American Airlines, Inc.: Proposal for a Three-Class Transcon Service SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
Sales & Marketing
Strategy / MBA Resources
Case Study SWOT Analysis Solution
Case Study Description of American Airlines, Inc.: Proposal for a Three-Class Transcon Service
American Airlines, Inc., the largest airline in the United States, is considering a proposal to enhance its flagship New York JFK - Los Angeles transcontinental service from a two-class (first and coach) to a three-class (first, business, and coach) product. The proposal was originated by the marketing group, and is motivated by considerations of competition, freqent-flyer upgrade policies, product consistency, and demand stimulation (for domestic business-class travel). While the new product would be consistent with American's international product, it would be inconsistent with the rest of the domestic product. More important, it would require an expensive aircraft reconfiguration and the isolation of the JFK-LAX fleet from the rest of American's fleet--at a considerable loss of flexibility.
Swot Analysis of "American Airlines, Inc.: Proposal for a Three-Class Transcon Service" written by Anirudh Dhebar includes – strengths weakness that are internal strategic factors of the organization, and opportunities and threats that Jfk American's facing as an external strategic factors. Some of the topics covered in American Airlines, Inc.: Proposal for a Three-Class Transcon Service case study are - Strategic Management Strategies, Design, Marketing, Pricing and Sales & Marketing.
Some of the macro environment factors that can be used to understand the American Airlines, Inc.: Proposal for a Three-Class Transcon Service casestudy better are - – increasing household debt because of falling income levels, talent flight as more people leaving formal jobs, there is increasing trade war between United States & China, there is backlash against globalization, customer relationship management is fast transforming because of increasing concerns over data privacy, central banks are concerned over increasing inflation, supply chains are disrupted by pandemic ,
increasing commodity prices, wage bills are increasing, etc
Introduction to SWOT Analysis of American Airlines, Inc.: Proposal for a Three-Class Transcon Service
SWOT stands for an organization’s Strengths, Weaknesses, Opportunities and Threats . At Oak Spring University , we believe that protagonist in American Airlines, Inc.: Proposal for a Three-Class Transcon Service case study can use SWOT analysis as a strategic management tool to assess the current internal strengths and weaknesses of the Jfk American's, and to figure out the opportunities and threats in the macro environment – technological, environmental, political, economic, social, demographic, etc in which Jfk American's operates in.
According to Harvard Business Review, 75% of the managers use SWOT analysis for various purposes such as – evaluating current scenario, strategic planning, new venture feasibility, personal growth goals, new market entry, Go To market strategies, portfolio management and strategic trade-off assessment, organizational restructuring, etc.
SWOT Objectives / Importance of SWOT Analysis and SWOT Matrix
SWOT analysis of American Airlines, Inc.: Proposal for a Three-Class Transcon Service can be done for the following purposes –
1. Strategic planning using facts provided in American Airlines, Inc.: Proposal for a Three-Class Transcon Service case study
2. Improving business portfolio management of Jfk American's
3. Assessing feasibility of the new initiative in Sales & Marketing field.
4. Making a Sales & Marketing topic specific business decision
5. Set goals for the organization
6. Organizational restructuring of Jfk American's
Strengths American Airlines, Inc.: Proposal for a Three-Class Transcon Service | Internal Strategic Factors
What are Strengths in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The strengths of Jfk American's in American Airlines, Inc.: Proposal for a Three-Class Transcon Service Harvard Business Review case study are -
Learning organization
- Jfk American's is a learning organization. It has inculcated three key characters of learning organization in its processes and operations – exploration, creativity, and expansiveness. The work place at Jfk American's is open place that encourages instructiveness, ideation, open minded discussions, and creativity. Employees and leaders in American Airlines, Inc.: Proposal for a Three-Class Transcon Service Harvard Business Review case study emphasize – knowledge, initiative, and innovation.
Analytics focus
– Jfk American's is putting a lot of focus on utilizing the power of analytics in business decision making. This has put it among the leading players in the industry. The technology infrastructure suggested by Anirudh Dhebar can also help it to harness the power of analytics for – marketing optimization, demand forecasting, customer relationship management, inventory management, information sharing across the value chain etc.
