Lufthansa Case Study

1229 WordsNov 20, 20085 Pages
Lufthansa Case Study Lufthansa Case Study I. External Analysis: Several large scale, interrelated conditions have affected the airline industry over the past several years in such a manner that every carrier has had to respond in order to remain viable and competitive. a. Environmental Analysis: The international war on terror, with its attendant rising cost of oil has created havoc in a number of ways (Lufthansa Annual Report, 2004). Rising costs have resulted from the increase in fuel prices. Customer check-in wait times and flight time delays have resulted from new regulations designed to ensure passenger and plane safety, including more rigorous bag searches, more extensive passenger screening, and the like. This…show more content…
The very size of the company threatens to cause it ongoing trouble, as it must deal with problems around the globe on an ongoing basis and must remain flexible with a behemoth corporate organism. III. Strategic Intent and Mission: Lufthansa has restructured its operations to allow it to respond quickly to problems areas and to control costs across the organization. It has also utilized its market power to negotiate favorable contracts for products and service, including fuel. The company has also withdrawn from unprofitable routes and simplified product and service offerings to cut costs. Finally, it has capitalized on technology, by making flight check-ins and bookings available online to make the customer service appropriate for demands (Moody’s Investors Services, 2005). In order to compete in the future, the company must find new ways to control costs without sacrificing infrastructure or customer service. IV. Strategy Formulation: The effort to control costs will force the company to focus on profitable routes and ruthlessly cut service to unprofitable areas going forward. (The company has shown a willingness to take this sort of approach.) It will also force the company to form strong alliances with other carriers that essentially protect its own territory by providing alliance coverage of different markets. Company officials will have to

More about Lufthansa Case Study

Open Document