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 - – technology disruption, wage bills are increasing, increasing household debt because of falling income levels, cloud computing is disrupting traditional business models, supply chains are disrupted by pandemic , customer relationship management is fast transforming because of increasing concerns over data privacy, increasing government debt because of Covid-19 spendings,
there is increasing trade war between United States & China, increasing energy 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 -
Training and development
– Germania Fluggesellschaft has one of the best training and development program in the industry. The effectiveness of the training programs can be measured in Germania Fluggesellschaft mbH (A) 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.
Ability to lead change in Sales & Marketing field
– Germania Fluggesellschaft is one of the leading players in its industry. Over the years it has not only transformed the business landscape in its segment but also across the whole industry. The ability to lead change has enabled Germania Fluggesellschaft in – penetrating new markets, reaching out to new customers, and providing different value propositions to different customers in the international markets.
Analytics focus
– Germania Fluggesellschaft 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 Matthias Hild 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.
Ability to recruit top talent
– Germania Fluggesellschaft is one of the leading recruiters in the industry. Managers in the Germania Fluggesellschaft mbH (A) are in a position to attract the best talent available. The firm has a robust talent identification program that helps in identifying the brightest.
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.
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.
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.
High switching costs
– The high switching costs that Germania Fluggesellschaft has built up over years in its products and services combo offer has resulted in high retention of customers, lower marketing costs, and greater ability of the firm to focus on its customers.
Organizational Resilience of Germania Fluggesellschaft
– The covid-19 pandemic has put organizational resilience at the centre of everthing that Germania Fluggesellschaft 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 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.
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.
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.
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 -
Compensation and incentives
– The revenue per employee as mentioned in the HBR case study Germania Fluggesellschaft mbH (A), is just above the industry average. Germania Fluggesellschaft needs to redesign the compensation structure and incentives to increase the revenue per employees. Some of the steps that it can take are – hiring more specialists on project basis, etc.
Lack of clear differentiation of Germania Fluggesellschaft products
– To increase the profitability and margins on the products, Germania Fluggesellschaft needs to provide more differentiated products than what it is currently offering in the marketplace.
Slow decision making process
– As mentioned earlier in the report, Germania Fluggesellschaft has a very deliberative decision making approach. This approach has resulted in prudent decisions, but it has also resulted in missing opportunities in the industry over the last five years. Germania Fluggesellschaft even though has strong showing on digital transformation primary two stages, it has struggled to capitalize the power of digital transformation in marketing efforts and new venture efforts.
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 star products
– The top 2 products and services of the firm as mentioned in the Germania Fluggesellschaft mbH (A) 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 Germania Fluggesellschaft has relatively successful track record of launching new products.
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.
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.
Slow to harness new channels of communication
– Even though competitors are using new communication channels such as Instagram, Tiktok, and Snap, Germania Fluggesellschaft is slow explore the new channels of communication. These new channels of communication mentioned in marketing section of case study Germania Fluggesellschaft mbH (A) can help to provide better information regarding products and services. It can also build an online community to further reach out to potential customers.
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.
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.
No frontier risks strategy
– After analyzing the HBR case study Germania Fluggesellschaft mbH (A), it seems that company is thinking about the frontier risks that can impact Sales & Marketing strategy. But it has very little resources allocation to manage the risks emerging from events such as natural disasters, climate change, melting of permafrost, tacking the rise of artificial intelligence, opportunities and threats emerging from commercialization of space etc.
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 -
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.
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.
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.
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.
Redefining models of collaboration and team work
– As explained in the weaknesses section, Germania Fluggesellschaft is facing challenges because of the dominance of functional experts in the organization. Germania Fluggesellschaft mbH (A) case study suggests that firm can utilize new technology to build more coordinated teams and streamline operations and communications using tools such as CAD, Zoom, etc.
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.
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.
Creating value in data economy
– The success of analytics program of Germania Fluggesellschaft has opened avenues for new revenue streams for the organization in the industry. This can help Germania Fluggesellschaft to build a more holistic ecosystem as suggested in the Germania Fluggesellschaft mbH (A) case study. Germania Fluggesellschaft can build new products and services such as - data insight services, data privacy related products, data based consulting services, etc.
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.
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.
Harnessing reconfiguration of the global supply chains
– As the trade war between US and China heats up in the coming years, Germania Fluggesellschaft can build a diversified supply chain model across various countries in - South East Asia, India, and other parts of the world. This reconfiguration of global supply chain can help, as suggested in case study, Germania Fluggesellschaft mbH (A), to buy more products closer to the markets, and it can leverage its size and influence to get better deal from the local markets.
Manufacturing automation
– Germania Fluggesellschaft can use the latest technology developments to improve its manufacturing and designing process in Sales & Marketing segment. It can use CAD and 3D printing to build a quick prototype and pilot testing products. It can leverage automation using machine learning and artificial intelligence to do faster production at lowers costs, and it can leverage the growth in satellite and tracking technologies to improve inventory management, transportation, and shipping.
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.
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 -
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.
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. Germania Fluggesellschaft 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.
Increasing wage structure of Germania Fluggesellschaft
– 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 Germania Fluggesellschaft.
Increasing international competition and downward pressure on margins
– Apart from technology driven competitive advantage dilution, Germania Fluggesellschaft can face downward pressure on margins from increasing competition from international players. The international players have stable revenue in their home market and can use those resources to penetrate prominent markets illustrated in HBR case study Germania Fluggesellschaft mbH (A) .
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.
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 Germania Fluggesellschaft in the Sales & Marketing sector and impact the bottomline of the organization.
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.
Easy access to finance
– Easy access to finance in Sales & Marketing field will also reduce the barriers to entry in the industry, thus putting downward pressure on the prices because of increasing competition. Germania Fluggesellschaft can utilize it by borrowing at lower rates and invest it into research and development, capital expenditure to fortify its core competitive advantage.
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.
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.
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.
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.
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.