In this simulation you chose a sector to operate in (budget, mid-range or luxury). What have you learned about these sectors because of this of your experience in this simulation? What will you have done in another way at the beginning of the simulation and why? What do you have done in another way to become more successful through the simulation and why?"
In this sector we handled as Emirates Airlines in mid-range as a view that there surely is a huge people in the sector and even if circumstances favours even budget and luxury people would select for mid-range. In such a sense during the start we sold 3 plane tickets which we had as it generally does not had head room and toilets and leased three plane tickets for the procedure. We started 1st quarter reselling seat tickets for 35 cents and it's really a mistake that we improved to luxury flight advertising for 48 cents immediately after the 1st quarter. As this would have transformed our focus on customer and everything the operation should also been changed accordingly. We incurred heavy expenses on Promotion and ad which hadn't created any impact. There have been complaints from customer for poor food services which we realised and started out allocating cost for quality and services. High amount could have been made on maintenance and general market trends which is the essential aspect in competitive industry like Airline.
Strategic Strategy: we didn't have any strategic approach when we started out our simulation. And that is the reason we had made unreasonable decisions like move to luxury and sales of airplane. if we had a strategic approach we would have sold the flights when there may be huge income and avoided rent payment to be added in the expenditures. Also we'd have shifted to luxury at least following the 4th quarter whenever we experienced a good customer bottom and market. Hence rather than having a single strategy, it would have been better if we had followed a mixture of strategies in terms of charges, marketing and services.
Systematic Approach: there is no systematic approach at the beginning of the simulation. We blindly sold the plane tickets without ascertaining the financial position and brought new flights during 6th 1 / 4 which we wrongly numbered and resulted in the purchase of another 3 plane tickets when the business has already been in a damage and thus realised and sold a air travel at 7th 1 / 4. The fuel, airfare operation and maintenance cost acquired radical increase and because of the increase in the amount of passengers we didn't suffer huge reduction. Hence if we had a systematic way from the beginning we would reach a good earnings.
Pricing: A cost cue is defined as any marketing strategy used to persuade customers that prices offer good value compared to rivals' prices, past prices or future prices (Rao, 2010: 150); at first we sold the seat tickets for 35 cents as mid-range flight and suddenly hiked the purchase price to 48cents as luxury flight. We did not have idea about the impact and did not take steps to offer service according alternatively invested in advertising and ad. We realised it as fault and felt that the costs is an important factor in getting customers only during 5th one fourth and decrease the price to 40 cents and only from then on we were going to increase the variety of customer. Hence if the prices factor has given significant importance on the start of the simulation, the business would have escaped from losses.
- Proper maintenance of airplane to avoid fine from FAA.
- Good system for customer reservation system to be versatile, fast and user-friendly.
- Strong investment in market research to allow sales forecast and market situation examination.
- Proper training and quality to make the customer feel satisfied and get the luxury in food and other services.
- Good organized maintenance of accounts in loan interest repayment, rent payment, depreciation to be able to have a clear view of the genuine profit.
- Strategic allocation of bills on advertising and advertising campaign, sales forecast and communal performance
- Strategic procedure on pricing and increasing the number of sales person corresponding the number of flights controlled.
What were the KPI's you used in running your air travel and performed they change? Critically appraise the value of the info you had accessible to you in the results packs during the simulation. How have you utilize this to impact for you to decide making?"
The here are the main element Performance Indicator we as a team of Emirates Airlines thought at the start of the simulation which we tried pursuing throughout the quarters however, many were obligated to reframe it anticipated to company's situation and response. Thus once an organization has analyzed its mission, determined all its stakeholders and identified its goals, it requires ways to measure progress toward those goals. Key performance indicators are those measurements that assist to define and measure progress towards organizational goals (Geoff, 2009: 419)
Flight Procedure: Quite KPI we adopted is in terms of flight procedure. We believed that reaching 80% of maximum mileage each day would definitely produce a profit. As flights can be flew only with the utmost passenger and also contains the number of flights used. Hence it can perform all in one KPI. We achieved this until 1 / 45 achieving 70% in each but it received changed due to acquire of 3 more flights without knowledge which made the company to give attention to the reduced amount of bills and deviated from the mls operating.
Promotional and sales forecast: Emirates Air travel team believed that high investment in campaign, ad and sales forecast may lead company's success. In terms of sales forecast, our KPI is at a correct way. But in terms of promotion and advertisement we altered and reduced the level of expense as the company began to incur reduction.
Financial Perspective: we thought income is an essential aspect for an flight company to reach your goals as there will occur uncertain circumstances anticipated to weather or fuel price, hence got a KPI to boost the revenue through Fares. We began a s mid-range and seduced maximum customers and shifted to luxury charging huge fare as a KPI of increasing the revenue. We are terribly influenced till 5th one fourth because of this factor and then reduced the costing.
The information we received through the value packages and incident opinions was very useful in refining our performance and take corrective methods. Not only in terms of finance but also in conditions of flight operation and service, the index opinions gave us the steps for improvement. The company was in a hardcore situation after the move to luxury flight, where the incident responses helped us to identify what was heading wrong. The here are the some changes we effected from the information we acquired through the value packs,
Increased the amount of flights and amount of flight routes.
Decreased the solution fares to be able to raise the number of people.
Concentrated on cabin services to increase the quality service to the individuals and reduce problems.
Taken methods and allotted cash on aircraft maintenance to avoid accidents and evade from fine.
Got knowledge that the huge lack of the company is due to the purchase of 3 additional flights resulted from fault in numbering in the software.
