People Innovation Excellence

[Case Study] Air War in Indonesia: Garuda Indonesia and Lion Air

Year: 2007

Case number: 107-1108-001

Case Author: Firdaus Alamsjah

Course Major: Crafting and Executing Strategy

Related Topics: Evaluating a Company’s resources, Capabilities, and Competitiveness

Teaching Note Availability: Air War in Indonesia: Garuda Indonesia and Lion Air [Teaching Note]


In the airline industry, quality, cost, delivery, and flexibility were often mentioned as the key success factors that should be acquired by every company. Up to 2007 the competition within the airline industry became very severe. Therefore, it was crucial that every company should choose the right strategy to fit with the market condition.

Garuda as one of full services airline companies saw that the industry situation had been changed compared to the previous years. Competitive pressure made the Garuda’s management revise their strategy that had been executed for years. The effectiveness of the strategy execution had emerged as the main issue.

On the other hand, Lion Air as a new entrant in the industry saw that the crisis occurred in Indonesia gave them a new opportunity to grab the price sensitive segment. Lion Air’s management at the same time considered to improve their strategy to increase their market share.

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