United Airlines' Service-Recovery Challenge After Reputation Meltdown SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
Sales & Marketing
Strategy / MBA Resources
Case Study SWOT Analysis Solution
Case Study Description of United Airlines' Service-Recovery Challenge After Reputation Meltdown
In 2017, United Airlines suffered a blow to its corporate reputation throughout the United States and international markets, including China, mainly due to an incident on United flight 3411, in which an airport enforcement officer forcibly dragged a passenger out of a plane. The inadequate public relations reaction following the incident and ineffective crisis management left the company reeling. The company became subject to scathing social media attacks, customer dissatisfaction, passenger anger, and a drop in its stock value. The airline, which had already been grappling with very low rankings in customer satisfaction indexes, realized the need to rebuild its brand and greatly improve its customer satisfaction ratings. To prevent such instances from occurring in the future, United needed to take steps to rebuild its tarnished brand image and consider some important questions: What service expectations did customers have of airlines such as United? How would these expectations develop over time? How important were customer satisfaction, client relationships, and passenger experience to United? How could an airline company conduct a root cause analysis for service failure? How could it analyze the different gaps in delivering good quality service? Sandeep Puri is affiliated with Asian Institute of Management. Gaganpreet Singh is affiliated with National Institute of Industrial Engineering.
Authors :: Sandeep Puri, Kushal Dev Kashyap, Gaganpreet Singh
Swot Analysis of "United Airlines' Service-Recovery Challenge After Reputation Meltdown" written by Sandeep Puri, Kushal Dev Kashyap, Gaganpreet Singh includes – strengths weakness that are internal strategic factors of the organization, and opportunities and threats that United Passenger facing as an external strategic factors. Some of the topics covered in United Airlines' Service-Recovery Challenge After Reputation Meltdown case study are - Strategic Management Strategies, Customers and Sales & Marketing.
Some of the macro environment factors that can be used to understand the United Airlines' Service-Recovery Challenge After Reputation Meltdown casestudy better are - – increasing household debt because of falling income levels, challanges to central banks by blockchain based private currencies, customer relationship management is fast transforming because of increasing concerns over data privacy, talent flight as more people leaving formal jobs, competitive advantages are harder to sustain because of technology dispersion, there is increasing trade war between United States & China, supply chains are disrupted by pandemic ,
geopolitical disruptions, increasing transportation and logistics costs, etc
Introduction to SWOT Analysis of United Airlines' Service-Recovery Challenge After Reputation Meltdown
SWOT stands for an organization’s Strengths, Weaknesses, Opportunities and Threats . At Oak Spring University , we believe that protagonist in United Airlines' Service-Recovery Challenge After Reputation Meltdown case study can use SWOT analysis as a strategic management tool to assess the current internal strengths and weaknesses of the United Passenger, and to figure out the opportunities and threats in the macro environment – technological, environmental, political, economic, social, demographic, etc in which United Passenger 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 United Airlines' Service-Recovery Challenge After Reputation Meltdown can be done for the following purposes –
1. Strategic planning using facts provided in United Airlines' Service-Recovery Challenge After Reputation Meltdown case study
2. Improving business portfolio management of United Passenger
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 United Passenger
Strengths United Airlines' Service-Recovery Challenge After Reputation Meltdown | Internal Strategic Factors
What are Strengths in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The strengths of United Passenger in United Airlines' Service-Recovery Challenge After Reputation Meltdown Harvard Business Review case study are -
Operational resilience
– The operational resilience strategy in the United Airlines' Service-Recovery Challenge After Reputation Meltdown 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.
Digital Transformation in Sales & Marketing segment
- digital transformation varies from industry to industry. For United Passenger digital transformation journey comprises differing goals based on market maturity, customer technology acceptance, and organizational culture. United Passenger 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.
High switching costs
– The high switching costs that United Passenger 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.
Effective Research and Development (R&D)
– United Passenger 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 United Airlines' Service-Recovery Challenge After Reputation Meltdown - staying ahead in the industry in terms of – new product launches, superior customer experience, highly competitive pricing strategies, and great returns to the shareholders.
