Since the appointment of RALPH NORRIS as Managing Director and CEO of Air New Zealand in February 2002 Air NZ has been working on its new strategic direction. Structural changes in the marketplace made a new direction indispensable and Air NZ is now turning away from inflexible service offerings to align its route and service standards to customer needs.
In fact, Air NZ is developing from a full service airline into the direction of a “value-based-plus” airline (Airline to put profit on menu, 2002) which involves lower fares and more customers. Reduced revenues (per customer) should be offset by lower operating costs mainly achieved by simplification of product bundles and services. (UBS Warburg Conference, 2003, p.11 ; Airline to put profit on menu, 2002)
This essay gives an overview of Air NZ strategic direction. It analysis its strengths and weaknesses (SWOT). Moreover a recommendation for a new strategy is worked out and strategy implementation issues discussed.
Table of Contents
- Current strategic direction
- Mission and goals
- New Philosophy
- Cost reduction
- Portfolio of businesses and airlines
- Engineering and Cargo
- Airlines
- SWOT analysis
- External societal environment
- External industry analysis
- Competitors and intensity of rivalry
- Internal organisational analysis
- SWOT diagram
- Core competence and competitive advantage
- Strategy formulation
- Strategic Factor Analysis Summary (SFAS Matrix)
- The ten key strategic factors
- Modification of Air NZ's current strategy
- The top three strategic factors being faced by Air NZ
- New strategic goals and objectives for Air NZ
- Alternative strategies and effect on corporate strategy
- Alternative strategies
- Effect on corporate and current competitive strategy of Air NZ
- Implications for the various lines
- Implementation Issues
- Strategy evaluation and control
- Ethical issues
Objectives and Key Themes
The main objective of this work is to analyze Air New Zealand's strategic direction and its implications. The text examines the company's shift from a full-service airline to a "value-based-plus" model, focusing on cost reduction, portfolio management, and competitive strategy.
- Transition to a "value-based-plus" airline model
- Cost reduction strategies and their impact
- Portfolio management and the strategic interplay between different Air NZ business units
- Competitive analysis and response to market challenges
- Implementation of new strategic goals and objectives
Chapter Summaries
Current strategic direction: Since Ralph Norris became CEO in 2002, Air New Zealand has undertaken a strategic shift, moving away from inflexible service offerings toward a customer-needs-based approach. This involves transforming into a "value-based-plus" airline, aiming to offset lower revenue per customer with reduced operational costs through service simplification. The chapter outlines the key aspects of this new strategic direction, including the company's mission, goals, and cost-reduction initiatives.
SWOT analysis: This chapter delves into a comprehensive SWOT (Strengths, Weaknesses, Opportunities, Threats) analysis of Air New Zealand. It covers external factors like the societal environment, industry analysis, and competitive landscape, along with internal aspects such as organizational structure, sales networks, and financial performance. The chapter synthesizes these analyses to identify Air New Zealand's core competencies and competitive advantages in the market.
Strategy formulation: This section focuses on the development and refinement of Air New Zealand's new strategic goals and objectives. A Strategic Factor Analysis Summary (SFAS) matrix is utilized to identify and prioritize key strategic factors influencing the company. The chapter then outlines modifications to the existing strategy, including alternative strategic approaches and their potential impact on Air New Zealand's corporate and competitive strategy. It also discusses the implications of these changes for various business lines within the company.
Implementation Issues: This chapter addresses the practical challenges of implementing Air New Zealand's new strategic direction. It covers aspects of strategy evaluation and control, highlighting the importance of monitoring progress and making necessary adjustments. Furthermore, it explores potential ethical considerations associated with the implementation of the new strategy.
Keywords
Air New Zealand, strategic direction, value-based-plus airline, cost reduction, portfolio management, SWOT analysis, competitive strategy, implementation issues, ethical considerations, "new philosophy," Express Class, freedom air, ANZES.
Air New Zealand Strategic Direction: Frequently Asked Questions
What is the main focus of this document?
This document comprehensively analyzes Air New Zealand's strategic direction and its implications. It examines the company's transition from a full-service airline to a "value-based-plus" model, focusing on cost reduction, portfolio management, and competitive strategy. The analysis includes the company's mission, goals, SWOT analysis, strategy formulation, and implementation issues.
What is Air New Zealand's new strategic direction?
Air New Zealand has shifted from a full-service airline to a "value-based-plus" model. This involves offering a more customer-needs-based approach with simplified services to offset lower revenue per customer through reduced operational costs. The company aims to achieve this through cost reduction strategies and efficient portfolio management.
What key themes are explored in the analysis?
The key themes include the transition to a "value-based-plus" airline model; cost reduction strategies and their impact; portfolio management and the strategic interplay between different Air NZ business units; competitive analysis and response to market challenges; and the implementation of new strategic goals and objectives.
What is included in the Table of Contents?
The table of contents covers Air New Zealand's current strategic direction (including mission, goals, cost reduction, and portfolio of businesses), a SWOT analysis (external and internal factors, core competencies), strategy formulation (SFAS matrix, key strategic factors, alternative strategies), and implementation issues (strategy evaluation, ethical considerations).
What is the purpose of the SWOT analysis?
The SWOT analysis provides a comprehensive evaluation of Air New Zealand's internal strengths and weaknesses, as well as external opportunities and threats. This analysis helps identify the company's core competencies and competitive advantages in the market, informing the development of its strategic direction.
How does the document address strategy formulation?
The strategy formulation section details the development and refinement of Air New Zealand's new strategic goals and objectives. It utilizes a Strategic Factor Analysis Summary (SFAS) matrix to prioritize key strategic factors. The analysis includes modifications to the existing strategy, considering alternative strategic approaches and their impact on the company's corporate and competitive strategy across various business lines.
What implementation issues are discussed?
The document addresses the practical challenges of implementing Air New Zealand's new strategic direction. This includes strategy evaluation and control, emphasizing the importance of monitoring progress and making necessary adjustments. It also explores the ethical considerations associated with the implementation of the new strategy.
What are some key words associated with this analysis?
Key words include Air New Zealand, strategic direction, value-based-plus airline, cost reduction, portfolio management, SWOT analysis, competitive strategy, implementation issues, ethical considerations, "new philosophy," Express Class, freedom air, and ANZES.
What specific strategies are mentioned for cost reduction?
While the specific cost reduction strategies aren't detailed extensively, the document indicates that Air New Zealand's shift to a "value-based-plus" model involves simplifying services to offset lower revenue per customer with reduced operational costs. Further details would require a deeper dive into the full text.
What is the significance of the "value-based-plus" model?
The "value-based-plus" model represents Air New Zealand's strategic shift from a full-service airline to a more customer-needs-based approach, focusing on offering value while streamlining services to improve cost efficiency and competitiveness.
- Quote paper
- Marc Dominick (Author), 2003, Air New Zealand. Strategic Analysis and Recommendations, Munich, GRIN Verlag, https://www.grin.com/document/44841
