30 Jan Question:? This course provides you an opportunity to integrate the business knowledge and skills you gained throughout your
This course provides you an opportunity to integrate the business knowledge and skills you gained throughout your core courses and apply them in an online, interactive strategy simulation. In the simulation, you will collaborate in assigned teams to run a regional airline carrier. Your team will create objectives and a strategy, and make decisions for the airline for eight periods of simulated quarters. The simulation contains a schedule with deadlines for all periods. Your instructor will also post a schedule for all your required assignments for the course.
Procure the Airline simulation from the Capella University Bookstore. Use the instructions sent to you by the bookstore to access the simulation.
SUMMARY OF PROJECT COMPONENTS
You will complete some of the course assignments as part of a team and some of them individually. For all team assignments, you will receive a team grade—each team member will receive the same grade. Individual peer-review assignments are included to help keep you accountable to your team and ensure that everyone contributes to the team assignments.
Formulate Your Airline's Strategy (Team Assignment)
Read the Airline Student Manual on the Airline online simulation from Interpretive Simulations. Communicate with the members of your assigned team to collaborate on the first team assignment, Formulating Your Airline's Strategy – Team, due in Unit 1. Use whatever means of communication your team finds most suitable for collaboration. With the members of your assigned team, formulate a team strategy, using the summary on page 6 and the details in Section 3 of the Airline Student Manual for guidance. As a group, write a report documenting your team's strategy
THIS IS A GROUP PROJECT AND MY PART IS HERE BELOW
Attached you find the descriptions of the roles. I have VP of Human Resources.
Also, You will find a sample report.
my main focus for this assignment is a 2 page paper on:
- An explanation of how you plan to run your airline. Support your plan with at least three referenced sources.
If you need anything else from me let me know.
Excerpt from IGuide – Unit 1 Assignment
THIS IS THE GROUP ASSIGNMENT NOW
Important: Each member of the team must submit a copy of the team document to their own assignment area to be graded, and each member must submit the same document. However, each of you will receive a team grade.
Your airline's strategy should contain the following:
- A name for your airline. You will work with your team to create a name and a strategy for your airline.
- A mission and vision for your airline that illustrates your basic philosophy. (Will you be aggressive or conservative? Or, will you be disruptive and creative?)
- An explanation of how you plan to run your airline. Support your plan with at least three referenced sources.
- A communication strategy for your team. This should be a paragraph or two telling how your team intends to communicate, such as group discussion forum, email, Skype, et cetera, to discuss things and work on decisions.
This is a great chance for your team to be creative! Design a logo, develop a slogan, and so on. You are not required to follow any particular format. However, your airline's strategy should look professional and address all the elements completely. Review the Airline Strategy: Sample Report document given in the resources just to get an idea of the content required.
Your airline's strategy should be a fairly detailed report of approximately 5–10 pages. You must use references or citations from at least three professional or industry-related resources within your report. Be sure you follow APA sixth edition guidelines for all citations and references.
*Please stay tuned for updated emails as we progress. I would like to get this portion done no later than Saturday, as I do not want to wait until the very last minute to submit this project. By Sunday the latest I would like everything to be in order by then. These details are subject to change, depending on how we progress from here.
MBA6028 Unit 1 – Formulating Your Airline’s Strategy Orioles – July 2012
A Strategic Introduction o f
ULTAFLIGHT AIR SERVICES
Mike Orion
Capella MBA6028
Prof. R. Snarski
July 14, 2012
July 14, 2012
MBA6028 Unit 1 – Formulating Your Airline’s Strategy Orioles – July 2012
Introduction The Beginning of UltaFlight Air Services
Established and launched in July 2012, UltraFlight Air Services is headquartered in Kansas City, KS. Located in the geographic center of the United States and on the banks of the Missouri and Kansas Rivers, UltraFlight Air Services is a new and re-launched regional, hybrid air carrier of freight and passenger service.
The purpose of this strategy introduction is to provide our key stakeholders with the information and rational that was used to develop this new company’s purpose, mission, and values. The strategy will highlight the decision-making process, management’s approach to creating this strategy, its guiding factors, and the current industry environment.
1. Purpose The Dynamic Mission of Our Organization
Our firm looks to compete in and expand its current market position in an established industry of many competitors (regional air service). By creating a hybrid service model of freight and passenger service, UltraFlight seeks to earn profit above the industry average and expand beyond its current region.
Strategy Statement
“To create a viable and sustainable regional transportation system for freight and passenger travel.”
Mission Statement
“Provide reliable and cost effective transportation services.”
Vision Statement
“Lead the regional air industry in customer value and positive service reputation.”
Rational: The establishment of a more dynamic strategy fit the goals of our company better than that of a static approach. The air service industry is fast moving, expanding, and continually evolving competitively, static statements would only clip the wings of this fledgling airline poised to leave the nest of its other regional carriers. We look to incorporate both the passenger and freight services into our strategy in order to capture market more quickly and evolve into the regionals air service leader.
