Japan Airlines Corporation (JAL) is the leading full-service airline in Asia operating in the domestic and international passenger air-transport industry. However, in 2009 JAL's financial situation is alarming. 2009 was completed by a ¥51bn operating loss, representing a decrease of ¥140bn from previous year. In comparison, JAL's major competitor All Nippon Airways manages to stay in the black. This means JAL's competitive position is clearly in danger. Even worse - if JAL does not find a new strategic option immediately they are in danger of going bankrupt soon.
This paper intends to find such a strategic option to guarantee future success of the airline. A thorough strategic analysis including an internal and external analysis is used to find out the key strategic issues. Afterwards three possible strategic options are discussed. The most promising option is put forward and its implementation issues are thoroughly discussed.
Table of Contents
1 STRATEGIC ANALYSIS
1.1 External & Internal Analysis
1.1.1 Briefly Defining the Industry
1.1.2 Macro Environment: PESTEL-Analysis
1.1.3 Micro Environment: Porter’s Five Forces
1.1.4 Resources & Capabilities
1.2 SWOT Analysis & Key Strategic Issues
1.3 Strategic Options
1.4 Implementation Issues
Research Objective and Core Themes
The primary objective of this case study is to analyze the strategic position of Japan Airlines Corporation (JAL) amidst a period of financial distress and intense industry competition. The study evaluates the company's internal and external environment to determine viable paths forward, specifically focusing on the necessity of organizational restructuring and strategic realignment to secure future viability.
- Strategic analysis of the airline industry environment using PESTEL and Porter's Five Forces.
- Evaluation of JAL’s internal resources, capabilities, and financial standing compared to its primary competitor, ANA.
- Identification of strategic alternatives through a TOWS-Matrix analysis.
- Formulation of an effective change management strategy to support organizational transformation and potential merger integration.
Excerpt from the Book
1.1.2 Macro Environment: PESTEL-Analysis
The impact of the global economic crisis still slows-down worldwide transportation demand (IATA,2010). Additionally, natural disasters (e.g. volcano eruption, Iceland), terrorist attacks and epidemics often threaten the industry. However, in the long-term demand in air travel is forecasted to grow considerably (50%) until 2050 (Euromonitor,2008b).
By scanning regions it was noticed that air-traffic is shifting towards emerging markets in Asia-Pacific – especially to China, India and Vietnam – and the Middle East. Well-established markets (North Atlantic, EU) remain weak probably further depressed by current currency crises (Euromonitor,2008b;2009a,b;FT 2010c). This indicates that Asia-Pacific and Middle East provide the best future opportunities for marketers.
Japan’s economy, however, recovers only slowly, persisting job-cuts, high public debt and deflation. Therefore, Japan is becoming a more price-sensitive market (Economist 2010a,b). However, demand of premium long-haul routes remains rather stable as premium travellers here expect best value-for-money (FT,2010c).
A major uncertainty remain rising fuel costs. However, the completion of “open skies” agreement between US and Japan is likely to open up new opportunities of consolidations and strengthening alliances (FT,2010a,b;2009a).
Summary of Chapters
1 STRATEGIC ANALYSIS: This chapter provides a comprehensive evaluation of JAL's current competitive landscape, internal weaknesses, and financial instability while outlining potential strategic responses.
Keywords
Strategic Management, Japan Airlines Corporation, JAL, ANA, Airline Industry, PESTEL-Analysis, Porter’s Five Forces, SWOT Analysis, Mergers and Acquisitions, Strategic Options, Change Management, Emerging Markets, Fuel Costs, Competitive Advantage, Corporate Strategy
Frequently Asked Questions
What is the core focus of this case study?
The document provides a strategic analysis of Japan Airlines Corporation (JAL) during its period of financial crisis, evaluating its market position and recommending strategic directions for survival.
What are the primary themes discussed in the paper?
Central themes include the impact of macroeconomic environmental factors, comparative resource analysis between JAL and ANA, strategic option development, and the complexities of organizational change management.
What is the main objective of the research?
The goal is to assess JAL's viability and identify strategic solutions—such as focusing on emerging markets or merging with ANA—to overcome its financial and competitive challenges.
Which analytical tools were employed in the study?
The author utilized PESTEL-Analysis, Porter’s Five Forces, a TOWS-Matrix for strategy formulation, stakeholder mapping, and change management frameworks derived from Kotter and others.
What topics are covered in the main body of the paper?
The main body covers a detailed external and internal audit, SWOT analysis, a comparison of strategic alternatives, and an implementation strategy for managing organizational and structural change.
Which keywords characterize this analysis?
Key terms include Strategic Management, JAL, ANA, airline industry dynamics, competitive advantage, mergers, and change management.
Why is the merger with ANA considered a recommended option?
The analysis suggests that a merger would allow both entities to benefit from economies of scale, stop destructive competition, and improve their collective market position against global competitors.
What role does the Japanese government play in JAL’s situation?
The government acts as a key stakeholder and, through the provision of bankruptcy protection and financial aid, influences the decision-making process for JAL’s future restructuring.
How does JAL’s internal structure affect its ability to respond to change?
JAL is described as having a complicated business structure, which hinders its ability to react quickly to market changes, making the implementation of reform strategies particularly critical.
- Arbeit zitieren
- Svenja Stellmann (Autor:in), 2010, Case Study Japan Airlines, München, GRIN Verlag, https://www.grin.com/document/163063
