STRATEGIC MANAGEMENT

MPP 3053
UNITED CONTINENTAL HOLDINGS STRATGIC CASE
Prepare to : ABDUL AZIZ BIN ABDUL KADIR
Prepare by:
Mohamed Ahmed abdi A111164613
Abdikani Farah Abdi A111136113
Khalid Abdi Nur A112000413
Duong Tuan Anh-Muahammad A092039704

Overview
Company Overview
A brief history of United Continental
Holdings
Existing Mission and Vision
Statements
New Mission and Vision Statements
External Audit
Industry Analysis
Opportunities and Threats
EFE Matrix
CPM Matrix
Internal Assessment
Organizational chart
Strengths and Weaknesses
Financial Condition
IFE Matrix

Strategy Formation
SWOT Matrix
Space Matrix
Grand Strategy Matrix
Recommendation
United Airlines History
In 1926 Originating in Boise, Idaho, the carrier
flew the first Contract Air Mail flight in the U.S.
on April 6, 1926.

In 1933, United began operating the Boeing 247
the first all-metal airliner. It was able to fly a
transcontinental flight in 20 hours, which at the
time was very fast.

In 1961 to 1968 United merged with Capital
Airlines in 1961 and regained its position as the
United States' largest airline. In 1968, the
company reorganized, creating UAL Corporation,
with United Airlines as a wholly owned
subsidiary.

In 1982, United became the first carrier to
operate the Boeing 767, taking its first delivery
of 767-200s on August 19.


In 1985, United expanded dramatically by
purchasing Pan Aims entire Pacific Division,
giving it a hub at Tokyo's Narita International
Airport, and in 1991 purchased routes to London
Heathrow Airport from ailing Pan Am, making it
one of two US carriers permitted exclusive
access to Heathrow.

In 1995, United became the first airline to
introduce the Boeing 777 in commercial service.

During the September 11, 2001 terrorist attacks,
two of the four airplanes hijacked and crashed
by al-Qaeda terrorists were United Airlines
aircraft which created an airline industry
downturn.

In 2005, United announced it had raised US$3
billion in financing to exit bankruptcy and filed
its Plan of Reorganization, as announced, on
September 7, 2005.
Continental Airlines History
In 1934 Continental Airlines' history
dates back to 1934, when the carrier
was operated under the name of
Varney Speed Lines by its owners
Walter Varney and Louis Mueller.
They were operated out of El Paso,
Texas.
In July 1937, Robert Six changed the
name of Varney Speed Lines to
Continental Airlines and the carrier
moved its headquarters to Denver,
Colorado.
During the 1940' and 50's,
Continental Airlines was able to
expand its fleet of aircraft and
profits through its participation in
World War II by providing air
transportation to the military.
In 1983, Continental filed bankruptcy
with losses of ($218,000,000.).
By the end of 1984 Continental was
able to turn a profit. In 1986
Continental took over Frontier
Airlines and began flying its routes.

United Continental Holdings History
Early in February 2008, United Airlines and Continental began advanced
stages of merger negotiations
In June 2008, CEOs of both United Airlines and Continental Airlines signed an
alliance pact presaging their eventual merger
On October 1, 2010, UAL Corporation completed its acquisition of Continental
Airlines and changed its name to United Continental Holdings, Inc.

Management
Jeff Smisek, President and CEO.
Mike Bonds, Executive Vice
President, Human Resources and
Labor Relations.
Jim Compton, Vice President and
Chief Revenue Officer.
Jeff Foland, Executive Vice
President and Mileage plus Holdings
LLC.
Nene Foxhall, Executive Vice
President Communications and
Government Affairs.
Keith Halbert, Executive Vice
President and Chief Information
Officer.
Brett Hart, Senior Vice President,
General Counsel and Secretary.
Pete McDonald, Executive Vice
President and Chief Operations
Officers.
Zane Rowe, Executive Vice President
and Chief Financial Officer