July 14, 2012
MBA6028 Unit 1 – Formulating Your Airline’s Strategy Orioles – July 2012
UltraFlight SWOT Analysis Strength: Existing, well-known carrier/service in the operating area, seasoned employees, and established supply relationships. Weakness: Currently maxing out our equipment and available miles, the recent decline in public demand. Opportunities: Open routes and available cash and financing for route expansion. Threats: 10 new regional carriers, rising fuel and operating costs, slow demand for service.
2. The Operating Environment An Analysis of the Company’s Competitive and Operating Environments
In order to be successful and profitable, UltraFlight must create value for its existing customers while understanding the needs of the surrounding businesses and the current economy. The chosen area of operation is rich in suppliers and resources. Additionally, the competitive environment is continually faced with new entrants due to the low cost of entering the regional air service industry (10 new entrants in July 2012) concluding that UltraFlight is operating in a Perfect Competition.
UltraFlight must focus on creating a competitive edge with customers, suppliers, and the competing firms:
What We Know
• UltraFlight is an existing and well-known carrier in the region. • Large carriers have all but abandoned the area of current operation. • The airline has created steady growth in the area of operation with cyclical cycles of P&L. • Stock prices remain flat for the quarter. • Commuter demand is projected to increase (newsletter). • Industry research suggests that all the new entrants are similar in size, equipment, and financial
strength; differences in routes prove to be the only mitigating factor in achieving a competitive edge this quarter (industry reports).
• UltraFlight has an ending cash balance of 103,982 dollars and 2,482,089 dollars in liabilities and equity.
• Currently maxing out our aircraft mileage (operations). • Established network of suppliers and seasoned employees.
July 14, 2012
MBA6028 Unit 1 – Formulating Your Airline’s Strategy Orioles – July 2012
3. Courses of Action Considerations for Achieving Mission, Goals, and Purpose
Based on preliminary research and the SWOT analysis, the following is a list of strategic consideration:
• Review current routes and determine viability, value, and profitability • Review fare structure on all routes. • Review finance and capital availability for possible expansion. • Expand current fleet of aircraft. • Review marketing and advertising departments and budgets. • Review fuel purchasing and compensation strategies.
UltraFilght’s Competition Framework
The following demonstrates the structural variables influencing UltraFlight’s competition and profitability [1].
July 14, 2012
MBA6028 Unit 1 – Formulating Your Airline’s Strategy Orioles – July 2012
PESTEL Analysis of UltraFlight Factor Current Environment Goal/Mitigation
Political Deregulated and open markets. Exploit current markets with fare reduction and increased service.
Economic Available cash, credit and financing options.
Outpace competitors with capital expenditure and return on investments while using available cash for leases and short-term gain.
Social Moderate service demand in the operating community with growth in the industrial and business sectors.
Create a hybrid service model for both passenger and freight services. Expand services to business and industrial routes.
Technology Own an older fleet of identical aircraft.
Lease new equipment to meet market needs while maintaining maintenance costs of similar aircraft.
Environmental Current operations are in the geographic center of the country to maximize availability and service to both the east and west. Current location minimizes weather and business interruptions.
Location allows for expanded services into freight and industrial clients with minimal weather interruptions.
Legal No known issues N/A Energy Fuel is currently purchase on the
spot. Explore fuel contracts for cost Savings.
Competitive Structure 10 new carries entered the market this July. One carrier is in direct competition in four of five markets.
Exploit current markets with fare reduction and increased service offering, create industrial focus and demand.
4. Best/Chosen Courses of Action Strategy for Achieving Mission, Goals, and Purpose
Based on the competitive framework, PESTEL and the SWOT analysis, the following is a list of strategic courses of action:
• Review current routes and determine viability, value, and profitability.
o Company “Seven G” is UltraFlight’s direct competitor in four of its five markets. The four markets share the same amount of flights and seats sold per flight.
o Retain the fifth and sole UltraFlight market 34E. This route has the highest seat percentage and can be reviewed for a fare increase based on no competition.
July 14, 2012
MBA6028 Unit 1 – Formulating Your Airline’s Strategy Orioles – July 2012
• Review fare structure on all routes. o Reduce the fare “Fare Sale” on the four markets in direct competition with UltraFlight
(30A, 31B, 32C, and 32D). • Review finance and capital availability for possible expansion.
o Capital and financing does exist for expansion of the fleet and current routes. • Expand current fleet of aircraft.
o Lease one additional aircraft this quarter to expand the numbers of flights in markets 30A and 32C to three.
o Increase maintenance and cleaning to level three. • Review marketing and advertising departments and budgets.
o Increase the marketing and advertising budget to include new flights due to increase in aircraft and fare sale on all routes.
o Create a cargo budget. o Hire two sales persons to expand cargo operations.
• Review fuel purchasing strategy. o View fuel contracts next quarter.
• Employee and training. o Increase training budget by 500 dollars. o Increase compensation by 2 percent above prevailing wage add avail stock and bonuses
for all employees • Corporate.
o Establish the UltraFlight charitable foundation for communities we serve.
