Strategic management Essay Example | Topics and Well Written Essays - 750 words

Strategic management - Essay ExampleThus, it has be suffer assertive for airliners to re-engineer their operations to fit the requirements of strategies like humiliated-cost and differentiation. According to the Porters five forces model, the manufacturing situation has led to a decline in the attracter of the industry for new entrants. These new entrants would come up with some sort of an edge to beat the entrenched airlines of the industry. The industry is also overseeing a period in which the bargaining power of suppliers and customers both are high. Customers are demanding additional benefits at low cost, whereas suppliers like Oil companies are seeking high prices for fuel. The dynamics of the industry are such that the rivalry amongst competitors is high. Since the customer base has shrink as a result of the world recession, therefore airlines are competing to attract customers towards them by offer differentiated services. Moreover, recent investment by the government on the infrastructure of railways and road network has lead to a situation in which threat of backup man is high for this industry. The results of these two strategic analysis tools show that the airline industry is overseeing a period of unprecedented level of competition and operating environment. Therefore, each airliner take to come up with operational excellence that allows it to run low cost operations, which has become imperative for the industry participants. How the Airlines are maintaining low cost operations Airlines, which bring adopted a low cost operational mode, imbibe been very stringent when it comes to spending their resources. They have expanded their operations in to new regions moreover when they were confident that they had the resource to support this initiative. These carriers never go into a head-to-head battle with long distance carriers. Moreover, these airlines try to keep their debt position very steadfast by not taking too much debt to fund their fle et operations. These airlines have designed an operational method that allows them to be short haul, high frequency, and low fare and point-point carriers. In addition, these air carriers have identified a market niche that is a best fit to their style of operations, which enables these airlines to serve them efficiently and economically. some importantly, these airlines have ripped forth the costs associated with extravagant customer servicing. Such costs are associated with frills, lunch and ticketing material. All such costs have been taken away from the operations of these airlines. Conclusion Harsh economic conditions coupled by rising cost of fuel have made it imperative upon airlines to streamline their operations. Airlines have to come up with a cost structure that is effective and efficient. This cost structure should be incorporated in the operational design of these airlines so that the airline finish generate profits from its operations. In this regards many airlines have adopted a low cost strategy under which they have taken certain actions that have been discussed above. Strategic Evaluation of the Strategic Options for Future Growth for the EAI Companies Recent economic crisis have led airliners in a messy situation. These airliners are now veneer a situation in which they have revenues declining at an exponential rate. Moreover,