Why Air Canada Serves the Same Breakfast for Over 25 years?

Oct 18, 2019 1:36:44 AM

No Competition

This article is for seasoned boards, executives and next gen. hi-potentials.   Really, anyone who owns a P&L or would like to lead a successful business.

Alert: You may be underutilizing the value of how competition can help your performance.

First a short story and then the punchline.

The Story:

As a Canadian business person I travel frequently as many of you do.   Travels routines and patterns are helpful little methods we all use to make sense of and pass the time between what we do and what we really do – add value to our clients, in measurable terms, not from our viewpoint but theirs.

You know – or should know – you are in a non-competitive (i.e. monopoly, duopoly or denial) situation– real or perceived – when you keep doing the same strategy over and over – and expect different results…..or don't care about the results.

 

The Same Nuts Drive Me Nuts.

air-canada-311517_1920

As the flight attendant brings the same mixed nuts – warmed – over to my seat.   I can’t help think how many years this has been going on.  The nuts must be a hit and address a specific customer need. Or there is no competition.

 

Similarly if you have ever eaten breakfast on Air Canada – the egg, parsley omelet, with turkey sausage and some type of red sauce divider – has been served continually, consistently as an option for over 25 YEARS! ( It may be slightly less or significantly more) – but each experienced Flight Attendant on AC – just smiles when I pass on breakfast – as they themselves cringe at the thought of serving it.

 

This again may be meeting a specific customer need, and is so popular that there would be anarchy if it was changed.  Or there is no competition.

 

For AC  - to be meeting a customer need through services, prices and experiences  - that does not change over 25 years – the following assumptions would have to be true. ( I will let you determine where on the scale you rate the probability of the assumption)

 

  1. Food Preferences Have Not Evolved in 25 years
  2. Customer Feedback Does Not Drive Decision Making
  3. No Competition

 

The Punchline

 

In Canada we have the highest fares for business class, the longest wait times for customer service, and the most code-shared (read: one airline flies direct or not at all) from Vancouver to major North American cities – try getting to Boston, Philly, Atlanta, Houston, Dallas, New York – with a choice.

 

The result – lack of completion breeds dull thinking, entitlement and lack of innovation. Text book thinking note the negative impact of monopolies are proven to be:

 

  1. Price Fixing – regardless of demand customer have no choice
  2. Inferior products and services – no choice
  3. No Incentive to Innovate – why change
  4. Inflation – raise prices for no change in value, less for more

 So if you are NOT in a monopoly situation or don’t refer to yourself organization as part of a cartel – you should embrace competition for the following three reasons

  1. Comparative – Competition forces you to look at what others are doing against how you are doing it – if you don’t have a systematic way to build this into your strategy and decision making process -you need one. You may agree or disagree with the model the competition is using – but it's the IS – BUT NOT comparison that stokes ideas and innovation

 

  1. Value – Competition forces you to come to grips if you are offering value – something people choose to pay money for – relative to the competition and alternatives where they can spend their money or not. Unless you are have the greatest mousetrap in the world where you have unmatched pricing power, margins and share – in today’s business environment it not likely. Across all industries and companies sizes – we must address unmet or poorly met customer needs in a better way  than our competition

 

  1. Appetite – Competition forces companies to hunger, lose, win and learn to be better, for themselves and their customers. The appetite to compete creates motivated, self-directed and proactive organizations that can flex, change and respond to all the external forces at play in the world today. 

 

 

So – why did I skip the nuts – no competition.  Just lowered value and expectations.  Don’t let that lesson unfold in your company.  Embrace what competition can teach you.

 

Learn more about effective decision making...

New Call-to-action

 

Tim Lewko

Written by Tim Lewko

Vancouver, BC, Canada | CEO Thinking Dimensions Global, London, UK

Tim works with CEOs and boards on their big decisions – those that involve product, market and future capability choices.

He has worked with CEOs and Senior Executives using a process rather than prescription approach to strategy over the last 20 years across North America, South America, Europe, Asia and India. His clients to date have achieved over 900 million USD in improved EBITDA .

He is also the author of the book ,Making Big Decisions Better: How to Set and Simplify Strategy https://www.amazon/dp/1472451082

SIGN UP TO OUR NEWSLETTER

Sign up for our newsletter and receive updates that will help your business to grow. Do not waste time, we're here for you.