Refer to the case study “Air War In Indonesia: Garuda Indonesia And Lion Air” to answer these questions. Elaborate the data, to support and strengthen you analysis (from text books, journals, internet, etc). Based on your understanding about airlines industry from the case study provided and the additional information you could gather, analyze the business future of the company. Please gather all the necessary information and references to prepare yourself for the midterm exam. Then answer these following questions :

a. Analyze the “real-product” of the company and the demand facing Garuda Indonesia and Lion Air, including the cost structure of these two airlines. (15 points)

b. What are the economic conditions in Indonesian market in which the company is or could be competing? In particular:

1. Market structure? (5 points)

2. Cost leader? (5 points)

3. Product differentiation? (5 points)

4. Focus on market niche? (5 points)

5. Outsourcing, alliances, mergers, acquisitions? (5 points)

6. Supply and demand condition? (5 points)

7. Technology? (5 points)

8. Government regulations? (5 points)

9. International dimensions? (5 points)

10. Future conditions? (5 points)

11. Macroeconomic factors? (5 points)

c. From the discussion above, what are the economic variables that need to be taken into the competitive strategy related to Indonesian market to gain its competitive advantages in Indonesian operations (15 points)? Explain, what do you think the company has to do in maintaining their competitive position, especially as its industry changes such as the emergence of new types of travelers drive by the emergence of low cost carrier airlines or the global political event (US Travel Band, etc) ? (15 points)