Gordon Bethune at Continental Airlines SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
Leadership & Managing People
Strategy / MBA Resources
Case Study SWOT Analysis Solution
Case Study Description of Gordon Bethune at Continental Airlines
A $385 million loss for the final months of fiscal year 1994 signaled Continental might go bankrupt. Could new CEO Gordon Bethune turn Continental around? Continental was in dire straits because the deregulation of the commercial airline industry in 1978 ushered in a new era focused on mergers and acquisitions and bitter employee-management relations. Venerable airline brands with a commitment to quality, like Continental, were prime takeover targets. After Texas Air Chairman Frank Lorenzo (HBS 1963) secured Continental in his hostile takeover bid, tensions escalated between Lorenzo and the old guard--especially when Lorenzo declared Continental bankrupt in the fall of 1983 and then fired and replaced half his staff with cheaper nonunion labor. In October 1994, five months after Continental exited its second bankruptcy, Bethune was elevated to CEO and created a Go Forward Plan to return Continental to profitability. Two years after unveiling the Go Forward Plan, Continental was at the top of the industry in a number of important performance metrics.
Authors :: Nitin Nohria, Anthony J. Mayo, Mark Benson
Swot Analysis of "Gordon Bethune at Continental Airlines" written by Nitin Nohria, Anthony J. Mayo, Mark Benson includes – strengths weakness that are internal strategic factors of the organization, and opportunities and threats that Continental Bethune facing as an external strategic factors. Some of the topics covered in Gordon Bethune at Continental Airlines case study are - Strategic Management Strategies, Change management, Developing employees, Financial management, Leadership, Motivating people, Regulation, Strategy execution and Leadership & Managing People.
Some of the macro environment factors that can be used to understand the Gordon Bethune at Continental Airlines casestudy better are - – increasing inequality as vast percentage of new income is going to the top 1%, central banks are concerned over increasing inflation, banking and financial system is disrupted by Bitcoin and other crypto currencies, increasing household debt because of falling income levels, supply chains are disrupted by pandemic , digital marketing is dominated by two big players Facebook and Google, increasing transportation and logistics costs,
geopolitical disruptions, wage bills are increasing, etc
Introduction to SWOT Analysis of Gordon Bethune at Continental Airlines
SWOT stands for an organization’s Strengths, Weaknesses, Opportunities and Threats . At Oak Spring University , we believe that protagonist in Gordon Bethune at Continental Airlines case study can use SWOT analysis as a strategic management tool to assess the current internal strengths and weaknesses of the Continental Bethune, and to figure out the opportunities and threats in the macro environment – technological, environmental, political, economic, social, demographic, etc in which Continental Bethune 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 Gordon Bethune at Continental Airlines can be done for the following purposes –
1. Strategic planning using facts provided in Gordon Bethune at Continental Airlines case study
2. Improving business portfolio management of Continental Bethune
3. Assessing feasibility of the new initiative in Leadership & Managing People field.
4. Making a Leadership & Managing People topic specific business decision
5. Set goals for the organization
6. Organizational restructuring of Continental Bethune
Strengths Gordon Bethune at Continental Airlines | Internal Strategic Factors
What are Strengths in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The strengths of Continental Bethune in Gordon Bethune at Continental Airlines Harvard Business Review case study are -
Diverse revenue streams
– Continental Bethune is present in almost all the verticals within the industry. This has provided firm in Gordon Bethune at Continental Airlines 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.
Successful track record of launching new products
– Continental Bethune has launched numerous new products in last few years, keeping in mind evolving customer preferences and competitive pressures. Continental Bethune has effective processes in place that helps in exploring new product needs, doing quick pilot testing, and then launching the products quickly using its extensive distribution network.
Effective Research and Development (R&D)
– Continental Bethune 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 Gordon Bethune at Continental Airlines - staying ahead in the industry in terms of – new product launches, superior customer experience, highly competitive pricing strategies, and great returns to the shareholders.
Highly skilled collaborators
– Continental Bethune 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 Gordon Bethune at Continental Airlines HBR case study have helped the firm to develop new products and bring them quickly to the marketplace.
Operational resilience
– The operational resilience strategy in the Gordon Bethune at Continental Airlines 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.
Analytics focus
– Continental Bethune 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 Nitin Nohria, Anthony J. Mayo, Mark Benson 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.
High brand equity
– Continental Bethune has strong brand awareness and brand recognition among both - the exiting customers and potential new customers. Strong brand equity has enabled Continental Bethune to keep acquiring new customers and building profitable relationship with both the new and loyal customers.
