Preview

Hna Case

Good Essays
Open Document
Open Document
405 Words
Grammar
Grammar
Plagiarism
Plagiarism
Writing
Writing
Score
Score
Hna Case
HNA group’s five blocks of business are all interrelated around the airline industry and tourism space. All business blocks compliment each other and are instrumental toward HNA group’s achieving success in the “soaring plan”, going forward. The strategic organization of the HNA group in terms of visible resources, organizational resources, financial resources and human resources allow it to synergize across its business blocks and derive profitability which is higher than individual players in each of these businesses.
Looking at major crises that affected the HNA Group, such as the SARS epidemic and oil price fluctuations, I believe that being in multiple blocks of business allows the group to hedge its risks against such unexpected global events.
Air transport is definitely the major growth area for the HNA group, generating 78% of the group’s revenue. Efficient operations and lean management allow it to derive higher margins compared to its competitors. The group’s plans in this business block are aggressive, indicated by the formation of Grand China airlines. Airports are directly complementary to the airline operations and provide an avenue to grow and expand, with the increasing Chinese government policy towards privatization of airports. The tourism block and the hotels block complement each other in addition to benefiting the air transport business. The relative industries serve a primary purpose of diversifying the Group’s assets, protecting it against unexpected global fluctuations.
Looking at the HNA group’s current financial distress, I believe that the HNA group could look at generating some cash immediately by disposing off some of its high value physical assets or some of its relative industries. The group has high fixed assets amounting to $1636 million, which include some high value properties in business districts where they face direct competition from international chains like the Marriott and the Hilton group. From 2004 to 2008, revenue

You May Also Find These Documents Helpful

  • Powerful Essays

    Southeastern Jet Airways (SEJA) philosophy and vision is very simple: to be a client-focused company. Armed with this philosophy, the team developed a strategy to guide and take SEJA beyond the next level and well into the future. SEJA’s vision which is to ensure that the organization remains an affordable transportation company, continues to build, remains strong to maintain customer loyalty by providing excellent customer service, and enhances shareholders’ value is a reflection of its mission. Such mission is to provide the highest quality transportation service while committed to excellence, safety, reliability, and efficiency, Intrinsic factors as those described above very seldom change the direction of an organization. However, on the other side of this equation is the basic framework where lies the strategy – the link between the firm (internal) and the industry (external) environment. Key factors that require a change in strategy could be found either in the firm (resources and capabilities, structure and systems changes or fluctuations) or the industry environment (competitors, customers, or suppliers) (Grant, 2013, Chapter 1).…

    • 1650 Words
    • 5 Pages
    Powerful Essays
  • Better Essays

    HMP1 000305944 Task 1 2

    • 4618 Words
    • 12 Pages

    Before David Neeleman’s non-compete agreement with Southwest Airlines expired, he envisioned the concept of starting a low-fare airline that would combine common sense, innovation, and technology and bring the humanity back into air travel (Gittel & O’Reilly, 2001). In 1998, JetBlue was born. In order for David to fulfill his goal of a “do-it-right” kind of airline, he needed to recruit superior industry veterans who were willing to start from scratch and place an emphasis on employees and customers. Each of these individuals, from the President, General Counsel, CFO, and the HR director, wanted to create an airline that was fun, had integrity, was safe, and cared for their employees, plus had a passion to get it right (Gittel & O’Reilly, 2001).…

    • 4618 Words
    • 12 Pages
    Better Essays
  • Satisfactory Essays

    Hbs Cases

    • 358 Words
    • 2 Pages

    What general sources of value (potentially common to other acquirers) and specific sources of value does Newell bring to an acquisition?…

    • 358 Words
    • 2 Pages
    Satisfactory Essays
  • Good Essays

    Financially, GHB is financed mostly on debt, making it highly leveraged and with great financial risk. This is a problem because with the decreasing sales and profit margins from previous years, the banks are threatening to call the loans that financed the company. This is a problem that has developed with the previous management team, and requires negotiation for restructuring of the terms of the loans. This will allow newly implemented strategies to incorporate themselves into the company and develop results.…