Combining these two companies is the best way to position ourselvesto thrive in the changing
and competitive airline industry. Continental is strong where United is weak; United is strong
where Continental is weak. Putting these two carriers together is a match made in heaven Jeff
Smisek
Existing Mission and Vision Statement
Existing Mission and Vision Statement was no written mission and vision statement and they
proposed a vision and mission and imply aspect of the mission and vision from both companies.
Vision statement proposed
United Continental Holdings vision is to create the world leading airline.
Mission statement proposed (actual):
The airline will focused on being the airline customers want to fly, the airline employees want to
work for, and the airline shareholders want to invest in.
Mission statement (modified)
The worlds most comprehensive global route network, including world class
international getaways to Asia , Europe ,Latin America, and the middle east
with nonstop or one stop service from virtually anywhere in the us.
Most modern and fuel efficient fleet and the best new aircraft order book
among us network carriers.
Industry leading frequent flyer program that will provide more opportunities
to earn and redeem miles worldwide.
Optimal hub locations in 10 cities, including hubs in the four largest cities in
the us.


Components
Customer
Products or services
Markets
Technology
Concern for survival, profitability, growth
Philosophy
Self-concept
Concern for public image
Concern for employees

External Analysis
External opportunities
With over 100 open skies agreements in effect, more access to international airports is allowed.
Maintenance operation center at SFO occupies 120 acres of land, 2.9 mil square feet of floor space, and nine
aircraft hangar bays, lease up for renewal in 2013 and able to renew through 2023.
Growing use of websites, alternative distribution systems, and new global distribution systems (GDS) entrants leads
to a predicted 87% for online air ticket sales in 2011.
Global penetration, in areas such as the pacific which accounts for only 17% of total revenue.
The aviation industry is growing by a projected amount of 11.0 billion which will ultimately enable more people to
fly.
United Continental will be affected by the growth in the tourism industry expected to grow 3.2% in 2011.
The merging of the two corporations, United and Continental is expected to deliver $1.0 billion to $1.2 billion in net
annual synergies on a run-rate basis by 2013, and between $800 million and $900 million in incremental annual
revenues.
United Continental Holdings Inc. establishes a joint venture with Air Canada will likely result in a substantial
lessening of competition on 19 trans-border city pair routes.
After merging and earning the extra percentage in revenue s by 1.0 billion, United Continental will show strong
liquidity give the new company a flexibility to pay down its debt.
United Continental made plans to increase WIFI capabilities in 200 domestic Boeing 737 and 757 aircraft equipped
with DIRECTV(R), providing onboard connectivity and more than 95 channels of live television programming to
customers in late 2010.

External Threats
Unstable fuel prices and availability can cause large expenses, accounting for 31% of total operating costs in 2010
With 72% of employees under labor organizations, union disputes, employee strikes, and other labor disputes are likely to
occur.
100% of United employees and 53% of Continental employees are covered by collective bargaining agreements (CBA),
significant increases in pay and benefits from new CBAs could financially harm the company
New open skies agreements decrease value of routes, caused United $29 million impairment charge in 2010 for indefinite-
lived Brazil route
With an aging fleet, UAL will have to soon start replacing or fixing their planes. With a large amount of planes this will
become very costly.
Illnesses could affect travel and decrease the amount of passengers flying, UAL reported that H1N1 cost them roughly $50
Million in related revenue.
The airline industry is vulnerable to terrorist attacks and other related security threats. The new threats have resulted in
new security measures which will increase the security related costs adding to the already high number of operating costs at
$22,253.
Customer prior dissatisfaction with either United or Continental may inflict buyers decision to choose new merged company
while united standing at 12th in customer dissatisfaction and Continental standing at 8th in 2010.
ARM Corp is trailing United Continental Holdings co. by just 1059 million standing in third place for top revenue for airlines
2010.
The company faces stiff competition from national and international airline companies which can affect competitive
pressures and ultimately lowering $3billion market cap.

Competitive Profile Matrix ( CPM )
UAL DAL AAMRQ

Critical Success factors Weights Rating
Weighted
Score Rating
Weighted
Score Rating Weighted Score


Advertising 0.08 4 0.32 4 0.32 3 0.24
Product Quality 0.10 4 0.40 3 0.30 3 0.30
Price Competitiveness 0.08 2 0.16 3 0.24 3 0.24
Financial Position 0.10 4 0.40 3 0.30 3 0.30
Customer Loyalty 0.14 3 0.42 4 0.56 3 0.42
Global Expansion 0.12 4 0.48 3 0.36 3 0.36
Market Share 0.07 3 0.21 4 0.28 2 0.14

