Gogo (formerly known as Aircell), is an innovation company, becoming leaders in providing inflight connectivity. The company began in 1991, when they began creating telephone systems for aircrafts, they progressed from this and in 2006 began creating a broadband network for aircraft. In 2008, they launched this new system into commercial flights and since then they have been offering this service for various American airlines including US Airways, Virgin America and American Airlines (Gogo 2013). The purpose of this paper is to discuss the recent experience of using Gogo Wi-Fi on an American Airlines flight, and investigate the strategy of Gogo, with reference to the innovation dilemmas when creating this new service.
The experience occurred on an American Airlines flight from San Francisco to Los Angeles, although the technology had been available for a few years, this was the first time the consumer had experienced Wi-Fi whilst flying. Although the consumer had no need for the Internet on their flight and only purchase it to update their Facebook status, they recognised the benefits of having the internet on long haul flights, this included people being able to check emails and stay in touch with people and it also provides people with the ability to download entertainment from online sources and no longer be limited to the selection provided by the airline.
Due to the nature of the Airline industry, at the core level it can be viewed as a generic offering across the industry. This resulting in airlines often creating a differentiation strategy, in order to gain a competitive advantage as they seek to increase the value of the product/service on offer to the consumer (Hooley et al, 2012). The Gogo Company acknowledged that their innovation could provide a service to Airlines that will enable them to differentiate themselves. This can be identified on the Gogo website, as it states ‘By differentiating your airline and providing a memorable passenger experience, you stand to gain loyalty among your valued flyers…lets you custom wrap the video portal, so your brand is consistently comes forth whenever passengers are connected’ (Gogo 2013).
In 2009, American Airlines announced it would be using Gogo services on their domestic flights, costing the airline $100 000 to install (Semuels, 2009). This therefore shows that American Airlines have recognised the benefits and the increase ticket sales and revenue they could receive by advertising Gogo Internet is now a part of inflight entertainment.
When innovation occurs within a company, they must consider the following innovation dilemmas, whether the product or service is a technology push or market pull, product or process innovation, open or closed innovation and finally a technological or business-model innovation.
Technology push is when innovation is pushed by technologist or scientist who pass this information onto the company, from there they will manage, promote and distribute this new innovation. This can be compared to market push, this is when companies create innovation based on what the ‘lead users’ are doing in that particular industry (Johnson et al, 2011). One aspect that has enable Gogo to overcome this dilemma, is by listening to what the market wants and ensuring they are up to date with the current market technological tends.
Product Innovation is when emphasis on innovation is placed on the finally product, whereas in process innovation is when innovation is focused on the production and distribution (Johnson et al, 2011). At the beginning Gogo was focused on the product innovation, but as the company has grown, they have shifted to process innovation. This can be identified on the Gogo website stating that ‘1 in 4 people consider their laptop, tablet or IPad an essential carry on item’ (Gogo 2013), therefore Gogo has had to ensure its innovation is compatible across the multiple devices.
Open innovation is when companies improve their innovation through gaining ideas through internal and external personnel. This can be compared to closed innovation, when innovation is based on internal personnel (Johnson et al, 2011). Gogo tend to go for closed innovation to ensure they remain leaders in the industry however ensuring they are receiving feedback from their clients to ensure they are meeting their needs.
Technological or business-model innovation, technological innovation is when innovation is relied on new science or technology, whereas business-model innovation emphasises on creating new models that will bring stakeholders together in a new method (Johnson et al, 2011). Gogo began as a technological innovation, however has become a business-model innovation for companies using Gogo products and service, as it changes the way they sell and promote their airline company.
Overall, Gogo are the market leaders and innovators in inflight communications services. And from reviewing the company’s current strategy, it can be recognised that will continue to be market leaders as they are aware of the demands from today’s consumers, and are constantly updating, innovating and meeting these demands. Although by company innovating new products or services, it dose propose the risk of innovation dilemmas, Gogo has proven that they can overcome these dilemmas and continue to lead and grow.