Sustainable margins compare to other players in Leadership & Managing People industry
– Gordon Bethune at Continental Airlines firm has clearly differentiated products in the market place. This has enabled Continental Bethune to fetch slight price premium compare to the competitors in the Leadership & Managing People industry. The sustainable margins have also helped Continental Bethune to invest into research and development (R&D) and innovation.
Ability to recruit top talent
– Continental Bethune is one of the leading recruiters in the industry. Managers in the Gordon Bethune at Continental Airlines are in a position to attract the best talent available. The firm has a robust talent identification program that helps in identifying the brightest.
Organizational Resilience of Continental Bethune
– The covid-19 pandemic has put organizational resilience at the centre of everthing that Continental Bethune does. Organizational resilience comprises - Financial Resilience, Operational Resilience, Technological Resilience, Organizational Resilience, Business Model Resilience, and Reputation Resilience.
Innovation driven organization
– Continental Bethune is one of the most innovative firm in sector. Manager in Gordon Bethune at Continental Airlines Harvard Business Review case study can use Clayton Christensen Disruptive Innovation strategies to further increase the scale of innovtions in the organization.
Low bargaining power of suppliers
– Suppliers of Continental Bethune in the sector have low bargaining power. Gordon Bethune at Continental Airlines has further diversified its suppliers portfolio by building a robust supply chain across various countries. This helps Continental Bethune to manage not only supply disruptions but also source products at highly competitive prices.
Weaknesses Gordon Bethune at Continental Airlines | Internal Strategic Factors
What are Weaknesses in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The weaknesses of Gordon Bethune at Continental Airlines are -
Skills based hiring
– The stress on hiring functional specialists at Continental Bethune 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.
Slow to harness new channels of communication
– Even though competitors are using new communication channels such as Instagram, Tiktok, and Snap, Continental Bethune is slow explore the new channels of communication. These new channels of communication mentioned in marketing section of case study Gordon Bethune at Continental Airlines can help to provide better information regarding products and services. It can also build an online community to further reach out to potential customers.
Increasing silos among functional specialists
– The organizational structure of Continental Bethune is dominated by functional specialists. It is not different from other players in the Leadership & Managing People segment. Continental Bethune needs to de-silo the office environment to harness the true potential of its workforce. Secondly the de-silo will also help Continental Bethune to focus more on services rather than just following the product oriented approach.
Slow decision making process
– As mentioned earlier in the report, Continental Bethune 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. Continental Bethune 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.
Interest costs
– Compare to the competition, Continental Bethune 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.
Ability to respond to the competition
– As the decision making is very deliberative, highlighted in the case study Gordon Bethune at Continental Airlines, in the dynamic environment Continental Bethune has struggled to respond to the nimble upstart competition. Continental Bethune has reasonably good record with similar level competitors but it has struggled with new entrants taking away niches of its business.
Capital Spending Reduction
– Even during the low interest decade, Continental Bethune has not been able to do capital spending to the tune of the competition. This has resulted into fewer innovations and company facing stiff competition from both existing competitors and new entrants who are disrupting the industry using digital technology.
High dependence on star products
– The top 2 products and services of the firm as mentioned in the Gordon Bethune at Continental Airlines 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 Continental Bethune has relatively successful track record of launching new products.
Employees’ incomplete understanding of strategy
– From the instances in the HBR case study Gordon Bethune at Continental Airlines, it seems that the employees of Continental Bethune don’t have comprehensive understanding of the firm’s strategy. This is reflected in number of promotional campaigns over the last few years that had mixed messaging and competing priorities. Some of the strategic activities and services promoted in the promotional campaigns were not consistent with the organization’s strategy.
High bargaining power of channel partners
– Because of the regulatory requirements, Nitin Nohria, Anthony J. Mayo, Mark Benson suggests that, Continental Bethune 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.
Slow to strategic competitive environment developments
– As Gordon Bethune at Continental Airlines HBR case study mentions - Continental Bethune takes time to assess the upcoming competitions. This has led to missing out on atleast 2-3 big opportunities in the industry in last five years.
Opportunities Gordon Bethune at Continental Airlines | 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 Gordon Bethune at Continental Airlines are -
Manufacturing automation
– Continental Bethune can use the latest technology developments to improve its manufacturing and designing process in Leadership & Managing People 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.
Redefining models of collaboration and team work
– As explained in the weaknesses section, Continental Bethune is facing challenges because of the dominance of functional experts in the organization. Gordon Bethune at Continental Airlines 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.
Low interest rates
– Even though inflation is raising its head in most developed economies, Continental Bethune 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.
Better consumer reach
– The expansion of the 5G network will help Continental Bethune to increase its market reach. Continental Bethune 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.
