...article discusses the failure of Swissair by analyzing the financials of the company prior to the year 2001 when the company became grounded. It begins by giving the company’s profile and its history from establishment in 1931. The paper highlights the company’s successes and gives a table that shows the gradual increase in the number of fleet, employees, revenue, cities served, and the break-even load factor from 1931 to 2000. The paper goes ahead to explain the reasons why the company failed to consider the alliance strategy that was commonly used by similar companies as well as elaborating other principal causes of failure such as government interference and uncritical media coverage, A five year financial review of the company is provided beginning 1996 to the year 2000 showing how the operating revenue increased while the EBIT and profits decreased and finally led to losses. Mileski, J., & Nwabueze, U. (2008). The Challenge of effective governance: a case study of Swissair. Journal of Corporate Governance, 8, 5, 583-594 This article begins by giving a brief history of Swissair Company making note of its initial successes and good management practices. It then explores the best managerial practices that are crucial for the success of any business, laying emphasis on the precepts of effective corporate governance and their impact on businesses. The paper then explores the corporate governance practices that were common in the Swissair Company comparing them to the best...
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...Business Failure Analysis Derrick Canty LDR 531 April 13, 2010 Tim Buchanan For several decades, Switzerland’s former national airline, Swissair, has had a reputation as being an almost perfect embodiment of traditional Swiss virtues like technical innovativeness combined with reliability and solidity at the same time. They were so financially stable that they were known as the “Flying Bank.” Established in 1931, Swissair epitomized international transportation until the late 1990s, when the management decided to follow the aggressive borrowing and acquisition policy known as the Hunter strategy. This strategy was a major expansion program initiated by Swissair aimed to grow its market share through acquisition of small airlines rather than entering into alliances agreements. The buying spree created a major cash flow crisis for parent company SAirGroup (Swissair Group), and was exacerbated by environment caused by the September 11 attacks. Those attacks put a void in the company’s plans and Swissair found itself hamstrung with debt. Unable to make payments to creditors on its large debt, and the refusal of UBS AG (Union Bank of Switzerland) to extend its line of credit a month later forced the entire Swissair fleet to be grounded in October 2001. Management was the blame for how this company failed because of failure to conduct a market research and not taking competition seriously. Swissair figured that they could just “muscle” the little guy and...
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...s nmnsn m EAR GOVERNMENT COCA COLA SWISSAIR PASSENGERS 50 issue 25. summer 2006 EBF D6PTH By Dominique Turpin, IMD "No comment". Those two simple words can shatter a company's reputation and cost it millions in lost sales. So how can you turn a corporate crisis into competitive advantage? n October 2001, news of potentially harmful bacteria found in a McChicken Burger in Buenos Aires, Argentina, spread across South America via television and the internet. Although no one was proved to have been made sick or placed at risk, the incident cost McDonald's several million dollars in lost sales and damaged brand eguity {Turpin, 2002). Effective or ineffective communication during the first hours - or even minutes - of an emergency can have dramatic implications for the image of a company (Dawar and Pillutla, 2000). A study of 2,645 consumers conducted by the advertising agency DDB Needham showed that a company's handling of a crisis ranked as the third most important influence on consumer purchasing, after product quality and handling of complaints {Marketing News, 1995). issue 25. summer 2006 51 When disaster strikes: communicating in a crisis Crisis-management experts are unanimous in concluding that it is not a matter of if a company wiil be faced with a crisis, but when and how weii-prepared executives wili be to weather the storm {Albrecht, 1996). Indeed, no company is immune to a potential crisis created by flawed products, blackmail by unscrupulous...
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...RUNNING HEAD: First and Last Mover Theories First and Last Mover Theories AIU – MGT680 Abstract This paper will include a comparison of the advantages and disadvantages of the first and last mover theories. It will include examples of real firms which have been successful or failures as they employed one of the theories at their company. The conclusion will be a recommendation on which theory should be used with supportive details and an example of a company that validates the claim. First and Last Mover Theories The first-mover theory is all about being first to enter a new market which allows a business to gain the advantage over its rivals (First-Mover Advantage, 2014). This is true for developing new geographical or demographic markets for existing products or to introduce new products to an existing market. The first-mover theory advantages include the first one to the market gains defensible ground because it captures the market share much more easily without rivals. The first one to the market also has a leg in with the competition when it does come because the customer is already familiar with their product. The first one to the market also consolidates its position in order to compete more effectively. The first one to the market also captures the majority share and become the lower cost leader. Being first to the market also allows for many disadvantages (First-Mover Advantage, 2014). The first-mover theory disadvantages include that the mistakes the first...