Innovation driven organization
– Jfk American's is one of the most innovative firm in sector. Manager in American Airlines, Inc.: Proposal for a Three-Class Transcon Service Harvard Business Review case study can use Clayton Christensen Disruptive Innovation strategies to further increase the scale of innovtions in the organization.
Diverse revenue streams
– Jfk American's is present in almost all the verticals within the industry. This has provided firm in American Airlines, Inc.: Proposal for a Three-Class Transcon Service case study a diverse revenue stream that has helped it to survive disruptions such as global pandemic in Covid-19, financial disruption of 2008, and supply chain disruption of 2021.
Organizational Resilience of Jfk American's
– The covid-19 pandemic has put organizational resilience at the centre of everthing that Jfk American's does. Organizational resilience comprises - Financial Resilience, Operational Resilience, Technological Resilience, Organizational Resilience, Business Model Resilience, and Reputation Resilience.
Cross disciplinary teams
– Horizontal connected teams at the Jfk American's are driving operational speed, building greater agility, and keeping the organization nimble to compete with new competitors. It helps are organization to ideate new ideas, and execute them swiftly in the marketplace.
Sustainable margins compare to other players in Sales & Marketing industry
– American Airlines, Inc.: Proposal for a Three-Class Transcon Service firm has clearly differentiated products in the market place. This has enabled Jfk American's to fetch slight price premium compare to the competitors in the Sales & Marketing industry. The sustainable margins have also helped Jfk American's to invest into research and development (R&D) and innovation.
Successful track record of launching new products
– Jfk American's has launched numerous new products in last few years, keeping in mind evolving customer preferences and competitive pressures. Jfk American's has effective processes in place that helps in exploring new product needs, doing quick pilot testing, and then launching the products quickly using its extensive distribution network.
Effective Research and Development (R&D)
– Jfk American's has innovation driven culture where significant part of the revenues are spent on the research and development activities. This has resulted in, as mentioned in case study American Airlines, Inc.: Proposal for a Three-Class Transcon Service - staying ahead in the industry in terms of – new product launches, superior customer experience, highly competitive pricing strategies, and great returns to the shareholders.
Strong track record of project management
– Jfk American's is known for sticking to its project targets. This enables the firm to manage – time, project costs, and have sustainable margins on the projects.
Ability to recruit top talent
– Jfk American's is one of the leading recruiters in the industry. Managers in the American Airlines, Inc.: Proposal for a Three-Class Transcon Service are in a position to attract the best talent available. The firm has a robust talent identification program that helps in identifying the brightest.
Training and development
– Jfk American's has one of the best training and development program in the industry. The effectiveness of the training programs can be measured in American Airlines, Inc.: Proposal for a Three-Class Transcon Service Harvard Business Review case study by analyzing – employees retention, in-house promotion, loyalty, new venture initiation, lack of conflict, and high level of both employees and customer engagement.
Weaknesses American Airlines, Inc.: Proposal for a Three-Class Transcon Service | Internal Strategic Factors
What are Weaknesses in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The weaknesses of American Airlines, Inc.: Proposal for a Three-Class Transcon Service are -
Employees’ incomplete understanding of strategy
– From the instances in the HBR case study American Airlines, Inc.: Proposal for a Three-Class Transcon Service, it seems that the employees of Jfk American's don’t have comprehensive understanding of the firm’s strategy. This is reflected in number of promotional campaigns over the last few years that had mixed messaging and competing priorities. Some of the strategic activities and services promoted in the promotional campaigns were not consistent with the organization’s strategy.
High bargaining power of channel partners
– Because of the regulatory requirements, Anirudh Dhebar suggests that, Jfk American's is facing high bargaining power of the channel partners. So far it has not able to streamline the operations to reduce the bargaining power of the value chain partners in the industry.
Products dominated business model
– Even though Jfk American's has some of the most successful products in the industry, this business model has made each new product launch extremely critical for continuous financial growth of the organization. firm in the HBR case study - American Airlines, Inc.: Proposal for a Three-Class Transcon Service should strive to include more intangible value offerings along with its core products and services.
