Air France Klm Strategic Management Essays

7216 Words Feb 26th, 2011 29 Pages
1 Introduction of Air France – KLM 4

1. Governance in Air France – KLM 4 1.2 Turnover and competitive position 5 1.3 Air France – KLM mission and vision 5 1.4 Risk and challenges 6

2 External diagnoses 6

2.1 The industry life cycle 6 2.2 PESTEL (external environment) 8 2.3 Porters 5 forces + 1 (Air France - KLM) 9 2.4 Opportunities, Threats and Key Success Factors 11

3 Internal Diagnoses 12

3.1 Air France, resources and competences 12 3.1.1 Core competences 13 3.1.2 Cost efficiency 14 3.2 Value chain and processes 16 3.3 Strengths and weaknesses 18

4 Strengths/weaknesses and Opportunities/threats (SWOT)
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Half of the appointed representatives can be considered as independent of different interests (e.g. employee interests, shareholder interests, governmental intervention etc.). In 2008 the Air France – KLM Group decided to reduce the directors possibility to stay in office in the company from six years to maximum four years.

1.2 Turnover and competitive position
The revenue for 2009 was 23,970 billion €. The 2009 revenue was decreasing compared to 2008 where it was 24,123, which mean that it fell 0.6 %.

Air France – KLM actual competitive position is quite strong compared to other airline companies. The company and its subsidiaries operate more than 2,500 daily flights to 258 destinations in 103 different countries, this includes 42 destinations, which carries passengers out of the European borders. The Air France – KLM group is the biggest one in Europe. If you separate the two companies Lufthansa is the biggest one in Europe and Air France secondly in terms of passenger numbers.

1.3 Air France – KLM mission and vision
Air France – KLM is a European airline holding company dedicated to the passenger transportation (which represents the 78.5 % of the turnover), cargo services (11.9 % of the turnover) and maintenance (0.04 % of the turnover). It started out in May 2004 after the mutually agreed merger between Air France and KLM and transformed itself as the European leader in air passenger transport with more than 74 million