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...Diversification Strategies Diversification Strategies The question of whether a business should diversify or not sounds fairly simple. Businesses are always looking for ways to reduce risk in the marketplace as well as ways to improve performance and diversification is often a way to achieve those goals (“Business Diversification,” n.d.). Upon further examination though, the question is more complicated and could have a tremendous impact on whether a business succeeds or fails (Heller, R. 2006). This paper examines two companies that implemented diversification strategies with very different results: one successful and one that wasn’t. It will conclude with possible reasons why their outcomes were different and suggested actions the unsuccessful company could have taken that would have resulted in a successful outcome. Hallmark Cards, Inc. Hallmark Cards was first incorporated in 1923 and is now the world’s largest greeting card company. They distribute their cards and other products in more than 30 languages to more than 100 countries and in 2006 had $4.1 billion in sales. In the US alone, their products are sold in over 40,000 retail outlets, they have over 20,000 employees, and they continue to be privately held (“Hallmark Cards, Inc.,” 2007). Even in the early years of the company’s history, Hallmark saw a need to diversify and it continues that strategy today. Early diversification efforts were related to products like wrapping paper...
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...Acct:6302.720 Contemporary - Control Systems Journal Critique 2 Dr. Carol Sullivan July 3, 2015 The Accounting Competency Crisis within the U.S. By Max Jackson Tell me something... What do Bear Stearns, Swissair, Health South, World Com/MCI INC. Tyco Ltd, Enron and Arthur Anderson all have in common, they all shared one weakness that has killed all companies alike.... the inability and the lack of quickness to spot bad accounting practices and procedures that were in place that lead to their immediate demise. It is because of this bad oversight and bad practices that Corporate America is railing for new talent, only for the talent not to be at the caliber they wanted. Some within Corporate America blame the current education system for not preparing today's "OVER ENTITLED STUDENT" who feel as though they can rightfully command a 6 figure salary as if they were Moses parting the Red Sea, with regards to doing the job they have been hired to do only to do nothing! In my paper, I not only place blame where it needs to be, at both the foot of the Educational System and Corporate America for not doing their part in order to prepare today's students, but I also state from those what can be done to help today's student over come today’s current job disparities within the field of accounting. Intro: In today’s tough job market, companies all across the United States are in a race as if it were a nuclear arms deal in order to find the top talent within the accounting...
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...systems, principles and processes by which a company is governed. They provide the guidelines as to how the company can be directed or controlled such that it can fulfil its goals and objectives in a manner that adds to the value of the company and is also beneficial for all stakeholders in the long term. Stakeholders in this case would include everyone ranging from the board of directors, management, shareholders to customers, employees and society. The management of the company hence assumes the role of a trustee for all the others. Corporate governance is based on principles such as conducting the business with all integrity and fairness, being transparent with regard to all transactions, making all the necessary disclosures and decisions, complying with all the laws of the land, accountability and responsibility towards the stakeholders and commitment to conducting business in an ethical manner. Another point which is highlighted in the SEBI report on corporate governance is the need for those in control to be able to distinguish between what are personal and corporate funds while managing a company. Fundamentally, there is a level of confidence that is associated with a company that is known to have good corporate governance. The presence of an active group of independent directors on the board contributes a great deal towards ensuring confidence in the market. Corporate governance is known to be one of the criteria that foreign institutional investors are increasingly...
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...Individual Project 3 Robert F Murphy MGT680-1204A-02 Abstract This paper assumes the role of a member of a team of managers wanting to know how to go about introducing a new product. The paper will discuss if it is better to use a late-mover theory or a first-mover theory through the use of positives and negatives of each which will be supported by examples of sixteen companies. Finally, a decision will be made as to which style should be used and why. Introduction Within this paper the late mover theory and the first mover theory will be defined. Once they are both defined each one will be shown to have advantages as well as disadvantages. All of these advantages and disadvantages will be supported with real life situations and businesses that have used both for the positive as well as the negative. This analysis is being done because the head company wants to know which theory to go with in terms of releasing its new product. Unfortunately, the product is unknown as well as many other facets of the company. The benefit to that is the decision can be made with an unbiased approach and only the facts will hold true within this report. Advantages & Disadvantages of the Theories The “First-mover” theory and the “Late-mover” theory are both ways of attacking the global marketplace with regard to product placement as well as the best time to strike. Many corporations in the world will come up with similar or even...
