Strategy and Change Management

Airline Simulation Report

By:

Cristina Scarlat (ID:1523080),

BA (HONS) BUSINESS
M ANAGEMENT
Contents
1. Introduction ........................................................................................................................ 1

2. Executive Summary............................................................................................................ 1

3. Inherited Strategy ............................................................................................................... 1

4. Mission Statement and Strategic Vision ............................................................................. 2

5. Business Objectives ............................................................................................................ 2

6. Strategic, Operational and Financial Evaluation ................................................................ 4

7. Teamwork Evaluation......................................................................................................... 6

Team Leadership .................................................................................................................... 6

Responsibilities Within The Group ........................................................................................ 6

8. Final observations and conclusion ...................................................................................... 7

Appendices ................................................................................................................................. 8

SWOT analysis ....................................................................................................................... 8

PESTLE analysis .................................................................................................................... 8

Key Success Factors ............................................................................................................... 9

Stock Price.............................................................................................................................. 9

Income & Expenditure ......................................................................................................... 10

Net Profit .............................................................................................................................. 11

Cumulative Net Income ....................................................................................................... 11

Ending Balance Sheet........................................................................................................... 12

Ending Cash Flow ................................................................................................................ 13

 Quarterly Decision Making Log .......................................................................................... 14

Quarterly Decision Making Log (Quarter 1) .................................................................... 14

Quarterly Decision Making Log (Quarter 2) .................................................................... 15

Quarterly Decision Making Log (Quarter 3) .................................................................... 17

Quarterly Decision Making Log (Quarter 4) .................................................................... 18

Quarterly Decision Making Log (Quarter 5) .................................................................... 19

Quarterly Decision Making Log (Quarter 6) .................................................................... 20

Reference List .......................................................................................................................... 22

 1. Introduction

FC Airline within a year ago has been an airline company which has been small managed by

a team of people which how no experience. It has been a cross road for the organization and

they are needing a strategy which must be new and a new team of decision making.

This report is showing how the organization is being changing within the last years and

how they are evolving from a regional small organization into an organization which is

having a greatly potential and future within the industry of airline.

2. Executive Summary

Before getting the organisation charge, FC Airline had struggled with being able to serve

routes and the towns which are small which have not been covered by a big organisation of

airline. Mostly because the airports locally lack of appropriate facilities and the demand it is

being lowly (the targeted cities are having a lowly population).

The big challenges to make changes among the organisation have been a capital lack and

also the structure which has been fleet (aircrafts have been suitable for the growth regarding

the terms of the services of quality, fleet and routes). All the decisions and changes made

within the process have been presented among this report.

3. Inherited Strategy

We are considering into a necessary way for conducting both SWOT and PESTLE reports

and analyzing them into an appropriate manner for approaching the appropriate strategy for

the organization. These are analyzing could be seen within the appendix. Also we have

identified and analyzed the Key Success Factors within the airline (see appendix)

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 4. Mission Statement and Strategic Vision

By the use of the techniques and the tools mentioned above we deemed appropriately for

pursuing a strategy of differentiation for FC Airline. Meaning the goal within two years from

now is for creating services which are unique which cannot be copied easily and enabling us

a price premium for our services within the multiples markets. (Thompson and Strickland,

2001:26). By the look at the analysis SWOT the conclusion have been needed for facilitating

and improving the growth while eliminating the trends within profits.

5. Business Objectives

Focusing on the Key Success Factors which have been presented into the appendix we

have gained understandings that we need for firstly achieving those objectives which are

closely linked for each over. As Thompson and Strickland said, effective objectives business

might be utilized for converting the strategic overall vision within the specific target

performance. (2001:27) However, even though we are focusing our decision to be able to

achieve the appropriate results, all the objectives would be specifically as possible, rather

than to set a generically goal such as to decrease the costs or for increasing the sales.

(Thompson and Strickland, 2001:28) Also, a timeframe should be defined for the objectives.

As seen within the below picture, strategically planning represents a process which is

involving lots of other processes.

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For that, we have made a definition of the following goals for our plan two-year:

1. To improve the services quality by making investments of large money amount, on a

term which is long but also keeping the growth and the profit under a control?

2. Renewal of fleet;

3. Routes expansion;

4. To expand the additionally services of airline (to start an rental auto of business);

5. To invest into hirings persons for sales and marketing.

6. To improve the level of maintenance;

7. Increase the training budget;

8. To make improvements into advertisings;

9. To try into selling the tickets nationwide within an electronically system for

decreasing costs.

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 6. Strategic, Operational and Financial Evaluation

Within the 4 quarters since taking over the organization we have achieved only some goals

which have been set within out initially plan, most of all because we are not having focus on

the strategically offensive moves as suggested by Thompson and Strickland (2001). This

might be seen into the financially results and also into the expenses and incomes results (see

appendix). We thought a quickly moves such as to sell stocks for increasing cash and

acquiring various aircrafts has been too soon within the firstly years. Which has been a badly

decision in comparison with the rest of the industry, who is rapidly moving within increasing

the routes number and the airplanes. What have we achieved within these firstly quarters

have been the goals secondary which we have set. Into quarter 2 we have managed for

externalizing thee tickets selling (distribution of the picket channels have been sold for a 5%

fee from the ticket price but they also have offered discounts for buyers such as 3-5% per

ticket.

