Case Study Description of Germania Fluggesellschaft mbH (A)
Students conduct game-theoretic analyses as they examine the situation of Germania Fluggesellschaft MBH at the launch of its first scheduled flight service on the Frankfurt-Berlin route in the fall of 2001. Entry into this market will bring Germania into direct competition with Deutsche Lufthansa AG, which currently holds a monopoly on the route. Students perform strategic analyses from the viewpoints of both competitors, to explore the strategic implications of repeating the same game several times (i.e., explore the difference between games and supergames), to discover the strategic role of reputation in repeated interactions between players, to understand the value of deterrence and evaluate the threat of predatory pricing, and to create a successful business model for entry into a market that is dominated by a large, monopolistic incumbent. See also the B case (UVA-QA-0621).
Swot Analysis of "Germania Fluggesellschaft mbH (A)" written by Matthias Hild includes – strengths weakness that are internal strategic factors of the organization, and opportunities and threats that Germania Fluggesellschaft facing as an external strategic factors. Some of the topics covered in Germania Fluggesellschaft mbH (A) case study are - Strategic Management Strategies, Competitive strategy, Entrepreneurship, Marketing, Policy, Pricing and Sales & Marketing.
Some of the macro environment factors that can be used to understand the Germania Fluggesellschaft mbH (A) casestudy better are - – increasing transportation and logistics costs, increasing household debt because of falling income levels, geopolitical disruptions, talent flight as more people leaving formal jobs, increasing energy prices, banking and financial system is disrupted by Bitcoin and other crypto currencies, there is increasing trade war between United States & China,
digital marketing is dominated by two big players Facebook and Google, increasing commodity prices, etc
Introduction to SWOT Analysis of Germania Fluggesellschaft mbH (A)
SWOT stands for an organization’s Strengths, Weaknesses, Opportunities and Threats . At Oak Spring University , we believe that protagonist in Germania Fluggesellschaft mbH (A) case study can use SWOT analysis as a strategic management tool to assess the current internal strengths and weaknesses of the Germania Fluggesellschaft, and to figure out the opportunities and threats in the macro environment – technological, environmental, political, economic, social, demographic, etc in which Germania Fluggesellschaft 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 Germania Fluggesellschaft mbH (A) can be done for the following purposes –
1. Strategic planning using facts provided in Germania Fluggesellschaft mbH (A) case study
2. Improving business portfolio management of Germania Fluggesellschaft
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 Germania Fluggesellschaft
Strengths Germania Fluggesellschaft mbH (A) | Internal Strategic Factors
What are Strengths in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The strengths of Germania Fluggesellschaft in Germania Fluggesellschaft mbH (A) Harvard Business Review case study are -
Operational resilience
– The operational resilience strategy in the Germania Fluggesellschaft mbH (A) Harvard Business Review case study comprises – understanding the underlying the factors in the industry, building diversified operations across different geographies so that disruption in one part of the world doesn’t impact the overall performance of the firm, and integrating the various business operations and processes through its digital transformation drive.
Learning organization
- Germania Fluggesellschaft 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 Germania Fluggesellschaft is open place that encourages instructiveness, ideation, open minded discussions, and creativity. Employees and leaders in Germania Fluggesellschaft mbH (A) Harvard Business Review case study emphasize – knowledge, initiative, and innovation.
Innovation driven organization
– Germania Fluggesellschaft is one of the most innovative firm in sector. Manager in Germania Fluggesellschaft mbH (A) Harvard Business Review case study can use Clayton Christensen Disruptive Innovation strategies to further increase the scale of innovtions in the organization.
Sustainable margins compare to other players in Sales & Marketing industry
– Germania Fluggesellschaft mbH (A) firm has clearly differentiated products in the market place. This has enabled Germania Fluggesellschaft to fetch slight price premium compare to the competitors in the Sales & Marketing industry. The sustainable margins have also helped Germania Fluggesellschaft to invest into research and development (R&D) and innovation.
Digital Transformation in Sales & Marketing segment
- digital transformation varies from industry to industry. For Germania Fluggesellschaft digital transformation journey comprises differing goals based on market maturity, customer technology acceptance, and organizational culture. Germania Fluggesellschaft has successfully integrated the four key components of digital transformation – digital integration in processes, digital integration in marketing and customer relationship management, digital integration into the value chain, and using technology to explore new products and market opportunities.
Cross disciplinary teams
– Horizontal connected teams at the Germania Fluggesellschaft 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.
