MANAGEMENT 2
Article Review: How Lufthansa Capitalized on Big Data for Business Model Renovation
Introduction
The business environment is becoming dynamic with very large volumes of data being
handled at a time. The traditional data storage and manipulation perspective may not be
sufficient enough to handle such data since other organizations have resolved to use
approaches that will enhance competitive advantage in the business operation. Big data is one
of the approaches that have competitive advantages and can handle large data sets accurately
and within a short time to avoid uncertainties that may arise when using traditional methods.
Lufthansa capitalized on Big Data for Business Model Renovation as a way to demonstrate
how important this technology is to the business. Based on the summary of the article, a
reflection on the success factors of the Big Data will be part of the review and a conclusion
derived from such benefits that come with Big Data will be established.
Summary
Bog Data has faced deployment gap since it involves different perspective to be
considered before it is implemented. Big Data is considered as a two-edged sword which is
advantageous when properly implemented and may be defective when the implementation
process is not done properly. The new technology in Big Data will enhance competitive
advantages that come with innovations and use of the internet to do business (Chen et al.,
2017). The technology will be able to compute vast data sets and make decisions based on the
available data. However, Big Data has challenges and risks that come due to its technical
complexity, need for design thinking, rapid proliferation and evaluation, and the agile
methodology required in the development of Big Data. Most importantly, the implementation
of Big Data requires a considerable amount of investment that must be available in the
organization.
Lufthansa has been able to successfully discover the values that come with Big Data
and has resolved to deployment. Considering the risk factors that come with technology and
the costs for deployment, the company has transformed into a renovated business model due
to Big Data. Lufthansa is one of the largest airline based in Europe and operates in more than
78 countries within Africa, Asia, America, and Europe (Chen et al., 2017). The company was
faced with low-profit margin, high competition, and poor safety which all lead to economic
uncertainties. These factors with low-profit margins required an innovation that could make
the company attain high revenue.
The flight company, Lufthansa, enables a service-dominant Business Model through
Big Data. This was done in a top-down process that was sufficient for all types of innovation.
The model helps in handling innovation in major areas such as personalizing the experience
of customers, handle irregular situations in the management, predicting delays that are
rampant in departure and irregular discoveries, and establish an implementation to prevent
aircraft maintenance. Such capabilities that Big Data provides established a renovation to
Lufthansa’s business as customer satisfaction and innovation are considered in the model
(Chen et al., 2017). This type of innovation will help the organization to establish end-to-end
customer experience before departure, after departure, within the flight, and at the destination;
it provides a full board protection to customers.
Lufthansa used various approaches to discover the value of Big Data before
implementation. The business used a value discovery approach which is a top-down
innovation process. This approach has three phases; innovation process, use case
development, and strategic development planning. The use case strategy is a scenario-based
that is borrowed from other organization that has successfully implemented Big Data and are
enjoying its benefits. This is the major interest of Lufthansa that will enable effective
competition in the industry.
