Strategic Options Available To Lufthansa Airlines Essay

Strategic Options Available To Lufthansa Airlines Essay

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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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