Saram Airlines: Strategic Directions - Case Study Example

Plan Objectives/strategies The aim and structure of this report will consist of four major sections which will facilitate a strategic direction to be suggested to Saram Airlines. These sections include; Examining the executive roles in creating this plan as well as the expected roles to make the plan successful. Analyzing Saram Airlines’ internal and external environment Utilizing the internal and external results/analysis in selecting an efficient strategic option. Examining the appropriate policies regarding overall performance for the company and how to measure the performance of each objective. Company Overview Saram Airlines is a global scheduled airline. Beside, Saram Airlines will engage in other operation services like, local and global transportation of cargo and mails. In alliance with other global licensed airlines, Saram Airlines is expected to have 100 destinations which would carry more than 5 million passengers. This will give an expected average earning per year of about £2.8 billion for the next three years. Though recently there is a global economic recession that perhaps may affect the imminent industries, Saram Airlines’ future shows potential. The great importance here is to develop an executive body that will enhance efficient delivery of services as well as carefully driving the achievement of the main goal through a right strategic direction. Company’s Executives The top-down approach for the management (executive) team in Saram Airlines will integrate the all the functional areas of the organization. These areas include; marketing, finance, Operations planning and administration. Saram Airline management team will comprise of three management bodies that will be responsible for implementing both the generic and the long-term strategic plans of the organization. a) Senior Management Team: The team is expected to collaborate with the planning team in ensuring that the grand strategies and the long-term goals and objectives are achieved within the stipulated time. b) Department Leaders (HODs): Also, they are expected to collaborate with the planning team to define the short-term objectives of the company. They will play a big role in ensuring that the progress of strategic plan in achieving company’s mission is seen by all the stakeholders. c) Staff Level Leaders: The staff leaders will be responsible for ensuring that actions that apparently lead to attainment of department’s objectives are conducted in accordance to the action plan developed. Three Key Objectives The proposed Saram Airline will have the following three objectives as the primary elements: To set up and run a new regional airline that aims at serving customers within the various states of Australia all the way northwards across the Pacific Ocean as well as global other destinations. To provide cargo and mail services in the three main passage categories; Both served and the unserved ways with high demands, serve key global markets that is poorly served by other airlines companies and gathering for the traffic demands especially during peak times. To achieve a NOP (net operating profit) in 5% range in the first year of flight operations, and annualize ROI (return on investment) of at least 45% on the subsequent year of operations that will enhance rational growth of the Airline later. SWOT Analysis It is very essential to note that strategic plan development is a reflective of Saram Airline strengths and opportunities relative to the expected competitors in the industry. Threat and weaknesses on the other side perhaps reflects the peripheral of challenges that are most likely to be faced by the company (Saram Airline). Opportunities that are expected Due to our diverse range of service delivery (flights, cargo and mail services), some of the competitors perhaps will be forced to exit the industry. Therefore, this will give Saram Airline an opportunity to expand its market share. Some expected competitors have been failing to offer reliability to its customers. Therefore, this is seen as the crucial opportunity to maximize on the good service delivery to the customers in the industry. Recently, there is emergence of new markets that is initiated by the developing world as well as the magnification of the ICT world. Therefore, the company expects to attract new entrants within a short time possible. Threats expected The global skyTrax quality system is likely to hinder the company since the organization has not flourished enough to be in the high rank of airline classification according to the system. Open sky agreement is a possible major threat when it later after the attainment of the second operational year’s goals. For instance, terrorist perhaps may hinder the expansion of the company relative to the emergence of new markets in the world. As mentioned earlier, there is a recent global economic crisis therefore this may hinder the success of the plan. Strengths Brand image; The brand image of the company is very exceptional therefore customers are able to differentiate the company (Saram Airline) from other airlines in the industry. Partnership and Alliances: As mentioned before, Saram Airlines will form strong partnership with various stakeholders in order to achieve a corporate performance. The initial financial size and stability of the company can sustain the current global economic downturn unless a situation of higher recession in various regional reliable markets. Terminal 5 destination is equipped with high standard infrastructure controlled by ICT professional. Therefore, making this (Terminal 5) as one of the destinations of the flights perhaps will increase the market share of the company. Weaknesses There is a high risk of the company selecting employees with poor performance history if at all there is a poor consultation process in the initial stages of plan development. The company is new in the market, therefore reliability and trust perhaps will hold back the achievement of objectives in the first year of operations since it holds a small market share at the moment. Change and innovation may not be achieved in the end of three years of operations as expected by the customers since the company is striving to maximize ROI (returns-on-investment). The reason is there will be lack of good ideas during marketing communications since it has no experience in the market. Technology, Operations and Finance posture of the company Great improvement on flights services normally depends on the appearance of technological capabilities in the company. The introduction of the ICT system in the company will be assessed through the major three elements; a) Suitability; As a functional strength therefore, the company will introduce basic internet facilities that will enhance access to all flight. Apparently, Saram Airlines will enter into an industry with competition and therefore developing a corporate culture will be of great importance. b) Acceptability: From the market research findings, it was found that internet availability is very important when it comes to airline operations. For instance, it eases monitoring of flights, cargo and mails. c) Feasibility: Saram Airlines ought to deploy a corporate culture that integrates all aspects of operations, technology as well as financial performance without delay. Otherwise, this would lead to criticism and perhaps will ruin the performance in the long-run. Corporate structure Mission Statement of Saram Airline Company The proposed Saram Airline Companxy Mission statement states; The company endeavors to fill a role in the growing air-flights, cargo and mail services between Australian States and points beyond, to across pacific and southeastern parts of Asia turkey; to attain high and advantageous corporate culture by discovering and serving main routes in the country which is currently underserved or inadequately served and when considerable opportunity exists, the company strives to set a new professionalism both within the target market area and global as well. Policies for Saram Airline Company 1. Human Resource Management policy for Diversity and Equal Employment Opportunity This policy will promote workplace diversity by protecting the interest of both genders in the organization. For instance the cases of sexual harassment are watched over by this policy while affirmative action is maintained for the same as well. 2. Competition policy The policy guides the pricing rule in various destinations especially in the competitive areas of business operations. The policy ought to be transparent such that when it comes to cases like congestion costs and other factors that are price determinants, the policy will tend to limit control pricing. How to measure the performance of each objective in the plan SMART model will be used in measuring the performance development progress of Saram Airline. The model will analyze whether the objectives are; Specific, Measurable, Attainable, Relevant or Time Bond. The following perspectives focus on the key performance mentioned above; Are the customers satisfied with the service delivery by employees? Is the overall project managed properly especially when bridging the gaps on underserved and poorly served regions? Does the system adhere to cost-efficient strategies in recovering ROI (return-on-investment? Conclusion Putting into consideration the results from internal and external analysis of the company, the report recommends more strategic analysis to implement strong corporate bond between major players in the market and lack of primary research for the corporate market needs a back up of cased studies of successful airline companies, for instance, British Airways. Work cited Hunger, J. David, and Thomas L. Wheelen. Essentials of strategic management. 5th ed. Upper Saddle River, NJ: Prentice Hall, 2011. Print. Read More