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Running Head: WRITTEN ASSIGNMENT UNIT 5 1 Written Assignment Unit 5 BUS 5117 Strategic Decision Making and Management University of the people May 8, 2020
WRITTEN ASSIGNMENT UNIT 5 2 In this week's assignment, we should read the case “E-commerce at Yunnan Lucky Air,” (Berenguer, Jing, Liang, Shijun, & Wang, 2008) and reflect on the challenges of the organization as they relate to costs. We should analyze the costs and, using specifics, develop a cost-centered business strategy for the airline to move forward as a profitable firm. We should devise a tactic to differentiate the firm and to support the cost-focused strategy developed. Finally, we should explain how the tactic can be implemented within the scope of the overall strategy. Case description and key issues Yunnan Lucky Air is a low-cost airline serving domestic routes in the province of Yunnan, China (Berenguer et al. 2008). Yunnan is one of China's top tourist destinations, and Lucky Air capitalized on this upcoming destination. In the year 2007, Lucky Air attracted over 1.2 million travelers in this area. Lucky Air modeled her operations equal to the low-cost high- efficiency system of Southwest Airlines in the United States. Lucky Air confronts certain challenges as governmental regulations, limiting flexibilities for new airlines, and high competition. For Lucky Air to distinguish itself among other airlines, it needs to develop a competitive advantage. One possibility is to become the front runner in airline e-commerce. To achieve a competitive advantage, Lucky Air needs to overcome some challenges (Berenguer et al. 2008). Challenges related to cost According to Berenguer et al. (2008), Lucky Air has four major cost components: 1) Fuel. China Aviation Oil has a monopoly on fuel supply for Chinese airlines, the fuel price is determent by a national commission, and the prices differ per region. Yunnan
WRITTEN ASSIGNMENT UNIT 5 3 happens to be one of the most expensive areas.

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