Lufthansa
Structure and Governance.

Performance and Competition.

Five-force analysis.

Lufthansa is one of the oldest and most successful commercial airlines in the world, and is the fourth-largest in terms of passengers. However, the company has not always been so successful, and in fact was teetering on the brink of bankruptcy just a short while ago. y examining Lufthansa's history, structure, governance, and contemporary strategies and goals, one is able to see how the company has weathered the ups and downs of political and economic history while increasing its market share to become a dominant force in the air transport market. Furthermore, by applying a SWOT and TOWS analysis to the company, one is able to effectively determine the best course going forward so that the company may retain its historical dominance while preparing itself for the unprecedented technological and social growth expected over the next decade.

History

The German airline Lufthansa offers an ideal case study…...

mla

Bibliography

Adler, N. (2005). Hub-spoke network choice under competition with an application to western europe. Transportation Science,39(1), 58-72. Retrieved from http://search.proquest.com/docview/203507606

Bruch, H., & Sattelberger, T. (2001). Lufthansa's transformation marathon: Process of liberating and focusing change energy. Human Resource Management, 40(3), 249-259. Retrieved

from http://search.proquest.com/docview/222065439

Cutshall, C., & Weisbrodt, J. (2006). Implementing an O&D revenue management solution.

There is no evidence to support the notion that Lufthansa requires an entrepreneurial mindset. There is no discernable purpose that an entrepreneurial culture would serve that is sorely needed by Lufthansa and an entrepreneurial culture would not address the company's most pressing strategic needs. The company has been able to demonstrate entrepreneurial skill in the past with the Star Alliance, but it is in a mature industry that is characterized by a slow pace of change. Lufthansa's business model works well, and aside from 2009 when most airlines lost money Lufthansa has largely been profitable since its troubles in the early 1990s. The company's path to ongoing success is more likely to be incremental improvements to its operations punctuated by the occasional strategy tweak, rather than the introduction of an entrepreneurial culture.
10. Describe what strategic leadership actions should be recommended for reducing complexity at Lufthansa.

Lufthansa is not an especially…...

mla

Works Cited:

Bruch, H. & Sattelberger, T. (2001). Lufthansa's transformation marathon: Process of liberating and focusing change energy. Human Resource Management Vol. 40 (3) 249-259.

Goudy, G. (2007). International expansion -- risk sharing considerations. Business Credit. Retrieved June 8, 2010 from  http://www.allbusiness.com/finance-insurance/credit-intermediation-related-activities/4012083-1.html 

Lufthansa 2009 Annual Report. Retrieved June 8, 2010 from  http://reports.lufthansa.com/2009/ar/servicepages/welcome.html 

Middlemist, D. (2004). Cooperative Strategy. Kent University. Retrieved June 8, 2010 from -- ch09notes.pdfhttp://www.personal.kent.edu/~vberardi/44285/44285

Out of company total fixed assets estimated at €10,002 billion, €3,273 billion is in aircraft and €63 mln.
A more in other tangible assets. he company has extensive fleet and is currently devoted to improving it in all the business segments, including passenger and freight services.

5. Apply the value chain model to Lufthansa. Based on this model, in which activities does Lufthansa have its main competencies?

In 2005, the biggest company generated Value Added was within the logistics and MRO (Maintenance, Repairment and Overhaul) business segments. Also, it services attributed a considerable share to the total company generated and added income.

6. Does Lufthansa have a sustainable competitive advantage in the global airline industry?

Lufthansa currently does not have a very sustainable competitive position within the global airline industry, but the current strategy plan of the company is very competitive and wise and accounts for all the company strengths within each business segment…...

mla

The management is highly qualified with well planned and worked out strategy which allows the company to growth the market capitalization and profitability.