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...required. (Please note: the latest edition of the textbook will be adopted if there is one available. Please check out our online bookstore for most updated textbook information http://bookstore.mbsdirect.net/jhu-carey.htm.). Please see other required and recommended readings in the class schedule. Blackboard Site A Blackboard course site is set up for this course. Each student is expected to check the site throughout the semester as Blackboard will be the primary venue for outside classroom communications between the instructors and the students. Students can access the course site at https://blackboard.jhu.edu. Support for Blackboard is available at 1-866-669-6138. Course Evaluation As a research and learning community, the Carey Business School is committed to continuous improvement. The faculty strongly encourages students to provide complete and honest feedback for this course. Please take this activity seriously because we depend on your feedback to help us improve so you and your colleagues will benefit. Information on how to complete the evaluation will be provided towards the end of the course. Disability Services...
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...An overview of strategic alliances Dean Elmuti Lumpkin College of Business and Applied Sciences, Eastern Illinois University, Charleston, Illinois, USA Yunus Kathawala Lumpkin College of Business and Applied Sciences, Eastern Illinois University, Charleston, Illinois, USA Keywords Strategic alliances, Competitive advantage, Success Introduction Nike, the largest producer of athletic footwear in the world, does not manufacture a single shoe. Gallo, the largest wine company on earth, does not grow a single grape. Boeing, the pre-eminent aircraft manufacturer, makes little more than cockpits and wing bits (Quinn, 1995, p. 1). Abstract Strategic alliances can be effective ways to diffuse new technologies rapidly, to enter a new market, to bypass governmental restrictions expeditiously, and to learn quickly from the leading firms in a given field. However, strategic alliances are not simple or easy to create, develop, and support. Strategic alliances projects often fail because of tactical errors made by management. By using a well managed strategic alliances agreement, companies can gain in markets that would otherwise be uneconomical. Considerable time and energy must be put forth by all involved in order to create a successful alliance. It is essential that corporations enter into strategic alliances arrangements with a comprehensive plan outlining detailed expectations, requirements, and expected benefits. ``How can this be?'' you ask. These companies, like...
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...An overview of strategic alliances Dean Elmuti Lumpkin College of Business and Applied Sciences, Eastern Illinois University, Charleston, Illinois, USA Yunus Kathawala Lumpkin College of Business and Applied Sciences, Eastern Illinois University, Charleston, Illinois, USA Keywords Strategic alliances, Competitive advantage, Success Introduction Nike, the largest producer of athletic footwear in the world, does not manufacture a single shoe. Gallo, the largest wine company on earth, does not grow a single grape. Boeing, the pre-eminent aircraft manufacturer, makes little more than cockpits and wing bits (Quinn, 1995, p. 1). Abstract Strategic alliances can be effective ways to diffuse new technologies rapidly, to enter a new market, to bypass governmental restrictions expeditiously, and to learn quickly from the leading firms in a given field. However, strategic alliances are not simple or easy to create, develop, and support. Strategic alliances projects often fail because of tactical errors made by management. By using a well managed strategic alliances agreement, companies can gain in markets that would otherwise be uneconomical. Considerable time and energy must be put forth by all involved in order to create a successful alliance. It is essential that corporations enter into strategic alliances arrangements with a comprehensive plan outlining detailed expectations, requirements, and expected benefits. ``How can this be?'' you ask. These companies, like...
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...Journal of Empirical Finance 7 Ž2000. 317–344 www.elsevier.comrlocatereconbase Firms, do you know your currency risk exposure? Survey results Claudio Loderer ) , Karl Pichler a a Institut fur Finanzmanagement, UniÕersitat Bern, Engehaldenstrasse 4, Bern 3012, Switzerland ¨ ¨ Abstract This paper surveys the currency risk management practices of Swiss industrial corporations. We find that industrials are unable to quantify their currency risk exposure and investigate possible reasons. One possibility is that firms do not think that they need to know because they use on-balance-sheet instruments to protect themselves before and after currency rates reach troublesome levels. This is puzzling because performing a rough estimate of at least the exposure of cash flows is not prohibitive and could be valuable. Another puzzling finding is that firms use currency derivatives to hedgerinsure individual short-term transactions, without apparently trying to estimate aggregate transaction exposure. q 2000 Elsevier Science B.V. All rights reserved. JEL classification: G15; G30 Keywords: Currency risk exposure; Swiss industrial corporation; On-balance-sheet instruments 1. Introduction This paper surveys the currency risk management practices of Swiss industrial corporations. Many of them sell most of their output abroad and would therefore seem to be heavily exposed to currency risk. In fact, currency risk can be substantial. Between 1978 and 1996, the Swiss franc experienced dramatic...