Slow to harness new channels of communication
– Even though competitors are using new communication channels such as Instagram, Tiktok, and Snap, Jfk American's is slow explore the new channels of communication. These new channels of communication mentioned in marketing section of case study American Airlines, Inc.: Proposal for a Three-Class Transcon Service can help to provide better information regarding products and services. It can also build an online community to further reach out to potential customers.
Interest costs
– Compare to the competition, Jfk American's has borrowed money from the capital market at higher rates. It needs to restructure the interest payment and costs so that it can compete better and improve profitability.
High dependence on star products
– The top 2 products and services of the firm as mentioned in the American Airlines, Inc.: Proposal for a Three-Class Transcon Service HBR case study still accounts for major business revenue. This dependence on star products in has resulted into insufficient focus on developing new products, even though Jfk American's has relatively successful track record of launching new products.
Workers concerns about automation
– As automation is fast increasing in the segment, Jfk American's needs to come up with a strategy to reduce the workers concern regarding automation. Without a clear strategy, it could lead to disruption and uncertainty within the organization.
Low market penetration in new markets
– Outside its home market of Jfk American's, firm in the HBR case study American Airlines, Inc.: Proposal for a Three-Class Transcon Service needs to spend more promotional, marketing, and advertising efforts to penetrate international markets.
High dependence on existing supply chain
– The disruption in the global supply chains because of the Covid-19 pandemic and blockage of the Suez Canal illustrated the fragile nature of Jfk American's supply chain. Even after few cautionary changes mentioned in the HBR case study - American Airlines, Inc.: Proposal for a Three-Class Transcon Service, it is still heavily dependent upon the existing supply chain. The existing supply chain though brings in cost efficiencies but it has left Jfk American's vulnerable to further global disruptions in South East Asia.
Aligning sales with marketing
– It come across in the case study American Airlines, Inc.: Proposal for a Three-Class Transcon Service that the firm needs to have more collaboration between its sales team and marketing team. Sales professionals in the industry have deep experience in developing customer relationships. Marketing department in the case American Airlines, Inc.: Proposal for a Three-Class Transcon Service can leverage the sales team experience to cultivate customer relationships as Jfk American's is planning to shift buying processes online.
Slow to strategic competitive environment developments
– As American Airlines, Inc.: Proposal for a Three-Class Transcon Service HBR case study mentions - Jfk American's takes time to assess the upcoming competitions. This has led to missing out on atleast 2-3 big opportunities in the industry in last five years.
Opportunities American Airlines, Inc.: Proposal for a Three-Class Transcon Service | External Strategic Factors
What are Opportunities in the SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The opportunities highlighted in the Harvard Business Review case study American Airlines, Inc.: Proposal for a Three-Class Transcon Service are -
Better consumer reach
– The expansion of the 5G network will help Jfk American's to increase its market reach. Jfk American's will be able to reach out to new customers. Secondly 5G will also provide technology framework to build new tools and products that can help more immersive consumer experience and faster consumer journey.
Building a culture of innovation
– managers at Jfk American's can make experimentation a productive activity and build a culture of innovation using approaches such as – mining transaction data, A/B testing of websites and selling platforms, engaging potential customers over various needs, and building on small ideas in the Sales & Marketing segment.
Creating value in data economy
– The success of analytics program of Jfk American's has opened avenues for new revenue streams for the organization in the industry. This can help Jfk American's to build a more holistic ecosystem as suggested in the American Airlines, Inc.: Proposal for a Three-Class Transcon Service case study. Jfk American's can build new products and services such as - data insight services, data privacy related products, data based consulting services, etc.
Changes in consumer behavior post Covid-19
– Consumer behavior has changed in the Sales & Marketing industry because of Covid-19 restrictions. Some of this behavior will stay once things get back to normal. Jfk American's can take advantage of these changes in consumer behavior to build a far more efficient business model. For example consumer regular ordering of products can reduce both last mile delivery costs and market penetration costs. Jfk American's can further use this consumer data to build better customer loyalty, provide better products and service collection, and improve the value proposition in inflationary times.