Lufthansa 2005 Annual Report, available at http://www.lufthansa-financials.de/lhir/pdf/en/DLH-GB_2005e.pdf

Lufthansa 2003

Air Cargo Management
Lufthansa Cargo

Lufthansa Cargo is a cargo airline company that is based in Germany. The company provides airline cargo, air freight, and logistic services. Lufthansa transports cargo and mail from airport-airport. Lufthansa is the largest airline in Germany and is amongst the leading airlines in the world. The company is headquartered at the Frankfurt Airport in building 451. Lufthansa Cargo has access to other cargo capacities in their Lufthansa passenger aircrafts. This is in addition to its own cargo freighters. Organizing its cargo business in a different airline entity has allowed the company (Lufthansa) to differentiate itself from other major competitors like Air France and British Airways. Lufthansa Cargo was the leading cargo in the recent past in terms of their international freight tonne-kilometers, but the company has been overtaken by Korean Air Cargo and Cathay Pacific Zhang & Zhang, 2002()

Cargo management is different from passenger business as cargo…...

mla

References

Forster, P.W., & Regan, A.C. (2001). Electronic integration in the air cargo industry: An information processing model of on-time performance. Transportation Journal, 46-61.

Gardiner, J., Ison, S., & Humphreys, I. (2005). Factors influencing cargo airlines' choice of airport: an international survey. Journal of Air Transport Management, 11(6), 393-399.

Hellermann, R. (2006). Capacity Options for Revenue Management: Theory and Applications in the Air Cargo Industry. New York / Heidelberg: Springer.

Lufthansa Cargo. (2013). Product Overview, from  http://lufthansa-cargo.com/en_uk/mainnav/products/product-overview/

Southwest vs. Lufthansa
quality management

Creating value through quality management

Southwest Airlines is famed for having one of the most unique business models and philosophies of any airline. It began as a ground-breaking organization that offered bare-bones, low-cost services to passengers. Flight crews were entertaining and responsive to passenger needs, and even though no in-flight meals were served, customers flocked to Southwest. The company openly advertises that it selects its employees because they have a certain 'attitude' and are willing to joke, be silly, break into song, and have 'fun' with their jobs. Although a larger percentage of its employees belong to unions than any other major carrier, it has never had a strike. Employees are the best-paid workers in the industry, but costs are kept low: "Since Southwest has about 30% fewer employees per aircraft than its network competitors, it has the lowest non-fuel C.A.S.M. (cost per available seat mile) of any…...

mla

References

Brancatelli, Joe. (2008). Southwest Airlines' seven secrets for success. Wired. Retrieved September 10, 2011 at  http://www.wired.com/cars/futuretransport/news/2008/07/portfolio_0708 

Lufthansa leads the way. (2008). Reuters. Retrieved September 10, 2011 at  http://www.reuters.com/article/2008/04/21/idUS174440+21-Apr-2008+MW20080421 

Webb, Alexis. (2011). Lufthansa CEO Franz predicts 2011 profit gain on hedging maintenance unit. Bloomberg News. Retrieved September 10, 2011 at  http://www.bloomberg.com/news/2011-08-30/lufthansa-ceo-franz-predicts-2011-profit-gain-on-hedging-maintenance-unit.html

7. Overall Performance

Lufthansa is one of the strongest corporations of the globe and a major player on the European airline market. Its success is obvious in the satisfaction of their customers or the fact that their employees love working for the company, and it often materializes in opportunities for growth and development. Throughout the past recent years, the German airline organization has managed to increase its customer base, its fleet as well as its product offering. But these are not the sole indicators of prosperity. The financial analysis of Lufthansa revealed a strong economic agent. Despite the existence of some few issues which…...

mla

References

April 3, 2007, World Airlines, Flight International

2009, Investopedia, accessed on February 11, 2009http://www.investopedia.comlast

2009, Deutsche Lufthansa AG, Reuters,   accessed on February 11, 2009http://www.reuters.com/finance/stocks/ratios?symbol=LHAG.DElast 