Organization Structure 0.06 4 0.24 3 0.18 3 0.18
Customer Service 0.10 3 0.30 4 0.40 3 0.30
Production Capacity 0.10 3 0.30 3 0.30 4 0.40
Employee Dedication 0.05 3 0.15 4 0.20 3 0.15
Totals 1.00 3.38 3.44 3.03
Note: 1= major weakness, 2= minor weakness, 3= minor strength, 4= major
strength
According to the information from the table, one most important factor to being successful in the
industry is Customer Loyalty, as indicated by weights of 0.14. UAL is strongest on Advertising,
Product Quality, Financial Position, and Global Expansion. Organization Structure as
indicated by rating of 4, whereas DAL is strongest on Global Expansion. Overall, DAL has the
highest weighted score of 3.44, while UAL and AAMRQ have weighted scores are 3.38 and 3.03. So
the DAL is week among its major competitors.

The five forces of competition model will be used in order to do industry
environment analysis. Analysis of five forces in the industry allows the firm to
determine the industrys attractiveness in terms of the potential to earn
adequate or superior returns.
The model as following:

Industry Environment Analysis

There are the analyses of each of the five forces accordance to the model above.
1. Threat of the new entrants
a).Economies of scale is height in airline industry
b).Capital requirement is high, such as huge physical facilities and capital.
c).Switch cost is high. Airline firms use customer loyalty programs, such as airlines frequent flyer miles, to increase the
customers switching costs
So, the threat of the new entrants is high.
2. Bargaining power of suppliers
a).In most industries, satisfactory substitute products are not available to industry firms, means that bargaining power
of suppliers is much. But airline industry is different, because the demand for major aircraft also relatively low.
So, bargaining power of suppliers is little.
3. Bargaining power of buyers
a).Switch cost is high.
b).Most companies with multiple segments and without single large customer.
So, the bargaining power of buyers is little.
4. Threat of substitute products
a).The speed of air plane cannot be substituted by other transport tools.
So, the threat of substitute products is low.
5. Intensity of rivalry among competitors
a).There are numerous or equally balance competitors.
So, the intensity of rivalry among competitors is strong.
Allover airline industry has high entry barriers, suppliers and buyers with little bargaining power, few competitive
threats from product substitutes, but with a strong intensity of rivalry among competitors. As result, airlines industry is an
attractive industry.

