Garuda Indonesia is the national airline of Indonesia. It was created in 1949 and is now a major airline. The company has two main hubs and three secondary hubs (Garuda, 2013). It flies to various destinations in Asia, Europe, Africa, and Australia. It is a part of the SkyTeam airline alliance. The company has various subsidiaries as well under its name. The fleet of Garuda Indonesia consists of 144 aircraft of various sizes. It flies to 96 destinations. The company is owned by the Indonesian government and has its headquarters in Tangerang, Banten. In 2018, the company generated revenue of $3.54 billion and had more than 20000 employees (Jakarta Globe, 2019).
Following are the four dimensions of the Ansoff Matrix for Garuda Indonesia:
Market Penetration
Market penetration refers to the activity of promoting existing products in existing markets. Garuda Indonesia does this in various ways. The first strategy the company offers is a loyalty program that motivates its current consumers to fly more with the company to gain loyalty points and other rewards. Another strategy that the company offers is that it offers various discounts during holidays and special seasons to boost its sales. These also include augmented promotions with various hotels to increase their sales. The aircraft are regularly renovated to reflect the innovation and creativity of the company. Garuda Airlines also once launched its low-priced air career to dominate the airline industry which was later sold off by Garuda Indonesia (Osman, 2012). It was named Citilink. Its association with the SkyTeam airline alliance has helped it improve its ranking and position in the international market. Market penetration allows the company to increase its sales in its existing markets.
Market Development
In this strategy, Garuda Indonesia promotes its existing products in new markets. The best strategy utilized by Garuda Indonesia in this category is to geographically expand into new markets. This is done by creating new destinations and flying to them. These can be into new nations or new cities to countries it already flies to. This increases the exposure of the company to new passengers and it can earn from them. Another strategy the company uses is to offer various classes in its flights intended to attract new segments in the market it already serves. These can include economy, upper economy, and first-class. Each class receives different meals and facilities. The ticket prices also differ for each class. Citilink was an attempt by Garuda Indonesia to step into the low-cost carrier market but it was not a success. Thus, market development is a slightly risky strategy for the company.
Product Development
Product development is the strategy to launch new products in existing markets by a company. Garuda Indonesia does this by renovating its existing aircraft or purchasing new aircraft. The new aircraft are then marketed when they are added to the fleet. Customers are motivated to fly on the routes the new aircraft are flying on. The company also offers various packages as a part of its product development program. These packages include return tickets and stays at various locations. An example is the honeymoon package the company offers in a strategic alliance with different hospitality companies. New routes are another form of a new product for the company. These routes are decided based on consumer demand and market needs. The routes are tested through a few flights before they are finalized. If the number of passengers is low on the route, it is dropped. Thus, each product development activity by Garuda Indonesia is in millions of dollars and requires detailed research before it is started.
Diversification
Under this strategy, new products are launched into new markets. Garuda Indonesia currently only operates in the aviation industry and does not offer any other services. However, the company holds potential and can diversify in various ways. It can vertically diversify to start its own supply services providing it with cooked meals, various maintenance services, and so on. It can also horizontally diversify into related industries such as creating its hotel, tourism, and resorts. Garuda Indonesia can also diversify into unrelated industries such as textiles, apparel, shoes, sports, and so on. The strong cash flows of the company allow it to take on the risk and benefit from diversification.
References
Garuda, 2013. Company Profile. [Online] Available at: https://web.archive.org/web/20130622011424/http://www.garuda-indonesia.com/us/investor-relations/about-garuda-indonesia/corporate-profile/index.page [Accessed 13 Jan. 2020].
Jakarta Globe, 2019. Garuda Indonesia Books strong returns. [Online] Available at: https://jakartaglobe.id/business/garuda-indonesia-books-122m-profit-in-strong-comeback [Accessed 13 Jan. 2020].
Osman, N., 2012. Citilink officially separates from Garuda today. [Online] Available at: https://web.archive.org/web/20121025160613/http://www.thejakartapost.com/news/2012/07/30/citilink-officially-separates-garuda-today.html [Accessed 13 Jan. 2020].