Identify volunteer opportunities
– Covid-19 has impacted working population in two ways – it has led to people soul searching about their professional choices, resulting in mass resignation. Secondly it has encouraged people to do things that they are passionate about. This has opened opportunities for businesses to build volunteer oriented socially driven projects. Jfk American's can explore opportunities that can attract volunteers and are consistent with its mission and vision.
Using analytics as competitive advantage
– Jfk American's has spent a significant amount of money and effort to integrate analytics and machine learning into its operations in the sector. This continuous investment in analytics has enabled, as illustrated in the Harvard case study American Airlines, Inc.: Proposal for a Three-Class Transcon Service - to build a competitive advantage using analytics. The analytics driven competitive advantage can help Jfk American's to build faster Go To Market strategies, better consumer insights, developing relevant product features, and building a highly efficient supply chain.
Developing new processes and practices
– Jfk American's can develop new processes and procedures in Sales & Marketing industry using technology such as automation using artificial intelligence, real time transportation and products tracking, 3D modeling for concept development and new products pilot testing etc.
Remote work and new talent hiring opportunities
– The widespread usage of remote working technologies during Covid-19 has opened opportunities for Jfk American's to expand its talent hiring zone. According to McKinsey Global Institute, 20% of the high end workforce in fields such as finance, information technology, can continously work from remote local post Covid-19. This presents a really great opportunity for Jfk American's to hire the very best people irrespective of their geographical location.
Leveraging digital technologies
– Jfk American's can leverage digital technologies such as artificial intelligence and machine learning to automate the production process, customer analytics to get better insights into consumer behavior, realtime digital dashboards to get better sales tracking, logistics and transportation, product tracking, etc.
Low interest rates
– Even though inflation is raising its head in most developed economies, Jfk American's can still utilize the low interest rates to borrow money for capital investment. Secondly it can also use the increase of government spending in infrastructure projects to get new business.
Buying journey improvements
– Jfk American's can improve the customer journey of consumers in the industry by using analytics and artificial intelligence. American Airlines, Inc.: Proposal for a Three-Class Transcon Service suggest that firm can provide automated chats to help consumers solve their own problems, provide online suggestions to get maximum out of the products and services, and help consumers to build a community where they can interact with each other to develop new features and uses.
Loyalty marketing
– Jfk American's has focused on building a highly responsive customer relationship management platform. This platform is built on in-house data and driven by analytics and artificial intelligence. The customer analytics can help the organization to fine tune its loyalty marketing efforts, increase the wallet share of the organization, reduce wastage on mainstream advertising spending, build better pricing strategies using personalization, etc.
Finding new ways to collaborate
– Covid-19 has not only transformed business models of companies in Sales & Marketing industry, but it has also influenced the consumer preferences. Jfk American's can tie-up with other value chain partners to explore new opportunities regarding meeting customer demands and building a rewarding and engaging relationship.
Threats American Airlines, Inc.: Proposal for a Three-Class Transcon Service External Strategic Factors
What are Threats in the SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The threats mentioned in the HBR case study American Airlines, Inc.: Proposal for a Three-Class Transcon Service are -
Increasing wage structure of Jfk American's
– Post Covid-19 there is a sharp increase in the wages especially in the jobs that require interaction with people. The increasing wages can put downward pressure on the margins of Jfk American's.
Regulatory challenges
– Jfk American's needs to prepare for regulatory challenges as consumer protection groups and other pressure groups are vigorously advocating for more regulations on big business - to reduce inequality, to create a level playing field, to product data privacy and consumer privacy, to reduce the influence of big money on democratic institutions, etc. This can lead to significant changes in the Sales & Marketing industry regulations.
Technology disruption because of hacks, piracy etc
– The colonial pipeline illustrated, how vulnerable modern organization are to international hackers, miscreants, and disruptors. The cyber security interruption, data leaks, etc can seriously jeopardize the future growth of the organization.
New competition
– After the dotcom bust of 2001, financial crisis of 2008-09, the business formation in US economy had declined. But in 2020 alone, there are more than 1.5 million new business applications in United States. This can lead to greater competition for Jfk American's in the Sales & Marketing sector and impact the bottomline of the organization.
