Bhutan Case Study

We have been asked to carry out an analysis into Drukair’s current situation to identify strategic solutions that will provide a basis for the company’s operations in the near future. Bhutan has increasingly become a desirable tourist destination as it has opened its doors to the world, and as a result there has been a large increase in tourist numbers as well as increased economic activity throughout the country. It follows that our main objective was to provide a range of strategic solutions addressed to the opportunities created from these macro-environmental changes.

There are three resulting issues we will attempt to address with our strategy solutions. The first is the need to compete based on industry standards which have been set by global airline alliances. Secondly it is evident that East Bhutan needs to be made more accessible for tourism as well as to the benefits of the local population. Finally as a large portion of Drukair’s customers are tourists we realise the need to address the issue of the off-season slump in demand.

I would like to provide some further context in terms of background before Mr Burton guides you through the strategic options we have devised. Obviously Drukair has been operating in air-transport for over 25 years and in that time annual passenger numbers have increased from 3000 to 125000. In looking to the industry we have identified that large multi-company strategic alliances have been formed which dominate all markets for the most part. Essentially this makes it very hard to gain entry to the industry. However Drukair is one of a few exceptions to this rule in that they are the sole airline to Bhutan and thus face no real direct competition in air travel. Drukair are fortunate in this regard and have something of a free-rein over the thousands of people who seek out passage to and from Bhutan each year.

options

Now we will discuss the options that we have come up with in relation to the issues we have identified earlier....