Delta Airlines SWOT Analysis: Achieving Leadership in Air Transport - Essay Sample

SWOT analysis on Delta Airlines that deals in air transport, both cargo and passengers. The air transport industry has grown since its inception due to its advantages such as speed. Since then, there have been significant adjustments to the way business is conducted in the industry. The changes necessitate a change in business strategy (Collaborative Dynamics, 2015) to enhance competitiveness. The mission of the company is to be the leading airline in the aviation industry. The company envisions the provision of excellent services for its customers so that it would become the first choice for many. The company does not manufacture its airplanes but buys and sometimes leases from manufactures. The company incurs cost when it comes to maintenances of the fleet as they have to be done by the sellers of the planes. The company further suffers a loss in salaries and equipment—the main operational strength for the company innovativeness in customer service delivery through technology.

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Current Trends in Air Transport

Air transport continues to advance as technology continues to be revolutionary. The cargo sector, for example, demands a lot of innovation for companies to ferry even heavier cargo to various parts of the world. This necessity has seen bigger planes with huge cargo capacities and a light body structure to reduce fuel consumption. Agents tasked with selling plane tickets are now a thing of the past as people have embraced technology and can remotely book hotels and flights directly through airline websites. Regulations have become stricter as the world aims at reducing global warming; companies need to reduce Carbon dioxide emitted from their planes. The regulations have added more corporate responsibility which adds to the company's expenditure.

Luxury is an emerging trend in the industry as more business persons prefer a more customized experience. Technology is revolutionizing the aviation industry in coming years planes without pilots will be a reality (Porter's five forces model, 2015). Many companies have started exploring the possibility of having both cargo and passenger planes fly without pilots. At this moment, drones are the way to go when it comes to the delivery of certain services such as disinfectants. The impacts of the trends are universal as companies will have to align their business strategies to get an edge and be leaders in the sector (“Human Factor”, n.d). The company must evaluate its strength and weaknesses, opportunities, and threats to provide a comprehensive assessment for evaluation for a defined compact strategy.

Strategic Business Intent

Formulation of strategy has evolved over the years, and many firms are trying to juggle between internal business operations and corporate responsibilities. The business intent is aligned with sustaining every competitive advantage over its peers in the industry. The business intent is based on the works of (Katavic, 2016) and the structure on the developments of Weihrich (1982). The works are based on the internal and external analysis to boost the strength of business strategy by incorporating analysis of business strengths and weaknesses, threats, and opportunities. The model, however, has evolved to touch two aspects of the organization, namely organization and resource. The company, therefore, aims at utilizing its opportunities and strengths to mitigate its threats and weaknesses to enable smooth operations.

Financial objective

The company utilizes its resources to achieve an optimal competitive advantage. The company has launched initiatives with a clear direction to follow through building excessive capacity. To improve its profits, the company has pursed differential service delivery and cost leadership to gain an advantage over its competition as in figure 1. The critical operational strategy of the company focuses on cargo delivery based on the current situation in the market (Olsen, 2016). The total operating cost excluding taxes is 10% of the entire company expenses and more than three-quarter of a billion dollars in revenue. The company has created more employment opportunities for the local community (“business plan”, n.d) The company has realized these objectives as evaluated as illuminated by the position it holds in the aviation industry. The creation of employment for the local community has endeared it well in the hearts of the local community and a healthy relationship with authorities. The relationship might come in handy when the provincial government is setting regulations.

Strategy and Planning

The company needs a concrete strategy to ensure that its missions and goals are well executed and come to the realization (Yeates, 2014). Some of the strategy the company can employ include:

• Exploration of alternative fuel options to reduce C02 levels emitted by the planes
• Improve customer experience through the launch of an interactive platform where customers can get answers for their queries
• Manufacture of light aircraft for lower fuel consumption and avoid incurring the cost of leasing and buying airplanes
• Increase fleet size with modern luxurious planes to offer more comfort to customers
• Offer incentives to loyal customers
• Diversify the company's portfolio through investment in startups that complement their presence in the market.

The plan to realize the strategies work is through forging new alliances, the launch of new products, innovativeness, and organizational integrity, as seen in figure 2.

