Problem Solution Essay

Problem Solution: Classic Airlines
The terrorist attack of September 11, 2001 resulted in negative economic repercussions that impacted all areas of the U.S. economy. The airline industry suffered the most significant decline because of customers’ fears of flying coupled with increases in airline fuel. Classic Airlines was not exempt from these unforeseen events.   In addition, the negative atmosphere on Wall Street has resulted in employee moral being at it lowest since the company began operations 25 years ago. As McShane and Von Glinow (2004) stated “…employees become more loyal when communication processes keep them informed about what is happening in the company and when they have opportunities to interact with co-workers across the organization” (p. 128). Classic Airlines has to reduce overall cost while satisfying customers’ needs. ). The analysis in this paper will present the issues, develop alternate solutions, assess the risks, and prepare the implementation of a solution to the problems that Classic Airlines is investigating and will enable Classic Airlines to continue to be a major contender in the airline industry.
Describe the Situation
Issue and Opportunity Identification
Classic Airlines has seen growth in the number of its employees to 32,000 since it started 25 years ago. In the last fiscal year, the company earned $10 million on $8.7 billion in sales.
Classic Airlines is facing decline in its share profits of 10%; employees’ morale is declining, and customer loyalty fell off and has resulted in 19% decline in the number of customers in the company’s Reward Program. At the same time, there has been 21% decline in flights for the frequent flier customers. The major challenge is to determine how to use the present Customer Relationship Management (CRM) system to identify and satisfy the needs of its customers. Classic Airlines has to differentiate between value and price. The management has to realize that when people feel good about the...