...Airline Lufthansa Companies Strategic Change and Strategic Challenge for Lufthansa Introduction The biggest airline in Germany- Lufthansa is one of the leading airline companies in the world, but it suffered from the danger of bankruptcy in 1991. However, the flexible strategic change programs made it survive. Thus, the implementation and effects of those programs are obviously attractive and deserve further study. Moreover, current business environment is full of opportunities and challenges, which poses Lufthansa to identify relative challenges and adopt some reaction to respond. Therefore, this report will discuss two parts: one is strategic change programs and the other is current strategic challenges for Lufthansa. In the first part, it will evaluate the strategic change programs which Lufthansa applied and also cover the effects of leadership and politics. The second part of this report will analyse the strategic challenges for Lufthansa based on current and future business environment. I. Strategic changes for Lufthansa Strategy is argued to be a useful tool for an organization to achieve its target in the long term, and its contribution to development of the organization is evident. However, it is impossible to use one strategy to respond the changeable demand due to the dynamic external environment, so the organization should change their strategies to adapt the market. 1. Strategic change program According to Balogun and Hailey (1999)...
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...Lufthansa: Going Global, but How to Manage Complexity Elizabeth Olive Dr. Matthew Ademola Business 499 June 11, 2010 1. Describe the type of international strategy the company has chosen. Lufthansa has chosen a transnational strategy through which the firm looks to achieve both global efficiency and in their home market. The firm has focused on building a shared vision and individual commitment through an integrated network that includes its five business segments, alliances, and partnerships. Lufthansa uses this strategy to continue with their strategic goals regarding its core business activity passenger transportation’s vision to be a top leader at home and across-borders. These networks allow Lufthansa to manage its connections with its customers, suppliers, partners, and alliances at home and globally more efficiently. In addition, it helps to implement value-based and cost saving strategies options in regards to the products and services offered to different markets. Lufthansa’s aim in 2009 was to maintain and expand their position as the leading European quality carrier. In order to succeed the firm has focused on long term growth prospects of securing and building their market position at home then following international expansion. The firm’s position has allowed Lufthansa’s group to choose an international strategy that allows them to act with farsightedness in how to differentiate and customize their services and products to local and global markets by...
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...Lufthansa 2000: Maintaining the Change Momentum Prepared for: Business 497a Professor Don Fujitani Section # 15663 Prepared by: Amiel Traynum Elin Ghadimian Josh Sherriff Ross Zalavsky Ryan Neal External Environment: Global: Worldwide events such as the Gulf War, followed by a recession, put a burden on the airline industry and on Lufthansa as a company. These events caused a major decrease in the amount of seats filled in the airline industry. In 1991 the Seat Factor decreased to about 57 percent in Europe, compared to 65 percent worldwide. Socio-Cultural/ Demographic: You can infer from the case that the growing alliances in the airline industry have been increasing due to globalization. In 1991, Lufthansa had an increase of passenger numbers by 11% due to German re-unification. Legal/Political: The airline industry was strongly regulated by the government in the US and most of the airline industry was owned by the government in Europe. This changed in the US when deregulation of the industry began in 1978 as airlines gained more lenience in operating their business. Before becoming privately owned and profitable in 1997, Lufthansa was a state-owned, national airline carrier of Federal Republic of Germany and the government had strict control over both routes and landing slots. Regulations for the rest of Europe were not as strict. Economic: In the past, an economic recession contributed to the major problem...
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...business. The term Human resource management is therefore also widely known as "Personnel Management" as a description of the process of managing people in organisations. In a constantly changing world, which requires flexible responses, with strong competition from nearly every continent, due to increased globalisation, it is important for organisations to have some kind of competitive edge. Especially in the service industry, but more generally spoken throughout every industry, the human leverage is the most contributing factor to being competitive and making a difference to customer satisfaction and general organisational performance. Other elements effecting HRM and increasing its importance are technological changes, increasing litigations due to changes in legislations worldwide (e.g. EU) and the changing characteristics of the workforce (e.g. diversity). That is why HRM is important for an organisation to improve the competitive advantage. Professor Pfeffer (cited by Bernadin, H.J., Chapter1, 2007) notes that "traditional sources of success (e.g., speed to market, financial, technological) can still provide competitive leverage, but to a lesser degree now than in the past, leaving organizational culture and capabilities, derived from how people are managed, as comparatively more vital." The main functions of HRM (Human Resource Management) are to employ...
