Delta’s purchase of the Trainer Refinery and the merger with Virgin Airlines are clear examples of grand strategies. Delta sought these strategies to achieve long-term business objectives. Delta recognized hurdles in achieving profit posed by increased costs associated with jet fuel (and their incredible dependence on fuel as an operating cost) and a lack of access to the international market for trans-Atlantic flights. In order to achieve these objectives Delta employed two different strategies. The first was vertical acquisition. By purchasing a refinery, Delta was acquiring a supplier and the inputs that it needed for operations. More specifically, this is an example of backward vertical integration because Trainer “operates at an
Describe horizontal and vertical integration. Why do businesses leverage these vehicles for growth, and how can they aid in gaining competitive
As Chris Zook suggests in his book ‘Profit from the Core’, a “sustained and profitable growth requires a strong, well-defined core”2. Over time Ryanair remained consistent with its strategy, kept its dominant market position but failed to reinforce the execution of its strategy and thus to maximise profits.
In the horizontal integration, the company product range is from a wide clientele. That is they sell product either clothing or luxurious foods from different manufacturers. These give them the edge since the products they offer a variety for the customers to choose from, and hence they can shop less than one roof (Cole, 1997). In the vertical integration strategy, the firm will deal substantial with products from a single supplier and M&S gets the exclusive rights to deal with the product and its supply to the market. This is necessary when the company aim is to serve an identified target market which is exclusive and has the potential to sustain and grow the company substantively. These employ a tar...
One of the many influences that affect Qantas is the presence of globalisation, which has heavily affected the airline both positively and negatively. Globalisation is a process which refers to the increased integration between different countries and economies as well as the increased impact of international influences on all aspects of life and economic activity. Globalisation is responsible for the removal of many trade barriers and the increased level of competition that Qantas has been exposed to. The increased levels of competition has increased consumer sovereignty and forced Qantas to implement strategies to gain a competitive advantage in order to redirect consumers towards their business. Qantas has implemented a cost leadership strategy as a response to globalisation and the influence of cost based competition. One way that Qantas achieved this was by using Globalisation itself to the business’ advantage. Globalisation ha...
IAG continues to believe that retaining the core assets of brands and products in each of its operating airlines is important to maintaining valuable customer loyalty. IAG has maintained its disciplined approach to evaluating future inorganic growth opportunities and will only act if it is in the interest of its shareholders. This disciplined approach is reflected in IAG’s six core strategic objectives, which are described below:
In my discussion I will use the Australian airline industry to present how oligopolies operate, and to show the different behaviours and strategies that arise from the interdependence of firms. I will mainly concentrate on the domestic airline market in Australia. The domestic airline market consists of a duopoly of two firms, Qantas and Virgin Blue. Since Qantas and Virgin are the only two Airlines supplying domestically in Australia, they account for all of the profits in the market and consequently they are in direct competition with each other. Because only two firms are competing, each firm must carefully consider how its actions will affect the other, and how its rival is likely to react. Thus, strategic considerations regarding the behaviour of competitors in this duopoly are essential in order for Qantas and Virgin to set prices.
Southwest Airlines /Competition Paper Introduction: Air transport is a global industry and as such every airline is a likely challenger for every other. It is contrary to expectation that any airline will be able to contest on a large scale without being associated to other carriers. Traffic feed is the industry's lifeblood and stand-alone carriers will be labored to carry low-revenue point-to-point traffic when front with airlines able to offer manifold route alliances. Southwest Airlines is a major carrier to the USA accounting for about 85% of its airfreight tonnage, but it also operates scheduled services to South Africa, Japan and Hong Kong. The subject of strategic alliances inside the air transport industry is not a well-researched area. This is due, in part, to the truth that alliances are a nearly new happening in the industry. The 1990s in specific have seen a commotion of alliance activity of all descriptions. At present it is operating more than 2,100 flights per day and carrying over 44 million passengers a year to 50 different cities all over the United States. Southwest is very well known for its best on-time record, best baggage handling and has the pride of getting least customer complaints in the airline industry. The airline has won the airline industry's Triple Crown award for Best Airline continuously for five times from 1992-96. The airline is also famous for its innovative discount and convenience packages introduced by it from time to time including the frequent flyer program, fun fares, same-day airfreight delivery service etc. Southwest Airlines in the U.S is having some success at weathering the current industry turbulence. They’re showing profits and/or expanding their routes to take up the slack left ...
Delta Airlines: Past Present and Future Delta Airlines have transformed over the decades. They started out as a crop dusting company, blossomed into an airline company, fought litigations, went bankrupt, then resurrected it and merged with Northwest Airlines to become one of the biggest airline companies in the world. Their aircraft, operations, and cities and countries that they service have transformed and blossomed as well.
Since its first grand opening in 1971, Southwest Airlines has shown steady growth, and now carries more passengers than any other low-cost carrier in the world (Wharton, 2010). To expand the business operations, Southwest Airlines took over AirTran in 2010 as a strategy to gain more market share for the Southeast region and international flights. However, the acquisition of AirTran brought upcoming challenges both internally and externally for Southwest Airlines. In this case analysis, the objectives are to focus on the change process post the merger with AirTran, and to evaluate alternatives to address the impacts of the merger. II.
This paper examines the strategic environment and the relevant strategic factors that relates to British Airways. It will focus on features and factors of the aviation industry and how it affects British Airways. From there, the paper critically evaluates the strategic choices that were made by British Airways and the results that were attained from the strategic choices made by the airline.
“The shoe that fits one person pinches another; there is no recipe for living that suits all cases,” observed Carl Jung in Modern Man in Search of a Soul. Jung wasn’t thinking about strategic management when he wrote that passage.
When an airline does not have a sustainable competitive advantage, it does not have any properties of differences from there competitor and turns to a dangerous price war. The sustainable ...
Rothaermel, F. T. (2013). Corporate Strategy: Vertical Integration and Diversification. Strategic management: concepts and cases (p. 220). Upper Saddle River, N.J.: Pearson Prentice Hall.
Some small business owners have a goal of growing into a larger, more corporate organization. The reality of that actually happening is small. “Research suggests that only one-tenth of 1 percent of companies will ever reach $250 million in annual revenue” (Dahl, 2010). An intensive growth strategy should consist of market penetration, a market development plan, alternative channels, product development, and new products for new customers. The next type of growth strategy that could be utilized by an organization is an imperative growth strategy or an acquisition. In most cases an acquisition is the perfect example for organizations that are on the downward spiral.
...rket share and most importantly loss of life (Appelbaum, 2004). In order to achieve Qantas objectives and goals as an airline, which includes opening gateways to the world, growing with Asia, building a strong, viable business and being best for global travellers, strategic management has to be implemented. Strategic management is defined by Thompson and Strickland as ‘the process whereby managers establish an organisation’s long-term direction, set specific performance objectives, develop strategies to achieve these objectives in the light of all the relevant internal and external circumstances and undertake to execute the chosen action plans’ (Stone, 2014). Qantas has to achieve a competitive advantage through precise and concise strategic management in order for them to have an edge as well as to manage environmental influences as compared to their competitors.