Innovation driven organization
– United Passenger is one of the most innovative firm in sector. Manager in United Airlines' Service-Recovery Challenge After Reputation Meltdown Harvard Business Review case study can use Clayton Christensen Disruptive Innovation strategies to further increase the scale of innovtions in the organization.
Organizational Resilience of United Passenger
– The covid-19 pandemic has put organizational resilience at the centre of everthing that United Passenger does. Organizational resilience comprises - Financial Resilience, Operational Resilience, Technological Resilience, Organizational Resilience, Business Model Resilience, and Reputation Resilience.
Learning organization
- United Passenger 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 United Passenger is open place that encourages instructiveness, ideation, open minded discussions, and creativity. Employees and leaders in United Airlines' Service-Recovery Challenge After Reputation Meltdown Harvard Business Review case study emphasize – knowledge, initiative, and innovation.
Strong track record of project management
– United Passenger is known for sticking to its project targets. This enables the firm to manage – time, project costs, and have sustainable margins on the projects.
Analytics focus
– United Passenger 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 Sandeep Puri, Kushal Dev Kashyap, Gaganpreet Singh 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.
Cross disciplinary teams
– Horizontal connected teams at the United Passenger 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.
Superior customer experience
– The customer experience strategy of United Passenger in the segment is based on four key concepts – personalization, simplification of complex needs, prompt response, and continuous engagement.
Low bargaining power of suppliers
– Suppliers of United Passenger in the sector have low bargaining power. United Airlines' Service-Recovery Challenge After Reputation Meltdown has further diversified its suppliers portfolio by building a robust supply chain across various countries. This helps United Passenger to manage not only supply disruptions but also source products at highly competitive prices.
Weaknesses United Airlines' Service-Recovery Challenge After Reputation Meltdown | Internal Strategic Factors
What are Weaknesses in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The weaknesses of United Airlines' Service-Recovery Challenge After Reputation Meltdown are -
Aligning sales with marketing
– It come across in the case study United Airlines' Service-Recovery Challenge After Reputation Meltdown 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 United Airlines' Service-Recovery Challenge After Reputation Meltdown can leverage the sales team experience to cultivate customer relationships as United Passenger is planning to shift buying processes online.
Increasing silos among functional specialists
– The organizational structure of United Passenger is dominated by functional specialists. It is not different from other players in the Sales & Marketing segment. United Passenger needs to de-silo the office environment to harness the true potential of its workforce. Secondly the de-silo will also help United Passenger to focus more on services rather than just following the product oriented approach.
No frontier risks strategy
– After analyzing the HBR case study United Airlines' Service-Recovery Challenge After Reputation Meltdown, 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.
High dependence on star products
– The top 2 products and services of the firm as mentioned in the United Airlines' Service-Recovery Challenge After Reputation Meltdown 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 United Passenger has relatively successful track record of launching new products.
Skills based hiring
– The stress on hiring functional specialists at United Passenger 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 operating costs
– Compare to the competitors, firm in the HBR case study United Airlines' Service-Recovery Challenge After Reputation Meltdown 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 United Passenger 's lucrative customers.
Low market penetration in new markets
– Outside its home market of United Passenger, firm in the HBR case study United Airlines' Service-Recovery Challenge After Reputation Meltdown needs to spend more promotional, marketing, and advertising efforts to penetrate international markets.
Lack of clear differentiation of United Passenger products
– To increase the profitability and margins on the products, United Passenger needs to provide more differentiated products than what it is currently offering in the marketplace.
High cash cycle compare to competitors
United Passenger 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.
Employees’ incomplete understanding of strategy
– From the instances in the HBR case study United Airlines' Service-Recovery Challenge After Reputation Meltdown, it seems that the employees of United Passenger 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.
Products dominated business model
– Even though United Passenger 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 - United Airlines' Service-Recovery Challenge After Reputation Meltdown should strive to include more intangible value offerings along with its core products and services.