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...EMIRATES AIRLINE EXPANSION STRATEGY DUBAI-VANCOUVER About Emirates Airlines: Our Vision & Values The principles which propel us forward A strong and stable leadership team, ambitious yet calculated decision-making and ground-breaking ideas all contribute to the creation of great companies. Of course, these have played a major part in our development, but we believe our business ethics are the foundation on which our success has been built. Caring for our employees and stakeholders, as well as the environment and the communities we serve, have played a huge part in our past and will continue to signify our future. Emirates flies to more than 100 destinations in over 60 countries and has been fundamental in establishing Dubai as the Middle East’s commercial center and aviation hub. It operates more than 1,000 flights per week across six continents from its base at Dubai International airport, which has the capacity to handle 70 million passengers per year. Emirates was launched in 1985 with two leased aircraft from a rudimentary airport. It’s phenomenal growth is reflected in the 160-plus aircraft in its rapidly expanding fleet – a mix of the latest wide-body Airbus and Boeing aircraft - as well as Dubai’s state-of-the-art Emirates Terminal 3, which is used solely for the airline's flights. Its fleet is one of the youngest in the skies, with an average age of under 80 months, and this figure will fall further as it takes delivery of the 200-plus aircraft it has...
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...the most established one. Here the essay is mainly dealing with the reviewing of the management strategy of the budget airline giant RYANAIR. Essay includes not only the management strategies but also the main problems that Ryanair have to face in their entire business period. And also includes the analyses of European Airline Industry in relation to Ryanair. ANALYSIS OF EUROPEAN AIRLINE INDUSTRY European Airline industry can be called as the world’s biggest airline industry. Europe’s main stream airlines industry includes British airways, Lufthansa, Scandinavian Airlines and BMI. Before the establishment of the budget airlines they were the kings of European airline industry. The Budget Airline or the Low frae airline includes Easyjet, Virgin Express, Aer Lingus, bimbay My TravelLite and last but not the least Ryanair. Among these budget airlines and the main stream airline there occurring a massive competition and many have lead to disputes also. The emergences of the budget air lines really make the condition of the main stream very worse. In response to that the main stream also comes with many remedies and some of them was a success and other was futile. After the unprecedented tragic events of September...
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...internal strategic capabilities (SWOT)……...4 Ryanair’s strategic choice (Porter’s five forces)………5 VRIO framework……………………………………………..5 Rumelt’s criteria……………………………………………..6 Ryanair’s implementation of low cost strategy………..6 Recommendations………………………………………….6 Conclusion…………………………………………………...7 Reference List……………………………………………….7 Appendix………………………………....…………………..8 12.1 Presentation’s slides…………………………………8 Word count 1,744 (excluding reference list and appendix) 2 Besmir Lika 1.0 Introduction Strategic Management Individual Report Richard Jump The notion of underlying the concept of generic strategies is that competitive advantage is at the heart of any strategy, and achieving competitive advantage requires a firm to make a choice, if a firm is to attain competitive advantage, it must make a choice about the type of competitive advantage it seeks to attain and the scope within which it will attain it (Porter, 2004). The purpose of this report is to assess the key strategies chosen by Ryanair within cost leadership and that were likely to generate competitive advantages to the organisation. Furthermore, this paper will analyse the Ryanair’s decision to become a low cost airline through Porter’s five forces. It will help to understand the industry attractiveness and competitive forces. PEST analyses will be directed in order to analyse the business environment where Ryanair operates. SWOT analyses will be piloted to diagnose the strategic capabilities of Ryanair. Porter’s...
