A Swot Analysis Of American Airline

A Swot Analysis Of American Airline Abstract The airline industry has always been and continues to be the most fiercely competitive business sector in all facets of its operations. Operating on paper thin margins the drop in passenger traffic brought on by the events of September 11th, 2001 have affected domestic United States airlines as well as all global carriers. The events of that day have caused governmental intervention in the form of loan guarantees, compensation for terrorist attack losses, as well as insurance related to war risk (Shane, 2003). The Associate deputy secretary of Transportation stated that the industry is in its à ¢Ã¢â€š ¬Ã‚ ¦worst financial crisisà ¢Ã¢â€š ¬Ã‚ ¦(Shane, 2003), since the industry was deregulated in 1978. It is important to understand that two differing types of airline carriers exist in the United States. The majors refer to airlines earning revenues in excess of $1 billion USD annually and generally they provide national as well as international service. These airlines cater to the bus iness class customer and passengers who either expect or desire full in flight services such as meals and related amenities. American Airlines, Delta Air Lines, United Air Lines, U.S. Airways, Continental Airlines and Northwest Airlines fit these designations (Mayer, 2002). The discount air carriers have changed the face of the airline industry with their no frills, low-cost airfares and have put pressure on the majors in terms of eroding their market share. The preceding battle between discount carriers has further exacerbated the majors thin operating margins and has resulted in Delta, Continental, Northwest, United and US Airways (Beck, 2005) filing for protection under Chapter 11 of the United States bankruptcy laws while they restructure and renegotiate union contracts and creditor agreements. United States Senate Commerce Committee Chairman John McCain has stated that the United States government should be à ¢Ã¢â€š ¬Ã‚ ¦reluctant to do anything that might keep inefficient businesses afloat (Shane, 2003). This is the climate in which the subject airline, American Airlines operates. Chapter 1 American Airlines PEST Analysis The utilization of a PEST analysis with regard to American Airlines takes into account the political, economic, social and technological (NetMBA, 2004) environment the industry is embroiled in and how this has, is and will threaten to impact its operations and profitability. It must be remembered that the number of possibilities concerning macro-environmental aspects is almost limitless, thus concentration will be paid to those areas perceived to have the highest impact. Political The political stability of the United States was severely shaken by the terrorist events of September 11, 2001, and this directly resulted in a catastrophic drop in business as well as personal air travel (Ito et al, 2003). The preceding along with the following areas have impacted negatively on earnings as well as profitability among the majors: Pricing regulations Wage legislation and union requirements Deregulation policies of 1978 Increased emphasis on national and airport security Economic The overall economic climate in the United States prior to the events of September 11, 2001 called for a mild recession and the airline industry was wrestling with discount carriers. The pre 9-11 airline climate forecast a slight contraction as a result of the reversionary climate which was dramatically impacted by the events of 9-11 and the resulting economic aftermath (Ito et al, 2003): Dramatic slowdown of the economic growth rate Increase in fuel costs Balance of trade accounts Inflationary and fluctuations of the dollars against the Euro, and Yen Social The emphasis on September 11th throughout these varied analysis is due to the sweeping impact that event had on global events in all theatres. The social implications thus shaped or amplified are as follows (Mayer, 2002): Increased layoffs impacting all income groups Sharp decrease in lower and middle class travel Decline in airline related vacations destinations Negative impact of air travel safety brought on by the events of 9-11 Decrease in general airline related travel plans by consumers Low-fare travel stigma attitude shift to an acceptable alternative Technological The Internets impact on business and consumer purchasing habits heralded in a new age of information exchange which changed the manner in which airline tickets are sold. Airline SABRE system Decrease in airline travel agencies Introduction of Internet airline ticket reservations and ticketing Entry of Travelocity, Orbitz, Cheaptickets, Expedia and other best price shopping services The availability of the Internet as a consumer and business fare and flight shopping tool Porters Five Forces Michael Porters Five Forces model (QuickMBA, 2005) provides a framework to view the airline industry from the perspective of five forces that influence it: Rivalry American ranks as the worlds largest airline in terms of passengers carried, however is rated number 11th in terms of overall airline quality (Holderbach, 2004). Low-fare airlines garnered three of the top four spots in airline quality ratings, 1. Jet Blue, 2. Alaska, 3. Southwest, 4. America West. All but Alaska Airlines are low fare carriers. The remaining airlines are 5. US Airways, 6. Northwest, 7. Continental, 8. AirTran, 9. United, 10. ATA, 11. American, 12. Delta, 13. American Eagle and 14 Atlantic Southeast (Holderbach, 2004). Some of the more important facets within this category of the Five Forces model are: slow market growth since 9-11 high fixed operating costs low relative levels of product differentiation among the majors inroads of the low-fare carriers in the changing perception of air travel shake out of the industry