External Factors Evaluation (EFE) Matrix
Critical Successful Factors Weight Rating Weight Score
Opportunities
1. With over 100 open skies agreements in effect, more access to international airports is allowed 0.04 3 0.12
2. Maintenance operation center at SFO occupies 120 acres of land, 2.9 mil square feet of floor space, and nine aircraft
hangar bays, lease up for renewal in 2013 and able to renew through 2023.
0.05 2 0.1
3. Growing use of websites, alternative distribution systems, and new global distribution systems (GDS) entrants leads to a
predicted 87% for online air ticket sales in 2011.
0.06 4 0.24
4. Global penetration, in areas such as the pacific which accounts for only 17% of total revenue. 0.04 4 0.16
5. The aviation industry is growing by a projected amount of 11.0 billion which will ultimately enable more people to fly 0.06 2 0.12
6. United Continental will be affected by the growth in the tourism industry expected to grow 3.2% in 2011. 0.04 2 0.08
7. The merging of the two corporations, United and Continental is expected to deliver $1.0 billion to $1.2 billion in net annual
synergies on a run-rate basis by 2013, and between $800 million and $900 million in incremental annual revenues.
0.05 2 0.1
8. United Continental Holdings Inc. establishes a joint venture with Air Canada will likely result in a substantial lessening of
competition on 19 trans-border city pair routes.
0.04 3 0.12
9. After merging and earning the extra percentage in revenue s by 1.0 billion, United Continental will show strong liquidity
give the new company a flexibility to pay down its debt.
0.03 3 0.09
10. United Continental made plans to increase WIFI capabilities in 200 domestic Boeing 737 and 757 aircraft equipped with
DIRECTV(R), providing onboard connectivity and more than 95 channels of live television programming to customers in
late 2010.
0.05 4 0.2
Threat
1 .Unstable fuel prices and availability can cause large expenses, accounting for 31% of total operating costs in 2010 0.04 3 0.12
2. With 72% of employees under labor organizations, union disputes, employee strikes, and other labor disputes are likely to occur. 0.07 1 0.07
3. 100% of United employees and 53% of Continental employees are covered by collective bargaining agreements (CBA), significant increases in pay and benefits from new
CBAs could financially harm the company
0.04 2 0.08
4. New open skies agreements decrease value of routes, caused United $29 million impairment charge in 2010 for indefinite-lived Brazil route 0.04 2 0.08
5. With an aging fleet, UAL will have to soon start replacing or fixing their planes. With a large amount of planes this will become very costly. 0.06 3 0.18
6. Illnesses could affect travel and decrease the amount of passengers flying, UAL reported that H1N1 cost them roughly $50 Million in related revenue. 0.03 2 0.06
7. The airline industry is vulnerable to terrorist attacks and other related security threats. The new threats have resulted in new security measures which will increase the security
related costs adding to the already high number of operating costs at $22,253.
0.05 2 0.1
8. The airline industry is vulnerable to terrorist attacks and other related security threats. The new threats have resulted in new security measures which will increase the security
related costs adding to the already high number of operating costs at $22,253.
0.07 3 0.21
9. ARM Corp is trailing United Continental Holdings co. by just 1059 million standing in third place for top revenue for airlines 2010. 0.06 3 0.18
10. The company faces stiff competition from national and international airline companies which can affect competitive pressures and ultimately lowering $3billion market cap. 0.08 3 0.24
Total 1 2.65
As the table shows, our team has identified 20 critical successful factors, generated by the
environment factors. 10 factors come from opportunities factors, other 10 factors come from
threats factors.
10 opportunity factors identified make up 0.46 the weight, with weighted score of 1.33 ,10
threat factors identified make up 0.54 the weight, with weighted score of 1.32.
Therefore, total weighted score is 2.65, less than 2.50, means United Continental Holdings is
effective in addressing the major critical successful factors generated by the environment. But
further analysis shows:
TWSO = 1.33/0.46=2.89
TWST = 1.32/0.54=2.44
TWSO is higher than TWST, means United Continental Holdings is more effective in addressing
the opportunities. So, the future strategies for United Continental Holdings to be successful
need to develop stream based on the threat.

Internal Analysis
Strengths
Passenger revenue increased 43% in 2010
Unrestricted cash and cash equivalents hit a record $8.7 billion
Aircraft rent expense decreased by 6% in 2010
They employ roughly 85,000 employees, the highest among their competitors.
UAL offers premium seating with spacious accommodations for those who seek a more comfortable
trip.
The U.S. and Canada market account for 61.7% of total revenue.
Net income grew 38% from a loss in 2009 to a profit in 2010.
United Continental has strong strategic collaborations. The company has a number of bilateral and
multilateral alliances with other airlines such as the largest alliance which is the Star Alliance who
serves approximately 1,290 destinations in 189 countries.
Because of United Continental Holdings flight completion factors of 98.5% and 99%, it has a very
strong brand utilization and trustworthiness.
United is the larger of 2 U.S carrier to the Peoples Republic of China and maintains a large operation
throughout Asia.

Weaknesses
Operating expenses increased $2.2 billion in 2010
Interest expense increased by 23% in 2010
Removal of Boeing 737 fleet and some Boeing 747 aircraft caused impairment charges of $165 million
in 2010
In relation with salaries and related costs increasing, Pension liability increased by $1,380,000 in 2010
They are behind Delta Airlines (DAL) in market cap by over $3Billion.
From the income statement it appears that they have no money spent on research and development
for the past 3 years.
At 16.0 cents, UAL has the highest cost per available seat mile in their industry compared to AirTran
Holdings at 11.0 cents.
UAL has assets of $20.1 Billion, liabilities of $22.9 Billion and equity of -$2.76 Billion. This may make it
hard for them to get loans when their assets are currently less than their liabilities.
United Continental puts heavy dependence on third party providers, many of the operations such as
customer care, aircraft maintenance, and aircraft fueling are outsourced, which adds to the overall
expense amount of $22,253 million.
The overall age of aircrafts totals about 14.3 years old, which gives higher expense to the operating
costs because they are less fuel efficient and require more maintenance.

