Classic Airlines: One Of The Biggest Airlines In The World

1423 words - 6 pages

Running head: PROBLEM SOLUTION: Classic Airlines

Problem Solution: Classic Airlines
Standing as one of the biggest airlines in the world, Classic Airlines has seen many successful years of operation, characterized by phenomenal growth. However, in recent months the airline giant has faced several challenges that many other firms have fallen victim to before. Amidst softer economic market conditions and increased competition, Classic Airlines has seen its sales drop. Moreover, the rising price of fuel and labor has also taken its weight on the company, thus making the airline giant less cost-efficient compared to the younger airlines. Given their current situation, its important to ...view middle of the document...

Such data would allow operational groups to make certain decisions based on consumer trends and behaviors. In addition, the right use of their CRM software would also allow Classic Airlines to get better customer feedback towards a stronger rewards program. An efficient CRM allows an organization to “discover and satisfy customer needs as well as shape new ones” (Kerin et al, 2006). Also, with a better control on consumer trends and a better understanding of the consumer’s voice, Classic’s marketing team will be better placed to launch new promotions and as well as take certain marketing decisions that will ultimately forge long-term customer relationships.

Another key issue that has affected Classic Airlines is the increased amount of competitors that have recently emerged. Following the events of September 11th, 2001, many new airlines emerged without the “restrictive cost structures” (Classic Airlines Scenario, p.1) that the bigger airlines now faced. As such, Classic Airlines needs to take certain measures to ensure that it retains its competitive edge. The most effective tools that can be used to efficiently provide potential solutions lie in a company’s analytical and benchmarking abilities. Many firms, in similar situations as those faced scenarios by Classic Airlines have either succeeded or failed with the decisions they made. Although benchmarking does not necessarily provide a guaranteed solution to be implemented, it will help the firm to better understand potential solutions that would fit the organizations needs. The firm should focus on benchmarking within the airline industry and non-related industry in order to provide a broad range of potential solutions. It is imperative that Classic Airlines understand and see what it is that their competitors are offering so that they may be better placed to fill any gaps that they currently perceive within their own offerings. Sometimes both companies provide the same service but the competitor is doing something a little extra then what the current company, in this case Classic Airlines, is doing. In this case, chances are that consumers will opt to go to the competitors who better meet their customer’s needs and wants.
Finally, in terms of cost reductions, Classic received a memo from the board of directors clearly mandating the company to execute a “15% across-the-board” cost reduction (Classic Airlines Scenario). Moreover, in addition to reducing costs, Classic Airlines has also been mandated to increase its service levels through its frequent flier rewards program. Given the current issue, Classic might want to possibly look at partnering up with another in expanding its rewards program and at the same time, they will benefit from sharing the incurred costs of launching a new marketing campaign towards the new program. This team-up with another company might include joining forces with another airline or a multitude of other companies in transportation and...

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