2009, Website of the Lufthansa Group, last accessed on February 11, 2009

The results retrieved by Victor, Boynton and Stephens-Jang point out to a necessity to find a balance between standardized work and continuous learning process. They also indicate that employees who have managed to find this balance reveal higher levels of on-the-job satisfaction, as well as lower levels of stress.
A crucial approach to total quality management is taken by Mohamed Zairi (2002), who looks at quality management in the context of the current threats. He argues for instance the growing threats of competition, as promoted by the intensifying forces of globalization, or the necessity for any organization to operate in accordance with the growing concerns for environmental well-being. In this context, Zairi points out not only to the necessity of TQM for organizational survival, but even more so for the importance of sustainable models of TQM that maintain organizational competitiveness. The basic idea is that of the ongoing necessity for…...

mla

References:

Gabor, A., 2001, Quality Revival, Part 2: Ford Embraces Six Sigma, The New York Times

Hahn, G.J., Hill, W.J., Hoerl, R.W., Zinkgraf, S.A., 1999, The Impact of Six Sigma Improvement -- A Glimpse into the Future of Statistics, The American Statistician, Vol. 53, No. 3

Kanji, G.K., 2002, Business Excellence: Make It Happen, Total Quality Management, Vol. 13, No. 8

Harry, M., Schroeder, R., 2000, Six Sigma, Random House, ISBN 0-385-49437-8

(Dunn, 2009)
Arumemi-Ikhide believes that Arik can succeed due to a combination of the opportunity -- helped by economic and air transport reforms in Nigeria -- and the capability to deliver a high quality product." (Dunn, 2009) Also stated by Arumemi-Ikhide is that this "will be a key in differentiating it in the international market and providing feeder traffic. That will be the lifeline for the international network. That's what sets up apart from our rivals." (Dunn, 2009)

Martin Russell states in the report entitled: "Arik Air: The Future of African Aviation" that both the "internal opinion of African air travel and that of onlookers overseas was bleak before the arrival of Nigeria's newest treasure, Arik Air." (2008) Russell states that the aviation industry is African is "hampered by somewhat less predictable weather and frequent storms" resulting in aviation in African being "far from predictable with temperamental skies that readily unleash…...

mla

Bibliography

Nigeria's air traffic grows by 31% during 2008; defies global slump (2009) TradeInvest Nigeria Thu, 05 Mar 2009. Online available at:  http://www.tradeinvestnigeria.com/news/957188.htm 

Lawal, Lateef (2009)FG Invests Over N7b In Air Navigation, Safety, Search & Rescue - Nigeria Masterweb Daily News. Online available at: http://www.nigeriamasterweb.com/blog/

More Frequencies to Foreign Airlines Put Nigerian Carriers at Risk (2009) The Guardian -- Travels 17 Jul 2009. Online available at:  http://www.ngrguardiannews.com/travels/article01//indexn2_html?pdate=170709&ptitle=More%20frequencies%20to%20foreign%20airlines%20put%20Nigerian%20carriers%20at%20risk 

Dunn, Graham (2009) Arik Air: Pressing Ahead with International Plans. 3 June 2009. Airline Business. Online available at:  http://www.flightglobal.com/articles/2009/03/06/323508/arik-air-pressing-ahead-with-international-plans.html

These strategies can also be used to reduce the risk of a drop in the stock price without regard to tax issues. In deciding whether to employ these strategies, it is necessary to consider the cost of the option and any related transaction costs.
A swap is an agreement in which counterparties (generally two) agree to exchange future cash flows arising from financial instruments. For example, in the case of a generic fixed-to-floating interest rate swap, company a agrees to pay company . periodic fixed interest payments on some "notional" principal amount (say $100 million) in exchange for variable rate payments on that notional. The floating "leg" is typically periodically reset based on some reference rate such as LIOR. Usually, one leg involves quantities that are known in advance (e.g. The "fixed leg" in an interest rate swap) the other involves quantities that are uncertain or variable (e.g. The "floating…...

mla

Bibliography

McMillan, Lawrence G., 1986, Options as a Strategic Investment: A Comprehensive Analysis of Listed Option Strategies, 2nd edn, New York Institute of Finance, New York.

Smith, Courtney, 1987, Option Strategies: Profit-Making Techniques for Stock, Stock Index, and Commodity Options, John Wiley & Sons, New York.

