Market Analysis – Southwest Airlines What is the market structure for your good or service selected in Week Two? After almost thirty years of service, Southwest Airlines has emerged as one of the world's premier airlines. The Southwest approach to business and the industry at large have enabled the company to continue to grow at profit in times of true economic downturn. Presently, the market for air carriers is saturated and highly fragmented. Overcapacity has led the major United States airlines to compete with Southwest's low fare pricing strategy.
Case Summary and Important facts Despite the fact the airline industry had 87 new-airline failures in the US over the past 20 years. David Neeleman convinced a group of investors and quickly raised $130 million from venture-capital community. With its strong capital base, JetBlue acquired a fleet of new Airbus A320 aircraft and focused on innovation, providing the most valuable and the most excellent travel experience, low-cost, point-to-point service to large metropolitan areas with high average fares or highly traveled markets that were underserved, mainly on central and Western routes in the US. During 2001 and 2006, the airline industry was facing a number of external stress, such as the 911 terrorist attacks, Iraq War, SARS, high price of petroleum, ect. The airline industry in US has been challenged and many of firms were bankrupt.
Assignment # 1 Crafting and Executing Strategy Jacqueline R. Jones Dr. Gigi Smith Strategic Management – BUS 599 July 10, 2011 Introduction In today’s world where there is a constant barrage of business dealings, international competition and recent technology, operating a business, can be complex and challenging. Crafting and executing strategies are the heart and soul of managing a business. In the business environment it is crucial for businesses to implement strategic planning for the success and long-term viability of its business. Using a business strategy will set the direction for which it intends its business to go, where it is, and where it wants to be. Strategy consists of the competitive moves and business approaches that managers are employing to grow the business, attract and please customers, compete successfully, conduct operations, and achieve the targeted levels of organizational performance (Thompson, et al, 2010).
Boeing has customers in more than 90 countries world-wide and is one of the largest U.S. exporters in terms of sales. The company values innovation and is continually expanding their product line and services to meet emerging customer needs (About Us). Boeing generates $66 billion in revenues from their global aerospace and defense markets and conducts business through three operating segments. Boeing Commercial Aircraft (BCA; 50% of revenues and 49% of operating profits in 2007) and EADS's 80%-owned Airbus division are the world's only makers of 130-plus seat passenger jets. Integrated Defense Systems (IDS; 48%, 48%) is the world's second largest military contractor behind Lockheed Martin Corp. Boeing Capital Corp. (2%, 3%) primarily finances commercial aircraft for airlines (Business).
Having already filled the market with 747s, Boeing is looking to capitalize on the demand for direct flights and medium capacity requirements. Airbus on the other hand is producing the A380, an aircraft capable of carrying up to 800 people. Airbus is looking to replace the ever growing old Boeing 747s in the market with a higher capacity more fuel efficient plane. Its easy to compare the two aircrafts in terms of size and primary use. The A380 is a high capacity aircraft capable of transoceanic flights, while the 787 has relatively the same traveling distance, but a maximum passenger count of 280.
Introduction Despite the recession of American airline industry, JetBlue Airway’s profitability and productivity were still growing sharply after the terrorist attacks of September 2001and the distress of SARS in Asia areas in 2003. Therefore, the management decided to raise funds by initial public offering (IPO) in order to enforce the growth strategy. This article will analysis the advantages and disadvantages of JetBlue’s IPO by SWOT analysis, then, the recommended price will be provided calculated by P/E ratio and DCF methods and the limitations will be demonstrated as well. SWOT analysis of JetBlue: Strengths 1. JetBlue has a professional and experienced leadership team who dare to implement the innovations during the worst period in airline history.
Southwest Airlines – 2008 Case Study Executive Summary Millions of people fly everyday. Southwest airlines provide low-fare travel among 58 cities in the United States. Although the airline industry suffered greatly in the aftermath of September 11, Southwest was able to continue to hold strong. Southwest airline continues to maintain steady sales as much of the industry was affected by changes in laws/regulations and competition entering the market. In the following report there is a brief introduction to Southwest Airlines and their strategy and then what, if anything, they need to do or not do to remain at the top and competitive in the airline industry.
Part I The aim of this paper is to compare the management of operations in bmibaby and one of other video case organisation (Vue, Fuller’s Brewery or Elm Surgery) featured in the DVD that accompanies Block 2 Operations Management and to show what are the similarities and differences in the management of these operations. bmibaby was established in March 2002 and is now one of the UK's fastest growing low cost airlines operating more than 900 flights a week from four UK bases to 28 European destinations. By October 2007 bmibaby was operating a fleet of 22 aircrafts. bmibaby is hugely successful because it delivers simple service, simple products, great prices and great reliability. Vue was formed in May 2003 by the acquisition of Warner Village Cinemas by SBC International Cinemas.
This was a major opportunity within the airline industry since the global number of passengers increased from 450 million to 700 million between1990 and 2000 mainly due to the retiree that were travelling for leisure. Fuel prices and labor costs increased during the year 2000 which led to a rise in the airline cost. Air travel increased to 160 per cent from 1978 to 2000. Despite this increase, US airline RPKs (the average revenue per passenger kilometer) went down by 2.5 per cent per annum. The business model for Full Service Carriers (FSCs) main focus was to provide product quality and service to lots of cities.
JetBlue was named the number one U.S domestic airline by Coned Nast Traveler magazine’s Readers” Choice Awards” for the sixth year in a row. Furthermore, their product and services/extra amenities are excellent. There are leather seat and sleep kit, TV’s at each seat, additional leg room throughout all JetBlue aircraft. In an industry with many circulating question marks, JetBlue has used its strengths to produce a promising results and a successful company. Every coin has two sides.