Instructions: This assessment focuses on the student’s understanding and application of strategic concepts associated with Strategic Position and Strategic Choice ; outlined in Parts I and II the...

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Instructions:


This assessment focuses on the student’s understanding and application of strategic concepts associated with

Strategic Position

and

Strategic Choice
; outlined in
Parts I and II
the textbook.


Read the short account of the
US airlines
industry provided in the Task 2 folder (Assessment 2 – Background Information) and prepare a 2500-word report that addresses the following:






Conduct a PESTEL and competitive forces analysis of the U.S. airline industry. What does this analysis tell you about key drivers for change, industry attractiveness, potential opportunities and possible threats?





Given your analysis of the Strategic Position of the US airlines industry, what Strategic Choices do you think an airline should adopt to improve its chances of being persistently profitable?






Report Structure:


















































Note:
Executive Summary, Table of Contents
and
Reference List
do not contribute to the word count.
Section




Content



Assignment Cover Sheet



Assignment/student information



Title Page





• • This is developed by the individual student. Identify the unit name & code, assignment title, student name & ID, and the word count.


• • The title should provide insight into the focus of the report.


• • The Title Page is not numbered.




Executive Summary





• • A brief overview of the importance of the topic and the aim and findings of the report.


• • Must be on a page by itself that is numbered in roman numerals.




Table of Contents





• • Professional presentation using MSWord
Insert Table of Contents
function.


• • On a page by itself and numbered in roman numerals.




Introduction





• • “Page 1” begins here at the bottom right hand corner. Use the ‘page number’ formatting function for this purpose.


• • The remaining pages should then be numbered ‘Page 2’, ‘Page 3’, etc.


• • Provide topic orientation (what is the topic and why is it important), state the aim of the report, define any key terms and outline what will be presented in the report.




Body
(do not use this word as a heading)





• •
Context: Historical overview of the economic performance of the US airline industry


• •
Theory: Explanation and relevance of Strategic Position/Choice, PESTEL analysis, five forces tool and its advantages and disadvantages and relevant strategic choice concepts.


• •
Analysis: PESTEL analysis identifying key drivers, five forces analysis of US airline industry with diagram summarising main findings.


• •
Discussion: Evaluation of key drivers of change, industry attractiveness, potential opportunities and possible threats. Application of strategic choice concepts to potential strategies for profitability.




Conclusions





• • Restate the aim of report and its significance (i.e. the aim).


• • Summarise findings/evaluation.


• • State limitations of report.




Recommendations





• • List in dot point short sentences the strategies for airline profitability




List of References





• • Correctly apply Harvard referencing style.




Appendices





• • Any additional information, if required.








US airlines – Case Study



The United States Airline Industry


The U.S. airline industry has long struggled to make a profit. Analysts point to several factors that have made the industry a difficult place in which to do business. Over the years, larger carriers such as United, Delta, and American have been hurt by low-cost budget carriers entering the industry, including Southwest Airlines, Jet Blue, AirTran Airways, and Virgin America. These new entrants have used non-union labor, often fly just one type of aircraft (which reduces maintenance costs), have focused on the most lucrative routes, typically fly point-to-point (unlike the incumbents, which have historically routed passengers through hubs), and compete by offering very low fares. New entrants have helped to create a situation of excess capacity in the industry and have taken share from the incumbent air- lines, which often have a much higher cost structure (primarily due to higher labor costs). The incumbents have had little choice but to respond to fare cuts, and the result has been a protracted industry price war. To complicate matters, the rise of Internet travel sites such as Expedia, Travelocity, and Orbitz have made it much easier for consumers to comparison shop, and has helped to keep fares low.


Beginning in 2001, higher oil prices also complicated matters. Fuel costs accounted for 32% of total revenues in 2011 (labor costs accounted for 26%; together they are the two biggest variable expense items). Many airlines went bankrupt in the 2000s, including Delta, Northwest, United, and US Airways. The larger airlines continued to fly, however, as they reorganized under Chapter 11 bankruptcy laws, and excess capacity persisted in the industry.


