Case Analysis Template

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CaseAnalysis Template

Important facts in this case (company, industry, competition, etc.)?

Spirit Airlines operates in a highly competitive ultra low-cost carrier industry. It offers the cheapest fares and target customers paying for their travels, rather than business class clients. It serves 52 airports in USA, Caribbean, and Latin America and over 200 flights daily. According to the company CEO, “Our vision is to make sure the customer who can’t afford to pay current airline prices has an option to still travel.” With an average age of 4.5 years, the company has one of the youngest fleets in the region (David &amp David, nd).

Environmental &amp Competitive Scan

External factors outside the direct control of the company, but which affect the company. External factors create opportunities and threats to which the company must respond. (e.g., political, demographic, environmental, political, global, legal)

Several external factors have an influence on Spirit Airlines’ operations. The most important factor in the industry is the volatility of fuel prices in the global market. A quarter of all revenues generated by the company are spent on fuel. Despite the favorable figures that have been reported in the recent past, the unpredictability has a huge impact on the airlines. The labor market and trade unions have direct consequences on the management of the company. It employs over three thousand employees, and, thus, is affected by the increased cost of wages and remuneration, as well as unions activities. Ancillary fees and related trends in the industry is also an important external factor, where airlines are increasingly offering creative packages for their client to improve profitability. Government interventions through new taxes and laws related to stranded passengers as well as concerns about emissions and noise pollutions have also come into play (David &amp David, nd).

Competitive factors that impact the company (e.g., nature of competition, characteristics of existing competitors, potential new competitors, substitute products, bargaining power of suppliers and customers)

Spirit Airlines operates in a very competitive market. The industry players compete in terms of prices, loyalty programs, schedules, and the conditions of their aircraft. Consequently, they have adopted vigorous marketing strategies, which include mergers and alliances to enhance their capital base and new destinations. Some of the main competitors in the low-cost segment include “American Airlines, Delta Airlines, and JetBlue Airways” (David &amp David, nd).

What are the critical success factors in this industry?

Critical success factors in the industry include

  1. Low cost flights.

  2. Frequent flier programs.

  3. Newer fleet.

  4. Flexible and convenient schedules.

  5. More destinations.

  6. Effective labor management strategies.

How well does this company address those critical success factors?

Although it has a relatively newer fleet, the company is not very effective in addressing the critical success factors compared to its competitors. Consequently, the other market players are performing better than Spirit Airlines.

Internal Scan – what are the company’s internal strengths and weaknesses relative to critical success factors, the competition, and the environment? (Include financial ratios, utilizing the Financial Ratios Spreadsheet provided under Course Materials – submit separately with this assignment)

Internal strengths

  • Newer fleet

  • Low prices

  • Steady growth in the domestic market.

Internal weaknesses

  • Poor flight experience

  • Poor performance in the regional market.

  • Lack of market alliance.

As you consider this company, what do you see as its sustainable competitive advantages? List and comment on at least five. (i.e., what core competencies does this company have that competitors will not be able to imitate/improve upon in the foreseeable future)?

Some of the competitive advantage the company will continue to enjoy in the near future includes

  1. Relatively newer fleet compared to its competitors, and, thus, low maintenance cost.

  2. Ultra low prices, which focuses on a particular niche in the market.

  3. Leasing of aircraft rather than buying, resulting in reduced cost of operations.

  4. Good financial performance such that the company has remained profitable.

  5. Less number of employees compared to the main competitors.

  6. More sitting capacities in their aircraft contributing to low cost of flights.

What strategic recommendations/initiatives would you make for this company (i.e., where should they go and how should they get there)?

Although there is a large market in the low-cost travels, it is essential for the company to venture into other segments. For example, Spirit Airlines can offer packages with better customer experience through a business class travel. This will improve its ratings and, thus, enhanced profitability.

Reference

David,F. R., &amp David, F. R. (n.d.). StrategicManagement Concepts and Cases A Competitive Advantage Approach.15 Edition. Indianapolis: Pearson.

