Strategic Management Assignment

2068 Words9 Pages
Faculty of Business and Law

Session: 2008/9

MBA: Strategic Management 1



Markets differ in a variety of ways including the degree of concentration and competitiveness, a fact which is reflected in the concept of ‘market structure’. Economists’ models link the structural characteristics of a market to the behaviour of firms in that market and subsequently to their performance. A key question therefore is how far a firm’s strategic decisions are shaped by the structure of the market in which it operates.

You are required to undertake a detailed examination of the changing nature of the long-haul transatlantic airline market. The market you are required to investigate comprises only the international
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He lambasted British Airways and Virgin for "fleecing passengers for too long" as he and his brother
Hugh unveiled a route from London to New York for just £129 each way.

With two hot meals, designated seating and premium upgrades, it aimed to change long-haul air travel and make Scotland a powerhouse in global aviation. A stock market flotation was mooted, valuing the airline at up to £100m, while its summer flight schedule was spectacularly upgraded, offering 40% more seats across the Atlantic.

Not since the days of Sir Freddie Laker 's Skytrain in the late 1970s had the established transatlantic carriers faced such a threat. Back then, despite huge support from the public and the Prime Minister, it took five years and an aggressive price dropping exercise for the competition to drive Laker out. But while British Airways, Pan Am, TWA and Lufthansa were said to have met to plot Laker 's downfall, with Zoom they didn 't have to: a soaring fuel bill did it for them.

As with other transatlantic carries such as MaxJet, Eos and Silverjet, Zoom 's problems lay primarily with the price of oil, which last year added more than £27m to Zoom 's fuel bill.

A combination of soaring oil prices, poor sales and a weak economy has precipitated the worst crisis
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