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Saturday, September 29, 2012

dIscrimination

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The Orphan Train will depart today to Nebraska. The children on the train range from age seven to sixteen. The orphans age eight and up were taught how to read, write, and sew. Take on as your own or just to do your dirty work.


The Orphan Train movement started in 1854. It started because New York City had a growing population of homeless children. This program was started by Reverend Charles Loring Brace who is also the founder of the Children’s Aid Society (CAS). However if you choose to adopt one of the orphans you must promise to take them to school and church.


The chaperone, Mr. Bell and the Orphan Train will arrive at Nebraska on May rd.


One reason for exploration is war. I think the Crusades between the Christians and the Muslims helped amplify trading. When the Christians went to the Middle East they found luxuries that the Muslims had and were not available in Europe. Among these luxuries were dyes, medicines, fragrances, sugar, and spices. After the Crusades ended trade continued with the Middle East.


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Another motivation or reason for exploration is the invention of the printing press. Some Europeans who went on long expeditions could now record information about their trip and compose maps displaying the path they took. Finally the maps and records could be printed and sold to other voyagers.


This program was started by Reverend Charles Loring Brace who is also the founder of the Children’s Aid Society (CAS). However if you choose to adopt one of the orphans you must promise to take them to school and church. printing press. Some Europeans who went on long expeditions could now record information about their trip and compose maps displaying the pathitions c


Please note that this sample paper on dIscrimination is for your review only. In order to eliminate any of the plagiarism issues, it is highly recommended that you do not use it for you own writing purposes. In case you experience difficulties with writing a well structured and accurately composed paper on dIscrimination, we are here to assist you. Your cheap custom college paper on dIscrimination will be written from scratch, so you do not have to worry about its originality.

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Friday, September 28, 2012

ulysses

If you order your custom term paper from our custom writing service you will receive a perfectly written assignment on ulysses. What we need from you is to provide us with your detailed paper instructions for our experienced writers to follow all of your specific writing requirements. Specify your order details, state the exact number of pages required and our custom writing professionals will deliver the best quality ulysses paper right on time.

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By all means, I think


Tennyson is a wonderful writer and this poem is absolutely gorgeous,


but it contradicts a bit with the original story. Having read the


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original epic, I have to say that Tennyson’s argument for having


Odysseus leave Ithaca for a second time is pretty weak. Throughout


the Odyssey, Odysseuss perseverance is driven purely by his desire


to return home, not by adventurous spirit. Even after living with


Calypso for ten years, Odysseus admits, each day I long for home,


and no matter what trial the gods put before him, his tough heart


can undergo it. In Tennyson’s poem, however, a different purpose


seems to drive Odysseus. Odysseus says his purpose holds to sail


beyond the sunset, and the baths of all the western stars, until


[he] dies. I think his quest in the poem is a bit pathetic. After


living at home for three years, Odysseus seems to have gotten bored


with his aged wife and wants to go sailing again. He feels that


his life rusts unburnished on Ithaca. What is he saying?! In my


opinion, his one adventure is enough to last ten lifetimes! Okay,


Odysseus is suffering from a bit of wanderlust and obviously has a


strong will to live life to the fullest (sorry about the clich�),


but frankly, Tennyson’s poem shows Odysseus to be incredibly impulsive.


He does not even seem to care about all the pain that his family has


suffered during his first journey. Every night, Pen�lopê cannot sleep


from grief and even prays to be shot by Artemis so that she can meet


Odysseus in the underworld. La�rtês weeps at his son’s name. Tel�machus


risks his life to learn of his father’s fate. Odysseus’s mother even


kills herself mourning. Odysseus is simply selfish to want to leave


again. Plus, Athena may not help him out this time. In addition,


his leaving Ithaca would undermine the killing of the suitors at the


end of the epic. Although Tennyson’s argument is weak when put in


context with the original epic, the poem by itself is very beautiful


and convincing. The vivid language strongly portrays Odysseus’s longing


to pursue knowledge and meaning in his life, despite his age.


Tennyson’s message is what makes this poem so wonderful. And it comes


across so clearly and strongly that it warms the hearts of all who


read the poem, inspiring them to strive, to seek, to find, and not


to yield.





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Thursday, September 27, 2012

Lecture search on issey miyake

If you order your custom term paper from our custom writing service you will receive a perfectly written assignment on Lecture search on issey miyake. What we need from you is to provide us with your detailed paper instructions for our experienced writers to follow all of your specific writing requirements. Specify your order details, state the exact number of pages required and our custom writing professionals will deliver the best quality Lecture search on issey miyake paper right on time.

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Literature Search


The aim of the literature search is to find a good range of high quality, relevant information relating to your chosen designer or (company) and designed object/image.


Issey Miyake is the topic that I am going to do. As I know he is the Japanese famous fashion designer.


In order to analysis the topic for learning proposes, there are several elements are essential to be operated and concluded


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1) Dictionaries and encyclopaedias of design


) Bibliographic and printed reference indexes


) Electronic database


4) The OPAC system


5) Illustration sources


6) Company and industry reports


7) Internet


1) Dictionaries and encyclopaedias of design


I found this search method very straight forward to use. All reference section were clearly labelled, which made it easier to find your book of your desire. After I am looking through the entire section on design/designer. I couldn’t find any information on assay menace advertising. But I have found some information related with design,


?0th Century Design “Reference 745.40.JUL


That’s nothing related with fashion


For Encyclopaedias of design I found the book which called “Design of encyclopaedia?


Reference 745.0.BYA


I found the other Japanese fashion designer Miyamoto Eiji (148)


But nothing about Issey Miyake


) Bibliographic and printed reference indexes


By using the Designer International Index, I found nothing at all on Issey Miyake, His fashion, but there was other related fashion designer in this index, such as Gianni Versace…etc


) Electronic database


Electronic Database was very useful for finding pretty much everything on Issey Miyake in fashion. For example You can find out something about Museum, Exhibitions, fashion design, advertising of Issey Miyake. Perfume for bottle/design, books, and magazines


Through using Art Abstracts, I found topic that were related to Issey Miyake fashion


There are some information are useful.


Title Cut out and keep


Personal Author Thompson, Henrietta


Journal name Blueprint no. 18 (August 00) p. 4-5


Subject Custom made clothing; Fashion design/Japan; Miyake, Issey


Title Issey Miyake A-POC


Personal author Lin, Vance


Journal name Graphis


Source Graphis v. 57 no. (May/June 001) p. 7-


Subject(s) Fashion design/Japan; Miyake, Issey


Title Fashion without taboos


Other titles Victoria and Albert Museum, London; exhibit


Personal author Mathews, Cleve


Journal name Fiberarts


Source Fiberarts v. 1 (May/June 185) p. 70


Subject(s) Miyake, Issey


Title Fashion a design


Other titles Boilerhouse Project, Victoria & Albert Museum, London; traveling exhibit


Personal author romberg, Craig


Journal name industrial Design


Source Industrial Design v. (May/June 185) p. 67


Subject(s) Miyake, Issey


Title Irving Penn Issey Miyake


Other titles book photographs of fashion designs


Personal author Licitra, Salvatore; Licitra Ponti, Lisa


Journal name Domus


Source Domus no. 701 (January 18) p. 10-11


Subject(s) Fashion photography; Miyake, Issey; Penn, Irving


Title Freedom clothes


Other titles by Issey Miyake


Personal author Sato, Kazuko


Journal name Domus


Source Domus no. 78 (November 17) p. 8-107


Subject(s) Fashion design; Miyake, Issey


Title Issey Miyake making things Foundation Cartier pour lart contemporain, Paris


Other titles exhibit


Personal author Carion, Anne


Journal name FMR


Source FMR no. 5 (December 18/January 1) p. 11


Subject(s) Costume/Japan/0th century/Exhibitions; Miyake, Issey


4) The OPAC system


The OPAC system was one of the catalogues in the library. Firstly, I have found six books relevant with the keyword “Miyake Issei?


Irving Penn regards the work of Issey Miyake photographs 175-18 / Irvin


Penn, Irving, 117-other titles by Author(s) Publication Date 1


The Issei the world of the first generation Japanese immigrants, 1885-14


Ichioka, Yuji-other titles by Author(s)


Publication Date 188


Issey Miyake & Miyake design studio 170-185


Publication Date 185


Issey Miyake / photographs by Irving Penn / edited by Nicholas Callaway / [e


Penn, Irving, 117-other titles by Author(s)


Publication Date 188


Issey Miyake / text by Laurence B�naïm


B�naïm, Laurence-other titles by Author(s)


Publication Date 17


Issey Miyake making things


Miyake, Issei, 18-other titles by Author(s)


Publication Date 1


Secondly, I also found Undressed Video recording fashion in the 0th century on video catalogue. The Publication Date is 18


5) Illustration sources


I think that’s not useful at all.


I went to the slide library in Level , there were a lot of loose folder, and I only find the film in Japan in the cardboard. Finally I couldn’t found any related with fashion.


6) Company and industry reports


The search method wasn’t useful at all. The topic box had a lot of information about fashion. For example Next Directory, Laura Ashley home by post, Fashion Company, Design Consultancy. I had looked all of those. But there is nothing about Issey Miyake Fashion. Secondly, I couldn’t find any company report on Issey Miyake.


7) Internet


This was the most successful search method to use. It was very useful and extremely quick in terms of finding relevant info on a specific subject area.


For the yahoo and google search www.yahoo.com /www.google.com


I found some which are followings


www.isseymiyake.com


It is the official web site of Issey Miyake, and also it shows the details of the shop in the world. There were many photo of the model about fashion.





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Interview with Baguette

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I interviewed my friend Baguette about boots that she had bought for 10$ at Aldos. The desire for Baguette to get herself a new pair of boots came from the fact that her mom had just offered her a new leather skirt for her birthday. Baguette felt the need to buy a new pair of boots to match her new brown skirt, as she did not own any brown boots. Her external motivation to buy the boots (the need to buy) was created by the gain of a new product that made her feel in need of a second product. The self-esteem criterion was the internal factor that made her buy the new boots. She felt good that the new boots would match perfectly with her new skirt. It’s the desire to look good for others and for herself that pushed Baguette to buy the boots.


When it came to alternatives, Baguette had none. With fashion, she is a compulsive buyer. She went into one store and her eyes fell on a pair of brown boots. She asked the lady for her size, and purchased the boots without looking at the price. Afterwards, she experienced cognitive dissonance, and visited other shoe stores to see if she had really made the right decision.