Assessing the Need for SWOT Analysis

Facing competition and uncertainty in the market, the company needs new strategies to explore how it can use the advantages it has in the industry through the utilization of a SWOT analysis (“PESTLE analysis”, 2016). This is to establish itself as a competitive player in the aviation industry. Currently, the company has not considered expanding to other regions, and expansion to these regions will be vital for the survival of the company. Position itself as a competitive airline; Delta Airlines will need to establish another different business unit to:

• Develop new products
• Mainstream media advertisement
• Promotions of company ideals
• Management of ticket prices and sales

The company has used a piece-meal approach other than formulating a comprehensive framework. As evidence suggests and amplified in figure 3, the responsiveness of the strategy has been mainly to support the company's operation daily operation (Converting your strategy into action). These actions were mostly due to the various problems the company was facing. Extra measures that created redundancy were adopted by the company to deal with the shortcomings. SWOT analysis will help the company take another strategy that will eliminate redundancies and formulate a comprehensive framework.

SWOT Analysis

The company should consider service differentiation in anticipation of competition. It has to reorganize itself, focus on industrial and commercial businesses to concentrate more on its top commercial customers (Gill, 2016). The company has a strong customer base and occasionally researches to see the impact of their services on customers. It, however, lacks a new product design unit that can design new product. The company should rethink its employee it's funding to the program by increasing the money allocated to the program (Wright, David, et al., 2011). The company has a customer information system that is out of date and sometimes causes problems during billing.

The company recognizes the need to develop a new customer information system to take advantage of its customer base to reduce any problems that can lead to customer dissatisfaction. The maintenance of the company's fleet of planes is done by third parties (Riley, 2016). The company realizes the need to have a re-engineering program to create a good maintenance program that focuses on increasing the operability of the aircraft. The company should consider operational priorities and actions through strategic priorities area.

Conclusion

The SWOT analysis is to guide the company is introducing a new strategy to ensure operations continue smoothly (Ten key elements to strategic planning). It will reduce redundancies in operational costs by using its strengths and weakness and find ways the strengths can be used to mitigate the risks of weaknesses. This paper addresses the strategy challenge by Delta Airlines and it analyses the challenges through SWOT analysis. It also provides guidelines for the airline to adopt a new strategy. The guidelines include the business eliminating redundancies and finding its core strengths.

References

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Brethren, C. A. (n.d.). The business plan versus the strategic plan - Part 1 - BizQuest.com. Retrieved from http://www.bizquest.com/resource/the_business_plan_versus_the_strategic_plan__part-31.htmlClarke, L. W. (2011). Writing an article synthesis. Retrieved from https://www.youtube.com/watch?time_continue=33&v=PqJ6lQimP3k (6:18)

Collaborative Dynamics. (2015, January 13). Strategic planning and SWOT Analysis [Video file]. Retrieved from https://www.youtube.com/watch?v=VTH_WsyoEeMDowell, J. A. (n.d.). Introduction to synthesis. Retrieved from https://msu.edu/~jdowell/135/Synthesis.html#anchor48017Gill, A. (2016). Floundering in a deregulated market: an energy company seeks new strategies. Journal of Business Strategy, 37(2), 27-35.

Gould, M. (n.d.). Ten key elements to strategic planning. Retrieved from http://yourstrategicconsultant.com/ten_key_planning.phpGreen, H. G. (n.d.). The five "must-have" elements of a strategic plan - The Human Factor. Retrieved from http://thehumanfactor.biz/the-five-must-have-elements-of-a-strategic-plan/

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Olsen, E. (2016, November 17). Corporate level strategy [Video file]. Retrieved from https://www.youtube.com/watch?v=isVsG6d9dmwOlsen, E. (2016, October 27). Overview of the strategic planning process [Video file]. Retrieved from https://www.youtube.com/watch?v=s_OvXeUQV3o (5:54)

Olsen, E. (2016, September 19). How to perform a SWOT analysis [Video file]. Retrieved from https://www.youtube.com/watch?v=I_6AVRGLXGA (7:02)

Riley, J. (2015, June 3). Topic briefing - Porter's five forces model of industry competition [Video file]. Retrieved from https://www.youtube.com/watch?v=cm9SsMa56r4 (21:32)

Riley, J. (2016, May 25). PESTLE analysis [Video file]. Retrieved from https://www.youtube.com/watch?v=sP2sDw5waEU (8:42)

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Yeates, D. (2014). Strategy analysis. Business analysis (3rd ed., pp. 38-55). Swindon, U.K.: BCS, The Chartered Institute for IT.