Market Solution of the Classic Airlines - Essay Example

Market Solution Market Solution The fifth largest airline in the world, ic Airlines comprises of approximately three hundred and seventy five airplanes functioning in two hundred and forty cities and has about two thousand and three hundred daily flights. It has grown to a company of thirty two thousand employees in the 25 years of operation and has gained 10 million dollars with just $8.7 billion in the department of sales. It has been able to keep up with profits regardless of the various problems it has encountered. During the past year, a ten percent downfall in share prices was witnessed by Classic Airlines. The morale of employees is the least in the organization because of the huge scrutiny and investigation by the investment companies, especially the media, public, and most prominently Wall Street. Furthermore, the customer confidence in Classic Airlines is decreasing along with the Rewards program, which saw a nineteen percent reduction in Classic Rewards members and also a twenty one percent reduction in the flights per each member. The rising costs of labor and fuel have jeopardized the success of Classic Airlines as it is unable to compete for the most efficient valued numerous flier miles. The aftermath of 9/11 has led Classic Airlines to see a restrained structure of costs unlike the younger airline companies. Adding to the problems is a fifteen percent decline in the board cost over a period of eighteen months (Classic Airlines, 2007). Most of the best opportunities are a result of dilemmas. Such is the case of Classic Airlines. It has the power to change its problems into profitable opportunities via meticulous changes to the whole scenario; therefore the situation is handled carefully. Classic Airlines should keep in mind all the travelers who need a higher level of personal service as compared to the ones they might expect to get from competitors. The customers can greatly help the airlines to enhance the confidence of the general public. This can easily be done without letting additional costs come in the path of Classic Airlines. Contended customers are the best type of advertisement for each and every organization and is also a base to gain attention of the new customers (Classic Airlines, 2007). Classic Airlines should look into the aspect of refurbishing their Classic Rewards Program by coming into partnership with an airline company to enhance the experience of customers on flight. Such a trail would improve the frequent flyer mile partnership and also the opportunities for purchase, which would then make Classic Airlines frequent flyer, program a more rewarding one for its customers so as to create value. Installing winglets on Classic Airlines carriers can be accomplished. A winglet is especially designed to diminish drag and therefore enhance the efficiency of fuel. And this can help to increase the overall efficiency of the Classic Airline (Classic Airlines, 2007). Ethical Problems according to Stakeholders The stakeholders of Classic Airlines include management, union, towns, cities, stockholders, and customers. These stakeholders gain or lose from the failure or success of Classic Airlines respectively and their ideas need to be kept into consideration. Stakeholders can have positive or negative views about the organization or its projects. It is because of this very reason that the management cannot reach a decision very easily; and hence brings a challenge for the company to bring together various opinions Classic Airlines, 2007). Stockholders of the company want share prices to go down and reverse so as to move towards an inclined slope. The stockholders stock price can also be increased by gain in the customer’s confidence as it will help the share price to go up. The management of Classic Airlines wants it to prosper as a business and be a vital part of the airline industry. The management wishes to enhance the company’s stature by bringing this organization as a firm that caters different opportunities for its people. The employees of Classic Airlines want the pessimistic views to be eradicated as soon as possible from the Wall Street Journal. The Union must safeguard the salaries, benefits, advantages, jobs, and also the rights of the employees who are working for Classic Airlines. The towns and cities where terminals of Classic Airlines are located want increased revenues. The customers of Classic Airlines also want transformed confidence which does not speak of any negativity or scrutiny (Dean, 2005). The perspectives of the stockholders give rise to ethical dilemmas. The management must find a balance between business needs and the promise made by Classic Airlines. It should also deliver the commitment it made to its employees or the business will come to a standstill. Stockholders must provide a balance between the long-term benefits for the airlines and also the short term advantages of the increase in stock prices. The Union also must put up all the effort to realize the great solution for the employees of Classic Airlines to come up with a good solution for this dilemma and to avoid a disturbed and