Overall, no problem which is involving the additionally costs. The revenues from the

tickets have been enough for covering the resulted losses from payments regarding fees. A

plus into our management within the firstly 4 quarters has been that which has kept the

aircrafts into an appropriate operation level (there has been just a single incident within the

period while other planes within the industry had important issues with their aircrafts). This is

because we have set the level two of maintenance for our planes which had costs which have

being bigger but have been safer for the passengers which increased the reliability into the

company.

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Among the 4 quarter, after there has been noticed a small but constantly growth into the

revenues net we have considered necessary for adding more services to the airline and we

began an rental auto business. This has been an expense into the next quarter and the cash

flow and the net profit have been affected. After finding a solution to the issues regarding

cash a loan on a long term of $2.5m (to cover losses and purchasing 2 more aircrafts) into the

quarter 6 we have made the selling decision one of our plan and adding 2 more with a better

condition to transport: British Aero 31 aircraft (this is having a services offer cabin) and a

first jet for our airline (Embraer ERJ135) for pursuing the initially goal which is attracting

luxury passengers.

Within this period the prices of stocks have seen some changes but overall we had the

ability of finishing the first year with smaller increases of 1.06 per share. We have also

succeed after four quarters into rebalancing again the profit and we are finishing next quarters

again with an appropriate profit margin, seeing below:

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 7. Teamwork Evaluation

Team Leadership

Florin Bulita has been assigned our leader as his skills organizationally and communications

are being probably the appropriate one within us and also he it is interested into the business

because he is also the manager of its own limited company. Meetings and talks have been set

up by him and also he is having the responsibility to look after the decisions made by the

team also checking the data entered correctitude. When the team has been assembled he has

designed also every member of the task among the process of decision making.

Responsibilities within The Group

Florin Bulita - Marketing: Florin is dealing with the budget of marketing, to hire

salespersons for increasing the revenues and also for deciding into offering passengers a

magazine inflight. Budget has been set by him for the activities and for the media to advertise

have been picked the lots of sources such a newspapers, billboards, TV, radio, online

website.

Cristina Scarlat - Financing: Within every meeting, Cristina had the responsibility with

analyzing all the fundings available and also the one is keeping a closely look of our

expenses into making sure that no expenses are being made which cannot be covered into the

next quarters.

Florina Simion - Fares: Florina has been prices analyst, always to make sure that no

substantially increases of the fares is putting into practice unless being justified.

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Cristian Pal Fleets and routes: Cristian have been our routes/ fares analyst, responsible to

estimate he necessary capacities for serving the router chosen and also the engineer with

regards into the consumptions fuel, costs maintenance, purchases aircrafts and the decisions

fleet overhaul.

8. Final observations and conclusion

For all the team of management which has been involved into the process such as ours we

are recommending them for focusing on the strategy luxury for the airline. Getting the ways

which are cheap into doing business into a niche such as this is not working within a long

term. We are analyzing in one of our meetings the potentially outcomes for the sales chosen.

The figures is suggesting a totally disaster. It is not having the meaning that the approach

luxury is the only one. The strategy on the long term should focus on searching a lit a bit

more and various methods and ways for expanding and for improving the business. There is a

good chance for predicting the weather into London rather than forecasting the changes

within the industry of airline. For example the prices of the fuel, they can go within a low

level and tomorrow could sky high because of certain politically tensions with Arab world.

We could have done an appropriate job if appropriate decisions are being taken within the

appropriate moments such as the stocks selling for increasing the capital and buying more

aircrafts. But the strategy on the secondly year into forecasting, will prove that our initially

plan it could be out into practice and the organization is becoming a leader within the

industry.

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Appendices

SWOT analysis

PESTLE analysis

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Key Success Factors

Stock Price

9
Income & Expenditure

10
Net Profit

Cumulative Net Income

11
Ending Balance Sheet

12
Ending Cash Flow

13
Quarterly Decision Making Log

Quarterly Decision Making Log (Quarter 1)

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Quarterly Decision Making Log (Quarter 2)

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Quarterly Decision Making Log (Quarter 3)

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Quarterly Decision Making Log (Quarter 4)

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Quarterly Decision Making Log (Quarter 5)

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Quarterly Decision Making Log (Quarter 6)

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 Reference List

- Thompson, A.A., Strickland, A.J. (2001). Crafting and Executing Strategy. McGrw-

Hill/Irwin. New York. (17th ed.), pp.25-30;

- Johnson, G., Scholes, K. & Whittingham, R. (2006). Exploring Corporate Strategy,

Prentice Hall. England. (7th ed.), pp.136-138.

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