As Lufthansa Airlines transforms its business in the aggressively competitive air travel market, it demands tools and information, which helps cut costs, speed transactions and allows employees to make informed purchasing decisions. Factiva.com, a powerful Web-based service that provides powerful tools for searching and monitoring news and business information, enables Lufthansa Airlines’ procurement department to source and negotiate better and faster – and thereby contribute significant cost savings to the organization. Lufthansa, the German airline, contracted with Boeing to purchase aircraft in the mid-1980's, when the value of the dollar was increasing. The price was set in dollars and Lufthansa was afraid that the dollar would strengthen, increasing the Deutsche mark cost of the planes. In 1986, Lufthansa entered into forward contracts for the dollars required to pay for the planes. Although Lufthansa feared a strengthening of the dollar, what actually happened is that the dollar weakened. The forward contracts cost Lufthansa $140 to $160 million more for the planes, than if it had simply waited and purchased the dollars on the spot market (Eckes, 2001). This study is of considerable significance for Lufthansa Airlines, as it will help the organization redefine its business strategy in order to improve its corporate image and to compete effectively in existing tight market situations. The study will help the company in identifying the factors that directly affect customer’s satisfaction and thus will facilitate in providing better quality service in future. As the current market conditions are not much favorable for the airline industry, especially in the US market, which itself is a major segment, airlines are required to ...
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The Lufthansa Heist was a robbery that took place at the John F. Kennedy International Airport; the people (players) robbed five million dollars at the time of the robbery. The total amount of money robbed to todays’ date is estimated to be around eighteen million dollars and three million dollars in jewelry. The heist was planned by Jimmy Burke and carried out by a number of people. A van would be used to transport the cash and another car would accompany the van to run interference should something happen.
It has stayed relevant to the market through its propelled philosophy of relationships to generate profits in the business. Since its establishment in Monroe, Louisiana the once tiny airline has stretched to greater heights serving in 6 continents. It has also established a distinguishable name among its competitors with a reputation of leading customer services. However, even as an established venture, the company needs to maximize its profits in order to stay in business and expand in to new territories beyond its conquered boundaries. A strategic analysis was carried out by our team to establish the company’s current situation. A SWOT analysis was performed to come up with three referenced, strategic alternatives. This alternatives are meant to act as a strategic guidance to the company in order to enhance growth. The strategic recommendation provided will improve and enable the business to cope with the competitors while the implementation of the strategy section will outline the way to go about achieving these alternatives in the business setting. Lastly, we put up a discussion on the evaluation procedures and necessary controls for the
of price versus service in the airline industry as a whole, as well as, the
Leading Change was named the top management book of the year by Management General. There are three major sections in this book. The first section is ¡§the change of problem and its solution¡¨ ; which discusses why firms fail. The second one is ¡§the eight-stage process¡¨ that deals with methods of performing changes. Lastly, ¡§implications for the twenty-first century¡¨ is discussed as the conclusion. The eight stages of process are as followed: (1) Establishing a sense of urgency. (2) Creating the guiding coalition. (3) Developing a vision and a strategy. (4) Communicating the change of vision. (5) Empowering employees for broad-based action. (6) Generating short-term wins. (7) Consolidating gains and producing more changes. (8) Anchoring new approaches in the culture.
Many elements of Delta Airlines are described in detail, within this paper. There is a breakdown of the external and internal factors, using external and internal analysis. Porter’s Five forces are used to create the external analysis, and the key factors for Delta are power of buyers, and rivalry. Delta’s competitive advantages are identified as customer service, sustainability, brand image, strong strategic alliances, and corporate travel. Delta’s main issues are the low expansion in international markets, continuous changing of incentive program, and glitches within technology. Delta should expand more into the Chinese and African markets in order to gain market share within the airline industry.
The airline industry has long attempted to segment the air travel market in order to effectively target its constituents. The classic airline model consists of First Class, Business Class and Economy, and the demographics that make up the classes have both similarities and differences to the other classes. For instance there may be similarities between business class travellers on a particular flight, but they will not all be travelling for the same reason. An almost-universal characteristic of air travel is that customers do not fly for the sake of flying; the destination is the important element and the travel is a by-product, a means-to-an-end that involves the necessity of an aircraft that gets the customer from point A to point B. Because the reasons can differ greatly in the motivations for a customer wanting to fly, it can be difficult to divide the market into discrete segments, that is, there is always going to be overlap in the preferences and characteristics of any given segment. With that in mind, the commonalities that are shared between the clientele that make up the respective classes can easily withstand analysis.
