QUESTION
Title: Aviation-Related Company strategic
analysis
You will be assigned to a group of no more than six and choose a company in the
overall aviation industry for strategic analysis. The company need not be Australian,
but it needs to be one about which you can readily gain significant amounts of data.
Direct, personal access to the company would be beneficial, but is not mandatory.
The purpose of this assignment is to provide an in-depth analysis of a company to
examine the following aspects:
Strategic objectives
Industry environment
Environment (internal, external)
Key management issues
Strategic recommendations
You are provided with some sample headings to use in your analysis. You may also
choose to add further headings for discussion if you feel they are appropriate.
Consult with your session leader and/or course coordinator regarding any queries on
the assignment.
Suggested Layout for the Group Report
1. Abstract/Executive Summary (no more than 300 words)
2. Introduction
2.1 Objective of the Report
2.2 Brief Description of the Research Method (data analysis and collection
procedures)
2.3 Brief Background of the Company
3. Strategic Direction
3.1 Mission
3.2 Goal/Objectives
4. Industry Environment – Porter’s Five Forces Competitive Analysis
4.1 Existing Competitors
4.2 Barriers to Market Entry
4.3 Threat of Substitutes
4.4 Power of Suppliers
4.5 Power of Buyers
5. Environment – Internal Analysis
5.1 Strengths and Weaknesses
5.2 Operational
5.3 Financial
5.4 Marketing
5.5 Human Resources Management
6. Environment – External Analysis
6.1 Opportunities and Threats
6.2 PESTEL Domestic and International (depending on size and scope of
organisation)
7. General Issues
7.1 Distinctive Competencies
7.2 Competitive Advantages
7.3 Key Weaknesses
8. Strategic Recommendations
9. Conclusions
PS:in this case the client will be research on the ANA- All Nippon Airlines, also only just focus on 3, 3.1, 3.2 and 6.1.
total as 1400words and must have at least 4 text book Ref. the report must incuble more logical thinking and not just describe the detail.
For example in 3.1 talking about the ANA Mission first discuess what is the mission, than tell the people why they have those mission and how they run those mission.
in the report the client are no need to finish the introduction and conclusion. just finish the part which is mention about.
if you need more information please let me know.
SOLUTION
All Nippon Airways Co. limited is involved in air transportation and travel services along with operating in the fields of sales, trading, distribution, hotels and ground transportation services. The company has divided its operations into three segments which are: (i) Air transportation (ii) travel services and (iii) other businesses. ANA group has 112 subsidiaries along with more than 40 affiliates, some of which are wholly owned subsidiaries of Air Nippon Co. Limited. The company is also engaged in providing services like baggage handling and passenger check in services to other air lines. It is also performs in-flight sales, developing and maintaining systems and maintaining aircrafts.
Strategic Direction:
The global economic crises hit the worldwide demand for transportation drastically. The adverse impact was further strengthened by natural calamities and epidemics which also hit the industry. An analysis of different region of the world reveal that while well established markets like EU and North Atlantic remained weak, the emerging markets of Asia-Pacific and the Middle East were witnessing more air traffic. This analysis reveals that regions of Asia-Pacific and Middle East can provide best opportunities in future for marketers.( www.ana.co.jp, 2011) The economic of Japan is recovering rather slowly from problems like persisting job cuts, deflation and high public debt and it has become a more price sensitive market. However the demand for premium long haul routes is considerably stable as premium travelers in this region want services which provide best value for their money. The rising costs of fuel are a major issue for ANA but the “Open Skies Agreement” concluded between US and Japan could open up new opportunities for strengthening alliances and consolidation. The increasing awareness among the public regarding pollution is also a factor which needs careful consideration by the airlines. Present day customers want “Green” transportation. Governments are also imposing strict regulations regarding harmful emissions and offering tax incentive to businesses who adopted environment friendly measures.
The easy access to internet and increasing popularity of social networks are providing more opportunities for online sales and better informed customers can curtail the role of middle men.