Other considerations include selling all aircraft and leasing a new and expanded fleet to new markets with the proceeds. This is not currently being explored in the first quarter.
Rational: UltraFlight is in direct competition on four of its five routes, so management has decided to lower fares and increase the available flights to three on these routes with the leasing of one new aircraft. The fifth market will experience a no fare increase due to a lack of competition. Marketing budgets will be expanded to advertise the lower fares and increased service. Wages, maintenance, training, and charitable giving will all increase.
5. Goals and Objectives How We Plan to Accomplish Our Strategic Plan
Our goals and objectives are predicated on the value provided to our customers, concentrating on our employees, fleet maintenance, and services provided.
Shareholder Value Creation and Market Standing: (Market standing, profitability) Measured by the increase or decrease in passenger load percentages, currently averaging at 51.4 percent. Our goal is to increase this by 10 percent over the next quarter to 54 percent (53.97 percent). UltraFlight is ranked eighth
in a class of 10 new carriers and has an industry ratio of 1.38 percent. Our goal is to increase this by .62 percent by the end of the quarter with the new route strategy.
July 14, 2012
MBA6028 Unit 1 – Formulating Your Airline’s Strategy Orioles – July 2012
Increasing Capital Expenditure and Margin: (Stockholder and financial targets) Measured in seat capacity, gross revenue, and short-term investments, we look to increase our capital expenditures and the margins on capital invested. Seats will be increased by 6.5 percent; new aircraft will be leased at a fraction of purchased cost in addition to availing cash for short-term investment. Current ROE and ROA are .013 and .009, respectively.
Invest in our employees/us: (Productivity, worker performance, development, and social responsibility) Target employee training and infrastructure including civic and charitable organizations. This will be measured in employee retention, maintenance/efficiency, and sales. We are currently paying a prevailing wage for the industry with no plans to increase. We will increase our public and social responsibility levels.
Facilities/equipment: Our total facilities and equipment assets of 100,000 dollars will be increase to allow for new equipment and reduce maintenance costs. The new allocation will increase by 10 percent.
Innovation: Create a hybrid route of passenger and freight services; future expansion will be concentrated on industrial and the expanding business routes. There a two untapped regions to explore in subsequent quarters.
Rationale: By focusing on our financial, customer and internal elements the strategic measures outlined will be measureable, attainable, and shared though the organization to the end customer.
6. Action plan Describing How the Objectives Will Be Accomplished
The specific courses of action will be delegated to the organization and area management for implementation and monitoring. Area management will be responsible for quarterly reporting and issue resolution as needed. Senior leadership will meet quarterly to review report and adjust the strategy.
UltraFlight Management and Officers
President John Orion Create and monitor overall strategy and company
VP Finance AJ Green Increase capital return on investments.
VP Marketing Bill Mary Increase current marketing and advertising position.
VP Human Resources Oakey Michael Training and employee survey. VP Operations Angie Joley Acquire new equipment and
service routes.
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MBA6028 Unit 1 – Formulating Your Airline’s Strategy Orioles – July 2012
7. Operating Guidelines Company Policies and Procedures, Standard Operating Guidelines
Our company policy is to service our passenger business with the highest of integrity, quality, cleanliness, and reliability. Our value is determined by our increase in sales and passenger loads. Freight services will be discounted to build the market over the next two quarters to determine demand.
Standard Operating Procedures
• All sales will be conducted and contracted through agents and online services. • Passenger service is priority over Freight operations. • All aircraft will be maintained according to legal and regulatory standards. • Employees will act and perform to the highest of standards with the client and customers as our
chief asset. • Management must operate ethically and to a higher moral code.
8. Organization Feedback Methods of Control and Feedback
UltraFlight and its human resources team will implement, analyze, report, and mitigate an employee survey to track management’s progress. Management will meet no less than quarterly to review this strategy and the position of this company. All reports are to be completed by the president of UltraFlight.
Summary The Four Ws and Two Hs
• Where we are now?
o Eighth in a market of 10. • Where could we go?
o To number one based on plans of expansion and competition. • What could we do?
o Increase our market to include industrial and business clients. • What is the best thing for us?
o Concentrate on the immediate competition and recent acquisition of UltraFlight. • How are we going to do it?
o Fleet expansion, fare sales, and new market exposure. • How are we going to measure our progress?
o Company financials, sales, industry reports, and competitive position and market.
July 14, 2012
MBA6028 Unit 1 – Formulating Your Airline’s Strategy Orioles – July 2012
References
Grant, R. M. (2010). Contemporary strategy analysis (7th ed.). New York, NY: John Wiley & Sons.
July 14, 2012
- A Strategic Introduction of
- Introduction
- 1. Purpose
- 2. The Operating Environment
- 3. Courses of Action
- 4. Best/Chosen Courses of Action
- 5. Goals and Objectives
- 6. Action plan
- 7. Operating Guidelines
- 8. Organization Feedback
- Summary
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