The late 2000s and early 2010s were characterized by a wave of mergers in the industry. In


2008, Delta and Northwest merged. In 2010, United and Continental merged, and Southwest


Airlines announced plans to acquire AirTran. In late 2012, American Airlines put itself under Chapter 11 bankruptcy protection. US Airways subsequently pushed for a merger agreement with American Airlines, which was under negotiation in early 2013.

Answered Same DayNov 17, 2021

Answer To: Instructions: This assessment focuses on the student’s understanding and application of strategic...

Taruna answered on Nov 20 2021
148 Votes
1
Introduction
    The strategic position is recognized as one of the major analytical perspectives that organizations have to hold in the modern business context (Johnson & Scholes, 2005). In fact, strategic positioning of a company includes the assessment of the organizational choices and preferences set by the any company in accordance with the internal sources, influential factors at external level as well as to see the role of stakeholders in achieving the desired objectives with the setti
ng up of the strategies for the future (Lees, 2008). If seen from close viewpoint, the strategic positioning of organizations tends to include the political, environmental social, economical and all other factors that can affect the future outcomes in terms of production and sales. Thus, the choices for the future, the assessment of the current position in the market and how the performance of the company can be improved are altogether set by the analysis of the strategic positioning (Lees, 2008).
The following report examines the positioning of US Airline industry in the current context of global aviation. The strattic positioning of the company is analyzed by the political, social, environmental, technological, economical and social perspectives. The conclusions of the reports are driven in favor of the fact that there is a great need of integrated efforts in US Airline industry in order to compete with the rapidly evolving aviation world; the merging of small Airline service providers in order to earn good profits can be a good alternative for them in this context.
The Historical Overview
    At first, it is significant to overview the historical aspect of the US Airline industry because it was founded in a time which is seen as the aftermath of World War I. It began in 1918 and was formally administered by the Post Office (Cook, 1996). In fact, the aviation in those days meant to be the carrying of the airmail by air force pilots from one place to the other—it is remarkable to note here too that the birth of US airline was native in the sense that the US army’s aircrafts were used in this process; the commercialization of the US Airlines began taking shape after two decades of this initiative (Cook, 1996).
    Later, the formation of Interstate Commerce Commission, ICC in 1935 gave way to the merging of passenger carrier services with the airmails—it was the time when the twin engine aircrafts were introduced at commercial level (Cook, 1996). The inclusion of DC1 and DC2 in the airline services increased the chance of fully commercialized aviation services to be born in the American industrial segment. However, the onset of the World War II hindered this procedure for a while and only after 1945, the rapid growth of airline industry could sustain itself (Cook, 1996).
    In the same context, the role of Civil Aeronautics Act of 1938 cannot be underestimated. It was the first time in the airline services in USA that regulatory authority over air commerce was transferred from Interstate Commerce Commission to an autonomous governing body, Civil Aeronautics Board. The formation of CAB was also decisive in the sense that in the later decades of US Airline industry most of the commercial and passenger services were monitored under the Civil Aeronautics Act of 1938 (Cook, 1996). Since then, this act serves as the major foundation to regulate the commercial and passenger carrier services in US Airlines.
The PESTLE and Five Competitive Force Analysis of US Airline Industry
    In the context of analyzing the PESTEL of US Airline industry, it is important to see the scale of completive environment produced by the buying and selling of services in airline industry. The analysis overall shows high competency level among the service providers. The PESTEL analysis is as below:
Political Environment
    In the context of US Airline industry, it operates in a highly regulated political environment where the passengers are kept on high priority (N. A. 2014). The US Airlines are controlled over the monopolistic behavior of their own—which is the reason behind the strict follow up of the Civil Aeronautics Act of 1938 which is further revised. The amendment clauses are added in 2003 and 2014 in it, showcasing the concern of the political thinkers about the safety and facility availability based concerns of the policymakers in this context. Passengers are understood as the valuable stakeholders and their priorities and expectations from the various airlines operating in business should be kept on paramount position (N. A. 2018).
    Additionally, if the political factors affecting the functioning of the US Airline industry are analyzed in specific context, the political factors are affecting the long term profitability of American Airlines Group Inc. (Fern Fort University, 2018). It requires political stability, avoiding of the military invasion, dependence over the service sector of the nation where the low cost workforce...
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