Case Analysis Template

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Running: HR MANAGEMENT 1

CaseAnalysis Template

Note: Use additional page(s), if needed, for any of the followingsections however, the sections will expand as you add typedmaterial.

Note: The financial ratios are to be submitted using the Financial RatiosSpreadsheet, provided under Resources.

Important facts in this case (company, industry, competition, etc.)?

The most important factor is competition. This is because consumers in the hospitality industry are price sensitive (they have an elastic demand curve). Price-sensitive consumers are those that are easily swayed by price changes, such that, if prices of the products were to change either upwards or downwards, then the demand for products would also increase or decrease by a rate that is larger than proportionate.

Environmental &amp Competitive Scan

External factors outside the direct control of the company, but which affect the company. External factors create opportunities and threats to which the company must respond. (e.g., political, demographic, environmental, political, global, legal)

External factors operate at the external environment and directly affect, causing changes in the internal organizational environment. Competition is one of the external factors that has a direct impact on Domino company. This level of competition has made the company change its strategies, the current operations, growth as well as its long-term sustainability. A company that ignores these factors could be making a huge management error that could work to the detriment of the organization.

Competitive factors that impact the company (e.g., nature of competition, characteristics of existing competitors, potential new competitors, substitute products, bargaining power of suppliers and customers)

Competitive factors refer to those factors that influence the ability of a company to gain a sizeable market share. Domino company faces competitors who are trying to wrestle the market share from it. The company’s operations have had to be modified over a number of times due to the price competition (price wars) they face from other organizations.

What are the critical success factors in this industry?

Any organization seeking to shake off its competitors in the market needs to focus its resources on the success factors. The company has been focusing on the improvement of the product quality and brand image with the aim of making a positive appeal to the consumers in order to have a competitive edge over the competition.

The other success story for the company is its investment in embracing technology as well as the diversification of their portfolio in a number of countries. This has reduced the company’s risks and at the same time reduced the cost of operations over the two years.

How well does this company address those critical success factors?

The company has addressed the success stories by strategizing on how to strengthen the diversification of their investments, investing more in technological advancement as well as seeking low-cost capital for its operations. The company’s management came to a realization that they need to have a competitive advantage, and it is through the success factors that they can gain it.

Internal Scan – what are the company’s internal strengths and weaknesses relative to critical success factors, the competition, and the environment? (Include financial ratios, utilizing the Financial Ratios Spreadsheet provided under Course Materials – submit separately with this assignment)

Internal strengths

  • The company enjoys economies of scale that include its brand name and the capital base that has seen its profitability ratio go up.

  • The company’s profitability has improved from the previous period.

  • The company’s cost of operation is relatively low, so the organization is making good profits

  • The company has a very strong asset base.

Internal weaknesses

  • The company recorded no improvement in the amount of sales revenue.

  • The company recorded an increase in the cost of sales.

  • The current ratio for the current financial year is less than one signifying that the company’s current assets were less than the current liabilities.

As you consider this company, what do you see as its sustainable competitive advantages? List and comment on at least five. (i.e., what core competencies does this company have that competitors will not be able to imitate/improve upon in the foreseeable future)?

The company’s sustainable competitive advantage is the company’s image. The image includes the brand name as well as the economies of scale that the company has. These factors have made it very difficult for the organization’s competitors to offer a credible competition to the company in a foreseeable future.

What strategic recommendations/initiatives would you make for this company (i.e., where should they go and how should they get there)?

  • The company should make use of the dynamic innovations to improve their technology in order to have more turnovers as a result of increased efficiency.

  • The human resources of the company need to be motivated more so that they can improve their productivity. This is because the staffs of any organization are the catalyst to better organizational performance.

  • Domino corporation needs to carry out more advertising campaigns to increase the sales of their products if the company is to improve its profitability continuously.

Reference

DOMINO’SPIZZA ENTERPRISES LIMITED. Retrieved August 23, 2016, frome9a16315-123f-40a1-a896-2e02cec0d17c-DMP757859.pdf

Howinternal and external factors drive organizational change – video &amplesson transcript (2003). Retrieved fromhttp://study.com/academy/lesson/how-internal-and-external-factors-drive-organizational-change.html

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