    • 1668 Words
    • 7 Pages
    Good Essays
  • Powerful Essays

    This internal business analysis is on Southwest Airlines, which was founded in 1967 by Rollin King and Herb Kelleher. The main focus for Southwest Airlines was to provide low cost flights for their customers, and also have exceptional customer satisfaction. Southwest is a leading airline company that continues to do well in an industry that has been historically challenging. For instance, in the span of two years (2005-2007) five major airlines have filed for bankruptcy. The challenges are great in the airline industry, because competitors are trying to imitate the “low-cost” offering of Southwest. Many companies have tried to do what Southwest has done, and many have failed to stay in business. Surprisingly, many of those companies were started by ex-employees of Southwest. Southwest currently has a profitability record for the past thirty six years, which is spectacular in such a challenging industry. Herb Kelleher has been replaced by Gary C. Kelly, as the president when he resigned in May of 2008. Southwest is in the process of expanding the locations they serve so that they can increase market share, and also find ways to cut costs without losing their quality. In order for southwest to continue their consecutive financial success there is a necessity for excellence in the execution process of their strategy.…

    • 1766 Words
    • 8 Pages
    Powerful Essays
  • Good Essays

    The Heynold

    • 745 Words
    • 2 Pages

    The Heynold & Rosander (2006) article illustrates an interesting trend active in the airline industry today in which airlines are rearranging their organizations from a functional model to a hybrid model. The basic functional model follows the idea that all profit centers report directly to the CEO, who is the only individual responsible to the investors regarding profit. If there are any decisions to be made, they go through the CEO. The major difference between this model and the hybrid model is that the individual profit centers are made into their own functioning business or business units. The business units have the authority and ability to transfer resources where and when they want with some degree of autonomy, a direct reference to an increase in their differentiation as described by Jones (2013).…

    • 745 Words
    • 2 Pages
    Good Essays
  • Satisfactory Essays

    HBS Case

    • 333 Words
    • 2 Pages

    1. Assume there are three separate real estate companies: US Realty (which applies the cost model), UK Realty (which applies the revaluation model), and International Realty (which applies the fair value model). Assume also that on December 31, 2003, each company pays £1,000 cash to obtain investment property comprising land with negligible value and an office building worth £1,000. The building has a 10-year useful life, has no residual value, and is expected to provide a constant stream of economic benefits over time.…

    • 333 Words
    • 2 Pages
    Satisfactory Essays
  • Powerful Essays

    This is a case study about how a foreign carrier, China Airlines, adapts it strategy competing in the Guam-based airline industry. The case traces the company’s history on Guam from setting up its regular flight schedule between Guam and Taipei, through a pricing competition with its main competitor Continental Micronesia, to today where it occupies the sole market share of flights between these locations. In addition, the study explains China Airlines approach to its customers through partnerships with hotels and tourism companies in both Taiwan and on Guam; how this business has been affected by immigration regulations; and how it has become a successful carrier on Guam, in spite of failing to reach its initial goal for even being on Guam.…

    • 2111 Words
    • 9 Pages
    Powerful Essays
  • Better Essays

    Air Asia-Marketing Plan

    • 781 Words
    • 4 Pages

    Competition in the airline industry is very intense and growing rapidly. The airlines are using several strategies to compete with one another in the industry. Airline companies need to identify their strategic management to achieve their vision and mission and Air Asia is no exception.…

