MBA 570 week 5

MBA 570 week 5 - 1 PROBLEM ANALYSIS: CLASSIC AIRLINES...

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1 PROBLEM ANALYSIS: CLASSIC AIRLINES Running head: PROBLEM ANALYSIS: CLASSIC AIRLINES Problem Analysis: Classic Airlines Tammy Wortherley University of Phoenix August 17, 2009
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2 PROBLEM ANALYSIS: CLASSIC AIRLINES This paper will explore the nine-step problem solving process through an analysis of Classic Airlines. These nine steps begin with step 1; Describe the Situation, which involves identifying key concepts, issues and opportunities, stakeholder perspectives and ethical dilemmas. Step 2, Frame the Right Problem, requires that the right problem be broadly stated so many possibilities can be examined. Describe the End-State Goals is step 3. In this step Classic Airlines will know it has become what it wants to become. Step 4, Identify the Alternatives and Benchmarking Validation, allows Classic Airlines the opportunity to look at other companies and develop techniques that will help it overcome weaknesses and implement best practices for those areas. Step 5, Evaluate the Alternatives, lets Classic examine and judge carefully between two or more possibilities. Once these choices have been made, step 6, Identify and Assess Risks, allows Classic Airlines to look at potential risks and negative consequences so the solution can be eliminated if necessary and mitigation can take place. Step 7, Make the Decision, allows for risks to be identified and explored. The decision that is made is the best based on facts. Step 8, Develop and Implement the Solution, defines the work that is to be done, how it will be done, when, and by whom. The last step, step 9, Evaluate the Results, tells what is the expected outcome, how is the outcome measured, and is the outcome in alignment with Classic's end-state goals. This nine-step concept of problem-based learning is then summed up in a conclusion. Describe the Situation Issue and Opportunity Identification Classic Airlines is the world's fifth largest airline. Its fleet consists of more than 375 jets serving 240 cities with more than 2300 daily flights. Classic has grown to an
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3 PROBLEM ANALYSIS: CLASSIC AIRLINES organization of 32,000 employees in its 25-year inception and last year earned $10 million on $8.7 billion in sales. Classic Airlines has sustained profits even though it has been plagued with numerous problems. Classic has seen a 10% decrease in share prices in the past year. Employee morale is at its lowest because of scrutiny from the investment community, negativity from Wall Street, the media, and the public. Customer confidence is also declining as well as Classic's Rewards program, which measured a 19% decrease in the number of Classic Rewards members, and a 21% decrease in flights per remaining members. Rising fuel and labor cost have hindered Classic's ability to compete for the valued frequent flier miles. The 911 aftermaths have caused Classic to face a restrictive cost structure unlike younger airline companies. And if that is not enough, Classic is facing a 15% across-the-board cost reduction over the next 18 months (Scenario: Classic
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MBA 570 week 5 - 1 PROBLEM ANALYSIS: CLASSIC AIRLINES...

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