Strong track record of project management
– Germania Fluggesellschaft is known for sticking to its project targets. This enables the firm to manage – time, project costs, and have sustainable margins on the projects.
Superior customer experience
– The customer experience strategy of Germania Fluggesellschaft in the segment is based on four key concepts – personalization, simplification of complex needs, prompt response, and continuous engagement.
Diverse revenue streams
– Germania Fluggesellschaft is present in almost all the verticals within the industry. This has provided firm in Germania Fluggesellschaft mbH (A) 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.
Effective Research and Development (R&D)
– Germania Fluggesellschaft 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 Germania Fluggesellschaft mbH (A) - staying ahead in the industry in terms of – new product launches, superior customer experience, highly competitive pricing strategies, and great returns to the shareholders.
Low bargaining power of suppliers
– Suppliers of Germania Fluggesellschaft in the sector have low bargaining power. Germania Fluggesellschaft mbH (A) has further diversified its suppliers portfolio by building a robust supply chain across various countries. This helps Germania Fluggesellschaft to manage not only supply disruptions but also source products at highly competitive prices.
High brand equity
– Germania Fluggesellschaft has strong brand awareness and brand recognition among both - the exiting customers and potential new customers. Strong brand equity has enabled Germania Fluggesellschaft to keep acquiring new customers and building profitable relationship with both the new and loyal customers.
Weaknesses Germania Fluggesellschaft mbH (A) | Internal Strategic Factors
What are Weaknesses in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The weaknesses of Germania Fluggesellschaft mbH (A) are -
Aligning sales with marketing
– It come across in the case study Germania Fluggesellschaft mbH (A) 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 Germania Fluggesellschaft mbH (A) can leverage the sales team experience to cultivate customer relationships as Germania Fluggesellschaft is planning to shift buying processes online.
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 Germania Fluggesellschaft supply chain. Even after few cautionary changes mentioned in the HBR case study - Germania Fluggesellschaft mbH (A), it is still heavily dependent upon the existing supply chain. The existing supply chain though brings in cost efficiencies but it has left Germania Fluggesellschaft vulnerable to further global disruptions in South East Asia.
High bargaining power of channel partners
– Because of the regulatory requirements, Matthias Hild suggests that, Germania Fluggesellschaft 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 Germania Fluggesellschaft 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 - Germania Fluggesellschaft mbH (A) should strive to include more intangible value offerings along with its core products and services.
Workers concerns about automation
– As automation is fast increasing in the segment, Germania Fluggesellschaft 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.
Slow to strategic competitive environment developments
– As Germania Fluggesellschaft mbH (A) HBR case study mentions - Germania Fluggesellschaft 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.
Interest costs
– Compare to the competition, Germania Fluggesellschaft 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 operating costs
– Compare to the competitors, firm in the HBR case study Germania Fluggesellschaft mbH (A) has high operating costs in the. This can be harder to sustain given the new emerging competition from nimble players who are using technology to attract Germania Fluggesellschaft 's lucrative customers.
Skills based hiring
– The stress on hiring functional specialists at Germania Fluggesellschaft has created an environment where the organization is dominated by functional specialists rather than management generalist. This has resulted into product oriented approach rather than marketing oriented approach or consumers oriented approach.
High cash cycle compare to competitors
Germania Fluggesellschaft has a high cash cycle compare to other players in the industry. It needs to shorten the cash cycle by 12% to be more competitive in the marketplace, reduce inventory costs, and be more profitable.
Increasing silos among functional specialists
– The organizational structure of Germania Fluggesellschaft is dominated by functional specialists. It is not different from other players in the Sales & Marketing segment. Germania Fluggesellschaft needs to de-silo the office environment to harness the true potential of its workforce. Secondly the de-silo will also help Germania Fluggesellschaft to focus more on services rather than just following the product oriented approach.
Opportunities Germania Fluggesellschaft mbH (A) | 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 Germania Fluggesellschaft mbH (A) are -
Building a culture of innovation
– managers at Germania Fluggesellschaft 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.
Leveraging digital technologies
– Germania Fluggesellschaft 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, Germania Fluggesellschaft 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.
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. Germania Fluggesellschaft can tie-up with other value chain partners to explore new opportunities regarding meeting customer demands and building a rewarding and engaging relationship.
Remote work and new talent hiring opportunities
– The widespread usage of remote working technologies during Covid-19 has opened opportunities for Germania Fluggesellschaft 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 Germania Fluggesellschaft to hire the very best people irrespective of their geographical location.
