Airlines problem
Classic Airlines Problem Solution
“Every company knows that it costs far less to hold on to a customer than to acquire a new one” (Gokey, 2002). As the commercial airline industry is changing at a rapid pace, Classic Airlines (CA) is faced with the challenge of delivering increased value within leaner consumer budgets. According to Plunkett Research Online, travel industry expenditures are decreasing and e-commerce is gradually replacing many jobs. With this report in mind, CA is set to use this pivot point as an opportunity to leverage proven techniques while improving the existing CRM system, and introducing a transparent planning process to increase customer loyalty.
Issues and Opportunities Overexpansion and rising costs have been challenging CA. With approximately 32,000 employees, 19% decrease in Rewards members and 20% decrease in flights, the firm is due for a significant change (UOP Portal, Classic Airlines). Added pressure has been experienced following the Board of Directors 18 months/15% cost reduction mandate. These issues have developed into a crisis that resulted in a 10% decrease in stock price. Amanda Miller (current CEO) was hired in 2000 to prepare for her promotion in 2002, following the retirement of Jack Broadway (former CEO). This transition happened at a critical time, and has unfortunately set back the company. Mrs. Miller believes in operational excellence as a number one priority, which has left the firm vulnerable in a time when consumers need to be valued and competitors are learning more of continuous improvement.
Stakeholder Groups Stakeholder alignment is an important part of marketing planning and implementation. Trade-offs exist at every level and should be balanced according to consumer needs/wants. “Organizations must connect not just with their consumers but with all the stakeholders, for the people affected by what the company does and how well it performs” (Kerin et al., 2006). The focus of
“Every company knows that it costs far less to hold on to a customer than to acquire a new one” (Gokey, 2002). As the commercial airline industry is changing at a rapid pace, Classic Airlines (CA) is faced with the challenge of delivering increased value within leaner consumer budgets. According to Plunkett Research Online, travel industry expenditures are decreasing and e-commerce is gradually replacing many jobs. With this report in mind, CA is set to use this pivot point as an opportunity to leverage proven techniques while improving the existing CRM system, and introducing a transparent planning process to increase customer loyalty.
Issues and Opportunities Overexpansion and rising costs have been challenging CA. With approximately 32,000 employees, 19% decrease in Rewards members and 20% decrease in flights, the firm is due for a significant change (UOP Portal, Classic Airlines). Added pressure has been experienced following the Board of Directors 18 months/15% cost reduction mandate. These issues have developed into a crisis that resulted in a 10% decrease in stock price. Amanda Miller (current CEO) was hired in 2000 to prepare for her promotion in 2002, following the retirement of Jack Broadway (former CEO). This transition happened at a critical time, and has unfortunately set back the company. Mrs. Miller believes in operational excellence as a number one priority, which has left the firm vulnerable in a time when consumers need to be valued and competitors are learning more of continuous improvement.
Stakeholder Groups Stakeholder alignment is an important part of marketing planning and implementation. Trade-offs exist at every level and should be balanced according to consumer needs/wants. “Organizations must connect not just with their consumers but with all the stakeholders, for the people affected by what the company does and how well it performs” (Kerin et al., 2006). The focus of
References: Bull, Christopher. (2003). Strategic Issues in Customer Relationship Management (CRM) Implementation. Business Process Management Journal. Retrieved June 28, 2009 from Byrne, John A. (1998) How Jack Welch Runs GE. Business Week. Retrieved from Businessweek.com June 28, 2009. Coyles, Stephanie. Gokey, Timothy. C. (2005). Customer Retention is Not enough. Journal of Consumer Marketing. Vol. 22, number 2, pp 101-105. Retrieved June 28, 2009 from Business Strategy. Vol. 5, Number 1, pp 29-34. Retrieved June 28, 2009 from Emerald. Kelly, Gary. C. (2008). Southwest Annual Report-To Our Shareholders. Retrieved June 28, 2009 from Southwest.com Kerin, Roger A., Hartley, Steven W., Barkowitz, Eric N., Rudelius, William. (2006). Marketing, 8e Pyzdek, Thomas. (2003) The Six Sigma Handbook. McGraw-Hill Companies. New York Senge, Peter M., (1990) United Airlines. (2009). United Airlines Business Travel Tools-Travel Info on the Go. Retrieved June 28, 2009 from Unitedairlines.com University of Phoenix Simulation Portal (2009). Classic Airlines. rEsource MBA570 website.