since 9-11 in terms of bankruptcies and failures Threat of Substitutes Within Porters model substitute services come into play when demand exceeds supply, or vice versa. In the airline industry the excess supply has been attacked by low-fare carriers who have continually gained market share. Buyer Power The airline industry suffers from oversupply as well as fixed costs which served as the foundation for low fare carriers who offer no frill flights in return for discounted fares. This approach effectively pulled the casual traveler and spread to frequent travelers and some classes of business travel for companies seeking to cut costs. Buyer demand is re-shaping the airline industry as a result of these options. Supplier Power In terms of this category, fuel is the single largest airline cost expenditure item which affects all firms equally. Low Fare carriers by eliminating frills lower their per flight operating costs which have and is attracting scores of travelers to their fold. Barriers to Entry / Threat of Entry Traditionally, the high cost of entry in the airline industry reduced the treat of entry by competitive companies. However the business model offered by low fare carriers exploited the lower end segment of the market via price and provided a foundation for the entry of Southwest, Jet Blue, America West and others (Ito et al, 2003). SWOT Analysis The strengths, weaknesses, opportunities or threats internal to a company represent the strategic environment known as a SWOT analysis (QuickMBA, 2004). Strengths Some of the advantages that American Airlines has in comparison to its competitors are (American Airlines, 2005): Recognizable brand name Largest global airline in terms of passenger traffic National and International routes serving all corners of the globe Perception as a major carrier with the commensurate levels of service Weaknesses internal flight amenities draining profits inability to compete with low fare carriers on price lack of competitive pricing to attract casual traveler base vulnerability to pricing Opportunities (American Airlines, 2005). code sharing agreements with domestic and international airlines SABRE ticketing system Presence at most airports American Eagle regional routes Lucrative route structure Threats thin operating margins favoring low fare carriers public acceptance of low fare carrier concept customer quality perception of low fare carriers that exceeds the majors prolonged slow economy favors low fare carrier pricing structure segmentation of the industry into business and discount carrier classifications high fuel prices government intervention Chapter 2 Conclusion The intense competition in the airline industry along with thin operating margins and fuel costs along with other expenditures existed before the dramatic events of September 11th. The strengths of American Airlines in being the worlds largest airline provides it with a huge customer base that is familiar with the airline. This represents the core of all marketing, customer retention as well as the foundation to attract new customer trial. Customer retention and utilization represent the primary advantage that American Airlines enjoys and needs to utilize to protect its position as well as build upon. The American Eagle division provides the company with an additional customer convenience marketing tool via intra city (regional) destination traffic. In order to accomplish the preceding objective the company must increase its quality of service from its current 11th position to increase customer satisfaction. The 50/50 mix of business and leisure travelers that comprise its customer b ase has remained relatively constant and business class travelers contribute heavily to profits as a result of the higher fares paid for first class and business class seating (American Airlines, 2005). Utilization of target marketing with concentration on the frequent flier base represents Americans primary advantage to capitalize upon since is does not compete in a low fare platform. Tightened restrictions on fares has closed a lot of the gap, thus consumer perceptions in the higher income categories represent a huge customer base for American to capitalize on in stealing customers from the other majors as a primary strategy and eroding the fringe low fare customer base as a secondary target market. Technology in terms of software advances along with code sharing, peaking and Americans route and connection structures offer convenience. Increased international travel also helps the company as a result of its global routes and destinations. Americans size, reach, reputation, fleet and presence at over 154 airports reinforces the preceding (American Airlines, 2005). The companys corporate vision states its objectives are to: set industry standard for safety and security, provide superior customer service, produce returns for stakeholders and shareholders by increasing business and thus revenue opportunities for vendors and allied firms further solidify the brand name and image as a premier carrier increase creative ticketing, promotions, vacation packages and associated areas to distance the company from low fare carriers and thus minimize their effects, capitalize upon inherent advantages As the worlds largest carrier American Airlines business and leisure base provides the customer foundation to enable it to compete successfully against other majors as well as differentiate itself from low fare carriers. This ability to be the choice in the full flight service category along with the number of airports, seamless domestic and international route structure that enable it to offer direct service to the most destinations via its own branded airline represents a key convenience and thus marketing factor to garner success in this highly competitive environment.