What made me discover the higher-level motivations underlying her purchase were the attributes that she found important when buying these boots.


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1st attribute Boots made out of real brown leather.


It was important for Baguette that the boots were brown to match her new skirt. She desired leather because she believes that it is a quality material that will last longer than any other one. Also, what is better than to match leather with leather!!


nd attribute Boots that are warm enough for the winter.


It was important for Baguette that the boots she was going to purchase were warm enough for the long Canadian winter. Also, it was an attribute to get mom off her back; she would never tolerate her daughter walking in the snow with boots that are not warm. Although, Baguette admits that if she had found the boots she had in mind and they weren’t very warm, she probably would have bought them anyways…!


rd attribute The heel is not too high…


In Baguette’s own words “Why? I am tall enough as it is… Also, I am such a klutz I would probably twist my ankle if the boots were too high, and that would make me look like a fool!”


4th attribute Boots match perfectly with the new skirt


Baguette’s mother offered her a new skirt for her birthday. As such, Baguette felt that she had to honor her mom’s gift, making sure to wear accessories that would only make the skirt look even better. She wanted to look good for herself and for the people surrounding her.


Baguette’s more- abstract motivation is self- esteem. If she thinks that she doesn’t look good then she cannot feel good about herself. She loves to be noticed without appearing too noticeable.


When asked what associations she held with this product, Baguette admitted, with a slight smile on her face, that the boots paired with the skirt made her feel very powerful. “I feel like one of the Charmed ones.” she said. “As soon as I saw those boots, I pictured one of my favorite characters in a television program that I love to watch. In Charmed, the girls are always so well dressed; their fashion style really inspires me.” said Baguette.


Also, the boots reminded Baguette of a pair of boots that her mom owned when she was young. She used to always put them on and try to walk around. Seeing the boots in the store also brought back memories of her childhood, making the decision of buying the boots only easier.


Baguette has no doubt that she would buy the same product again. She has been very satisfied with the boots so far. She has also received many compliments pertaining to her new boots. It has been those appraisals that brought down the cognitive dissonance she experienced in the early stages after her purchase. She now believes that Aldo sells quality boots, since she did not have a bad experience with the product.





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How Technological Advances in Automation Affect Unemployment

If you order your custom term paper from our custom writing service you will receive a perfectly written assignment on How Technological Advances in Automation Affect Unemployment. What we need from you is to provide us with your detailed paper instructions for our experienced writers to follow all of your specific writing requirements. Specify your order details, state the exact number of pages required and our custom writing professionals will deliver the best quality How Technological Advances in Automation Affect Unemployment paper right on time.

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When the word technology is mentioned, a vast majority of the population envision an increase in the level of society with innovative new advancements that will guide them into a new millennium and towards a positive, future economy. In order to achieve this level of economic welfare, growth is necessary. One of many aspects of economic growth calls for an increase in technology. Technological advances are important to any society to grow, big or small. However, not everyone shares this image of a glorious new future when the word technology is uttered. They see an image of a vast machine that replaces manpower and takes over their jobs. Massive assembly line machinery and a newer kind of automated technology self automated machines. Some examples are pay at the pump gas stations and self-checkouts. This paper will examine different types of automation; discuss how it affects unemployment and what that means to a full employment economy.


Automation is a system of manufacturing that is designed to more effectively perform certain tasks formerly done by humans, and to control sequences of operation without human intervention. This is used in the fields of aviation and communications as in automatic pilots and automated telephone switching equipment. Knowing how to get things done as quickly and as efficiently as possible can help any business succeed. In the 10’s the American auto industry was able to create an integrated system of production with the goal of an automated assembly line system which would lower the cost of making a car by lowering the number of workers to a minimum. This trend continues even today. Because of this, the fear of technology is just as prevalent today as it was in the 1880’s but it is less visible in today’s society which mostly only looks favorably on technological advancement.


Another form of automation designed in the advancement of a society is self automated equipment such as self-checkouts, pay at the pump gas stations, and atm machines. The bottom line for users here is control. Waiting in line, at least for now, is a fact of life�even in self-checkout lanes. But most customers do not mind waiting in line in a self-checkout lane because they want to check out their own items�even though most people are slower than cashiers and it might take longer the fact that they are doing it themselves and they are engaged, people tend not to notice. It is like seeking an alternate route during a traffic jam. The driver who sits in traffic often becomes frustrated. The driver who takes an alternate route may drive farther and longer, but is usually less annoyed. It is like seeking an alternate route during a traffic jam. The driver who sits in traffic often becomes frustrated. The driver who takes an alternate route may drive farther and longer, but is usually less annoyed because control is taken of the situation. Pay at the pump gas stations are just one of various types of self automated machines. Other examples are automated teller machines (ATM). A person is able to conduct his or her daily banking transactions without stepping foot into the bank and seeing a teller. The idea of control is that the customer is doing his or her own service, paying and leaving. This kind of technological advance is on the uprising in the United States, it is becoming more common everyday.


Unemployment is a normal occurrence in every society. Full employment sounds like a perfect term but it can include certain types of unemployment. Full employment does not mean that everyone is employed. In the United States, full employment is defined as, according to Irvin and Tucker, “when an economy operates at an unemployment rate equal to the sum of the friction and structural unemployment rates.” In other words, in a dynamic economy there will always be some amount of unemployment, when combined, gives the natural rate of unemployment caused by recession. The natural rate of unemployment is when unemployment is not affected directly by the business cycle. Unemployment is further categorized into three different types cyclical, frictional, and structural unemployment.


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The only type of unemployment that is not present during full employment is cyclical unemployment. Cyclical unemployment is unemployment caused by a drop in the level of economic activity. Recession occurs during this contraction phase of the business cycle. The foremost dramatic event that occurred was the Great Depression where there are fewer jobs available than workers. During the Great Depression, there was a lack of consumption causing a lack of production. With the lack of demand, came a lack for supply.


One of the two accepted types of unemployment during full employment is frictional unemployment. Frictional unemployment is only a temporary situation arising from the normal job search process. Many young people in search for their first job, temporary layoffs and unemployment between projects are just a few examples. There are other types of people that are considered frictionally unemployed. Among them are seasonal workers. Seasonal unemployment is when the person is currently not working due to seasonal activities, such as ski lodge employees in the summer or farmers during certain non-harvest seasons. There are also those who are transitionally unemployed, meaning the person is “in between jobs” is or is pursuing a new job opportunity and waiting for the new position to begin, this is all during a temporary, transitional time. Frictional unemployment is essentially unemployment that is temporary and usually is not cause for major concern. It actually helps the economy function more efficiently by allowing our economic system the ability of job options.


The next type of unemployment that is normal during full employment is structural unemployment. Structural unemployment is a result of organizational changes. Structural unemployment is caused due to the mismatch of the economys capital structure and the size of abundant labor force. Many people who are structurally unemployed do not have marketable skills and may face prolonged periods of unemployment. Structural unemployment is caused from changes in people’s tastes and/or new technology. Consumers’ tastes change throughout the years and it may have an affect on what items are produced. New technological advances may require new skills to operate them and produce certain new products that appeal to the masses.


Technological advancement has caused a shift in the demand for labor, from low skilled to high skilled labor. After this it becomes difficult for the displaced labor, i.e. low skilled employees, to acquire the demanded new skills because to do so would require massive amounts of reeducation which is likely too expensive. This has been called the structural unemployment debate or the technological unemployment debate. One side of this debate state that the technological change gives new rise to different compensation mechanisms which can create new jobs, and that these compensation mechanisms work smoothly and without any lags. While the other side claims that there is no guarantee that the compensation mechanisms can ensure full compensation of lost jobs at any time and under all conditions. In North America’s internationalized economy, it cannot be taken for granted that the new jobs that have been created by the labor-saving technologies will equal the number of jobs lost to the same technologies.


Some labor leaders and economists argue that automation causes unemployment and, if left unchecked, it will breed a vast army of unemployed that could disrupt the entire economy. The reason it has not been seen right now is that the growth in government-generated jobs and in the service industries has absorbed those who became unemployed due to automation. They believe that soon these industries will become saturated or the government-programs will be reduced and then the cost of automation will become apparent. Much of the fear of human-capital depreciation is grounded in the recent massive layoffs in the North American automobile and steel industries.


Another more apparent, direct cause of unemployment from automation is self serve type equipment where retailers are able to reduce man-hours. The latest phenomenon has caused a craze where customers provide free labor. Big retailers, especially grocery stores, have joined the bandwagon and created a new technological advancement in automation self-checkout. Self-checkout machines typically include a scanning device to read UPC bar codes on packaged items, a scale to weigh produce, a touch-screen monitor to guide consumers through the process with a menu (there are also synthesized voice prompts), a payment mechanism (credit card swiping device, cash and coin feeder) and a conveyor belt to carry goods to the bagging area. Customers scan their purchases (or look up prices on the screen for items such as produce) and place those items on the belt. Some systems have a security feature that will examine the dimensions of the item to make sure that what is placed on the belt was actually scanned and recorded. It is typically a four-lane setup and stores generally deploy one clerk to monitor the bank of self-checkout machines in order to train customers or bag items. With the reduction of man power, it creates unemployment. Arguably, self-checkout machines may also be helpful in providing better customer service by freeing up employees. For example, according to the current situation analysis for the University of Arizona Library, self-checkout machines will enable redeployment of staff, using librarians as a guide to information found both in the library and online and even creating workshops. The current situation analysis (CSA) is a process of collecting, analyzing, and reporting information that describes the current situation of the library, as well as anticipating changes in the future environment. The CSA is part of the cyclical strategic planning process that informs the library’s goals and objectives. It states that, ‘self-checkout units enable borrowers to record their own loans of books,” therefore alleviating the queues at the check out desk.