Performance Analysis Financial Ratios
2010
United Continental Worth Analysis for 2010 (in millions)
Shareholder's equity - Goodwill - Intangibles (7,713)
Net Income * 5 1,265
(Stock Price/EPS) * NI 4,940
# of Shares Out * Stock Price 7,813
Four Method Average 1,576
Net Worth
Liquidity Ratios
Ratio United Continental Holdings Delta
Current ratio 0.95 0.64
Quick ratio 0.92 0.61
Liquidity ratios show a firms ability to meet its short-term financial
obligations, that is, whether the company has the resources to pay its
creditors when payments are due. From the table, shows that Southwests
liquidity position is lower the average.
Leverage Ratios

Ratio United Continental Holdings Delta
Debt to total assets 0.96 0.98
Debt to equity 21.93 47.15
Long-term debt to equity 7.22 14.69
Times-interest-earned ratio 1.34 2.21
From the information of the above table, United Continental Holdings
uses more debt to equity to finance its assets and operations as
compared debt financing and Long-term debt to equity and Times-
interest-earned ratio to financing.
Activity Ratios
Ratio United Continental Holdings Delta
Fixed Assets Turnover 1.73 1.56
Total Assets Turnover 0.80 0.73
Inventory Turnover 49.8 48.65
Activity ratios measure how effectively the firm managing its assets
in generating revenue. From the table, three United Continental
Holdings efficiency ratios are lower than industry average, means
the effective in managing its asset in generating revenue is lower.
Profitability Ratios
Ratio United Continental Holdings Delta
Gross Profit Margin % 4.2 6.98
EBT Margin % 1.08 1.91
Net Profit Margin % 1.09 1.87
Return on total assets % 0.87 1.37
Return on Stockholder's equity 0.15 0.66
Price-earnings ratio 19.52 17.75
Information showed by the above table, indicates that the profitability
ratios are higher than industry ratios, means that United Continental
Holdings is effectively in using its assets to make profits.
Growth Ratios
Ratio United Continental Holdings Delta
Sales Growth (3-years) 4.87% 18.35%
Net Income Growth (3-years Average) -14.37% -28.35%
Earnings per share Growth (3-year
Average)
-27.12% -49.45%
Dividends per share Growth % (3-years) - -
Internal Factors Evaluation ( IFE )
Critical Successful Factors Weight Rating Weight Score
Strengths
1. Passenger revenue increased 43% in 2010

0.05 4 0.2
2.. Unrestricted cash and cash equivalents hit a record $8.7 billion

0.04 3 0.12

3. Aircraft rent expense decreased by 6% in 2010

0.03 3 0.09
4. They employ roughly 85,000 employees, the highest among their competitors.

0.04 3 0.12
5. UAL offers premium seating with spacious accommodations for those who seek a more comfortable trip.

0.06 4 0.24
6. The U.S. and Canada market account for 61.7% of total revenue.


0.07
3 0.15
7. Net income grew 38% from a loss in 2009 to a profit in 2010.

0.07 4 0.28
8. United Continental has strong strategic collaborations. The company has a number of bilateral and multilateral
alliances with other airlines such as the largest alliance which is the Star Alliance who serves approximately 1,290
destinations in 189 countries.

0.05 3 0.15
9. Because of United Continental Holdings flight completion factors of 98.5% and 99%, it has a very strong brand
utilization and trustworthiness.

0.05 3 0.15
10. United is the larger of 2 U.S carrier to the Peoples Republic of China and maintains a large operation throughout
Asia.

0.06
3 0.18
weaknesses
1. Operating expenses increased $2.2 billion in 2010 0.06 2

0.12
2. Interest expense increased by 23% in 2010 0.03

2 0.06

3. Removal of Boeing 737 fleet and some Boeing 747 aircraft caused impairment charges of $165 million in 2010 0.06

2 0.12

4. In relation with salaries and related costs increasing, Pension liability increased by $1,380,000 in 2010 0.03 2 0.06

5. They are behind Delta Airlines (DAL) in market cap by over $3Billion. 0.08 1 0.08

6. From the income statement it appears that they have no money spent on research and development for the past 3 years. 0.02

2

0.04

7. At 16.0 cents, UAL has the highest cost per available seat mile in their industry compared to AirTran Holdings at 11.0 cents.