Explore the similarities and differences Essay

Shakespeare’s original Hamlet was written in text, however Kenneth Branagh created a film version of the play as did Franco Zeffirelli. Firstly there are many advantages that film productions have over plays written in text only. For example, Shakespeare’s Hamlet cannot portray certain visual elements that can be vital in the understanding of a play – but film has that advantage and therefore can add such details as settings, characters and their costumes and body language. Even the way that a line is spoken can make a big difference in its portrayal to the audience. For example in Branagh’s version of Hamlet, whilst talking about the ghost he pauses before he says the word, â€Å"apparition,† which gives the impression he is confused as to how he will describe the spirit seen of King Hamlet. Film can use music in the background to suit the mood of the particular scene. For example in the opening scene of Hamlet by Branagh there is much imagery created even before any dialogue is used. There is an imposing view of the Kings castle at night whilst ghostly bells toll the midnight hour and you hear the crunching footsteps of Francisco guarding the gates. Just these few devices mixed together instantly create an atmosphere that cannot be recognised so easily in Shakespeare’s Hamlet. Instead, â€Å"Who’s there? † Barnado says. Starting off with a question like this immediately sets a mood of apprehension that Branagh captures when Barnado jumps on top of Francisco whilst shouting â€Å"Who’s there? † Also Shakespeare’s broken and short dialogue creates unease and confusion adding to the dark atmosphere. For example the first six lines are short and seem anxious and nervous – â€Å"Who’s there? / Nay, answer me. Stand and unfold yourself. / Long live the King! / Barnado? / He. / You come most carefully upon your hour. † Both Shakespeare’s and Branagh’s Hamlet are different in the way Branagh’s is in the format of film and Shakespeare’s is only text. However they are very similar in the way they both create a dark, corrupt atmosphere – Branagh with his dramatic imagery and Shakespeare with his broken, short dialogue. Also with Shakespeare’s Hamlet, Francisco says, â€Å"‘Tis bitter cold, and I am sick at heart,† just this single sentence adds to the atmosphere that something is seriously wrong in a very evil way. Another way in which Branagh used dramatic imagery – when the ghost appears for the first time in front of the men. The ghost is the image of the King in full battle armour floating towards them with dramatic music in the background. This imagery is clearly something that cannot easily be drawn from Shakespeare’s text on its own. A similarity between both Shakespeare’s and Branagh’s Hamlet is that Branagh’s version stays extremely faithful to the text in the original Hamlet by Shakespeare. For example, just after Horatio sees the ghost of old Hamlet he goes on at great detail about the ghost’s appearance as an omen of trouble brewing for Denmark – quite a long section of dialogue. However, Branagh’s film doesn’t cut out a single word and keeps the dialogue identical to the original text by Shakespeare. Zeffirelli’s Hamlet cuts out the whole of the original ghost scene completely substituting it with the funeral of old King Hamlet with emphasis on the King’s death rather than the ghost appearing. In this respect it loses a lot of the atmospheric effect that Branagh’s version creates. Hamlet should be portrayed in a dark, evil way to start off the play that Branagh’s does successfully. However, with Zeffirelli’s version there is no way of knowing that an evil deed has been done or that there is any corruption, guilt or suspicion of any kind. All you note is the negativity of the Kings funeral. Although both films’ opening scenes are very different in many ways they are both similar in another way. They both start with a negative theme. Branagh’s version shows the dead King Hamlet’s ghost haunting the troubled minds of the guards and this reinforces the sense of evil captured that night. Zeffirelli’s version shows the great castle and all the knights wearing black for the King’s funeral while Hamlet’s mother hysterically weeps over the still body of the King. Therefore in this way they are very similar. Another big difference is the running time of both films. Branagh’s film’s running time is 232 minutes, which is a long time compared to just 130 minutes of Zeffirelli’s version of Hamlet. This difference accounts for the fact that Zeffirelli cut out a great deal of the original Shakespearean text whereas Branagh included almost all of it in the entire film.

