Strategic Analysis of Airline Simulation

1846 Words Jun 8th, 2009 8 Pages
(Airline) 2009 – Reflective Essay
Word count: 1636

The aim of this essay is to analyze the strategic management of Bwright Airways (previously BBAirways) airline company’s performance, introduce possible amendments and reflect on the teamwork process.
The first step of the analysis is to introduce the concept of strategic management as well as to evaluate it in terms of our company’s managerial actions. According to Ansoff strategic management requires “entrepreneurial creation of new strategies for the firm, design of new organizational capabilities and guidance of the firm’s transformation to its new strategic posture”. 1 Following this definition the most important factors that are apparent in that process are: innovation, strategic
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sales, marketing and service, where each of them had a manager responsible for it. Sales manager was deciding upon a fare structure, service to be provided on the planes and markets’ to be entered. However driven by our growth strategy he has failed in terms of market management, and although the sales grew, the revenues were still not sufficient to cover our costs as the demand wasn’t high enough.
Fig.2 – Porter’s generic value chain7
The cooperation with financial department, which is a part of support activities, wasn’t adequate as well, therefore the expansion led to cash flow problems. As liquidity is seen to be a blood of each business, the insufficient cash flow management may lead to a bankruptcy. For that reasons cash flow forecasts should have been made on regular basis to be available to all of the managers that would use them in their cost planning. Furthermore, the financial officer should have paid more attention to profitability ratios, which were persistently negative. That should have been the main concern for the company, which by failing to retain profits didn’t fulfill its ethical responsibility to the shareholders. Although the poor financial performance, the company managed
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