0.03

2 0.06

8. UAL has assets of $20.1 Billion, liabilities of $22.9 Billion and equity of -$2.76 Billion. This may make it hard for them to
get loans when their assets are currently less than their liabilities.
0.06

1 0.06
9. United Continental puts heavy dependence on third party providers, many of the operations such as customer care, aircraft
maintenance, and aircraft fueling are outsourced, which adds to the overall expense amount of $22,253 million


0.05
1 0.05
10. The overall age of aircrafts totals about 14.3 years old, which gives higher expense to the operating costs because they are
less fuel efficient and require more maintenance.
0.06 1 0.06
Total 1.00 2.52
As the table shows, our team has identified 20 critical successful factors, generated by the
internal environment factors 10 factors come from strengths factors, other 10 factors come from
weaknesses factors. 10 strengths factors identified make up 0.52 the weight, with weighted
score of 1.81, 10 weaknesses factors identified make up 0.48 the weight, with weighted score of
0.71.
Therefore, total weighted score is 2.52, more than 2.50, means United Continental Holdings
has a strong internal position. Further analysis shows:
TWSS = 1.81/0.52=3.48
TWSW = 0.71/0.48=1.47
TWSS is higher than TWSW, means United Continental Holdings is more effective in addressing
the strengths. So, the future strategies for United Continental Holdings to be successful need to
develop stream based on the weaknesses
Strategic Formulation
SWOT Matrix
Strengths
S1, S2, S3,
S4, S5, S6,
S7, S8, S9,S10
Weaknesses
W1, W2, W3,
W4, W5, W6,
W7, W8,W9,W10
Opportunities
O1, O2, O3,
O4, O5, O6,
O7,O8, O9,O10
SO Strategies
1. Increase marketing in foreign countries to take advantage of the
over 100 open skies agreements and increase global penetration in
china, Asia, and the pacific. (S8, S10, O1, O4).
2. Increase premium seating and flatbed seats to enhance travel
experience and increase customer satisfaction on long flights. (S5,
O5, O8)
WO Strategies
1. Increase R&D spending to take advantage of aviation and
tourism growth through the production of new global
distribution systems. (W6, O3, O5, O6),
2. Utilize extra percentage in revenue, obtained through merging,
to pay down liabilities. (W8, O2).
3. . Renew Maintenance lease at SFO to ultimately decrease the
dependence on outsourced aircraft maintenance. (W9, O2)
Threats
T1, T2, T3,
T4, T5, T6,
T7,T8, T9,T10
ST Strategies
1. Utilize unrestricted cash and equivalents of roughly $8.7 billion to
replace aging fleet with more fuel efficient airplanes. (S2,S3,T1,T5) .
2. Utilize unrestricted cash and equivalents to lease or purchase new
aircrafts equipped with state of the art air purification and filtration
systems. (S2, T5, T6, T8, T10).
WT Strategies
1. Require employees to participate in stock ownership to decrease
or prevent pension liability increases and to increase employee
work satisfaction. (W4, T2, T3).
2. . Increase R&D to research methods that would increase the gap
between competitive airlines both nationally and internationally.
(W6, T9, T10).
SPACE Matrix
The SPACE matrix is a management tool used to analyze a company. It is used
to determine what type of a strategy a company should undertake. SPACE matrix
has four-quadrant framework indicates whether aggressive, conservative,
defensive, or competitive strategies are most appropriate for a given
organization.
The SPACE matrix is based on four areas of analysis, namely financial position
(FP), competitive position (CP), Environmental position (SP), industry position
(IP) as follow table:
Financial position Ratings
Cash Flow 6.0
Price Earnings Ratio 5.0
Earnings per Share 4.0
Working Capital 4.0
Liquidity 5.0
Net Income 4.0
Return on Assets 2.0
Financial Strength Total 4.29
Environmental position Ratings
Rate of Inflation -5.0
Barriers to Enter the Market -3.0
Competitive Pressure -6.0
Price Elasticity -5.0
Demand Variability -5.0
Price Range of Competing Products -4.0
Ease of Exit from Market -6.0
Environmental Stability Total -4.86


Industry Strength Ratings
Profit Potential 4.0
Financial Stability 4.0
Resource Utilization 2.0
Productivity, capacity utilization 3.0
Market Entry 3.0
Growth Potential 5.0
Extent Leveraged 3.0
Industry Strength Total 3.43