Some leaders and business executives’ claim that automation generates more jobs that in replaces. They point out that although some laborers may become unemployed many more will be employed in the industries producing the automated machinery. The computer industry is an example of this. However this also shows that the shift of labor from low skilled to high skilled is to be expected if automation continues. The future looks bright for consumers as prices plummet due to automation, but the future of the labors is much less unsure. Soon automated plants will be the norm and the workers that do remain will have to operate, and maintain the technologically advanced machines and will be required to have education and experience levels far above those workers that were forced to leave. The only workers that will be required in these very high tech plants will be maintenance engineers, electricians, and toolmakers, all of whom are necessary to keep the automated machinery in good operating order. The automated machines will do the rest of the work. Outside these advanced automated plants hundreds of thousands of blue-collar workers will be unemployed and since their skills will be


obsolete they will be unable to find any work. At this point a huge workforce will be available, and service industry employers will take advantage of this by lowering wages since the unemployed will take any job that they can find. Soon the blue-collar works will be working for next to nothing. Based on all the information available although the recent technological advancements have lowered the cost of goods for the consumer, the employees have been forced to attempt to look for new jobs or to remain unemployed and collect unemployment. It would seem that the problem of worker displacement will worsen steadily because of increasingly powerful information technologies that can now automate large segments of virtually ever kind of work (including lawyers, accountants, and physicians). It may destroy future employment opportunities because of the massive amount of retraining that would be needed.


Structural unemployment is caused directly by these new advances in technology. From automation in factory machinery to self automated, self serve technology, there will be some sort of man-hour reduction. Advances in technology encourages a better way of life and with this new technology comes the chance of a different type of labor.


Fears of technology first appeared in the early 1880’s in a group called the Luddites. These people were uneducated workers who destroyed textile machinery and other symbols of advancing technology because they believed that these technologies would take over their job and forces them out of the labor market. The early elements of automation where developed in the last half of the 18th century and were first discussed by British economist Adam Smith in his book Wealth of Nations in 1776. This resulted in the division of labor to increase production and allowed a reduction in the level of skills required of workers. Then mechanization was the next step for ‘technological advancement’ which created machines that duplicated the motions of workers.


In order to determine how technological automation affects the economy, one must examine it from the several, different prospectives. If speaking only about the unemployment rate then technological advances in automation affects the unemployment rate by increasing the number of unemployed people. Automation causes loss of jobs and fewer needed man-hours. However, if looking from an economist’s point of view on the literal definition for full employment, structural unemployment is part of the natural rate of unemployment. Therefore, even though advances in technology, by creating more automation processes, increase the rate of unemployment, it does not affect the full employment status of the economy. Structural unemployment is required for the essential growth of any strong economic system.





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Lee Iacocca, born Lido Iacocca on October fifteenth 14, was the son of


an Italian immigrant named Nicola Iacocca. He had one sister named


Antonette. The family lived in Allentown, Pennsylvania. His father was


some what of an entrepreneur in the food service industry. The family


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business was called the Orpheum Weiner House in Allentown, Pennsylvania.


The company is still standing today, operating under the name Yoccos,


his uncles are still making hot dogs for the public. Growing up in


Allentown was difficult for Lee, because of his ethnic background.


Allentown was primarily made up of Dutch immigrants. In his early years


of education he was ridiculed for his heritage. An his senior year in


high school Lee came down with rheumatic fever. He had a harsh bout with


the disease because there was no modern medicine to aid in the recovery.


In 141 during the World War he was very excited about joining the


military. Ironically, the illness that had almost killed him, saved him


from going to war. Most of his classmates that joined the service had


been killed over-seas and abroad. For college Lee chose Lehigh University


for its engineering program, although he wanted to go to Purdue, he did


not get a scholarship. Lehigh University was one of the sights that Ford


Motor Company used to recruit new employees. He was able to secure a


place in the Ford training program, it was difficult for him to get


admission but he survived. During his time in the training program Lee


had become less interested in the engineering aspect of the business and


more in sales. He dropped out of the program to pursue areas in sales


with the Ford Corporation. During his time at Ford Lee Iacocca came out


with several very innovative purchasing concepts. One concept was the 56


for 56 payment plan. This payment plan would allowed the consumer to


purchase a new Ford vehicle with a twenty percent down payment and a $56


monthly payment until the vehicle was paid off. This was one of the first


payment plans that was structured to be affordable for the consumer. The


system was responsible for selling over seven hundred fifty thousand


vehicle in 156. Although his career with the Ford Motor Company was


extensive, all that would come to an end with the production of one


vehicle the Pinto. After Ford was able to settle law suits over the


compact car for explosive reasons, (the Pinto was noted for exploding from


rear end collisions), they recalled over a million and a half Pintos.


This was June of 178, one month before Lee was fired. In 17 Lee


Iacocca was employed with the Chrysler Corporation. Within his first few


month there he had seen Chrysler cancel production of over sixty thousand


cars. After a short period of time he found out there were no dealers to


sell cars for them. Their inventory was bulging because of cars that were


made with no destination. These vehicles were part of Chryslers sales


bank. It was a large inventory of cars that were manufactured only to


keep plants running. One of his first ideas was to get rid of the


sales bank. He put pressure on all local dealers to empty the inventory.


He made the dealers take up the slack so he could implement a just in time


form of inventory. They would be manufacture specific orders so no


capital would be wasted. Another problem with Chrysler was they were


leasing vehicles to rental agencies instead of selling to them. Chrysler


had been running the worlds largest leasing company. Every six months


they would buy them back. The new car dealers wanted nothing to do with


the rented cars. With this policy in effect, Chrysler also made itself


the worlds largest used car broker. In late 17, early 180 Chrysler had


wrote off almost 88 million dollars in used car losses. Between the


inventory problem and the leasing issue, Chryslers loss was in the five


hundred million dollar range. The next item was the staff. He needed


to replace over thirty five stop level managers, and replace then with


people that knew what they were doing. With over twenty years of


experience with Ford it was clear were the replacements would come from.


Sales continued to drop steadily until the creation of the K car. These


were compact vehicles that would put Chrysler back in the market place or


finish them off. The present problem was that Chrysler had such a large


debit already with no fresh capital. Through the help of government loans


and an improving economy Chrysler was able to save itself. By giving more


of the market share Chrysler was on the way to recovery. Presently the


corporation holds a very large piece of the market from large trucks to


compact vehicles. Lee Iacocca was able to save a failing company by


establishing a competent management team, cutting production runs of


vehicles without destinations and arranging guaranteed loans from the


Federal Government during an uncertain time. Interest rates were very


high and the customer base was low. He had an extensive amount of fore


thought by staying with the firm. His guidance was able to save and


American corporation. With the successful turn around of the Chrysler


Corporation there was a lot of gossip and allegations that Lee would be


seeking a political career. In 18 he signed a three year contract with


Chrysler to close his career. In 186 he retired from the car


manufacturing industry completely. In my opinion Lee Iacocca was


blackballed from one of the worlds largest auto manufactures, then was


placed in charge of a company that had little chance of survival in the


present economy. He turned the struggling company around and repaid all


debits owed by the Chrysler Corporation. There is one phrase he also said


that will be remembered for years to come, If you can find a better car,


buy it.


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Sunday, September 9, 2012

How to be successul

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With the job market offering few opportunitiies for advancement,many in the workforce are going back to school, as a resultapplications to the natoins graduate school are soaring.is study that important?


sure,leaning provide us a good chance of improving,some one will say no knowledge does ont mean no money, but i will say no knowledge does mean less moey. Every one grow in the process of study,just as Aristotle saidLearning is an ornament in prospetity,a refuge in adeversity, and a provision in old agejames lehre also daidAcollege diploma does not mean you aree educated.Quite the contrary,it means that you have been openned up to a perpetual state of ignorance and thus a life long hunger for moreideas,more knowledge, more good thhoughts,more challenges,more of everything!however it is not enough to succeess .we have to change us to a bettrer situation all the time,for exaple,China has been develop so fast these years , but its currency stays unchanged all the time,Chinas competitive prowess,i respond, has littlee to do with currency.China competes mainly on the basiss of labourcostss, asnd tech,infrastructure,human capital,and its passion and commitment to reform,just sa the wold has to ,ive with China ,she shoullddd also know how to live with the ressst of the world.Let every nation know wether it wisheeees us well or ill,that we shalll pay any price , pay any priceeee,bear any burden,meet any hardship,support any friend,opposeee any foe to assure thesurvival and the success of liberty.


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Thursday, September 6, 2012

Wisdom

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We live in a time when the nature and place of human reason is a subject of considerable controversy. Often human reason is set over against divine revelation and battle lines are drawn between secular humanists and believers in Scripture. Yet there are many among us who despair of this division and look to Scripture itself to find in its pages some insight into the complex relationship between reason and revelation, human and divine. And there, hidden in, with, and under familiar books of Scripture are insights about insight, and reasoned statements about reason. Thus we turn our attention to the area known as biblical wisdom. This is a confusing area to many who haven’t a clue what all the fuss is about and who have a difficult time figuring out what precisely is meant by the term “wisdom.” The truth is there is not a simple definition or any scholarly consensus about what is meant by this term; rather, wisdom covers a field or grid of meaning, which can be approached from a number of angles. One of these angles is African youth. African youth encounter many disturbances that keep them from pursing wisdom.


We live in a time when the nature and place of human reason is a subject of considerable controversy. Often human reason is set over against divine revelation and battle lines are drawn between secular humanists and believers in Scripture. Yet there are many among us who despair of this division and look to Scripture itself to find in its pages some insight into the complex relationship between reason and revelation, human and divine. And there, hidden in, with, and under familiar books of Scripture are insights about insight, and reasoned statements about reason. Thus we turn our attention to the area known as biblical wisdom. This is a confusing area to many who haven’t a clue what all the fuss is about and who have a difficult time figuring out what precisely is meant by the term “wisdom.” The truth is there is not a simple definition or any scholarly consensus about what is meant by this term; rather, wisdom covers a field or grid of meaning, which can be approached from a number of angles. One of these angles is African youth. African youth encounter many disturbances that keep them from pursing wisd


Please note that this sample paper on Wisdom is for your review only. In order to eliminate any of the plagiarism issues, it is highly recommended that you do not use it for you own writing purposes. In case you experience difficulties with writing a well structured and accurately composed paper on Wisdom, we are here to assist you. Your cheap custom college paper on Wisdom will be written from scratch, so you do not have to worry about its originality.

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Monday, September 3, 2012

European Airline Industry

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INDEX


1. Introduction


. Macro Environment


a. Economy at Large


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b. Legislation and Regulation


c. External Shocks


d. Technology


. Immediate Competitive Environment (Five Forces Model)


a. Rivalry Among Competitors


b. Substitutes


c. Barriers to Potential New Entrants


d. Buyers


e. Suppliers


4. Strategy Recommendations


a. Low-Cost / Low-Price Strategy


b. Alliance Expansion Strategy


c. Balance ScoreCard Strategy - “If you can’t measure it, you can’t manage it”


d. Selected Strategy


5. Implementation


6. References


Appendix


Executive Summary


This case study attempts to understand the developments and strategic alliances that have occurred in the airline industry by using a series of tools for analysis commonly used in business. It identifies the alliance with the least favorable position in the industry in Europe and suggests a strategy and its implementation that would enable it to perform better.