Came to know that a flight was unused hence sold the flight to avoid maintenance bills.
We felt the value of passenger service and allotted more finance towards it.
Giving due factor to theory, evaluate how a merger or acquisition might have changed your results and how you operated through the simulation? What additional implications would there were for your small business?"
Merger and Acquisition are often used inter-changeable concepts while merger is the mixture of two companies in order to form a new company and Acquisition is a company's purchase of another company where there is absolutely no formation of new company (Scott C. Whitaker, 2012). Merger and acquisition have the goal of attaining synergy.
There are certain factors that should be taken health care while going in for merger or acquisition as it ends up with social risk, business, employees and customer retention risk. These hazards may not be appropriate if Emirates could have prepared the merger or acquisition in the initial stage that is before 4th one fourth but if it is after that these said risks should be studied care of. Hence it is evident that the nature of company to which heading to be merged or bought should be taken into account that it ought to be similar in business and really should be stronger in procedure as emirates are working in a hardcore situation.
There are many advantages for company to look set for a merger or acquisition. We as a emirates airlines can merge or acquire a financially strong airline whereby we become financially strong and can reduce the price tag on capital (Donald M. DePamphills, 2009). In emirates during 5th quarter, we had a NIL balance of cash flow after the overdraft loan hence during such situation merging with company with good cashflow is a potential decision. Also you will see a positive effect on the stock price especially for companies like emirates where we'd our stock price in negative statistics. Not only in financial conditions, merger and acquisition also helps in terms of operation synergy. For e. g. , if we Emirates team go for a merger during our mid-quarter with a firm which is technologically strong we'd experienced a chance for competitive advantage and fast progress platform (Scott C. Whitaker, ). We'd havent made a blunder of unsystematic strategy in buying a airline flight during our 6ht 1 / 4 where we suffers much loss. A couple of major operating cost involved in terms of Airlines they are simply petrol, maintenance, interest bills, lease amount, promotional activities, market research, taxes and so on. These costs could have been propagate between two companies after merging.
Merger and acquisition are also helpful to use the possessions and skills of the other companies merging or acquiring with. We as Emirates team lacked in conditions of allocation of expenses and proper maintenance of aircraft. Hence merging with a managerial strong company would have helped us to move in the correct path. It helps in bettering the operating efficiency with a combined activity of the merging companies thereby can benefit from the market power. This is called market electricity theory. With this the company can have a control on the rates and suppliers and can also have customer basic.
As a team of Emirates Airlines only in the 1st quarter we could actually make a profit. It may be due to sudden transfer to luxury airlines which made us to suffer from continuous deficits till 6th 1 / 4. Our stock price also went on negative price. Hence merger or acquisition during the mid-quarter could be the better decision as it would have reduced the cost and share the total cost. We also had a reduction of costing on 5th one fourth which is often avoided when we had merger with this competitor. We lacked in many procedure areas like customer satisfaction, aeroplanes maintenance and proper allocation of expenditures, hence merger and acquisition could have been potential at early on stage.
Appraise how successful your organization was at your industry. Were your relative success / failure due mainly to your analysis and analysis or the choices and decisions you made? Which models and theory have you take into account when participating in the game and how have this help you?"
Planning, executing and monitoring are the key aspects for a corporation to reach your goals. And in industry like Airline where there are enough numbers of dangers, it's important that the firm follows a strategic methodology. We as a team began to controlled Emirates airlines as mid-range where in the first 1 / 4 we are able to have a good degree of passengers and thus revenue. We didn't have a take on the level of risk in shifting to luxury range all of a sudden in the second quarter and increased the fare at an increased rate. Only during fifth 1 / 4 we came to know the value of price factor and reduced the fare. The team didn't understand that moving to luxury range should be accommodated with high quality service to be competitive. We sensed its importance from the event report at that time when the business has already been in damage. To my knowledge the company began well but confronted troublesome situations and failures and also achieved the survival level where it can reach a good profit within the next quarters. We had a systematic method of some degree and made many ground breaking options like online booking system which really is a success to us, however the decision what we made to buy a trip when we were in deficit business lead to failing. Also we are not managerial approach even as wrongly numbered and the program bought additional 3 flights which added to a further damage. We had a clear view in allocating resources for plane maintenance, but because of the above faults we made during the simulation, we were unable to allot sufficient resources for maintenance which lead to engine unit failing and fine from FAA.
At the start of the simulation we used learning resource dependency theory (Aldrich, 1977) where we believed the company can be damaged to some degree with its external environment. Hence we got measure to influence the environment. Our external surroundings are customers, general population and the airline industry. We thought spending heavily in campaign and advertisement would create competitive gain and a brand image among the client where a hike in the fare can be a hidden factor. Hence through the second 1 / 4 we allotted $40000 on ad and shifted to luxury airlines with fare of 48cents. But only during the succeeding simulation we felt that there surely is no relation between the campaign and competitive benefits in an extremely completive airline industry and comprehended the value of cost and service factors. Hence we reduced the price and concentrated on quality and training. We also started concentrating on cabin services and passenger services with the rise of customer complaints which came to your knowledge through event feedback.
We as a team felt the importance of strategic strategy through the simulation. During the end of the one fourth we were clear about the ways of be adopted and we were sure our company will make a good earnings if it has another two quarters as we're able to find the changes in stock price with our corrective steps. The simulation provided us an enormous experience about the concept of risk management, tactical approach and source of information allocation. We also thought the value of group dynamics in owning a successful business.
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