Essay on “The Renaissance as a Portal to the Modern Age”

Essay on â€Å"The Renaissance as a Portal to the Modern Age† The Renaissance was a time, as the name suggests, of rebirth and renewal in Europe; a time that led society into a new modern age. Inventions shaped society and brought it closer to what people would recognize today; and philosophical and religious enlightenment moved civilizations out of the dark ages and towards a deeper understanding of humanity. This essay will analyze the importance of these two features of the Renaissance as a portal to the modern age. New inventions during the Renaissance still play a part in the modern age today, from everyday necessities such as the toilet to technological innovations like the microscope (â€Å"Inventions of the Renaissance†, web). However, the invention that had the largest impact on Renaissance life as well as society today was the printing press. Although a number of people were partially responsible for the creation of the printing press, the name that is best remembered is Johannes Gutenberg, who invented moveable type. The printing press meant that ideas could be shared with greater ease, and more cheaply than before. The literacy of lay people increased as books became more freely available on a variety of subjects (previously, religion had been the dominant topic of books, which is hardly surprising since the majority of books were produced by monks) and scholarly work was aided, as philosophical ideas and scientific discoveries reached a wider audience (Kreis, 2000, web.). The printing press inadvertently aided another factor that made the Renaissance a portal to the modern world. In 1452, Gutenberg began to translate the Bible from Latin (Kreis, 2000, web.). In an act that to the Roman Catholic Church constituted heresy, Gutenberg made the Bible available to the lay people of Europe. The dominance of the Roman Catholic Church, along with the supremacy of the pope, came to an end (Finley, n.d. web). For the first time, lay people were able to study the Bible in their own language and interpret it for themselves, and then print their interpretations for others to read. Man became a master of his own faith and existence, and with a renewed interest in humanism, faith became multi-faceted and secularism rose in influence, two things that still exist in the modern world. The free exchange of ideas is a feature of the Renaissance that

Accounting Prudence Concept - 1972 Words

conservation Prudence concept: revenue and profits are included in the balance sheet only when they are realized(or there is reasonable certainty of realizing them) butliabilities are included when there is a reasonable possibility of incurring them. Also called conservation concept. Du Pont analysis A type of analysis that examines a company s Return on Equity (ROE) by breaking it into three main components:profit margin, asset turnover and leverage factor. By breaking the ROE into distinct parts, investors can examine how effectively a company is using equity, since poorly performing components will drag down the overall figure. To calculate a firm s ROE through Du Pont analysis, multiply theprofit margin (net income†¦show more content†¦These costs are recorded in ledger accounts throughout the year and are then shown in the final trial balance before the preparing of the manufacturing statement accounting concept and conventions In drawing up accounting statements, whether they are external financial accounts or internally-focused management accounts, a clear objective has to be that the accounts fairly reflect the true substance of the business and the results of its operation. The theory of accounting has, therefore, developed the concept of a true and fair view. The true and fair view is applied in ensuring and assessing whether accounts do indeed portray accurately the business activities. To support the application of the true and fair view, accounting has adopted certain concepts and conventions which help to ensure that accounting information is presented accurately and consistently. 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