Learning at scale
– Online learning technologies has now opened space for Germania Fluggesellschaft to conduct training and development for its employees across the world. This will result in not only reducing the cost of training but also help employees in different part of the world to integrate with the headquarter work culture, ethos, and standards.
Loyalty marketing
– Germania Fluggesellschaft 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.
Reforming the budgeting process
- By establishing new metrics that will be used to evaluate both existing and potential projects Germania Fluggesellschaft can not only reduce the costs of the project but also help it in integrating the projects with other processes within the organization.
Increase in government spending
– As the United States and other governments are increasing social spending and infrastructure spending to build economies post Covid-19, Germania Fluggesellschaft can use these opportunities to build new business models that can help the communities that Germania Fluggesellschaft operates in. Secondly it can use opportunities from government spending in Sales & Marketing sector.
Using analytics as competitive advantage
– Germania Fluggesellschaft 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 Germania Fluggesellschaft mbH (A) - to build a competitive advantage using analytics. The analytics driven competitive advantage can help Germania Fluggesellschaft to build faster Go To Market strategies, better consumer insights, developing relevant product features, and building a highly efficient supply chain.
Reconfiguring business model
– The expansion of digital payment system, the bringing down of international transactions costs using Bitcoin and other blockchain based currencies, etc can help Germania Fluggesellschaft to reconfigure its entire business model. For example it can used blockchain based technologies to reduce piracy of its products in the big markets such as China. Secondly it can use the popularity of e-commerce in various developing markets to build a Direct to Customer business model rather than the current Channel Heavy distribution network.
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. Germania Fluggesellschaft can explore opportunities that can attract volunteers and are consistent with its mission and vision.
Better consumer reach
– The expansion of the 5G network will help Germania Fluggesellschaft to increase its market reach. Germania Fluggesellschaft 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.
Threats Germania Fluggesellschaft mbH (A) External Strategic Factors
What are Threats in the SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The threats mentioned in the HBR case study Germania Fluggesellschaft mbH (A) are -
Shortening product life cycle
– it is one of the major threat that Germania Fluggesellschaft is facing in Sales & Marketing sector. It can lead to higher research and development costs, higher marketing expenses, lower customer loyalty, etc.
Environmental challenges
– Germania Fluggesellschaft needs to have a robust strategy against the disruptions arising from climate change and energy requirements. EU has identified it as key priority area and spending 30% of its 880 billion Euros European post Covid-19 recovery funds on green technology. Germania Fluggesellschaft can take advantage of this fund but it will also bring new competitors in the Sales & Marketing industry.
Trade war between China and United States
– The trade war between two of the biggest economies can hugely impact the opportunities for Germania Fluggesellschaft in the Sales & Marketing industry. The Sales & Marketing industry is already at various protected from local competition in China, with the rise of trade war the protection levels may go up. This presents a clear threat of current business model in Chinese market.
Technology acceleration in Forth Industrial Revolution
– Germania Fluggesellschaft has witnessed rapid integration of technology during Covid-19 in the Sales & Marketing industry. As one of the leading players in the industry, Germania Fluggesellschaft 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.
Consumer confidence and its impact on Germania Fluggesellschaft 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.
Barriers of entry lowering
– As technology is more democratized, the barriers to entry in the industry are lowering. It can presents Germania Fluggesellschaft with greater competitive threats in the near to medium future. Secondly it will also put downward pressure on pricing throughout the sector.
Learning curve for new practices
– As the technology based on artificial intelligence and machine learning platform is getting complex, as highlighted in case study Germania Fluggesellschaft mbH (A), Germania Fluggesellschaft may face longer learning curve for training and development of existing employees. This can open space for more nimble competitors in the field of Sales & Marketing .
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 Germania Fluggesellschaft.
Regulatory challenges
– Germania Fluggesellschaft 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.
High dependence on third party suppliers
– Germania Fluggesellschaft 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.
Stagnating economy with rate increase
– Germania Fluggesellschaft 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.
Backlash against dominant players
– US Congress and other legislative arms of the government are getting tough on big business especially technology companies. The digital arm of Germania Fluggesellschaft business can come under increasing regulations regarding data privacy, data security, etc.
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.
Weighted SWOT Analysis of Germania Fluggesellschaft mbH (A) 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 Germania Fluggesellschaft mbH (A) 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 Germania Fluggesellschaft mbH (A) 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 Germania Fluggesellschaft mbH (A) 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 Germania Fluggesellschaft mbH (A) 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 Germania Fluggesellschaft needs to make to build a sustainable competitive advantage.