vulnerable situation. The towns and cities where the Classic Airlines hubs are located must try to give the best service to its customers in an attempt to increase their revenues (Dean, 2005). State the Problem The dilemma with Classic Airlines is its maintenance with the strategic position in the airline industry by grasping customer confidence and loyalty. It also has to augment the profitability and keep it with that of stakeholder group. This will allow the Classic Airlines to be financially stable via growth opportunities and new marketing strategies. It also has to meet the standards of the airline industry as they are required in the world today. (Dean, 2005). Describe Vision Classic Airline’s vision is to keep up with its position of being the 5th largest company in the airlines industry. For this purpose, it has to enhance its profitability and customer satisfaction, which will help Classic Airlines to increase its market share. The reward program maintained at Classic Airlines will be revamped to establish the loyalty of customers once again by partnering with the other companies in the airlines industry. It will resolve the impediments of increasing costs of fuel by coming up with a system which will be fuel efficient and lessen the cost to the minimum level (Dean, 2005). Identify Alternatives and Realizing Benchmarking Via the use of benchmarking, the company inspects most of the business procedures with the best practices in their own industry, helping them to come up with plans which can be used to curb problems. Alternative ideas and solutions can then be sought out, analyzed, and also customized to fit with the necessities of Classic Airlines. Even though Delta Airlines was charged with Chapter 11, it was then able to mend its balance sheet, enhance the experience of its customers and also come up with a platform for its future success. Delta was able to achieve this by a sound revamping plan, and it defines measurable aims and objectives, solid implementation timelines and guide, and also an alignment with the stakeholder group. Even though Classic Airlines is not facing a case of bankruptcy, but it could follow the positive footsteps laid down by Delta as it shapes the firm and come up with a novel strategic plan (Delta, 2005). Lufthansa Airlines came up with the idea of Brand Ambassador Concept as an important part of realizing its objective of becoming a royal service provider. The Brand Ambassadors are employees who have dedication, personality, and also the capability to create strong brand loyalty in their daily transactions with customers. They assist in an optimistic psyche and also plan an emotional linkage between the firm’s product or service and the customers. Brand Ambassador is equally committed to the organization and the customer. He or she is liable to both customer and company. Through this idea, Lufthansa enhanced its benchmarking Brand Ambassador Idea would give classic Airlines an idea of how it is surviving against competition. Classic Airlines can then continue investing into the business regardless of its downturn and can enhance the employee morale and also confidence of customers (Dean, 2005). Continental Airlines reduced the cost of its fuel by adding a thing to their planes which is somewhat alike to winglets which assisted to keep the cost of fuel at a minimum cost. Continental Airlines reward program initiative not only awarded its consumers or customers, but also the shareholders. Shareholders received this advantage in form of satisfaction of customers via increased advantage of getting more profit. This profit was reassured because Continental Airlines comprehend the idea that to be on top of their game, they have to meet the persisting need of customers, in order to achieve this they have to have the assistance of their people, the employees. Classic Airlines had to face many problems. The increasing cost of fuel and then a reducing rewards program. The Classic Airlines can use the approach used by Continental Airlines as a solution to resolve such issues. Like the continental Airlines, Classic would prosper in balancing the costs of fuel, and enhancing the morale of employees and satisfaction of customers (Continental Airlines. 2007). Evaluating Alternatives Classic Airlines benchmarking of Delta Airlines practices will be a pragmatic step towards an optimistic direction. A sound revamping plan as discussed earlier would give Classic an edge and direction to be on top. Coming up with measurable and realistic goals and objectives would allow the employees to be alert on what matters are of foremost important to the company. These goals should come up with reasonable timelines for achievement. A 360 turn in the profitability, employee and customer confidence, and also the communication will be the result of how perfectly the alternatives are at work. Sustained cost of fuel or even lower costs for the Classic Airlines gives an idea of how well the alternative of Continental Airlines benchmarking is functioning or performing. The achievement in rewards program can only be determined via enhancement in number of the rewards given to Classic rewards