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...Business Proposal Professional Development II Prepared by: Casey Foo Don Lin Karen Lim Kim Hong Lawrence Lim 1 Executive Summary The airline industry is not young, and if it is not because of budget airlines who revolutionized how the industry works in terms of pricing strategies and marketing, it is honestly quite boring to fly! Since the September 11 attacks, airports around the world, including Australia has stepped up security measures extensively, which adds to the ʻhecticʼ experience of air travel. This is exactly the phenomenon what our proposal, called the WonderFlight program intends to address, by bringing our customersʼ flying experience to the next level. WonderFlight aims to bring our customersʼ flying experience to the next level by introducing themes into selected domestic B737-700 flights and each theme changes every three months. To start with, the launching theme would be Lady Gaga. For each WonderFlight, our flight attendants will dress up according to the theme and perform the usual in flight services such as serving meals & beverages. Passengers may also opt to take polaroid pictures on board with our well dressed flight attendants with a charge. On top of that, a custom flight safety demonstration will also be performed by our flight attendants according to the theme to encourage our customers of their interests in the safety features of the aircraft. Famous hits of that theme will also be played on-board to generate a fun and party going atmosphere. Passengers...
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...commercial airline in Asia operating under its original name. out of its hubs at Ninoy Aquino international airport of manila and mactan-cebu international airport of Cebu city, Philippine airlines serves nineteen destinations in the Philippines and 24 destinations in southeast Asia, middle east, east Asia, Oceania and north America. On March 1941, Philippine airlines (PAL) began to soar in the Philippine sky with one noble mission: to serve as a factor in building a better nation. With this in mind, notwithstanding the threats of World War II, pal took off and became Asia’s first airline. Since then, with its every takeoff and touchdown, pal carries with itself the making of a world-class legacy. With almost 70 years of service, PAL did not fail in becoming one of the world’s most respected airlines with its young and modern fleet of aircraft and destinations that cover 31 foreign cities and 29 domestic points. Its excellent service and world-class accommodation help pal win the hearts of travelers worldwide and pierce those of its competitors. Today, PAL has led the trend in the aviation industry. Aside from its young and modern fleet of aircraft and modern facilities, it has also one of the most extensive computer systems and radio communications networks in the Philippines. Also, PAL has been cited with...
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...The Future eTourism intermediaries Dimitrios Buhalis1, Maria Cristina Licata2 1 Course Leader MSc in eTourism, School of Management Studies for The Service Sector, University of Surrey, Guildford, GU2 7XH, UK d.buhalis@surrey.ac.uk Genesys Information Limited Clarendon House, 125 Shenley Road,Borehamwood, Herts WD6 1AG, UK cristina.licata@genesysinformation.com ____________________________________________________________________ 2 Acknowledgement: The authors would like to acknowledge Paul Richer and Dr Karsten Kärcher (Genesys Information Limited) for their contribution to this paper. Note: An earlier version of this paper was presented at the ENTER2001 conference in Montreal, Canada. The Future eTourism intermediaries Keywords: eTourism, Internet, intermediaries, disintermediation, Computer Reservation Systems, Global Distribution Systems, Digital TV, mobile commerce, Electronic Intermediaries ABSTRACT Hitherto, the travel distribution role has been performed by traditional Outgoing Travel Agents (OTAs), Tour Operators (Tos) and Incoming Travel Agencies (ITAs). They were supported by Computer Reservation Systems (CRSs), Global Distribution Systems (GDSs) or tour operators’ Videotext systems (or Leisure Travel Networks). These traditional electronic intermediaries (or ‘eMediaries’), particularly GDSs, progressively consolidated their position. The Internet created the conditions for the emergence of new eMediaries, based on three ePlatforms, namely the Internet,...
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