Case Study Description of Alaska Airlines and Flight 261 (A)
Weeks after the crash of Alaska Airlines Flight 261, 64 mechanics claim that they have been "pressured, threatened, and intimidated" into taking shortcuts. After briefly describing Alaska Airlines' history and CEO John Kelly, the case details how the airline responded to the crash and the resulting investigations. Also describes labor relations between management and its largest unions. At the end of the case CEO Kelly prepares for a news conference to respond to the mechanics allegations. Teaching purpose: To address crisis management, corporate diplomacy, labor relations, public relations, and transportation safety.
Swot Analysis of "Alaska Airlines and Flight 261 (A)" written by Michael D. Watkins, Kim Slack includes – strengths weakness that are internal strategic factors of the organization, and opportunities and threats that Alaska 261 facing as an external strategic factors. Some of the topics covered in Alaska Airlines and Flight 261 (A) case study are - Strategic Management Strategies, Customer service, Labor and Strategy & Execution.
Some of the macro environment factors that can be used to understand the Alaska Airlines and Flight 261 (A) casestudy better are - – talent flight as more people leaving formal jobs, supply chains are disrupted by pandemic , customer relationship management is fast transforming because of increasing concerns over data privacy, increasing commodity prices, increasing inequality as vast percentage of new income is going to the top 1%, competitive advantages are harder to sustain because of technology dispersion, banking and financial system is disrupted by Bitcoin and other crypto currencies,
increasing transportation and logistics costs, wage bills are increasing, etc
Introduction to SWOT Analysis of Alaska Airlines and Flight 261 (A)
SWOT stands for an organization’s Strengths, Weaknesses, Opportunities and Threats . At Oak Spring University , we believe that protagonist in Alaska Airlines and Flight 261 (A) case study can use SWOT analysis as a strategic management tool to assess the current internal strengths and weaknesses of the Alaska 261, and to figure out the opportunities and threats in the macro environment – technological, environmental, political, economic, social, demographic, etc in which Alaska 261 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 Alaska Airlines and Flight 261 (A) can be done for the following purposes –
1. Strategic planning using facts provided in Alaska Airlines and Flight 261 (A) case study
2. Improving business portfolio management of Alaska 261
3. Assessing feasibility of the new initiative in Strategy & Execution field.
4. Making a Strategy & Execution topic specific business decision
5. Set goals for the organization
6. Organizational restructuring of Alaska 261
Strengths Alaska Airlines and Flight 261 (A) | Internal Strategic Factors
What are Strengths in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The strengths of Alaska 261 in Alaska Airlines and Flight 261 (A) Harvard Business Review case study are -
Effective Research and Development (R&D)
– Alaska 261 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 Alaska Airlines and Flight 261 (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.
Diverse revenue streams
– Alaska 261 is present in almost all the verticals within the industry. This has provided firm in Alaska Airlines and Flight 261 (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.
Innovation driven organization
– Alaska 261 is one of the most innovative firm in sector. Manager in Alaska Airlines and Flight 261 (A) Harvard Business Review case study can use Clayton Christensen Disruptive Innovation strategies to further increase the scale of innovtions in the organization.
Analytics focus
– Alaska 261 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 Michael D. Watkins, Kim Slack 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.
Sustainable margins compare to other players in Strategy & Execution industry
– Alaska Airlines and Flight 261 (A) firm has clearly differentiated products in the market place. This has enabled Alaska 261 to fetch slight price premium compare to the competitors in the Strategy & Execution industry. The sustainable margins have also helped Alaska 261 to invest into research and development (R&D) and innovation.
Successful track record of launching new products
– Alaska 261 has launched numerous new products in last few years, keeping in mind evolving customer preferences and competitive pressures. Alaska 261 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.
High brand equity
– Alaska 261 has strong brand awareness and brand recognition among both - the exiting customers and potential new customers. Strong brand equity has enabled Alaska 261 to keep acquiring new customers and building profitable relationship with both the new and loyal customers.
Ability to recruit top talent
– Alaska 261 is one of the leading recruiters in the industry. Managers in the Alaska Airlines and Flight 261 (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.
Training and development
– Alaska 261 has one of the best training and development program in the industry. The effectiveness of the training programs can be measured in Alaska Airlines and Flight 261 (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.
Highly skilled collaborators
– Alaska 261 has highly efficient outsourcing and offshoring strategy. It has resulted in greater operational flexibility and bringing down the costs in highly price sensitive segment. Secondly the value chain collaborators of the firm in Alaska Airlines and Flight 261 (A) HBR case study have helped the firm to develop new products and bring them quickly to the marketplace.
High switching costs
– The high switching costs that Alaska 261 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.
Strong track record of project management
– Alaska 261 is known for sticking to its project targets. This enables the firm to manage – time, project costs, and have sustainable margins on the projects.
Weaknesses Alaska Airlines and Flight 261 (A) | Internal Strategic Factors
What are Weaknesses in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The weaknesses of Alaska Airlines and Flight 261 (A) are -
Interest costs
– Compare to the competition, Alaska 261 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.
Lack of clear differentiation of Alaska 261 products
– To increase the profitability and margins on the products, Alaska 261 needs to provide more differentiated products than what it is currently offering in the marketplace.
High operating costs
– Compare to the competitors, firm in the HBR case study Alaska Airlines and Flight 261 (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 Alaska 261 's lucrative customers.
Employees’ incomplete understanding of strategy
– From the instances in the HBR case study Alaska Airlines and Flight 261 (A), it seems that the employees of Alaska 261 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.
