Lufthansa External Environment Analysis

893 Words Mar 27th, 2011 4 Pages
CASE : 4 LUFTHANSA 2003 : ENERGIZING A DECADE OF CHANGE CASE PROFILE PROBLEM IDENTIFICATION: The Basic question arises that why Lufthansa has survived, and even prospered, when so many legacy carriers have not, after facing so many crisis. What was the primary means through which CEO, Jurgen Weber, changed the culture of the organization? In organization theory terms, how did the structure of Lufthansa change between1991 and 2003 and What are the advantages of the “new” structure? Whether the company would be able to sustain the growth that it has achieved in the past and manage any such Crisis in future.? GENERAL ENVIRONMENT ANALYSIS The general environment analysis will focus …show more content…
However it can be said that threats of substitute is lower because of the services provided by the Airline Industry. Competitive Environment Analysis Competition before 1999: Before 1997, Lufthansa was the national airline carrier of the Federal Republic of Germany- state owned, monolithic and unprofitable. In May 1994, the German government diluted its holdings to 36 %. Lufthansa became fully privatised in 1997. As a private company, Lufthansa experienced increased pressure to be competitive and strategically cost effective. This pressure became even more acute because of the continuing decline of yields (average proceeds per ticket sold), driven by strengthening price competition within the airline industry and a threat of substitution by other transport alternatives (primarily high speed trains). Lufthansa realized that it could not effectively respond to emerging competitive challenges with its existing structure. In the process of considering different organizational alternatives, the basic idea emerged that Lufthansa would be more successful as a federative group of small,

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