— EXPERIENTIAL EXERCISES Exercise 1: Airline Competitor AnalysisThe International Air Transport Association (IATA) reports statistics on the number of passengers carried each year by major airlines. Passenger data for 2006 is reported for the top ten fliers in three categories:Domestic flights International flights Combined traffic, domestic and international flightsThe table below lists both passenger data and rankings for each category. Int'lInt'l DomesticDomesticCombinedCombinedAirlineRankingPassengersRankingPassengersRankingPassengersAir France330,417749,411All Nippon Airlines645,328849,226American Airlines721,228278,607199,835British Airways429,498Cathay Pacific1016667China Southern Airlines745,2491048,512Continental Airlines935,852Delta Airlines363,446373,584Easyjet621,917Emirates916,748Japan Airlines Int'l837,154948,911KLM522,322Lufthansa238,236651,213Northwest Airlines545,743555,925Ryanair140,532Singapore Airlines818,0222-23
Chapter 2: The External Environment Southwest Airlines 1 96,277 2 96,277 United Airlines 4 58,801 4 69,265 US Airways 10 32,094 For this exercise, you will develop competitor profiles of selected air carriers. Part OneWorking in groups of five to seven people, each team member selects one airline from the table. The pool of selected airlines should contain a roughly even balance of three regions: North America, Europe/Middle East, and Asia. Using outside resources, answer the following questions:What drives this competitor (i.e., what are their objectives)? What is their current strategy?What does this competitor believe about their industry?What are their strengths and weaknesses?When researching your companies, you should use multiple resources. The company’s Website is a good starting point. Public firms headquartered in the U.S. will also have annual reports and 10-K reports filed with the Securities and Exchange Commission. Part TwoAs a group, summarize the results of each competitor profile into a single table. Then, discuss the following topics:Which airlines in your group had the most similar strategies? The most different? Would you consider any of the firms you studied to be in the same strategic group – i.e., a group of firms that follow similar strategies along similar dimensions?Create a composite five forces model based on the firms you reviewed. How might these elements of industry structure (e.g., substitutes, or bargaining power of buyers) differ from the perspective of individual airlines?How well do the strategies of these airlines fit with their industry and general environments? Which airlines do you expect to advance in passenger rankings, and which will lose ground?2-24
Chapter 2: The External Environment
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- Summer '15
- Barriers to entry, external environment, general environment