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Lufthansa-Case Notes - Lufthansa Going Global but How to...

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Lufthansa: Going Global, but How to Manage Complexity? CASE ASSIGNMENT You just got off the phone with Wolfgang Mayrhuber, Chairman of the Executive Board and CEO of Lufthansa. He has briefed you on the global challenges facing the company and its membership in the Star Alliance. As a management consultant, you have been invited to speak with his top management team and address the following strategic issues. 1. What role have the factors of production in Germany played in establishing and implementing Lufthansa's business strategy? What other national factors have influenced the company's strategy and success? 2. What type of international strategy has the company chosen, and what means has it used to expand internationally? 3. Discuss the elements and objectives of Lufthansa's cooperative strategy. 4. Describe the uncertainties and challenges related to operating beyond the company's national boundaries and the potential risks of cooperative strategies. 5. Discuss options for managing cooperative strategies, protecting the company from risks, and sustaining success. How can Lufthansa's role in the Star Alliance influence performance? 6. Discuss the use of organizational structure and controls to effectively support Lufthansa's strategy. 7. What strategic leadership actions do you recommend for developing human capital, establishing an effective organizational culture, promoting an entrepreneurial mind- set, and reducing complexity at Lufthansa? 8. How is Lufthansa dealing with the challenge of sustainability? You have agreed to meet with Mayrhuber in two weeks and to present a ten-minute oral presentation (with a minimum of six PowerPoint slides) for his team at that time. 245
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Lufthansa: Going Global, but How to Manage Complexity? STRATEGIC ACTIONS: STRATEGY FORMULATION 1. What role have the factors of production in Germany played in establishing and implementing Lufthansa's business strategy? What other national factors have influenced the company's strategy and success? A company's home country of operation is often an important source of competitive advantage. Environmental or structural attributes of a national economy contribute to national advantage . Lufthansa's competitive strategy was initially established in its own domestic market. The resources and capabilities developed in Germany allowed the firm to pursue its home strategy in Europe, then globally. Several factors contributing to the company's performance in the evolving global airline industry are associated with Lufthansa's home country and regional environment. Specifically, German factors of production (the inputs necessary to compete in any industry - labor, land, natural resources, capital, and infrastructure) have played a prominent role in the development of Lufthansa's competitive advantage.
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