Coates, C. Robert, 1978, Investment Strategy, McGraw-Hill Book Company, New York.

Bookstaber, Richard M., 1987, Option Pricing and Investment Strategies, Protus Publishing Company, Chicago.

Strategic Analysis of Qantas Group
Qantas Group Overview

Key Problems and Strategic Issues

Diagnosis: Analysis and Evaluation

Porter 5 Analysis

Power of Suppliers: Low-to-Medium

Industry ivalry: High

Power of Buyer: Medium

Barrier of Entry: High

Availability of Substitutes: Low

The study carries out the strategic analysis of Qantas Group to identify the problems that the company is facing in the contemporary business environments and provide the recommendations that will assist Qantas overcoming its problems and record high profitability. The Porter 5 analysis reveals Qantas is facing the intense competitions at domestic and international routes leading to a decline in the profit margins. Moreover, Qantas has not been able to overcome the problems associated with the high costs of operations from the constant increase in the fuel costs. The paper suggests that Qantas should consider both vertical and horizontal mergers to enjoy economies of scales, which will assist in enjoying a decline in the cost of operations and having a high…...

mla

Reference

Belobaba, P., Odoni, A., & Barnhart, C. (2009). The global airline industry (Vol. 23). Wiley. Com. 12-89.

CFA Institute (2010). Merger and Acquisitions. CFA Institute. USA.

Cowper-Smith, A., & de Grosbois, D. (2011). The adoption of corporate social responsibility practices in the airline industry. Journal of Sustainable Tourism, 19 (1), 59-77.

Dallas, H. Michael, A.H. & Ireland, R.D. (2012). Strategic Management: Competitive Globalization. Victoria. Cengage.

g. Lufthansa); partners with Blackberry and Yahoo for in flight conveniences.
Early aggressive additions to fleet and service did, as analysts predicted, negatively impact the company.

Company will need to carefully evaluate routes, new service, new equipment, and new technology in order to maintain growth potential.

Management

Fairly stable and industry respected; replaced CEO in May 2007.

Needed a new managerial focus after 2004.

Optimistic, keep tight rein on overly aggressive expansion.

Human esources

Jet Blue University, compensates better than most airlines, rewards loyalty for service

Unsuccessful attempt at unionizing

Ensure mission is translated to consumers; empower local employees to make better decisions so clients are not left sitting on tarmac.

Market Share

Huge and rapid growth spurt in early 21st century

Became a model for other carriers; major carriers copied model and took away share

Continued energy and fiscal focus on consumers and next generation of airline ideas.

Marketing Focus

Focus on consumer; what can be different about Jet Blue, but still cover costs?

May have…...

mla

REFERENCES

Air Transportation Safety and System Stabilization Act, Public Law 107-42. (2001, September 22). Retrieved October 2010, from Office of Transportation - U.S. Government: http://ostpxweb.ost.dot.gov/aviation/Data/stabilizationact.pdf

Jet Blue Press Release - Names Dave Barger President and CEO. (2007, May 10). Retrieved October 2010, from JetBlue.com: http://investor.jetblue.com/phoenix.zhtml?c=131045&p=irol-newsArticle&ID=998672&highlight=))

Air Travel Report: Dip in Delays, Spike in Complaints. (2010, October 12). Retrieved October 2010, from CNN Travel:  http://www.cnn.com/2010/TRAVEL/10/12/air.travel.consumer.report 

Jet Blue Shareholder Information. (2010, October 12). Retrieved October 2010, from Jet Blue:  http://investor.jetblue.com/phoenix.zhtml?c=131045&p=irol-irhome

2).
ir Cargo, Inc. only flew cargo from December, 1941 (when Pearl Harbor was attacked) through November, 1944. t that time, Siddiqi explains that individual airline companies authored their own freight services, and on page 2 the author of this article notes that in time the major passenger airlines began offering freight forwarding service and that pretty well eliminated the need for a whole fleet of airline companies that just forwarded freight (Siddiqi). Only Flying Tiger stayed aloft as a strictly air freight company until the 1980s when Federal Express entered the picture. More on FedEx later in this paper.