Competitive advantage Ratings
Market Share -3.0
Product Quality -3.0
Customer Loyalty -4.0
Capacity Utilization -3.0
Technologically Advanced -2.0
Global Expansion -2.0
Product Life Cycle -4.0
Competitive Advantage -3.00




Position of United Continental Holdings:
FS
CS
ES
IS
-1 -2 -3 -4 -5 -6 6 5 4 3 2 1
Conservative

Aggressive
Competitive
Defensive
1
2
3
4
5
6
-6
-5
-4
-3
-2
-1
(Competitive position)
Possible Strategies
Market Development:
Increase marketing in foreign countries to take
advantage of the over 100 open skies agreements and
increase global penetration in china, Asia, and the
pacific. (S8, S10, O1, O4)

Backward Integration:
Renew Maintenance lease at SFO to ultimately decrease
the dependence on outsourced aircraft maintenance.
(W9, O2)

Horizontal Integration:
Increase R&D to research methods that would increase
the gap between competitive airlines both nationally and
internationally. (W6, T9, T10).

Retrenchment:
Require employees to participate in stock ownership to
decrease or prevent pension liability increases and to
increase employee work satisfaction. (W4, T2, T3)
Utilize extra percentage in revenue, obtained through
merging, to pay down liabilities. (W8, O2)


Product Development:
Increase premium seating and flatbed seats to enhance
travel experience and increase customer satisfaction on
long flights. (S5, O5, O8)
Utilize unrestricted cash and equivalents of roughly $8.7
billion to replace aging fleet with more fuel efficient
airplanes. (S2,S3,T1,T5)
Utilize unrestricted cash and equivalents of roughly $8.7
billion to replace aging fleet with more fuel efficient
airplanes. (S2,S3,T1,T5)
Increase R&D spending to take advantage of aviation and
tourism growth through the production of new global
distribution systems. (W6, O3, O5, O6)

Quadrant II
1. Market development
2. Market penetration
3. Product development
4. Horizontal integration
5. Divestiture
6. Liquidation
Quadrant I
1. Market development
2. Market penetration
3. Product development
4. Forward integration
5. Backward integration
6. Horizontal integration
7. Related diversification
WEAK
COMPETITIVE
POSITION
STRONG
COMPETITI
VE
POSITION
Grand Strategy Matrix (GSM)
Quadrant IV
1. Related diversification
2. Unrelated diversification
3. Joint ventures
Quadrant III
1. Retrenchment
2. Related diversification
3. Unrelated diversification
4. Divestiture
5. Liquidation
SLOW MARKET GROWTH
RAPID MARKET GROWTH
Major Issues

Financial performance.
Service Quality.
Domestic and international regulation.
Airline industry and competition.
Fuel and labor costs.

Recommendation
Our group had come up with strategies of 3 Year Goals:

Year 1-Expand further into China.
Year 2-Expand throughout Asia to regions such as South Asia and India.
Year 3-Expand into Russia

In this part, our team had also got strategies that are the common strategies between SWOT analysis and SPACE matrix. Available strategies accordance by
SWOT analysis as following:
SO Strategies
1. Increase marketing in foreign countries to take advantage of the over 100 open skies agreements and increase global penetration in china, Asia, and the pacific. (S8, S10,
O1, O4).
2. Increase premium seating and flatbed seats to enhance travel experience and increase customer satisfaction on long flights. (S5, O5, O8).

WO Strategies
1. Increase R&D spending to take advantage of aviation and tourism growth through the production of new global distribution systems. (W6, O3, O5, O6),
2. Utilize extra percentage in revenue, obtained through merging, to pay down liabilities. (W8, O2).
3. Renew Maintenance lease at SFO to ultimately decrease the dependence on outsourced aircraft maintenance. (W9, O2).

ST Strategies
1. Utilize unrestricted cash and equivalents of roughly $8.7 billion to replace aging fleet with more fuel efficient airplanes. (S2,S3,T1,T5) .
2. Utilize unrestricted cash and equivalents to lease or purchase new aircrafts equipped with state of the art air purification and filtration systems. (S2, T5, T6, T8, T10).

WT Strategies
1. Require employees to participate in stock ownership to decrease or prevent pension liability increases and to increase employee work satisfaction. (W4, T2, T3).
2. Increase R&D to research methods that would increase the gap between competitive airlines both nationally and internationally. (W6, T9, T10).