The operating environment of ANA will be shaped by the full scale competition it is going to face in the coming 5 years. ANA group will start a phase of sustain expansion which will be driven by the growth of the company on international routes. For this purpose the company will adopted a dual hub strategy in the Tokyo area. The company is trying to respond to the changes that have taken place in its operating environment and transform to a more powerful operating structure which can help the company in achieving future growth. The company was forced to review its corporate strategy as Japan was hit by the earthquake soon after the company formulated its corporate strategy. ANA group aims at enhancing its managerial efficiency and also improves its ability to face the risks generated by the changes taking place in its operating environment.( Anonymous 2012)
The business strategy adopted by the company includes dual hub strategy for Tokyo area. This will allow the company to maintain its high low factors on out bound and inbound routes at the Narita and Haneda airports. The company has also initiated joint ventures with continental airlines and united airlines. It is expanding its operations globally by adopting measures like merging schedules to shorten connection time and setting up joint fares. The group has considerably enhanced its capacity on routes serving China and other countries of Asia by increasing its international passengers operations due to the increase in its arrival and departure slot at airports in the Tokyo area. The company hopes for a study income from its domestic passengers operations due to the significant scale of the market and also due to the competitive advantage enjoyed by the ANA group in that market. The competitive environment in this market consists of route expansion by new airline companies and also competition with the Shinkansen bullet trains but due to the capacity reduction by its major competitors in domestic airline industry, the ANA group has been able to increase its passengers share, taking into 50.4 percent. The company hopes that the down turn in demand in the domestic market caused by the earthquake will continue till the end of the present fiscal year, there is positive evidence that the pace of recovery is faster than anticipated. The company is going to take the delivery of Boeing 787 and will start their use from the domestic routes. The company aims to increase its earning by fares that are set flexibly and manage its yield by the precise matching of capacity with demand.
Mission
The demand dropped considerably after the earthquake but it is now recovering especially more so on international routes. The ANA group quickly adopted and implemented a new approach in a phased manner to accommodate this drop in demand by precisely matching its capacity with demand and also by controlling its costs particularly.( Nuoffer, 2010) The company had to adjust the targets fixed in its initial plans but even after the earthquake in East Japan, the basic corporate strategy has not change and the mission of the company remains the same. It viewed the crises as an opportunity to improve its management practices and accelerate further growth in production and efficiency.
Goals/Objectives
Aim of ANA group is to enhance its managerial efficiency and also their ability to face the risks in fast changing environment. The company hopes to achieve this aim by introducing structure reforms of costs.(Stellman ,2010) The group has consistently implemented measures aimed at the costs reduction and reforms in cost structure. The company aims at reforming its costs structure even more as its share of operating revenue generating from a relatively volatile international passenger operation increases.
Mid to long term objective of the company is to cut its operating expanses by ¥ 1.0 per ¥100 billion. The company successfully cuts its unit cost by ¥ 0.2 after it implemented emergency budget measures in wake of the earthquake. ANA group also aims at reducing drastically its costs by restructuring these costs and bringing them in tune with global standards. For this purpose the company aims to implement a comprehensive program which also includes a review of the standards, regulations and operation manuals.
Opportunities and Threats
The changes taking place in the air transportation market provide a challenge to the ANA group to maintain its sustained growth and maximize its earnings. Enhanced return to shareholders is seen as the primary management responsibility by the company and company tries to balance this responsibility with the need for increasing its internal capital resources that could provide support to stable operations. This will allow the ANA group to further strengthen its finances an opportunity to make capital investments which would ensure profitability and growth in future also. The group is not contend with serving the traditional demand but is also going to target new demand in a process which will turn opportunities into success.
References:
Annual Report, All Nippon Airways Co. Limited, 2011, viewed on 22nd april 2012, www.ana.co.jp/eng/aboutana/corporate/.ir/pdf/anual/11/11_05.pdf.
Anonymous 2012, Financial and Strategic Analysis Review, All Nippon Airways
Co., Ltd.
Matthias Nuoffer 2010, Japan airlines bankruptcy: A strategic analysis, GRIN Verlag
Svenja Stellman 2010, Case study Japan Airlines: A strategy analysis, GRIN Publishing.
KB15
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