1.0 Introduction


The traditional airline industry has experienced a transformation process in recent times due to the intense levels of competition and the global economic slowdown. To get around these problems, the traditional players have formed global alliances; by creating such alliances, the airlines attempt to offer additional destinations to their clients without costly investments and to decrease the unit cost per passenger.


The main European carriers have grouped into three different main alliances Sky Team (led by Air France), One World (led by British Airways) and Star Alliance (led by Lufthansa).


The airline industry deregulation in Europe has enable the entrance of new players, the so-called low-cost carriers, into the market. The tremendous success of these newcomers, such as EasyJet, Ryan Air, German Wings, etc, has put a lot of pressure on the traditional players.


External unpredicted events like September 11th and the SARS outbreak have also challenged the airline industry. The response of the alliances to all these challenges will be critical to determining their future competitive position within the airline industry.


.0 Macro Environment


.a Economy at Large


The airline industry all around the globe is heavily dependent on the overall economic situation that the world is experiencing. The more money people have to spend, the more likely they are going to spend it in leisure and travel.


.b Legislation and Regulation


Over the last decade, European aviation has moved from a highly regulated market, with little or no competition at all, to an open sky policy. At present, any airline with an Air Operations Certificate in the European Union may operate any route within the Union, including flights within other countries. But in practice, these airlines are often aligned to a single hub for operations (profit sanctuary).


.c External Shocks


The air travel industry in Europe is a very sensitive industry due to the dependency on people’s perception regarding safety. External shocks in the last few years have severely affected air travel industry around the world; September 11th and paranoia following up this event considerably lowered the demand for airline services, the SARS outbreak in Asia also represented a slump in sales for many airlines around the world (40 to 50% drop in Asian to & fro traffic ).


Direct effects of these events were also felt in the European air travel industry, i.e. it resulted in reduced revenues (appendix A-1).


.d Technology


The Internet era has revolutionized the way that airline tickets are booked. Now, buyers have first hand information about ticket prices, schedules, connections, updates, etc. at just click of the mouse sitting anywhere in the world. The airlines are using new technologies to reach new customers and to lower their overall operating costs. Internet provides an option for the airlines to sell their tickets online in addition to conventional distribution channels such as travel agencies.


.0 Immediate Competitive Environment (Five Forces Model)


.a Rivalry among competitors


Currently the most important European traditional airlines are grouped in three different alliances (see table A- in the annex). The Star Alliance was established in 17. It is the largest of the alliances with a global market share of . % (see chart A-4). It has access to 700 airports in 18 countries . The One World Alliance was launched in 18. It has a global market share of 17.8 %. With 16 different country destinations, it serves more countries than any other alliance. The Sky Team is the youngest alliance of the big three, formed in 1. It has a global market share of 11. %. The alliance flies to 51 airports in 114 countries worldwide. This year, Air France and KLM (ex-member of the Wings alliance) unveiled a merger deal that will create Europes largest carrier. The Italian airline Alitalia has expressed interest in joining this new company. The following table shows some relevant facts about each alliance


Alliance No. of Partners Countries Served Revenues(approx) Fleet PassengersServed


Star Alliance 16 18 $ 67.5 Bill. ,058 Mio.


One World 16 $ 51.0 Bill. 1,6 0 Mio.


Sky Team 7 114 $ 56.0 Bill. 1,44 48 Mio.


In order to achieve economies of scope, European carriers came up with three pronged approach 1) to have dominant market position in the domestic market. ) to gain foothold other European markets. ) to establish a global presence.


European airlines entered these strategic alliances though code sharing agreements, way of equity purchases, wet leases and franchising agreements, but now they are in phase two or three of the alliance formation (see appendix A-5 for further reference).


Alliances offer the following advantages to its members


1) Reach of seamless service networks Increase of numbers of routes and destinations. By means of alliances, airlines manage to overcome legal barriers for entering foreign markets.


) Enhance traffic fleet With linkage of airline networks the airlines can increase their load factor with the improved feed. Also, flight frequency can be increased without augmenting the size of the fleet.


) Cost reduction Partners of the alliances can have benefits of attaining the economies of scale (through joint operations of air and ground services) and scope.


4) Service quality improvement Ease of online connections, frequency and schedule convenience are enhanced by alliances. They also increase itinerary choices and reduce waiting time for passengers.


5) Marketing advantages Members of the alliances benefit from common marketing campaigns and frequent flyer programs.





Traditionally the European airline market has been controlled by the national airlines; however, the supremacy exerted by the main players has been challenged over the last decade by the emergence of low cost competitors in the market. The business strategy of the low cost group is centered on offering low-price tickets compared to traditional players. The great success of these new players is partially based on the efficient usage of the information technology, i.e. internet for selling tickets, resulting in reduced advertising and distribution cost. While the traditional players try to distinguish themselves from their competitors by offering differentiated service, the low cost carriers offer no frill service on board, e.g. no free food and drinks. Further cost reduction is achieved by operating a fleet of similar aircrafts, with catering space being used for more passenger seats and establishing a long-term relationship with suppliers, which positions them to bargain better. Since most of these new players use secondary airports and no-catering services, it enables them to reduce the turnaround time. According to Aviation Economics, a London consultancy, low-cost carries get 11 hours flying per day out of each aircraft, compared with about only hours for a traditional carrier . All the above factors result in considerable operating cost reduction. Despite the fact that the newcomers account only for approximately 5 % of the European market share, they are expected to gain up to 5 % of the market by 010 at expenses of the traditional and charter airlines (see chart A- in the annex). At the moment these newcomers do not offer overseas transportation services.


Another competing group of airlines consists of the charter operators. These airlines have lost market share in recent times to the new entrants and are supposed to loose even more (see appendix A-). Their strategy is to offer all-inclusive package to the clients, i.e. transport and


accommodation, and hence they depend on the development of the leisure travel industry. In Germany, tour operators are moving into the low-cost sector, e.g. TUI, Europe’s biggest holyday company, opened its low-cost carrier named Hapag-Lloyd Express.


.b Substitutes


Passenger transport by road in the 15 European Union countries increased by 7 % only in 000. Between 170 and 000 the railway’s share for passengers shrank from 10.% to 6.%. However, the European Commission plans to support environmental friendly transport systems such as railways and waterways . Therefore, the airlines will face some competition from state-run railway networks in the future, especially on the lucrative, heavily used long-distance routes (roughly 400 to 700 km). Hence, the threat coming form this sector is considered as medium.


.c Barriers


This industry’s main barrier is large capital needed to acquire airplanes. But this barrier can be easily overcome by leasing new aircrafts or purchasing second hand airplanes. Outsourcing of maintenance and facility services can help the airlines to compete at lower costs and consequently let new entrants lower these barriers. Another barrier was represented by airplane manufacturers, but right now they are willing to sell their products, spare parts and maintenance knowledge to any customer for a price. One of the most difficult obstructions for a new comer is characterized by charges the airports apply for the hub services.


The Open Sky policy in the European Union has substantially reduced the barriers for the airlines, unveiling an opportunity for new savvy entrants. Distribution centers such as travel agencies and airport counters were also a barrier to be considered, because they were traditionally





seen as distribution centers. But now, with the internet, airlines can move around these barriers by offering these services themselves.


Therefore, entry barriers in the air travel industry are not difficult to overcome.


.d Buyers


Buyers are differentiated in the airline industry as first class buyers, business class buyers, tourist / travelers class and economy class buyers (appendix A-7). Each buyer segment presents different needs and purchasing power. Buyers in the Internet era have better and more accurate information than ever before. Even though demand elasticity for the airline industry is growing as people have more choices of airlines delivering comparable services, many airlines still fix prices corresponding with the demand and the time of the year, and the customers still have to cope up with the prices the airlines arrange. Frequent flyers and corporate buyers enjoy special benefits from these airlines. Even though intense competition between airlines has brought prices down to attract customers, they do not have much of a bargaining power.


.e Suppliers


Major Airline Industry Suppliers


· Airplane Manufacturing and Leasing (mainly Airbus and Boeing)


· Fuel Suppliers (e.g. Royal Dutch Shell, Exxon Mobile, Chevron Texaco, etc)


· Caterers/Maintenance Crew (e.g. Lsg Sky Chefs, Gate Gourmet, Servair, Allied Pilot Association (APA), Association of Flight Attendants (AFA), etc)


· Airports and Airline Ticketing Software Providers (Amadeus, Galileo, etc.)





Bargaining Power of Suppliers Factors relating to bargaining power of the Suppliers


· Concentration of Suppliers in the industry. Suppliers are concentrated within the Airline Industry. Supplier concentration makes it very difficult for competitors to exercise leverage over the supplier and obtain lower price or play one supplier against other. Thus, suppliers command a substantial bargaining power in the airline industry.


· The threat of forward integration. The threat of forward integration is low. It is unlikely that Boeing, for instance, would staff flight attendants, commercial pilots and a maintenance crew and operate flights all over the continent.


The appendix A-6 represents the Five Forces Model by M. Porter.


The appendix A-1 shows a strategic group map displaying the different competitive positions that rival firms occupy in the industry.


A SWOT Analysis (see appendix A-) was performed to identify the Star Alliance’s Strengths and Weaknesses, and of examining the Opportunities and Threats they face. This SWOT analysis is limited to the European airline market.


None of the alliances has mentioned a clear vision and mission statement. For the strategy recommendation we formulate a vision and mission statement for the selected alliance.


4.0 Strategy Recommendations


As the situation analysis above suggests, the least favored alliance in Europe in terms of cost per passenger and geographical coverage is the Star Alliance (appendix A-10). The following strategic recommendations are focused on increasing the performance and presence of the Star Alliance in Europe. The strategy recommendation is based on the following mission and vision statement


Vision


To become the world market leader in terms of service, quality, cost and market share by 010.


Mission


Service is our vocation. We endeavor to offer our employees job security, good working conditions, career opportunities and convincing corporate ethics. Our staff honor that endeavor with customer friendly service and thereby underpin future growth. We are committed to creating sustainable value for our investors. We are fully committed to keeping a balance between sustainable development and care for the environment.


