India’s airline industry was an oligopoly, with six major players in the market. IndiGo, launched in 2006, had become India's largest airline and a dominant player, after having taken advantage of market conditions, including a rise in per capita income that led to increased demand for air travel. However, after a decade of consistent profitability, IndiGo was experiencing a decline in profits that was affecting its share price. The airline’s management needed to consider how the company could sustain its market-leading position over the long term and even increase profits, while accepting the minimal control it and its competitors had over ticket prices, amid an atmosphere of rising costs for aviation fuel and personnel costs.
靛蓝航空：垄断印度航空业 Indigo Airlines: Monopolizing Indian Skies (Simplified Chinese version)
Ramakrushna Panigrahi
Product #:W34064
Supplier:Ivey
Discipline:Strategy
Setting:India, 2006-2018
Subjects:
Industries:
Your Price:$10.54
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Learning Objectives
- 了解在寡头垄断市场结构中定价决策是如何做出的，以及为什么价格会长期保持粘性；
- 了解寡头垄断的扭结需求曲线模型，即成本会在一段时间内上升，但由于竞争对手之间的价格战，价格无法提高；
- 了解管理经济学中的概念，如产品差异化、边际成本和平均成本、规模经济、交叉价格弹性和寡头垄断市场结构下的价格战;
- 了解实际价格和名义价格之间的差异，实际收入和名义收入之间的差异，以及对消费者购买力的重要性;
- 考虑公司如何在寡头垄断竞争中利用动态定价模型维持盈利能力。
This case is intended for a postgraduate managerial economics course, but can also be used in a business strategy course for a discussion of alternative strategic decisions in the face of fierce competition or in courses on brand management and the marketing of services. Working through the case will give students the opportunity to
- understand how pricing decisions are made in oligopolistic market structures and why prices remain sticky for a long period;
- understand the kinked demand curve model of oligopoly where costs escalate over a period of time but prices cannot be increased due to price wars among competitors;
- gain exposure to numerous concepts in managerial economics such as product differentiation, marginal cost and average cost, economies of scale, cross-price elasticity, and price wars under an oligopolistic market structure;
- understand the difference between real and nominal prices, and between real and nominal income, and their significance for consumers' purchasing power; and
- consider how a company can sustain profitability under oligopolistic competition with dynamic pricing models.