The Literature -- the History of ir Freight Transportation -- Berlin ir Lift

When the long, bloody war was over it was time for the winning llies to divide up the territory that once was Nazi Germany, the negotiated, agreed-upon divisions gave the llies (U.S., Britain, and France) the Western sections of…...

mla

April 20, 2012, from http://www.centennialofflight.gov.

Wilde, Robert. (2005). Berlin Blockade / Berlin Airlift. About.com. Retrieved April 20, 2012,

From  http://europeanhistory.about.com .

Description of high/low marketing strategy

The marketing strategy of choice, however, is simply to accentuate low costs by cutting frills and eliminating hub-based systems in favor of short nonstop hops for even the largest national carriers. This is the model followed by such successful low-cost carriers as Jet lue and Southwest Airlines.

These airlines are able to go up against giants like United and American by slashing fares, marketing their no-frills image and flying short distances and choosing cheaper, slightly out of the way airports.

For instance, Jet lue flies not to Miami but to Ft. Lauderdale and even though Delta might fly to Miami, Jet lue will still get the fare because of its lower price and no-frills marketing strategy.

Airlines have to realize that this is a price-sensitive market and only spend marketing dollars on advertising low-cost fares and the fact that fliers are not being charged for peanut bags they believe…...

mla

Bibliography

Adams, Ed. (2005). "Low-cost carriers." www.navigant.com

Gooch, Daniel-Robert. (2005). "Air France suspending non-stop Vietnam flights." Commercial Aviation Today, Feb. 28, 2005.

Mercer Management Consulting. (2002). "Impact of low cost airlines." www.mercermc.com

Munich Massacre of 1972 was an organized terrorist attack on 11 Israeli Olympic athletes at the 1972 Olympic Games in Munich. By the end of day-long the conflict, 11 Israelis, five Arab terrorists, and a German policeman were dead.
On September 5, 1972 at 4:30 AM, Arab terrorists wearing tracksuits and carrying weapons in athletic bags scaled the fence of the Olympic Village in Munich. Security was lax or non-existent, enabling a quick and efficient entry. Upon breaching the Village, the terrorists rendezvoused with an under-cover terrorist, who had been working for the Village, and thus knew exactly where the future hostages were sleeping. At 5AM, the terrorists knocked on the door of Israeli wrestling coach Moshe Weinberg, who immediately recognized that something was awry. He shouted a warning to his players and, with wrestler Joseph omano, tried to keep the terrorists out while some of the players escaped out…...

mla

References

Palestine Facts 2010, Israeli 1972 Olympic Team Murdered in Munich, viewed 8 February,

2010, < http://www.palestinefacts.org/pf_1967to1991_munich.php>.

In terms of environment, British Airways has a rather opaque policy and they have yet to implement measures which safeguard the well-being of the environment. elative to the competition, the British operator strives to regain its strength through a merger with Iberia.
3. ecommendations for Improvement

Before presenting the recommendations for improving the operations management at British Airways, it is necessary to reveal some of the challenges presented by the modern day environment. This endeavor is necessary as the recommendations for improvement will be tailored to the need to satisfy the identified challenges. In this order of ideas, the difficulties raised by the current context include the following:

safety and security issues changing role of employees pollution, global warming and the general impact on the environment intensifying competition

Safety and Security

This threat has always been present within the airline industry, but never at levels as high as today. Flying used to be perceived…...

mla

References:

Boyd, C., 2003, Human Resource Management and Occupational Health and Safety, Routledge, ISBN 0415265908

Solon, D., June 4, 2007, Airlines Are Defending Their Record Over Pollution, the New York Times

2009, Official Website of British Airways,   last accessed on October 30, 2009http://www.britishairways.com 

2009, British Airways Plc., Hoovers,   -- /free-co-factsheet.xhtml last accessed on October 30, 2009http://hoovers.com/british-airways/--ID__41761