16,119 employees,
115 aircrafts and 900 daily takeoffs during the week.
The main goal with this Business Plan is to seek to strengthen all GOL’s operation, improving its
EBITDA, Market Share and Revenue. By this, the goal is to help GOL to expand its operation, and therefore becoming the biggest company in the South American airline industry.
Industry Analysis
The Brazilian airline market has a some very important barriers to entry, such as the necessary high investment to start the company (aircrafts costs, for example), but mainly the route availability, since the Brazilian government limited the daily number of takeoffs and landings at key airports, which inhibits other companies from entry an already consolidated market.
In 2001, when GOL was created, the Brazilian airline industry was growing on a base of 2% a year, but in the last few years, had experienced growths of 20% a year. This market used to have only one big player, TAM Airlines, which still is the biggest company in the region, but since 2001 GOL has grown as big true competitor. GOL knew how to get the attention of those new clients, and grew very fast. The difference on strategy on these two companies was very clear, as TAM focused on improving the quality of the services and on maintain its customers, and GOL went for the “low cost, low fare” and technology advance.
TAM and GOL had been controlling around 90% of Brazilian market share, but
References: Harris, Jared & Lenox, Michael. The Strategist 's Toolkit http://www.anac.com.br http://www.voeGOL.com.br/en-us/a-GOL/quem-somos/dados-e-estatisticas/paginas/default.aspx http://www.anna.aero/2013/12/12/tam-GOL-still-share-75-brazilian-domestic-market/ http://exame.abril.com.br/negocios/noticias/tam-tem-a-maior-perda-de-mercado-do-setor-emmarco http://centreforaviation.com/analysis/GOL-tam-two-strategies-gain-overwhelming-success-33756 http://www.bloomberg.com/news/2013-07-01/worst-currency-decline-imperils-GOL-sturnaround-strategy.html http://pt.wikipedia.org/wiki/Smiles_(programa_de_milhagem) Exame Megazine (04/18/2013) 6