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...Unclassified Organisation de Coopération et de Développement Économiques Organisation for Economic Co-operation and Development DAF/COMP(2014)14 06-Jun-2014 ___________________________________________________________________________________________ English - Or. English DIRECTORATE FOR FINANCIAL AND ENTERPRISE AFFAIRS COMPETITION COMMITTEE DAF/COMP(2014)14 Unclassified AIRLINE COMPETITION -- Background Paper by the Secretariat -18-19 June 2014 This document was prepared by the OECD Secretariat to serve as a background note for Item IX at the 121st meeting of OECD Competition Committee on 18-19 June 2014. The opinions expressed and arguments employed herein do not necessarily reflect the official views of the Organisation or of the governments of its member countries. More documents related to this discussion can be found at http://www.oecd.org/daf/competition/airlinecompetition.htm. English - Or. English JT03358883 Complete document available on OLIS in its original format This document and any map included herein are without prejudice to the status of or sovereignty over any territory, to the delimitation of international frontiers and boundaries and to the name of any territory, city or area. DAF/COMP(2014)14 TABLE OF CONTENTS Introduction ................................................................................................................................................. 3 1. Features of the airline industry .............................
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...strategic implications for Capital One. There are many key environmental forces that have an immediate strategic implication for Capital One. First, the credit card industry has reached a high level of competition. This is a period of mergers and consolidations. Some institutes are selling off their credit card portfolio, others merging operations you might say that the industry is undergoing a period of flux. Secondly, the rise of personal bankruptcies has a direct barring on the credit card portfolio of Capital One. Thirdly, the economy; when the economy is in recession many things have a direct bearing on Capital One. Employees lose their jobs and fall behind on their credit card payments, this directly affects cash flow. Credit card holders may file for bankruptcy thus resulting in a bad loan discharge or times are just hard and are late paying their credit card payments. Capital One also faces a potential risk from its practice of funding from securitization. Capital One had to shift away from sub prime loans to a larger portion of prime loans as a result of federal regulations and many individuals defaulting on their loans. Each of these forces has a direct bearing on the operations of Capital One now and in the near future. 2. Identify and describe the capabilities and weaknesses within Capital One that have immediate strategic implications. Capital One understanding their niche market realized that they must diversify into other market areas to seek new profit...
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...introduced their innovative approach to making coffee desirable again; bringing lattes, frappuccinos and espressos to a market that was previously sustained with bitter black coffee introduced an entirely new customer base for coffee to cater to. This resulted in a very profitable industry generating an estimated $36 billion in revenues and an annual growth rate of 3.8% meaning that this industry continues to be a valuable opportunity (IBISWorld). The Ripple Maker takes a personalized cup of coffee to another level, by printing ‘Ripple’ images onto the milk-froth left on the top of a coffee. Ripple began in Israel in 2013 and began to gain momentum after receiving awards at the ‘product demo of our lives!’ competition and after winning the ‘Last Gadget Standing’ competition. The Ripple Maker uses a patented coffee bean extract that uses 3D printing technologies to replicate any image onto the top of the cup. Their advantage is in the customizability of the printing which allows baristas and customers to choose from a library of images or upload their own, posting the picture on social media is almost inevitable. This report will delve into the history of this company, their business strategy and potential opportunities that this company will face in the future. Eyal Eliav and Danny Lavie are designers and inventors who fell in love with the idea of creating a unique experience for each coffee consumer. The vision was to ripple the world with a unique and innovative way to...
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...ctseng@mail.ncku.edu.tw Texts Ireland, Hoskisson, and Hitt (2009) The Management of Strategy: Concepts and Cases, 8th Edition, South-Western Press. Course Objectives In the past a few decades, the trend of globalization has rendered the world economies more interdependent. All businesses today (both international and domestic ones) are exposed to international competitive forces that can have serious consequences for their performance and survival. Such international competition especially brings new challenges and problems to corporations and managers directly involved in foreign markets. Among various issues arising from international operations, this course particularly focuses on the managerial challenges associated with strategy development and corporate management for those firms whose business activities transcend national boundaries. Specifically, objectives of this course are twofold: 1. to expose students to issues related to business strategy within the context of global markets and competition 2. to provide students with significant opportunities to develop oral communication and presentation skills Requirements and Grading Individual Activities: Participation 40% Exam (close-book) 20% Group Activities: Chapter Text Presentation and Discussion Leading 20% Case Analysis and Presentation 20% Participation: All students are expected to PREPARE for and PARTICIPATE in every class meeting. Through in-class discussion...