4.a Low Cost- Low Price Strategy


The Star Alliance players in Europe are facing extensive rivalry by the low cost carriers and at the moment are struggling in many of their routes to break even. The buyer focus has undergone a drastic change from being service sensitive to price sensitive.


The Star Alliance members have the financial resources, reputation and experience that would enable them to integrate one of the low cost carriers into the alliance. The members have to convince a company already in the market, with experience and an intricate network of destinations over Europe to join the alliance.


Integrating a low cost carriers in the market to the alliance would involve an overhaul in the service of the new member, as the customer experience has to be completely inclusive, and therefore increase slightly the costs. Primary key points for this would be unique baggage check in and coordination in the connections of the partners within the alliance.


These would also enable the partners of the alliance to increase their load factors, for the low cost carrier would bring the ability to access another customer segment and open new routes; while the full service carriers might as well increase the load of passengers in their aircrafts, increase the geographical reach of the alliance to small hubs that would otherwise be inaccessible due to high costs of the airlines and cut costs by divesting certain non profitable or low profit routes that can be operated by the low cost partner, and compete with other European full service carriers over some destinations (France, Ireland, England, Italy, etc.) and not competing with the members of the alliance on some special routes.


4.b Alliance Expansion Strategy


The entrance of 10 new members into the European Union from 1st. May 004 will increase the existing population of the common market by almost 80 million inhabitants (appendix A-8). The membership of these new comers in the Union will enable them to perform better economically, and as there is a strong relationship between well economical being and the demand for air travel, the European airline industry will also benefit from the enlargement.


The Star Alliance has the chance to take advantage of the new opportunities due to the Open Sky treaty allowing point to point connections within any country in the European Union. Star Alliance already went in this direction by accepting the Polish Airlines LOT as a member of the


Alliance. LOT covers more than 0 cities in Europe, 16 of them in Eastern Europe. Warsaw can be used as an important hub for the north-eastern European area.


4.c Balance ScoreCard Strategy - “If you can’t measure it, you can’t manage it”


1.- Financial Perspective. Star Alliance can start its Scorecard by defining its high level financial objective to increase return on capital employed (ROCE) from its current level within next five years. This could be difficult to achieve in mature, slow growth airline industry but not impossible. Star Alliance can start with using two financial themes productivity & growth.


Productivity theme consists of two components cost reduction and asset intensity. Cost reduction can be measured by operating cash expenses versus industry, with the goal of being the cost leader within the alliances. Asset productivity would enable the alliance to handle greater volumes from its growth strategy without expanding its asset base.


Growth theme also can consist of two components Volume growth in terms of passengers/ load factor and growth of niche business passengers. So it has two measures for these growth components volume growth rate versus industry growth rate and percentage of volume in premium sales.


.- Customer Perspective. Identify different customer segments. Measuring total market share would represent an undifferentiated strategy, perhaps no strategy at all, attempting to be all things to all customers. Star Alliance must define the value proposition it must deliver to attract, retain and deepen its relationship with customers in the three target segments. Market research is critical. The alliance must give its customer a great buying experience. The attributes should add on to become “fast and friendly service”. Also special focus should be paid on environment and


safety. It would contribute to the customer’s perception of Star Alliance being a good citizen in the community.


.- Internal Business Process Perspective. The important internal processes identified are


Develop new products & services Airline members can develop new products and services to enhance the buying experience of consumers. Share Process Optimization Since many of the airline suppliers are placed within the industry and specifically within the alliance, members can gain a lot by reducing cost by sharing their suppliers. As a whole the alliance would have more bargaining power to exercise to external suppliers.


4.- Learning and Growth Perspective. The strategic objectives for the learning and growth perspective are


a) Core competencies & skills Encourage and facilitate the employees of member airlines to gain a broader understanding of the services. Build the level of skills and competencies necessary to execute the vision/goal. Develop the leadership skills required to articulate the goal/vision and promote integrated thinking.


b) Access to strategic information Develop strategic information required to execute the strategy.


c) Organizational involvement Enable the achievement of the vision by promoting an understanding of the organizational strategy and by creating a climate in which member airline employees are motivated and empowered to strive toward the vision.


4.d Selected Strategy


The implementation of the strategy is based on the Balance ScoreCard Strategy which is an all-inclusive strategy, i.e. it increases shareholder value, customer value and takes the employees of the alliance into accountability for the implementation. The low cost-low price strategy was


rejected because, if implemented, it would result in restructuring of the business model of the alliance, this resulting in a conflict of core competences needed in each business model increasing the probability of failure. The expansion strategy is already being persuaded by the alliance by the inclusion of LOT; however, another feasible strategic move could be to include a second East European airline as a Star Alliance member. Malev Hungarian Airlines could be a good candidate for further expansion. It is not a member of any alliance yet, and it has a good potential in Central and South East Europe.


5.0 Implementation


Balance Scorecard is a proven strategy formulation model for Strategic Alliance of Phase and Phase types (see appendix A-5 for further reference). As mentioned before, the Balance Scorecard measures strategy with four perspectives in the given order.


The objectives while implementing the Balance Scorecard strategy are to ‘Align the Alliance to strategy’ (change the organizational structure if needed), to ‘Align the Strategy to Operational Terms’ (value chain and external linkages), and to ‘Make Strategy Everyone’s Everyday Job’ (link every employee by means of communication, delegation, cooperation and planning).


a) Financial Perspective


Star Alliance‘s ScoreCard might start with an important financial objective to increase return on capital employed (ROCE). This could be difficult to achieve in mature, slow growth airline industry but not impossible. Star Alliance should look at two key financial themes productivity & growth.


Productivity theme consists of cost reduction and asset intensity. To become an industry cost leader in terms of operating cash expenses per passenger, alliance should set a long-term target


for minimization of expenditure; this target should be broken into quarterly or yearly milestones for controlling the whole process. Asset productivity could be achieved by intensive utilization of huge fixed assets which alliance has. Training the human resource on Time Management and Service Management will enhance productivity. Both can go hand in hand if they apply “KISS” principle in delivering service i.e. Keep it short and simple. Some of the member carriers have fleet which exceeds the capacity, so at times many of these carriers fly at half or even less load. Proper utilization of these carriers can be achieved by doing away with overcapacity and flying to only profitable routes. Member airlines should giveaway the non-profitable routes, as they are not adding any value to the shareholders. This would also decrease the operational expenses and thus increase the return on capital employed.


Growth consists, as well of two components Volume growth in terms of passengers/ load factor and growth of niche business passengers. The financial perspective could be achieved by having defined customer perspective and internal business perspective having a differentiated strategy that focuses on resource efficiency maximization.


b) Customer Perspective


Identify different customer segments (see appendix A-7). The alliance ought to define the value proposition it must deliver to attract, retain and deepen its relationship with customers in the three target segments i.e. First Class, Executive Class, Tourists/Travelers Class. The customer of the Star Alliance should be delighted by the service received and maximize his/her bliss in every defining moment in the service delivery.


Factors identified that contribute to the service perception of the customer include the following


· Immediate and easy access to tickets.


· Good point-to-point connectivity (number of routes).


· Reduced waiting time.


· Satisfactory onboard service


· Less passenger baggage lost.


· Staff friendliness (consider all defining moments � greetings, service delivery, augmentation, etc.).


· Availability of add-on services like hotel bookings, car rentals etc.


· More frequent flyer flexibility.


These attributes should add on to become ‘fast and friendly service’. For achieving customer perspective, alliance should create a dedicated workforce or organization within itself which would then train the employees of all the member airlines so as to have a similar quality service being delivered to customers anywhere in Europe. Alliances should promote the differentiation in service by having regular marketing programs via sponsoring conferences, festivals, sporting events, fairs, exhibitions, etc. under star brand. To check the quality of the service Star Alliance can use the concept of Mystery Shopper. This Mystery Shopper would then use the service of all the member airlines and advice to improve the service in any airline wherever there is a bottleneck. Special focus should be paid on environment and safety, it would contribute to Star Alliance being a good citizen in the community.


Since many of these airlines have ticketing agents to sell and deliver the tickets to the end customer, they should be component of strategy formulation. Have an objective to increase the agent’s profitability as well. This would result in positive sum game, increasing the size of reward that could be shared between agents and airlines, so possible synergies would develop.


Star Alliance customer strategy involved a virtuous cycle, motivated and independent agents would deliver a great buying experience that would attract an increasing share of targeted customers. If possible, have an analyst to look at the ticket selling websites of the member airlines to check the friendliness and informativeness of these websites. The strategy would generate the quality revenue growth for alliance airlines’ financial strategy.


c) Internal Business Process Perspective


The important internal processes as identified are


· Develop new products & services.


· Share Process Optimization.


· Value Chain Integration.


This could be achieved by having a dedicated organization/employees to develop new products committed to create value to customer. The process would result in delivering a great buyer experience e.g. Star Alliance has already come out with Mobil Link, special fares for world tour, Asia-Pacific region, innovation in seat configuration, non-smoking air carriers, duty free sales, etc. They can also have regular brainstorming sessions by the employees of member airlines on a monthly or quarterly basis and also could come out with an innovative approach such as “War Room”. A key concept in the management of services is the “servicescape”, i.e. the environment in which consumers receive the service. Therefore, the alliance should collaborate with the airplane manufactures to provide more innovative cabin designs, within the limitations of cost and space available . All the employees of the member organization should take part in being innovative in order to reduce the cost and enhance productivity. This would also result in same


corporate culture throughout the alliance, which is a guiding force to similar thinking.


All the member airlines have to fine-tune connection process and enhancing schedule coordination in order to provide the customers with better connectivity and less waiting time. Punctuality of the flights is one of the major issue needed to be stressed upon. Alliance should also start building and improving facilities like waiting lounges, baggage claim offices, cafeteria/restaurants at key hubs to provide delight service to its customers; as well the alliance can benefit from sharing the technological advancements between members.


Alliance would also save lot of costs if it purchases from suppliers as one entity and not as individual airlines. Since many of the suppliers to the airline industry are situated in the alliance,


a special price for the member airlines would decrease the cost appreciably for these members. All the members of the alliance should evaluate their value chain components by doing cost-benefit analysis and try to reduce the former with respect to the best practices/benchmarks; with this, they can make objective decisions about outsourcing benefits and divesting opportunities.


d) Learning and growth perspective


The strategic objectives for this perspective are


Core competencies & skills Commit resources and time to build a level of skills and competencies necessary to execute the vision/goal. This could be achieved by having regular workshops, training sessions for the employees and can be measured for strategic competence availability and strategic systems availability or alliance should wait till it defines its measures.