Aligning sales with marketing
– It come across in the case study Alaska Airlines and Flight 261 (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 Alaska Airlines and Flight 261 (A) can leverage the sales team experience to cultivate customer relationships as Alaska 261 is planning to shift buying processes online.
Ability to respond to the competition
– As the decision making is very deliberative, highlighted in the case study Alaska Airlines and Flight 261 (A), in the dynamic environment Alaska 261 has struggled to respond to the nimble upstart competition. Alaska 261 has reasonably good record with similar level competitors but it has struggled with new entrants taking away niches of its business.
Increasing silos among functional specialists
– The organizational structure of Alaska 261 is dominated by functional specialists. It is not different from other players in the Strategy & Execution segment. Alaska 261 needs to de-silo the office environment to harness the true potential of its workforce. Secondly the de-silo will also help Alaska 261 to focus more on services rather than just following the product oriented approach.
Products dominated business model
– Even though Alaska 261 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 - Alaska Airlines and Flight 261 (A) should strive to include more intangible value offerings along with its core products and services.
High dependence on star products
– The top 2 products and services of the firm as mentioned in the Alaska Airlines and Flight 261 (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 Alaska 261 has relatively successful track record of launching new products.
High cash cycle compare to competitors
Alaska 261 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.
High bargaining power of channel partners
– Because of the regulatory requirements, Michael D. Watkins, Kim Slack suggests that, Alaska 261 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.
Opportunities Alaska Airlines and Flight 261 (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 Alaska Airlines and Flight 261 (A) are -
Leveraging digital technologies
– Alaska 261 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.
Harnessing reconfiguration of the global supply chains
– As the trade war between US and China heats up in the coming years, Alaska 261 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, Alaska Airlines and Flight 261 (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.
Using analytics as competitive advantage
– Alaska 261 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 Alaska Airlines and Flight 261 (A) - to build a competitive advantage using analytics. The analytics driven competitive advantage can help Alaska 261 to build faster Go To Market strategies, better consumer insights, developing relevant product features, and building a highly efficient supply chain.
Increase in government spending
– As the United States and other governments are increasing social spending and infrastructure spending to build economies post Covid-19, Alaska 261 can use these opportunities to build new business models that can help the communities that Alaska 261 operates in. Secondly it can use opportunities from government spending in Strategy & Execution sector.
Loyalty marketing
– Alaska 261 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 Strategy & Execution industry, but it has also influenced the consumer preferences. Alaska 261 can tie-up with other value chain partners to explore new opportunities regarding meeting customer demands and building a rewarding and engaging relationship.
Redefining models of collaboration and team work
– As explained in the weaknesses section, Alaska 261 is facing challenges because of the dominance of functional experts in the organization. Alaska Airlines and Flight 261 (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.
Reforming the budgeting process
- By establishing new metrics that will be used to evaluate both existing and potential projects Alaska 261 can not only reduce the costs of the project but also help it in integrating the projects with other processes within the organization.
Lowering marketing communication costs
– 5G expansion will open new opportunities for Alaska 261 in the field of marketing communication. It will bring down the cost of doing business, provide technology platform to build new products in the Strategy & Execution segment, and it will provide faster access to the consumers.
Better consumer reach
– The expansion of the 5G network will help Alaska 261 to increase its market reach. Alaska 261 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.
Manufacturing automation
– Alaska 261 can use the latest technology developments to improve its manufacturing and designing process in Strategy & Execution 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.
Buying journey improvements
– Alaska 261 can improve the customer journey of consumers in the industry by using analytics and artificial intelligence. Alaska Airlines and Flight 261 (A) 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.
Learning at scale
– Online learning technologies has now opened space for Alaska 261 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.
Threats Alaska Airlines and Flight 261 (A) External Strategic Factors
What are Threats in the SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The threats mentioned in the HBR case study Alaska Airlines and Flight 261 (A) are -
Consumer confidence and its impact on Alaska 261 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 Strategy & Execution field will also reduce the barriers to entry in the industry, thus putting downward pressure on the prices because of increasing competition. Alaska 261 can utilize it by borrowing at lower rates and invest it into research and development, capital expenditure to fortify its core competitive advantage.
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. Alaska 261 needs to understand the core reasons impacting the Strategy & Execution industry. This will help it in building a better workplace.
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. Alaska 261 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.
High dependence on third party suppliers
– Alaska 261 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.
Learning curve for new practices
– As the technology based on artificial intelligence and machine learning platform is getting complex, as highlighted in case study Alaska Airlines and Flight 261 (A), Alaska 261 may face longer learning curve for training and development of existing employees. This can open space for more nimble competitors in the field of Strategy & Execution .
Barriers of entry lowering
– As technology is more democratized, the barriers to entry in the industry are lowering. It can presents Alaska 261 with greater competitive threats in the near to medium future. Secondly it will also put downward pressure on pricing throughout the sector.
Increasing international competition and downward pressure on margins
– Apart from technology driven competitive advantage dilution, Alaska 261 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 Alaska Airlines and Flight 261 (A) .
Increasing wage structure of Alaska 261
– 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 Alaska 261.
Trade war between China and United States
– The trade war between two of the biggest economies can hugely impact the opportunities for Alaska 261 in the Strategy & Execution industry. The Strategy & Execution 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.
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 Alaska 261.
Regulatory challenges
– Alaska 261 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 Strategy & Execution 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.
Weighted SWOT Analysis of Alaska Airlines and Flight 261 (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 Alaska Airlines and Flight 261 (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 Alaska Airlines and Flight 261 (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 Alaska Airlines and Flight 261 (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 Alaska Airlines and Flight 261 (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 Alaska 261 needs to make to build a sustainable competitive advantage.