members and then an increase in the brand loyalty. Success can be measured by surveys which show the genuine feelings of customers (Kerin, 2006). Identify and Assess Risks The risks associated with implementing new strategies are necessary to the success of each and every firm. Classical Airlines can go on losing the loyalty of its customers but will eventually vanish from the market if the current scenario does not change. The cost of fuel can persist to rise making any or some efforts to make its effects minimal. Retention of employees could become an issue because of low morale causing an increase in the cost for hiring and training of new employees. The contract with the union could come into question causing it to be altered. Classic Airlines rewards program could continue to decrease beyond the 20% loss that it already suffers. Last, but certainly not least, Classical Airlines CRM system runs the risk of being stagnant and not used to its fullest capacity (Kerin, 2006). Making the Decision To come up with a good decision for Classic Airlines, several of the firms were also benchmarked. There are numerous issues related to Classic Airlines and not a single company had the capability to resolve the problems of Classic Airlines, which is why Classic Airlines used a mixture of alternative solutions to resolve the dilemma. Classic Airlines should enhance customer loyalty by highlighting on the needs of customers and to cater to their requirements and needs and giving new in-flight experience via the adding of novel facilities. By adding winglets to planes, which will assist in keeping the cost low, the expenses of the company can be lowered down. Classic Airlines should also consider taking advantage of distinguishing between the small details that can make flying a good experience and also the lives of fliers can be made much easier. By partnering with different airlines to enhance partnership and purchase opportunities, Classic Airlines could make a frequent flyer program a much more rewarding one for its customers. This can create value for Classic Airlines as a whole and its employees. This further can help to boost the morale of the employees. The re-configuration of Classic Airlines CRM system will incorporate the phone channel with Web Channel (Dean, 2005). Implementing the Solution Classic Airlines will enhance the confidence of customers in it which will result in an increase of the share prices. The CMO Kevin Boyle is the head of this operation and CFO Catherine Simpson will be handling the winglets addition. The realistic philosophies that Catherine will pursue will be valuable when rechecking the prices for implementation for these additional costs. The CRM system will be re-configured by Renee Epson. She is important in the implementation of the CRM system. (Tokhi, 2009). Evaluating the Results The improved customer confidence and loyalty in Classic Airlines could be determined by customer surveys. These surveys are designed in such a way so as to ask relevant questions about Classic Airlines and the feelings of customers about its operations. Revamping of the rewards program and experience will enhance the flying pattern of customers. The stock prices restoration could be an indicator of the rewards system turn-around (Dean, 2005). Conclusion The 9 Step model to identify, define and apply a problem solving process of Classic Airlines were made. The issues, opportunities, and the reference to various concepts discussed in the course were outlined. The perspectives of stockholders and ethical dilemmas were taken into consideration. The Problem statement and also the end state goals were identified and defined. These were also formulated to allow for the pathway for classic Airlines as where it wants to go and what are its objectives. Alternative solutions were proposed and then implemented, the risks were assessed and identified and then certain problem solutions were proposed (Kerin, 2006). The problems which Classic Airlines suffer from can never be solved with just one proposed solution. The diversity of problems for Classic Airlines makes it important to bring various solutions together, and then a resolution can be sought out for Classic Airlines. This procedure was a challenging one because comprehending the issues and focusing on them is a tedious task (Dean, 2005). References Top of Form Classical Airlines (2007). Retrieved from www.classic-airlines.com/ Continental Airlines. Retrieved from http://www.continentalairline.net/product-and-services.html Dean, B. (March 14, 2005). Customers Respond to Southwest Airlines Latest Ding. Direct Marketing News. Retrieved from http://www.dmnews.com/cms/dm-news/internet-marketing/32096.html Edgar Online. Item 9.0.1 Financial Statements and Exhibits. Retrieved from http:// http://sec.edgar-online.com/delta-air-lines-inc-de/8-k-current-report-filing/2005/09/15/section4.aspx Kerin, R.A., Hartley, S.W., Berkowitz, E.N., Rudelius, W. (2006). Marketing. New York: The McGraw-Hill Companies. TokTTokhi, M (2009). A Case Study on Classic Airlines: Practical Marketing Solutions. Journal of Business Studies Quarterly, Vol 1, 16-25. Bottom of Form Read More