Access to strategic information Development of knowledge management and sharing systems that are required to execute the strategy. This could be done by campaigning and spreading information about alliance and communicating its strategy to each employee and the usage of


knowledge across the organization for the successful implementation of the strategy. The means could be notice boards, brochures, yearbooks, fliers, pamphlets, IT, etc.


Organizational involvement During the formation of strategy, middle managers as well as functional managers should be involved and grant them the sense of ownership. Create a climate in which every employee of member airlines, is motivated and empowered to strive towards the vision. This could be achieved by implementing an employee survey designed to measure people’s awareness about the new strategy and their motivation to help the alliance achieve its targets.


The strategy map for the Star Alliance is shown in the appendix A-11.


The assumptions over which the above strategy was formulated are based on following factors


· Top management of every member airline should be committed for the same strategy in the alliance (no internal disputes and every member acts as a devoted “team player” to the goal and allocates resources )


· Certain regulatory environment in which the governments keep the trend of constant deregulation of the air travel industry in Europe.


· Economic stability in the world.


· No extreme appearance of terrorist acts or outbreaks.


· Stable oil prices (the Alliance is already hedged in fuel and may gain competitive advantage with higher oil prices).


· Continuing competition from the low cost carriers. i.e. low cost carriers are still in the business and consumers perceive them as safe to travel with.


· People’s culture is not an obstacle to the strategy’s implementation





6.0 References


· IATA. International Air Transport Association. · EASA. European Aviation Safety Authority.


· European Commission · www.klm.com


· www.britishairways.com · www.airfrance.com


· www.lufthansa.com · www.ryanair.com


· www.easyjet.com · www.iflyswa.com


· www.businessweek.com · www.cnn.com


· WestLB Panmuro � European Airline Review · www.arilinemonitor.com· www.skyteam.com


· Europa Online � http//europa.eu.int · Yahoo Finance


· Mercer Management Consulting Group. · Low-Cost Airlines gaining Momentum in Europe


· European Airlines Case Study.· Association of European Airlines - AEA · Strategic Management. Thompson and Strickland. McGraw Hill.


· The Strategy focused Organization � Kaplan and Norton · The Emerging Airline Industry By A. T. Kearney


· www.staralliance.com · www.oneworld.com


· SouthWest Airlines Case Study. HBR.· Managing Innovation in Services by Prof. K. Goffin · Competitive Strategy. Michael Porter.





Appendix A � Charts and Figures


Table A-1 � Revenue passenger kilometer � percentage change





Table A- � The three major alliances and its members


American Airlines, British Airways, Qantas, Cathay Pacific Airways, Iberia, LanChile, Finnair and Aer Lingus.


Aeromexico, Air France, Alitalia, CSA Czech Airlines, Delta, KLM and Korean Air.


Air Canada, Air New Zealand, ANA, Asiana Airlines, Austrian, bmi, LOT Polish Airlines, Lufthansa, Mexicana, Scandinavian Airlines, Singapore Airlines, Spanair, Thai Airways International, United and VARIG


Source www.oneworld.com / www.skyteam.com / www.staralliance.com


Chart A- � Projected Change in Inter-European Passenger Market Share





Source AEA, IATA, Mercer Analysis


Chart A-4 � Global Market Share of the main Airline Alliances





Chart A-5 � The Phases of Strategic Alliance





Chart A-6 � Five Forces Model of Competition





Chart A-7 � Buyer Segmentation


Chart A-8 � European Union Enlargement





Table A- � SWOT Analysis of the Star Alliance


SWOT � Star Alliance


Strengths· Innovation in services.· Strong capital structure.· Strong hedging discipline.· Strong financial planning strategy. Weaknesses· Limited cost reduction.· No strong overall presence in Europe.· Personal overcapacity· Structural problems (diversification).· Alliance partners are in trouble (United, Air Canada, SAS, etc.).· High cost per passenger.


Opportunities· High growth potential in the European market.· Potential for restructuring, particularly in passenger business. Threats· External shocks (economic growth, fuel prices, etc.)· Low Cost Carriers.· Weaker yields as compared to competitors.


SWOT analysis inspired by European Network Airlines - Playing the cycle � paper by Stephen Furlong, David Jennings, Mark Hannon and Barry Dixon


Table A-10 � Unit Cost per Passenger, Coverage and Growth rate


Players Unit Cost per Passenger[ € ] Coverage [ Destinations in Europe ] Capacity Growth rate in Europe in 001


Low Cost Carriers 4 15 to 85 -


Star Alliance 67 15 1.0


Sky Team 5 16 1.6


One World 16 176 .1


Source web pages of the involved members


Table A-11 � Strategy Map








Chart A-1 � Strategic Group Map of Alliances vs. Low-Cost & Charters


INDEX


1. Introduction


. Macro Environment


a. Economy at Large


b. Legislation and Regulation


c. External Shocks


d. Technology


. Immediate Competitive Environment (Five Forces Model)


a. Rivalry Among Competitors


b. Substitutes


c. Barriers to Potential New Entrants


d. Buyers


e. Suppliers


4. Strategy Recommendations


a. Low-Cost / Low-Price Strategy


b. Alliance Expansion Strategy


c. Balance ScoreCard Strategy - “If you can’t measure it, you can’t manage it”


d. Selected Strategy


5. Implementation


6. References


Appendix


Executive Summary


This case study attempts to understand the developments and strategic alliances that have occurred in the airline industry by using a series of tools for analysis commonly used in business. It identifies the alliance with the least favorable position in the industry in Europe and suggests a strategy and its implementation that would enable it to perform better.


1.0 Introduction


The traditional airline industry has experienced a transformation process in recent times due to the intense levels of competition and the global economic slowdown. To get around these problems, the traditional players have formed global alliances; by creating such alliances, the airlines attempt to offer additional destinations to their clients without costly investments and to decrease the unit cost per passenger.


The main European carriers have grouped into three different main alliances Sky Team (led by Air France), One World (led by British Airways) and Star Alliance (led by Lufthansa).


The airline industry deregulation in Europe has enable the entrance of new players, the so-called low-cost carriers, into the market. The tremendous success of these newcomers, such as EasyJet, Ryan Air, German Wings, etc, has put a lot of pressure on the traditional players.


External unpredicted events like September 11th and the SARS outbreak have also challenged the airline industry. The response of the alliances to all these challenges will be critical to determining their future competitive position within the airline industry.


.0 Macro Environment


.a Economy at Large


The airline industry all around the globe is heavily dependent on the overall economic situation that the world is experiencing. The more money people have to spend, the more likely they are going to spend it in leisure and travel.


.b Legislation and Regulation


Over the last decade, European aviation has moved from a highly regulated market, with little or no competition at all, to an open sky policy. At present, any airline with an Air Operations Certificate in the European Union may operate any route within the Union, including flights within other countries. But in practice, these airlines are often aligned to a single hub for operations (profit sanctuary).


.c External Shocks


The air travel industry in Europe is a very sensitive industry due to the dependency on people’s perception regarding safety. External shocks in the last few years have severely affected air travel industry around the world; September 11th and paranoia following up this event considerably lowered the demand for airline services, the SARS outbreak in Asia also represented a slump in sales for many airlines around the world (40 to 50% drop in Asian to & fro traffic ).


Direct effects of these events were also felt in the European air travel industry, i.e. it resulted in reduced revenues (appendix A-1).


.d Technology


The Internet era has revolutionized the way that airline tickets are booked. Now, buyers have first hand information about ticket prices, schedules, connections, updates, etc. at just click of the mouse sitting anywhere in the world. The airlines are using new technologies to reach new customers and to lower their overall operating costs. Internet provides an option for the airlines to sell their tickets online in addition to conventional distribution channels such as travel agencies.


.0 Immediate Competitive Environment (Five Forces Model)


.a Rivalry among competitors


Currently the most important European traditional airlines are grouped in three different alliances (see table A- in the annex). The Star Alliance was established in 17. It is the largest of the alliances with a global market share of . % (see chart A-4). It has access to 700 airports in 18 countries . The One World Alliance was launched in 18. It has a global market share of 17.8 %. With 16 different country destinations, it serves more countries than any other alliance. The Sky Team is the youngest alliance of the big three, formed in 1. It has a global market share of 11. %. The alliance flies to 51 airports in 114 countries worldwide. This year, Air France and KLM (ex-member of the Wings alliance) unveiled a merger deal that will create Europes largest carrier. The Italian airline Alitalia has expressed interest in joining this new company. The following table shows some relevant facts about each alliance


Alliance No. of Partners Countries Served Revenues(approx) Fleet PassengersServed


Star Alliance 16 18 $ 67.5 Bill. ,058 Mio.


One World 16 $ 51.0 Bill. 1,6 0 Mio.


Sky Team 7 114 $ 56.0 Bill. 1,44 48 Mio.


In order to achieve economies of scope, European carriers came up with three pronged approach 1) to have dominant market position in the domestic market. ) to gain foothold other European markets. ) to establish a global presence.


European airlines entered these strategic alliances though code sharing agreements, way of equity purchases, wet leases and franchising agreements, but now they are in phase two or three of the alliance formation (see appendix A-5 for further reference).


Alliances offer the following advantages to its members


1) Reach of seamless service networks Increase of numbers of routes and destinations. By means of alliances, airlines manage to overcome legal barriers for entering foreign markets.


) Enhance traffic fleet With linkage of airline networks the airlines can increase their load factor with the improved feed. Also, flight frequency can be increased without augmenting the size of the fleet.


) Cost reduction Partners of the alliances can have benefits of attaining the economies of scale (through joint operations of air and ground services) and scope.


4) Service quality improvement Ease of online connections, frequency and schedule convenience are enhanced by alliances. They also increase itinerary choices and reduce waiting time for passengers.


5) Marketing advantages Members of the alliances benefit from common marketing campaigns and frequent flyer programs.