Opportunities United Airlines' Service-Recovery Challenge After Reputation Meltdown | 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 United Airlines' Service-Recovery Challenge After Reputation Meltdown are -
Leveraging digital technologies
– United Passenger 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, United Passenger 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, United Airlines' Service-Recovery Challenge After Reputation Meltdown, 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
– United Passenger 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 United Airlines' Service-Recovery Challenge After Reputation Meltdown - to build a competitive advantage using analytics. The analytics driven competitive advantage can help United Passenger to build faster Go To Market strategies, better consumer insights, developing relevant product features, and building a highly efficient supply chain.
Loyalty marketing
– United Passenger 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.
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. United Passenger 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 United Passenger to increase its market reach. United Passenger 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.
Creating value in data economy
– The success of analytics program of United Passenger has opened avenues for new revenue streams for the organization in the industry. This can help United Passenger to build a more holistic ecosystem as suggested in the United Airlines' Service-Recovery Challenge After Reputation Meltdown case study. United Passenger can build new products and services such as - data insight services, data privacy related products, data based consulting services, etc.
Manufacturing automation
– United Passenger 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.
Low interest rates
– Even though inflation is raising its head in most developed economies, United Passenger 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.
Developing new processes and practices
– United Passenger 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.
Use of Bitcoin and other crypto currencies for transactions
– The popularity of Bitcoin and other crypto currencies as asset class and medium of transaction has opened new opportunities for United Passenger in the consumer business. Now United Passenger can target international markets with far fewer capital restrictions requirements than the existing system.
Buying journey improvements
– United Passenger can improve the customer journey of consumers in the industry by using analytics and artificial intelligence. United Airlines' Service-Recovery Challenge After Reputation Meltdown 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.
Reforming the budgeting process
- By establishing new metrics that will be used to evaluate both existing and potential projects United Passenger can not only reduce the costs of the project but also help it in integrating the projects with other processes within the organization.
Threats United Airlines' Service-Recovery Challenge After Reputation Meltdown External Strategic Factors
What are Threats in the SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The threats mentioned in the HBR case study United Airlines' Service-Recovery Challenge After Reputation Meltdown are -
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.
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. United Passenger can utilize it by borrowing at lower rates and invest it into research and development, capital expenditure to fortify its core competitive advantage.
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 United Passenger in the Sales & Marketing sector and impact the bottomline of the organization.
Technology acceleration in Forth Industrial Revolution
– United Passenger has witnessed rapid integration of technology during Covid-19 in the Sales & Marketing industry. As one of the leading players in the industry, United Passenger 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.
Barriers of entry lowering
– As technology is more democratized, the barriers to entry in the industry are lowering. It can presents United Passenger with greater competitive threats in the near to medium future. Secondly it will also put downward pressure on pricing throughout the sector.
Increasing wage structure of United Passenger
– 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 United Passenger.
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. United Passenger 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.
Environmental challenges
– United Passenger 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. United Passenger can take advantage of this fund but it will also bring new competitors in the Sales & Marketing industry.
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 United Passenger.
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. United Passenger needs to understand the core reasons impacting the Sales & Marketing industry. This will help it in building a better workplace.
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 United Passenger business can come under increasing regulations regarding data privacy, data security, etc.
Increasing international competition and downward pressure on margins
– Apart from technology driven competitive advantage dilution, United Passenger 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 United Airlines' Service-Recovery Challenge After Reputation Meltdown .
Consumer confidence and its impact on United Passenger 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.
Weighted SWOT Analysis of United Airlines' Service-Recovery Challenge After Reputation Meltdown 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 United Airlines' Service-Recovery Challenge After Reputation Meltdown 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 United Airlines' Service-Recovery Challenge After Reputation Meltdown 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 United Airlines' Service-Recovery Challenge After Reputation Meltdown 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 United Airlines' Service-Recovery Challenge After Reputation Meltdown 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 United Passenger needs to make to build a sustainable competitive advantage.