1. Issues 2. American Airlines’ objectives 3. The airline industry 4. Market 5. Consumer needs 6. Brand image 7. Distribution system 8. Pricing 9. Marketing related strategies 10. Assumptions and risks
I am currently involved in a project to carry out process improvements within Customer Support organisation. Customer support is a high visible business unit for customers and is usually the first point of contact. So the project involves implementing business management strategy like Six Sigma to find and improve areas in customer request, escalat...
To prevent the American Airlines loss from the business, he decided to make SABRE a strategic management tool, where he introduced the Ultimate Super Saver Fare plan. To overcome this problem Bob Crandall recognised two factors which would affect their revenue to increase the first reason was the average cost and the other reason was the market value. Both the factors were very well specified by Bob Crandall to improve the rev...
Lufthansa, one of the world’s biggest airliners, has divisions handing maintenance, catering and air cargo. Since the World War II the airline industry has never earned its cost of capital over the business cycle (Hitt, 2010). Most of the airline companies have either filed for bankruptcy or are being bailed out by their government. Lufthansa had also gone through these tough times, but had resurfaced to become one of the worlds most profitable airline company. The company adapted a transnational strategy, seeking to achieve both global efficiency and local responsiveness. Lufthansa’s monopoly in Germany came to a halt with the creating of the European Union. All the EU member countries become one regional and therefore the European competition became, an increasingly a local competition. Lufthansa created its regional Hubs, to cater for its domestic market. But the availability of substitutes such as bullet trains and the Euro tunnel, made is necessary for Lufthansa to create short traveling time, customizations and quality standards in the region to achieve a competitive advantage. But outside the EU there are no substitute to air travels as such all the flag carriers are competing in the market, the international airline industry is a highly competitive environment. A new force has also emerged in the world of air travel, in the form of three Gulf airlines with jumbo ambitions. Within a decade Dubai’s Emirates, Qatar Airways and Eithad from Abu Dhabi have between them carried the capacity of two hundred million passengers (Micheal, 2010). The company had to go global and therefore adopted the international corporate-level strategy, where Lufthansa will ope...
To buttress the implication of the model, Porter explained why the airline industry is the least profitable amongst industries owing to the high threat of the competitive forces. The airline industry players compete heavily on price. Most custom...
Porter stated; “for an airline to succeed in the marketplace, it must have a sustainable competitive advantage” (Porter M. E., 2008). The airline industry is the highest competitive industry, and I believe a sustainable completive advantage is essential to succeed in the future of the aviation industry. The competitive advantages that an airline embrace, needs to be based on the airlines strategy and differentiation to competitors. Emirates displays how it has a strategy and how the airline gets ahead of its competitors through how unique it is.
JetBlue’s marketing strategy focuses on offering a high-quality customer attentive low-cost product that provides amenities other airlines are unwilling to provide on their low-cost fares. The goal is to attract new customers while retaining current customers and to bridge the gap between low-cost fares and quality air travel, which JetBlue believes need not be mutually exclusive (JetBlue Airways Corporation, 2015). Overall this strategy has been very successful, attracting new customers and earning repeat customers through its innovative additions to its aircraft and by having more free amenities than any other airline. Additionally JetBlue Airways has been ranked highest in customer satisfaction among low-cost carriers in North America by J.D. Power for the last 11 years in a row (JetBlue Airways, n.d.).
Often lessors buy the planes and subsequently lease them to the respective airlines. Furthermore, the infrastructures are primarily established according to the precise needs of home airlines (BIEGER & WITTMER, 2011, p. 61-64). As an example, the airport of Zurich strongly adapted needs of Swissair when expanding its own infrastructure. Operations and outbound logistics cannot clearly be distinguished in the case of an airline business, since it is a service industry of intangible output. The “production” of the service and the order processing can be seen together as providing the transport to the desired destination of customers. Moreover, the added value is very much dependant on safety, service quality and comfort. Marketing and sales include every way of promotion and indeed, stipulating sales channels in pursuance of attracting new customers. As already alluded above, progressing technology in online distribution and increasing price competition caused by market liberalization force airlines to lay much more weight on the marketing and sales activities. The core differentiation possibility remains in quality of on-board service and additional services at
In past few years, companies and industries of various sizes have become aware that they need to improve business processes such as product development, order fulfilment, planning, distribution, and customer service. So everybody is now focusing on doing process improvement or redesigning.