Traditionally the European airline market has been controlled by the national airlines; however, the supremacy exerted by the main players has been challenged over the last decade by the emergence of low cost competitors in the market. The business strategy of the low cost group is centered on offering low-price tickets compared to traditional players. The great success of these new players is partially based on the efficient usage of the information technology, i.e. internet for selling tickets, resulting in reduced advertising and distribution cost. While the traditional players try to distinguish themselves from their competitors by offering differentiated service, the low cost carriers offer no frill service on board, e.g. no free food and drinks. Further cost reduction is achieved by operating a fleet of similar aircrafts, with catering space being used for more passenger seats and establishing a long-term relationship with suppliers, which positions them to bargain better. Since most of these new players use secondary airports and no-catering services, it enables them to reduce the turnaround time. According to Aviation Economics, a London consultancy, low-cost carries get 11 hours flying per day out of each aircraft, compared with about only hours for a traditional carrier . All the above factors result in considerable operating cost reduction. Despite the fact that the newcomers account only for approximately 5 % of the European market share, they are expected to gain up to 5 % of the market by 010 at expenses of the traditional and charter airlines (see chart A- in the annex). At the moment these newcomers do not offer overseas transportation services.


Another competing group of airlines consists of the charter operators. These airlines have lost market share in recent times to the new entrants and are supposed to loose even more (see appendix A-). Their strategy is to offer all-inclusive package to the clients, i.e. transport and


accommodation, and hence they depend on the development of the leisure travel industry. In Germany, tour operators are moving into the low-cost sector, e.g. TUI, Europe’s biggest holyday company, opened its low-cost carrier named Hapag-Lloyd Express.


.b Substitutes


Passenger transport by road in the 15 European Union countries increased by 7 % only in 000. Between 170 and 000 the railway’s share for passengers shrank from 10.% to 6.%. However, the European Commission plans to support environmental friendly transport systems such as railways and waterways . Therefore, the airlines will face some competition from state-run railway networks in the future, especially on the lucrative, heavily used long-distance routes (roughly 400 to 700 km). Hence, the threat coming form this sector is considered as medium.


.c Barriers


This industry’s main barrier is large capital needed to acquire airplanes. But this barrier can be easily overcome by leasing new aircrafts or purchasing second hand airplanes. Outsourcing of maintenance and facility services can help the airlines to compete at lower costs and consequently let new entrants lower these barriers. Another barrier was represented by airplane manufacturers, but right now they are willing to sell their products, spare parts and maintenance knowledge to any customer for a price. One of the most difficult obstructions for a new comer is characterized by charges the airports apply for the hub services.


The Open Sky policy in the European Union has substantially reduced the barriers for the airlines, unveiling an opportunity for new savvy entrants. Distribution centers such as travel agencies and airport counters were also a barrier to be considered, because they were traditionally





seen as distribution centers. But now, with the internet, airlines can move around these barriers by offering these services themselves.


Therefore, entry barriers in the air travel industry are not difficult to overcome.


.d Buyers


Buyers are differentiated in the airline industry as first class buyers, business class buyers, tourist / travelers class and economy class buyers (appendix A-7). Each buyer segment presents different needs and purchasing power. Buyers in the Internet era have better and more accurate information than ever before. Even though demand elasticity for the airline industry is growing as people have more choices of airlines delivering comparable services, many airlines still fix prices corresponding with the demand and the time of the year, and the customers still have to cope up with the prices the airlines arrange. Frequent flyers and corporate buyers enjoy special benefits from these airlines. Even though intense competition between airlines has brought prices down to attract customers, they do not have much of a bargaining power.


.e Suppliers


Major Airline Industry Suppliers


· Airplane Manufacturing and Leasing (mainly Airbus and Boeing)


· Fuel Suppliers (e.g. Royal Dutch Shell, Exxon Mobile, Chevron Texaco, etc)


· Caterers/Maintenance Crew (e.g. Lsg Sky Chefs, Gate Gourmet, Servair, Allied Pilot Association (APA), Association of Flight Attendants (AFA), etc)


· Airports and Airline Ticketing Software Providers (Amadeus, Galileo, etc.)





Bargaining Power of Suppliers Factors relating to bargaining power of the Suppliers


· Concentration of Suppliers in the industry. Suppliers are concentrated within the Airline Industry. Supplier concentration makes it very difficult for competitors to exercise leverage over the supplier and obtain lower price or play one supplier against other. Thus, suppliers command a substantial bargaining power in the airline industry.


· The threat of forward integration. The threat of forward integration is low. It is unlikely that Boeing, for instance, would staff flight attendants, commercial pilots and a maintenance crew and operate flights all over the continent.


The appendix A-6 represents the Five Forces Model by M. Porter.


The appendix A-1 shows a strategic group map displaying the different competitive positions that rival firms occupy in the industry.


A SWOT Analysis (see appendix A-) was performed to identify the Star Alliance’s Strengths and Weaknesses, and of examining the Opportunities and Threats they face. This SWOT analysis is limited to the European airline market.


None of the alliances has mentioned a clear vision and mission statement. For the strategy recommendation we formulate a vision and mission statement for the selected alliance.


4.0 Strategy Recommendations


As the situation analysis above suggests, the least favored alliance in Europe in terms of cost per passenger and geographical coverage is the Star Alliance (appendix A-10). The following strategic recommendations are focused on increasing the performance and presence of the Star Alliance in Europe. The strategy recommendation is based on the following mission and vision statement


Vision


To become the world market leader in terms of service, quality, cost and market share by 010.


Mission


Service is our vocation. We endeavor to offer our employees job security, good working conditions, career opportunities and convincing corporate ethics. Our staff honor that endeavor with customer friendly service and thereby underpin future growth. We are committed to creating sustainable value for our investors. We are fully committed to keeping a balance between sustainable development and care for the environment.


4.a Low Cost- Low Price Strategy


The Star Alliance players in Europe are facing extensive rivalry by the low cost carriers and at the moment are struggling in many of their routes to break even. The buyer focus has undergone a drastic change from being service sensitive to price sensitive.


The Star Alliance members have the financial resources, reputation and experience that would enable them to integrate one of the low cost carriers into the alliance. The members have to convince a company already in the market, with experience and an intricate network of destinations over Europe to join the alliance.


Integrating a low cost carriers in the market to the alliance would involve an overhaul in the service of the new member, as the customer experience has to be completely inclusive, and therefore increase slightly the costs. Primary key points for this would be unique baggage check in and coordination in the connections of the partners within the alliance.


These would also enable the partners of the alliance to increase their load factors, for the low cost carrier would bring the ability to access another customer segment and open new routes; while the full service carriers might as well increase the load of passengers in their aircrafts, increase the geographical reach of the alliance to small hubs that would otherwise be inaccessible due to high costs of the airlines and cut costs by divesting certain non profitable or low profit routes that can be operated by the low cost partner, and compete with other European full service carriers over some destinations (France, Ireland, England, Italy, etc.) and not competing with the members of the alliance on some special routes.


4.b Alliance Expansion Strategy


The entrance of 10 new members into the European Union from 1st. May 004 will increase the existing population of the common market by almost 80 million inhabitants (appendix A-8). The membership of these new comers in the Union will enable them to perform better economically, and as there is a strong relationship between well economical being and the demand for air travel, the European airline industry will also benefit from the enlargement.


The Star Alliance has the chance to take advantage of the new opportunities due to the Open Sky treaty allowing point to point connections within any country in the European Union. Star Alliance already went in this direction by accepting the Polish Airlines LOT as a member of the


Alliance. LOT covers more than 0 cities in Europe, 16 of them in Eastern Europe. Warsaw can be used as an important hub for the north-eastern European area.


4.c Balance ScoreCard Strategy - “If you can’t measure it, you can’t manage it”


1.- Financial Perspective. Star Alliance can start its Scorecard by defining its high level financial objective to increase return on capital employed (ROCE) from its current level within next five years. This could be difficult to achieve in mature, slow growth airline industry but not impossible. Star Alliance can start with using two financial themes productivity & growth.


Productivity theme consists of two components cost reduction and asset intensity. Cost reduction can be measured by operating cash expenses versus industry, with the goal of being the cost leader within the alliances. Asset productivity would enable the alliance to handle greater volumes from its growth strategy without expanding its asset base.


Growth theme also can consist of two components Volume growth in terms of passengers/ load factor and growth of niche business passengers. So it has two measures for these growth components volume growth rate versus industry growth rate and percentage of volume in premium sales.


.- Customer Perspective. Identify different customer segments. Measuring total market share would represent an undifferentiated strategy, perhaps no strategy at all, attempting to be all things to all customers. Star Alliance must define the value proposition it must deliver to attract, retain and deepen its relationship with customers in the three target segments. Market research is critical. The alliance must give its customer a great buying experience. The attributes should add on to become “fast and friendly service”. Also special focus should be paid on environment and


safety. It would contribute to the customer’s perception of Star Alliance being a good citizen in the community.


.- Internal Business Process Perspective. The important internal processes identified are


Develop new products & services Airline members can develop new products and services to enhance the buying experience of consumers. Share Process Optimization Since many of the airline suppliers are placed within the industry and specifically within the alliance, members can gain a lot by reducing cost by sharing their suppliers. As a whole the alliance would have more bargaining power to exercise to external suppliers.


4.- Learning and Growth Perspective. The strategic objectives for the learning and growth perspective are


a) Core competencies & skills Encourage and facilitate the employees of member airlines to gain a broader understanding of the services. Build the level of skills and competencies necessary to execute the vision/goal. Develop the leadership skills required to articulate the goal/vision and promote integrated thinking.


b) Access to strategic information Develop strategic information required to execute the strategy.


c) Organizational involvement Enable the achievement of the vision by promoting an understanding of the organizational strategy and by creating a climate in which member airline employees are motivated and empowered to strive toward the vision.


4.d Selected Strategy


The implementation of the strategy is based on the Balance ScoreCard Strategy which is an all-inclusive strategy, i.e. it increases shareholder value, customer value and takes the employees of the alliance into accountability for the implementation. The low cost-low price strategy was


rejected because, if implemented, it would result in restructuring of the business model of the alliance, this resulting in a conflict of core competences needed in each business model increasing the probability of failure. The expansion strategy is already being persuaded by the alliance by the inclusion of LOT; however, another feasible strategic move could be to include a second East European airline as a Star Alliance member. Malev Hungarian Airlines could be a good candidate for further expansion. It is not a member of any alliance yet, and it has a good potential in Central and South East Europe.


5.0 Implementation


Balance Scorecard is a proven strategy formulation model for Strategic Alliance of Phase and Phase types (see appendix A-5 for further reference). As mentioned before, the Balance Scorecard measures strategy with four perspectives in the given order.


