Strategic Management Scenario Project (GEA 2) Strategic Management Scenario: Assume you work for the Chief Executive Officer (CEO) of a moderate size US airline with strong balance sheet. As a strategic analyst, you have been assigned the task of assessing a new market. Currently your company utilizes a best-cost competitive strategy utilizing moderate-to-low airfare pricing while still providing some of the basics not included with all airlines (one free checked bag, free snack and non-alcoholic beverage, etc.). As part of your firm's growth strategy, the CEO would like you to assess expanding into the charter airline industry based on the seemingly popular trend of private air travel. Because this is a potential new market for your company, you will need to consider many strategic issues. For example, is this an attractive market to enter? If you enter the new market, what competitive strategy should your company use to compete in this new industry? Related to that, you will need to consider whether a new brand name is needed for this potential product division. Also, how would you market and sell the service? These and many other factors will require research and consideration. Pre Report Analysis 1) Using cross discipline knowledge you have gained from prior courses, analyze the charter airline industry and describe what is required to compete successfully. This should include discussing the overall growth of the market, the varying segments of the market (based on sales or volume), top companies and strategies used, and if available, the demographics of the buyers in the passenger segment, etc.. Keep in mind the non bolded question are general Gen Ed questions for university curriculum assessment. The bolded question are specific to the scenario forthis project and that is what you should address and answer. In other words, by answering the boldquestions you are answering the more general question but with more specificity relative to the givenscenario. So you only need to address the bolded part of the questions. 1) What do you see as plausible decision alternatives to the business scenario you have been provided? Describe at least three alternatives; each should be discussed in detail and address different stakeholder perspectives.

Specifically, in this scenario, is entry into the charter market a viable alternative? If so what competitive strategies (see Ch 5) are plausible for entering the charter airline market? Discuss two possible competitive strategies and defend why each would be viable. 2) What would be the implications of each decision alternative? Describe any ethical implications associated with each of the decision alternatives. Explain the implications of each plausible scenario. Specifically, consider the following. How would entry into the market impact supply decisions (ex. source of supplies such as aircraft, pilots, fuel, etc.)? How would the choice of competitive strategy (low-cost, best- cost, or differentiation) for the potential new charter company impact forward channel activities such as bookings/reservations, branding, advertising, etc.? Are there any ethical implications associated with these decisions? Consider factors such as safety or impact on the natural environment (there could be others as well). 3) What should the strategy be so that the company is best positioned under each decision alternative? Which decision alternative do you recommend and why? In other words, should the company expand into a charter business, and if so, what competitive strategy should be used? Regardless of your recommendation to diversify or not, make sure you fully describe your choice of competitive strategy and explain why it would be the optimal solution if the firm does decide to diversify. Make sure you defend your decision to expand (or not to expand) and your choice of competitive strategy that would work the best (regardless of your expansion recommendation). 4) As implications of your recommended decision, what are the actions needed in the next year for each function in the company: Marketing, Finance, Human Resource, Technology, Operations, etc.? Describe the impact of your recommended competitive strategy on how various functional area strategies should be performed. For example, how would operations/maintenance be dealt with? Would new employees be needed to staff the aircraft? Would marketing/advertising strategies need to be adjusted for the new product relative to the existing airline? Could the company rely on current operations technology to manage the logistics of reservations and flight scheduling?