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...[gview file="http://file.coursepaper.com/20131002214624535.pdf"] BS3100 Business Strategy Summary report “Ryanair – The Low Fares Airline” Ryanair – The Low Fare Airline Being founded in 1985 by an Irish businessman, Tony Ryan, Ryanair today is Europe’s first and largest low fares airline (Thomson and Bade-Fuller, 2010). Since 1991 with Michael O’Leary taking a position of CEO of the company, Ryanair in 2008 had served about 50.9 million passengers in around over 25 European countries with a total number of 163 Boeing 737-800 planes (ibid). The low-cost model airline is pursuing seem to be successful, resulted in continuously increasing margin rate and overwhelming competition with other major airlines, like easyJet and Lufthansa (ibid). The predominance of Ryanair as Europe’s largest low cost carrier is a consequence of the following cost advantage sources. Homogenous fleet, frequent short-haul flights, high seating density and planes filled to capacity due to cheap early bird tickets allow Ryanair to benefit from economies of scale (Thomson and Bade-Fuller, 2010). Standardisation and simplification of jobs results in economies of learning and residual efficiency. Process design, that includes 96% card only online bookings, fast boarding, short haul flights, use of homogenous fleet with simplified aircraft design, low number of staff, use of secondary airports and departures before 9pm leads to efficient service delivery (ibid). Ryanair product design is aimed...
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...over 57 countries. The airline also operates four other hubs in major U.S. notably Los Angeles which it has recently reestablished (Delta, 2011). Due to competition from lost-cost airlines, the negative effects of 911 on travel and skyrocketing fuel prices, the company held over $20 billion in debt as of September 2005 Delta declared bankruptcy. Delta was able to emerge from bankruptcy in 2007, achieving profitability that same year. In April, 2008, Delta announced its intention to purchase Northwest Airlines. The two companies combined created the world’s largest airline. Currently it is the only airline to service all six permanently inhabited continents in the world. The company's structure and management approach have constantly evolved in order to maintain competitive in the cutthroat airline industry (Delta, 2011). Delta vision will able them continue to be the world’s largest and the world’s greatest airline. Segments of General Environment Segments that rank the highest would be suppliers and work environment. The corporate culture is being heavily impacted with the new technology Delta is using. Customer service has decreased and the kiosk has increased. Delta has direct red phones that customer use to dial directly to a representative for assistance and virtual check-in capabilities that customer can check-in from their home computer. Delta is aware of the customer service...
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...low-cost player providing the distinctive ―JetBlue experience.‖ In its efforts to boost revenues, the airline began charging $10 to $20 for seats with extra legroom, doubled its ticket-change fee to $100, and introduced refundable tickets that cost more than nonrefundable ones. Further, the airline began charging $7 for a pillow-and-blanket kit, an amenity usually provided free of charge by other airlines.2 Breaking another low-cost rule, JetBlue moved away from ticket sales through its own Web site and signed up with travel agencies and the Galileo and Sabre global distribution systems in August 2006 and with online travel agencies such as Orbitz in January 2008. Further, it sold approximately 42.6 million shares of common stock to Deutsche Lufthansa, the German carrier, in January 2008 which indicates a move away from its ‗growing alone‘ strategy3 and also forged an interline agreement with Virgin Atlantic. With the interline agreement, passengers on JetBlue will be able to connect through Boston, New York, Washington to catch flights to London Heathrow on Virgin Atlantic. JetBlue customers connecting in Orlando will be able to fly to London's Gatwick...
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...Executive Summary Ryanair operates as a cost leader in the European low cost carrier segment of the airline industry. As a cost leader they aim to achieve high volume sales by attracting customers with low prices. As a result of charging some of the lowest prices in the industry, Ryanair has seen growth in traffic and reported record revenues. To remain profitable the company focuses on maintaining low costs and efficient operations. The key issues facing Ryanair include how to remain profitable in light of rising fuel prices and currency exchange risk, the ability to maintain market share and growth in a segment characterized by intense competition, and whether or not it would be profitable to expand into the growing international/emerging markets and internet retailing space. In addressing these key issues, it is recommended that Costco focuses on opportunities in the internet retailing space to grow bottom and top line growth as well as increasing market share. It is also recommended that they remain committed to their low cost high inventory turnover strategy in order to continue to offer consumers the lowest prices and achieve high inventory turnover. By taking these initiating the strategies summarized above, Costco will be able to maintain their position as market leader and continue to operate profitably in the discount membership warehouse segment of the retail industry. Business Model & Strategy Ryanair operates as a cost leader in the low cost...
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