Reforming the budgeting process
- By establishing new metrics that will be used to evaluate both existing and potential projects Continental Bethune 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, Continental Bethune can use these opportunities to build new business models that can help the communities that Continental Bethune operates in. Secondly it can use opportunities from government spending in Leadership & Managing People sector.
Changes in consumer behavior post Covid-19
– Consumer behavior has changed in the Leadership & Managing People industry because of Covid-19 restrictions. Some of this behavior will stay once things get back to normal. Continental Bethune can take advantage of these changes in consumer behavior to build a far more efficient business model. For example consumer regular ordering of products can reduce both last mile delivery costs and market penetration costs. Continental Bethune can further use this consumer data to build better customer loyalty, provide better products and service collection, and improve the value proposition in inflationary times.
Harnessing reconfiguration of the global supply chains
– As the trade war between US and China heats up in the coming years, Continental Bethune 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, Gordon Bethune at Continental Airlines, to buy more products closer to the markets, and it can leverage its size and influence to get better deal from the local markets.
Buying journey improvements
– Continental Bethune can improve the customer journey of consumers in the industry by using analytics and artificial intelligence. Gordon Bethune at Continental Airlines 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.
Developing new processes and practices
– Continental Bethune can develop new processes and procedures in Leadership & Managing People 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.
Creating value in data economy
– The success of analytics program of Continental Bethune has opened avenues for new revenue streams for the organization in the industry. This can help Continental Bethune to build a more holistic ecosystem as suggested in the Gordon Bethune at Continental Airlines case study. Continental Bethune can build new products and services such as - data insight services, data privacy related products, data based consulting services, etc.
Building a culture of innovation
– managers at Continental Bethune 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 Leadership & Managing People segment.
Using analytics as competitive advantage
– Continental Bethune 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 Gordon Bethune at Continental Airlines - to build a competitive advantage using analytics. The analytics driven competitive advantage can help Continental Bethune to build faster Go To Market strategies, better consumer insights, developing relevant product features, and building a highly efficient supply chain.
Threats Gordon Bethune at Continental Airlines External Strategic Factors
What are Threats in the SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The threats mentioned in the HBR case study Gordon Bethune at Continental Airlines are -
Environmental challenges
– Continental Bethune 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. Continental Bethune can take advantage of this fund but it will also bring new competitors in the Leadership & Managing People industry.
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.
Regulatory challenges
– Continental Bethune 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 Leadership & Managing People industry regulations.
Easy access to finance
– Easy access to finance in Leadership & Managing People field will also reduce the barriers to entry in the industry, thus putting downward pressure on the prices because of increasing competition. Continental Bethune can utilize it by borrowing at lower rates and invest it into research and development, capital expenditure to fortify its core competitive advantage.
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.
High dependence on third party suppliers
– Continental Bethune high dependence on third party suppliers can disrupt its processes and delivery mechanism. For example -the current troubles of car makers because of chip shortage is because the chip companies started producing chips for electronic companies rather than car manufacturers.
Barriers of entry lowering
– As technology is more democratized, the barriers to entry in the industry are lowering. It can presents Continental Bethune with greater competitive threats in the near to medium future. Secondly it will also put downward pressure on pricing throughout the sector.
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. Continental Bethune needs to understand the core reasons impacting the Leadership & Managing People industry. This will help it in building a better workplace.
Technology acceleration in Forth Industrial Revolution
– Continental Bethune has witnessed rapid integration of technology during Covid-19 in the Leadership & Managing People industry. As one of the leading players in the industry, Continental Bethune needs to keep up with the evolution of technology in the Leadership & Managing People 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.
Increasing wage structure of Continental Bethune
– 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 Continental Bethune.
Increasing international competition and downward pressure on margins
– Apart from technology driven competitive advantage dilution, Continental Bethune 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 Gordon Bethune at Continental Airlines .
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 Continental Bethune business can come under increasing regulations regarding data privacy, data security, etc.
Learning curve for new practices
– As the technology based on artificial intelligence and machine learning platform is getting complex, as highlighted in case study Gordon Bethune at Continental Airlines, Continental Bethune may face longer learning curve for training and development of existing employees. This can open space for more nimble competitors in the field of Leadership & Managing People .
Weighted SWOT Analysis of Gordon Bethune at Continental Airlines 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 Gordon Bethune at Continental Airlines 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 Gordon Bethune at Continental Airlines 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 Gordon Bethune at Continental Airlines 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 Gordon Bethune at Continental Airlines 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 Continental Bethune needs to make to build a sustainable competitive advantage.