The objectives while implementing the Balance Scorecard strategy are to ‘Align the Alliance to strategy’ (change the organizational structure if needed), to ‘Align the Strategy to Operational Terms’ (value chain and external linkages), and to ‘Make Strategy Everyone’s Everyday Job’ (link every employee by means of communication, delegation, cooperation and planning).


a) Financial Perspective


Star Alliance‘s ScoreCard might start with an important financial objective to increase return on capital employed (ROCE). This could be difficult to achieve in mature, slow growth airline industry but not impossible. Star Alliance should look at two key financial themes productivity & growth.


Productivity theme consists of cost reduction and asset intensity. To become an industry cost leader in terms of operating cash expenses per passenger, alliance should set a long-term target


for minimization of expenditure; this target should be broken into quarterly or yearly milestones for controlling the whole process. Asset productivity could be achieved by intensive utilization of huge fixed assets which alliance has. Training the human resource on Time Management and Service Management will enhance productivity. Both can go hand in hand if they apply “KISS” principle in delivering service i.e. Keep it short and simple. Some of the member carriers have fleet which exceeds the capacity, so at times many of these carriers fly at half or even less load. Proper utilization of these carriers can be achieved by doing away with overcapacity and flying to only profitable routes. Member airlines should giveaway the non-profitable routes, as they are not adding any value to the shareholders. This would also decrease the operational expenses and thus increase the return on capital employed.


Growth consists, as well of two components Volume growth in terms of passengers/ load factor and growth of niche business passengers. The financial perspective could be achieved by having defined customer perspective and internal business perspective having a differentiated strategy that focuses on resource efficiency maximization.


b) Customer Perspective


Identify different customer segments (see appendix A-7). The alliance ought to define the value proposition it must deliver to attract, retain and deepen its relationship with customers in the three target segments i.e. First Class, Executive Class, Tourists/Travelers Class. The customer of the Star Alliance should be delighted by the service received and maximize his/her bliss in every defining moment in the service delivery.


Factors identified that contribute to the service perception of the customer include the following


· Immediate and easy access to tickets.


· Good point-to-point connectivity (number of routes).


· Reduced waiting time.


· Satisfactory onboard service


· Less passenger baggage lost.


· Staff friendliness (consider all defining moments � greetings, service delivery, augmentation, etc.).


· Availability of add-on services like hotel bookings, car rentals etc.


· More frequent flyer flexibility.


These attributes should add on to become ‘fast and friendly service’. For achieving customer perspective, alliance should create a dedicated workforce or organization within itself which would then train the employees of all the member airlines so as to have a similar quality service being delivered to customers anywhere in Europe. Alliances should promote the differentiation in service by having regular marketing programs via sponsoring conferences, festivals, sporting events, fairs, exhibitions, etc. under star brand. To check the quality of the service Star Alliance can use the concept of Mystery Shopper. This Mystery Shopper would then use the service of all the member airlines and advice to improve the service in any airline wherever there is a bottleneck. Special focus should be paid on environment and safety, it would contribute to Star Alliance being a good citizen in the community.


Since many of these airlines have ticketing agents to sell and deliver the tickets to the end customer, they should be component of strategy formulation. Have an objective to increase the agent’s profitability as well. This would result in positive sum game, increasing the size of reward that could be shared between agents and airlines, so possible synergies would develop.


Star Alliance customer strategy involved a virtuous cycle, motivated and independent agents would deliver a great buying experience that would attract an increasing share of targeted customers. If possible, have an analyst to look at the ticket selling websites of the member airlines to check the friendliness and informativeness of these websites. The strategy would generate the quality revenue growth for alliance airlines’ financial strategy.


c) Internal Business Process Perspective


The important internal processes as identified are


· Develop new products & services.


· Share Process Optimization.


· Value Chain Integration.


This could be achieved by having a dedicated organization/employees to develop new products committed to create value to customer. The process would result in delivering a great buyer experience e.g. Star Alliance has already come out with Mobil Link, special fares for world tour, Asia-Pacific region, innovation in seat configuration, non-smoking air carriers, duty free sales, etc. They can also have regular brainstorming sessions by the employees of member airlines on a monthly or quarterly basis and also could come out with an innovative approach such as “War Room”. A key concept in the management of services is the “servicescape”, i.e. the environment in which consumers receive the service. Therefore, the alliance should collaborate with the airplane manufactures to provide more innovative cabin designs, within the limitations of cost and space available . All the employees of the member organization should take part in being innovative in order to reduce the cost and enhance productivity. This would also result in same


corporate culture throughout the alliance, which is a guiding force to similar thinking.


All the member airlines have to fine-tune connection process and enhancing schedule coordination in order to provide the customers with better connectivity and less waiting time. Punctuality of the flights is one of the major issue needed to be stressed upon. Alliance should also start building and improving facilities like waiting lounges, baggage claim offices, cafeteria/restaurants at key hubs to provide delight service to its customers; as well the alliance can benefit from sharing the technological advancements between members.


Alliance would also save lot of costs if it purchases from suppliers as one entity and not as individual airlines. Since many of the suppliers to the airline industry are situated in the alliance,


a special price for the member airlines would decrease the cost appreciably for these members. All the members of the alliance should evaluate their value chain components by doing cost-benefit analysis and try to reduce the former with respect to the best practices/benchmarks; with this, they can make objective decisions about outsourcing benefits and divesting opportunities.


d) Learning and growth perspective


The strategic objectives for this perspective are


Core competencies & skills Commit resources and time to build a level of skills and competencies necessary to execute the vision/goal. This could be achieved by having regular workshops, training sessions for the employees and can be measured for strategic competence availability and strategic systems availability or alliance should wait till it defines its measures.


Access to strategic information Development of knowledge management and sharing systems that are required to execute the strategy. This could be done by campaigning and spreading information about alliance and communicating its strategy to each employee and the usage of


knowledge across the organization for the successful implementation of the strategy. The means could be notice boards, brochures, yearbooks, fliers, pamphlets, IT, etc.


Organizational involvement During the formation of strategy, middle managers as well as functional managers should be involved and grant them the sense of ownership. Create a climate in which every employee of member airlines, is motivated and empowered to strive towards the vision. This could be achieved by implementing an employee survey designed to measure people’s awareness about the new strategy and their motivation to help the alliance achieve its targets.


The strategy map for the Star Alliance is shown in the appendix A-11.


The assumptions over which the above strategy was formulated are based on following factors


· Top management of every member airline should be committed for the same strategy in the alliance (no internal disputes and every member acts as a devoted “team player” to the goal and allocates resources )


· Certain regulatory environment in which the governments keep the trend of constant deregulation of the air travel industry in Europe.


· Economic stability in the world.


· No extreme appearance of terrorist acts or outbreaks.


· Stable oil prices (the Alliance is already hedged in fuel and may gain competitive advantage with higher oil prices).


· Continuing competition from the low cost carriers. i.e. low cost carriers are still in the business and consumers perceive them as safe to travel with.


· People’s culture is not an obstacle to the strategy’s implementation





6.0 References


· IATA. International Air Transport Association. · EASA. European Aviation Safety Authority.


· European Commission · www.klm.com


· www.britishairways.com · www.airfrance.com


· www.lufthansa.com · www.ryanair.com


· www.easyjet.com · www.iflyswa.com


· www.businessweek.com · www.cnn.com


· WestLB Panmuro � European Airline Review · www.arilinemonitor.com· www.skyteam.com


· Europa Online � http//europa.eu.int · Yahoo Finance


· Mercer Management Consulting Group. · Low-Cost Airlines gaining Momentum in Europe


· European Airlines Case Study.· Association of European Airlines - AEA · Strategic Management. Thompson and Strickland. McGraw Hill.


· The Strategy focused Organization � Kaplan and Norton · The Emerging Airline Industry By A. T. Kearney


· www.staralliance.com · www.oneworld.com


· SouthWest Airlines Case Study. HBR.· Managing Innovation in Services by Prof. K. Goffin · Competitive Strategy. Michael Porter.





Appendix A � Charts and Figures


Table A-1 � Revenue passenger kilometer � percentage change





Table A- � The three major alliances and its members


American Airlines, British Airways, Qantas, Cathay Pacific Airways, Iberia, LanChile, Finnair and Aer Lingus.


Aeromexico, Air France, Alitalia, CSA Czech Airlines, Delta, KLM and Korean Air.


Air Canada, Air New Zealand, ANA, Asiana Airlines, Austrian, bmi, LOT Polish Airlines, Lufthansa, Mexicana, Scandinavian Airlines, Singapore Airlines, Spanair, Thai Airways International, United and VARIG


Source www.oneworld.com / www.skyteam.com / www.staralliance.com


Chart A- � Projected Change in Inter-European Passenger Market Share





Source AEA, IATA, Mercer Analysis


Chart A-4 � Global Market Share of the main Airline Alliances





Chart A-5 � The Phases of Strategic Alliance





Chart A-6 � Five Forces Model of Competition





Chart A-7 � Buyer Segmentation


Chart A-8 � European Union Enlargement





Table A- � SWOT Analysis of the Star Alliance


SWOT � Star Alliance


Strengths· Innovation in services.· Strong capital structure.· Strong hedging discipline.· Strong financial planning strategy. Weaknesses· Limited cost reduction.· No strong overall presence in Europe.· Personal overcapacity· Structural problems (diversification).· Alliance partners are in trouble (United, Air Canada, SAS, etc.).· High cost per passenger.


Opportunities· High growth potential in the European market.· Potential for restructuring, particularly in passenger business. Threats· External shocks (economic growth, fuel prices, etc.)· Low Cost Carriers.· Weaker yields as compared to competitors.


SWOT analysis inspired by European Network Airlines - Playing the cycle � paper by Stephen Furlong, David Jennings, Mark Hannon and Barry Dixon


Table A-10 � Unit Cost per Passenger, Coverage and Growth rate


Players Unit Cost per Passenger[ € ] Coverage [ Destinations in Europe ] Capacity Growth rate in Europe in 001


Low Cost Carriers 4 15 to 85 -


Star Alliance 67 15 1.0


Sky Team 5 16 1.6


One World 16 176 .1


Source web pages of the involved members


Table A-11 � Strategy Map








Chart A-1 � Strategic Group Map of Alliances vs. Low-Cost & Charters








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