High level of anxiety and lack of motivation
– the Great Resignation in United States is the sign of broader dissatisfaction among the workforce in United States. Jfk American's needs to understand the core reasons impacting the Sales & Marketing industry. This will help it in building a better workplace.
Technology acceleration in Forth Industrial Revolution
– Jfk American's has witnessed rapid integration of technology during Covid-19 in the Sales & Marketing industry. As one of the leading players in the industry, Jfk American's needs to keep up with the evolution of technology in the Sales & Marketing sector. According to Mckinsey study top managers believe that the adoption of technology in operations, communications is 20-25 times faster than what they planned in the beginning of 2019.
Capital market disruption
– During the Covid-19, Dow Jones has touched record high. The valuations of a number of companies are way beyond their existing business model potential. This can lead to capital market correction which can put a number of suppliers, collaborators, value chain partners in great financial difficulty. It will directly impact the business of Jfk American's.
Consumer confidence and its impact on Jfk American's demand
– There is a high probability of declining consumer confidence, given – high inflammation rate, rise of gig economy, lower job stability, increasing cost of living, higher interest rates, and aging demography. All the factors contribute to people saving higher rate of their income, resulting in lower consumer demand in the industry and other sectors.
Aging population
– As the populations of most advanced economies are aging, it will lead to high social security costs, higher savings among population, and lower demand for goods and services in the economy. The household savings in US, France, UK, Germany, and Japan are growing faster than predicted because of uncertainty caused by pandemic.
Stagnating economy with rate increase
– Jfk American's can face lack of demand in the market place because of Fed actions to reduce inflation. This can lead to sluggish growth in the economy, lower demands, lower investments, higher borrowing costs, and consolidation in the field.
High dependence on third party suppliers
– Jfk American's high dependence on third party suppliers can disrupt its processes and delivery mechanism. For example -the current troubles of car makers because of chip shortage is because the chip companies started producing chips for electronic companies rather than car manufacturers.
Barriers of entry lowering
– As technology is more democratized, the barriers to entry in the industry are lowering. It can presents Jfk American's with greater competitive threats in the near to medium future. Secondly it will also put downward pressure on pricing throughout the sector.
Instability in the European markets
– European Union markets are facing three big challenges post Covid – expanded balance sheets, Brexit related business disruption, and aggressive Russia looking to distract the existing security mechanism. Jfk American's will face different problems in different parts of Europe. For example it will face inflationary pressures in UK, France, and Germany, balance sheet expansion and demand challenges in Southern European countries, and geopolitical instability in the Eastern Europe.
Weighted SWOT Analysis of American Airlines, Inc.: Proposal for a Three-Class Transcon Service Template, Example
Not all factors mentioned under the Strengths, Weakness, Opportunities, and Threats quadrants in the SWOT Analysis are equal. Managers in the HBR case study American Airlines, Inc.: Proposal for a Three-Class Transcon Service needs to zero down on the relative importance of each factor mentioned in the Strengths, Weakness, Opportunities, and Threats quadrants.
We can provide the relative importance to each factor by assigning relative weights. Weighted SWOT analysis process is a three stage process –
First stage for doing weighted SWOT analysis of the case study American Airlines, Inc.: Proposal for a Three-Class Transcon Service is to rank the strengths and weaknesses of the organization. This will help you to assess the most important strengths and weaknesses of the firm and which one of the strengths and weaknesses mentioned in the initial lists are marginal and can be left out.
Second stage for conducting weighted SWOT analysis of the Harvard case study American Airlines, Inc.: Proposal for a Three-Class Transcon Service is to give probabilities to the external strategic factors thus better understanding the opportunities and threats arising out of macro environment changes and developments.
Third stage of constructing weighted SWOT analysis of American Airlines, Inc.: Proposal for a Three-Class Transcon Service is to provide strategic recommendations includes – joining likelihood of external strategic factors such as opportunities and threats to the internal strategic factors – strengths and weaknesses. You should start with external factors as they will provide the direction of the overall industry. Secondly by joining probabilities with internal strategic factors can help the company not only strategic fit but also the most probably strategic trade-off that Jfk American's needs to make to build a sustainable competitive advantage.