Classic Airlines Essay Example | Topics and Well Written Essays - 1750 words

definitive Airlines - Essay casefulThe airline attention is an oligopoly. Oligopolies are characterized by having a limited numbers of participants in a foodstuff structure that has a medium level of worth elasticity. Since there are few competitors companies tend to respond to changes in prices of other airlines. The airline industry has been in a cost savings mode for several(prenominal) years. Since 2002 the number of people working in the airline industry has been reduced by over 150,000 workers (Plunkett Research, 2011). The revenues generated by the industry in the United States are significant. According to the USTA the airline industry in the United States generated $704.4 one million million (Plunkett Research, 2011). It would be in the best interest of Classic Airlines to increase its market share in the remunerative US travel market set up. In the past Classic Airlines made the mistake of pursuing an aggressive price discount strategy. The results of the offseterin g the price strategic approach were not favorable. Drastic price reductions in an oligopoly place the entire industry at risk of a price fight. In a price war all the participants lose due to the fact that the profit of the entire industry goes down. Internal and External Pressures Classic Airlines is currently facing a lot of pressures from different stakeholder groups. The order has stayed profitable, but its margins are extremely thin. know year the company generated $10 million in revenues which seems like a nice figure, but considering the fast generated $8.7 billion in sales its net margin was very low. The net margin of the company was 0.11%. The industry standard net margin in the airline industry is 2% (Dun & Bradstreet, 2011). The shareholders of the company are put pressure on the management staff to improve the results of the corporation. Due to the weak financial accomplishment of the company the price of the common stock of Classic Airlines has been going down. O ne of the objectives of any public corporation is to increase shareholders wealth. The company also faces pressures from its customer base. The customers are not very happy with the company. A metric that illustrates the current posture the company is facing is the fact that the firms customer inscription program has lost 20% participation during the last year and the frequency of purchases of the customer has also departed down by over 20%. One of the primary reasons the companys financial performance has been weak is due to the fact that the company has lost a lot of returning customers. The customer belongings rate of a company is a very in-chief(postnominal) marketing metric. The company lacks the service elements, operations procedures, and marketing programs to satisfy the customers needs. In the business world the customer is the most important stakeholder group because companies depend on the customers for its revenues. A third stakeholder group that is facing pressure s due to the current situation at Classic Airlines is the employees of the company. The firm is currently having major employee morale problems as morale is as low as it has ever been. When employees have low morale they lose their motivation and as a instant their performance and efficiency suffers. It is important for the managers of companies facing morale problems to demonstrate strong leadership. The low morale of the employees is negatively impacting the customer service function of the enterprise. One of the critical positions in regards to customer service is the flight attendants. Their hypothesize is to make the customer feel comfortable during the entire flight. Objectives and Obstacles of Marketing Department The objective of the marketing surgical incision