Continental Airlines - Report Example

COMPANY Background The current report concerns the company of Continental Airlines. One of the top ten US major airlines, Continental is in a very competitive market. The socio cultural or internal business culture of teamwork and integration could also be said to affect Continental in terms of the alliances it has formed with other airlines. “Since September 2004, Continental has been a member of the SkyTeam Alliance, in which it participates with Northwest Airlines, Delta Air Lines, Air France, Aeromexico and KLM. In addition to extensive code share arrangements with SkyTeam partner airlines” (Continental, 2008). This may be more of an issue of survival than culture, however, due to external changes in the airline market such as deregulation, oversight, government intervention, and union labor. Mission and vision Continental Airlines, on its website, states is mission: “To be recognized as the best airline in the industry by our customers, employees, and shareholders” (Continental, 2010). The vision of the airline’s leadership focuses on satisfying the customer and building industry partnerships. Internal and external analysis Internally, Continental faces issues to consider between public and private management. One internal strength is that Continental has some exclusive agreements with suppliers. “Continental Airlines was one of three carriers (with American Airlines and Delta Air Lines) to sign an exclusivity agreement with Boeing in the late 1990s. When Boeing acquired McDonnell Douglas, the European Union forced Boeing to void the contracts. Both parties have been adhering to the terms under a gentlemens agreement” (Continental, 2008). Internally, airlines like Continental also hope to provide an innovative platform of integrated and sophisticated products as well as services (this is a more recent development in the case of Continental) to clients in an organic and inclusive way. Perhaps the most important facet of this change in mission is a more customer-inclusive platform of service that is more aligned with the needs and wishes of the client. Still, a frequent weakness is that airlines like Continental order airplanes from the manufacturer some time before they would receive the final project, which would not be tailored to meet their specific needs. Externally, over the last few decades, the aircraft industry has changed and matured in ways that affect all aspects of business, from customer attenuation to systems integration to technological innovation. Therefore, the industry trends are also affected by mergers and integration. However, “Continental had ended talks with United late last month, when the airline said that it was not interested in a merger, but left room for talks to continue in the form of a beneficial agreement.” (LaMotta, 2008). This involves external economic threats. Strategy choice It is the recommendation of the current investigation that, for a long-term five year strategic plan, Continental installs Total Quality Management (TQM) initiatives to build up customer loyalty. “TQM is a business philosophy - a way of doing business. It describes ways to managing people and business processes to ensure complete customer satisfaction at every stage. TQM is often associated with the phrase - "doing the right things right, first time” (Total, 2010). According to TQM, the four steps in system development process are system initiation, system analysis, system design, and system implementation. An optional fifth step would be system support. In system initiation, the system project is determined in terms of its goals and schedules. In system analysis, the project becomes more complicated and the goals are contrasted to a more real-world setting as the project moves on, and changes and additions are made. In system design, there are less changes and additions, and it is more about sticking to a plan that the other stages have shown to work. In system implementation, the system is finally introduced in a real world context of use. Continental can also capitalize on its budget arms such as ExpressJet over the next five years. In this trend which is more recent in the industry, there is the cheap or low-cost airline. This type of airline is smaller and streamlined, and works as a private branch or arm of Continental trying to make money, rather than as a front for the government trying to increase commuter traffic. This second category often features cost-cutting devices, creative marketing, and slashed prices to bring value to the consumer. “Continental Airlines is a minority owner of ExpressJet Airlines, which operates under the trade name Continental Express but is a separately managed and publicly-traded company. They are also a minority owner of Copa Airlines” (Continental, 2008). Goals and implementation Some of the most important technology drivers referred to in the information on TCM include new development that businesses face with e-commerce and e-business, the global economy, knowledge asset management, and business process redesign (Total, 2010). These technology drivers are important for implementing information systems because they determine levels of innovation and change in the business environment, and represent the establishment of industry standards that represent a new future and new challenges for companies. In terms of implementation of which of these technology drivers is most important, I would say that the development of e-commerce and e-business are the most important, because they represent the most opportunities for business revenue generation using technology. Success factors Continental is in a dynamic industry with high entry barriers. Historically, the airline industry, home of companies such as Continental and its competitors like US Air and United, has high entry barriers, because a company starting out in this industry has to invest a huge amount of capital, and may not see returns for several years. However, Continental does not have to meet these start up costs—it is already in a position in which success is closer than for a start-up. Controls and evaluation Controls for the process of installing TQM at Continental will revolve around a pilot program in the first year, to be followed with more integration starting at the second year. Continental can be evaluated if it is able to move up as a larger airline in the US (it is currently fourth largest), can use TQM to invest in the customer and improving their flight experiences, and can increase air routes. The company can be evaluated on whether or not it is able to keep prices steady and stop profit losses. REFERENCE LaMotta, L (2008). Continental juggles other airlines. Forbes. Continental Airlines (2010). http://www.continental.com Continental takes off (2007). http://www.cioinsight.com/c/a/Case-Studies/Case-Study-Continental-Airlines-Tech-Strategy-Takes-Off/ Total Quality Management (TQM) (2010). http://tutor2u.net/business/production/quality_tqm.htm Read More