    • 781 Words
    • 4 Pages
    Better Essays
  • Powerful Essays

    air asia

    • 1392 Words
    • 6 Pages

    Air Asia is established on 12 December 2001 by Mr. Tony Fernandes, the CEO of Air Asia and expanding rapidly since that. Air Asia is the leading low fare airline in Asia and Air Asia succeed to become the award winning, ‘Asia Pacific Airlines of the year 2003’ by Centre for Air Pacific Aviation (CAPA) in 2003. Air Asia has successfully positioned itself in customers’ mind by using the “ Now Everyone Can Fly” slogan. Air Asia had flown over 55 million guests across the region and continually create more extensive route network through its associate companies. Air Asia flies over 61 domestics and international destinations with 108 routes and operates over 400 flights daily from hubs located in Malaysia, Indonesia, and Thailand with a fleet of 72 aircrafts. Air Asia’s net profit for the second quarter ending 31 December 2004 was reported RM44.4 million, a 323% increase over the previous quarter (Air Asia 2005). The vision of Air Asia is to serve the 3 billion people who are currently underserved with poor connectivity and high fare and to be the largest low cost airlines in Asia. Their mission is to create a globally recognized ASEAN brand, to attain the lowest cost so that everyone can fly with Air Asia, to be the best company to work for as employees are treated as part of a big family, and to maintain the highest quality product, embracing technology to reduce cost and enhance service levels.…

    • 1392 Words
    • 6 Pages
    Powerful Essays
  • Powerful Essays

    Various industries, specifically in airline business are attempting to improve their services to draw new passengers and travellers and to retain old passengers and travellers, and this objective is part of their business as well as their marketing model. In order to adjust with the stiff competition in the airlines business, airlines industries tend to come up with various businesses models and model to be competitive. Additionally, because of increasing competition among substitute industries, firms like AIRASIA, AIRASIA X and MAS. Airlines adopt strategic model to marketing and expend their market reach as well give better and satisfying service delivery to their target market. To sustain the market position as well as advantage business market model to management and marketing are being developed and utilized.…

    • 3089 Words
    • 13 Pages
    Powerful Essays
  • Powerful Essays

    Kf Strategy

    • 8213 Words
    • 33 Pages

    Kingfisher Airlines is facing a debt crisis with debt exposures from leasers and financial institutions worth more than Rs.8919.86 Crore as of 08/Aug/2012 and the consortium of lenders headed by State Bank of India has termed the firm as a Non Performing Asset. The increasing in aviation turbine fuel price, undercutting of ticket prices to win customer base, improper managerial accounting, and glamorous life style of owner has made Kingfisher to run n to deeper losses and ground its low cost fleet Kingfisher Red. Over the course of time from its launch in 2005, Kingfisher Airlines has lost its reputation among its customers and employees due to cancellation of flights and delay in salary payments and is facing the ire of government as well as financial firms for violation of DGCA rules and payments. KFA currently requires a major debt restructuring and proper recovery plan, with injection of fresh liquidity for working capital and payments. The funding needs can be met internally by selling the non-core assets of Kingfisher and UB Group which the promoters do not prefer much. The…

    • 8213 Words
    • 33 Pages
    Powerful Essays
  • Satisfactory Essays

    Hicom

    • 653 Words
    • 3 Pages

    What should be HICOM do to its three (3) subsidiaries or associate companies to mend its adverse effects to the company and its continuous losses?…

    • 653 Words
    • 3 Pages
    Satisfactory Essays
  • Best Essays

    The aspect of organizing is quite insightful in the case of the family owned Jetwing Group, with over 40 years of experience in the fast changing travel industry. For a deeper understanding this assignment will focus on one of the companies – Jetwing Travels, a destination management company. Jetwing Travels is an intermediary between the agents abroad selling holiday packages and the location based suppliers of hotels, transport and other activities. They are primarily in the business of low cost and high volume tourist traffic. One of the main goals is getting sales business and this is measured by the topline only.…

    • 2537 Words
    • 11 Pages
    Best Essays
  • Good Essays

    This essay examines the challenges faced by Hong Kong’s full service airlines nowadays. Air transportation serves not only to encourage trade and growth in the tourism industry in Hong Kong, but also to improve people 's mobility and to form a modern society. In this essay, full service airline is defined as traditional airline that provides services such as allocated seat, transfer of baggage between flights, blankets and meals. Full service airlines suffer several challenges in the aspect of production cost for developing advanced system and competition with low-cost airlines nowadays. For this reason, I would like to investigate the challenges in depth according to the above aspects and figure out possible solutions.…

    • 1243 Words
    • 4 Pages
    Good Essays

Related Topics