FreeWay“毕马威杯”管理案例分析大赛案例作品

More complexity in ticket ordering than the competitors Good at providing united transportation with different ranges Not intelligentized enough
Little effect with a large expenditure in advertisement Bad communication with the customers
Acquisition
• Merge low-cost airlines such as Esayjet • Incorporate our short-haul business with the low-cost airlines. • Rebuild a new low-cost airlines.
Background
Question
Analysis
Solution
Implement
Forecast
Background Overview
90’s -2000 • BA is the largest and most profitable airlines in Europe • Deregulation of airlines market in Europe • The establishment of tremendous low-cost airlines lead to fierce competition in short-haul market
Europe/total
UK/total Revenue
Profit
71.88% 37.00%
-31.76%
Euro especially UK have a large market share to lead high revenue and customer resource
High revenue with negative cost indicates the high cost and fierce competition
Present
Future Trend
• • • •
Airplanes have become a popular transportation Falling price LCA enter into the upmarket while giant airlines will go to downmarket The competition will force us to fight.
2000-2005
• • • •
Take measure to improve performance Leading little progress From loss to breakeven in short-haul market High operation cost •Some indexes like the number of passengers fall behind •The threat from low-cost carriers is stronger than ever •All options were rejected •Should we retreat from short-haul market?
Background
Question
Analysis
Solution
Implement
Forecast
Marketing（4C’s)
Care about the cost performance Rapid growth potential in area market rather than high-end market Low switch cost High operation cost Lack of power in price-making Large discount in tickets has already weaken the profitability
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Background
Question
Analysis
Solution
Implement
Forecast
Human Resources
Has 15 species of fleet
High upkeeps and training expenses
SWOT
Opportunity
•The expansion of the European Union •The market of low-cost is developing rapidly. •The development stage in Europe is earlier than America.
Background
Question
Analysis
Solution
Implement
Forecast
Alternative Plans
Retreat
• Give up short-haul • Focus on long-haul market which is more profitable.
Financial Marketing management and (Go to market) risk control TARGET
On time Service
18%
90%
3%
80%
Lost bags
Completions
17.7%
98.5% 65.24%
5%
99.4%
n/a
n/a
Revenue by original sale By Destination (euro/total) Passenger Source
Fleet
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Background
Question
Analysis
Solution
Implement
Forecast
Competitive Strategy
Target market
Long-haul: Differentiation
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Background
Question
Analysis
Solution
Implement
Forecast
Problem Breakdown
How to respond to Low-Cost Airlines? What is our competitive strategy?
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Independent Business Units
• Establish two independent business units which focus on short-haul and long-haul segments respectively. • These two units can executive different competitive strategy.
86% of employees are from UK
High salary per person
High labor cost
Potential expenses
Faced labor negotiations with unions in 2006
Culture
Structure
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Copyright © 2009 FreeWay Consulting, all rights resvered
÷
TURNOVER
Background
Question
Analysis
Solution
Implement
Forecast
Operation
BA Ryanair
05
Easyjet
05
Index
Background
Question
Analysis
Solution
Implement
Forecast
Competitive Position of BA
Strength
•High-end brand image •Scale effect •Leading the Long-haul market •The most comprehensive network •One world Alliance •Good performance at Capital strength •Long history
Threat
•Profitable low-cost start ups •Higher oil price •e-business is decreasing the business travel
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Weakness
•Loose cost control •High price •Weak influence on pricing (short-haul) •Major pension funding issues •Face challenges in labour negotiations with its unions
Should we retreat from the shot-haul market?
Retreat • Why? • How? Fight •Why? •Financial •Operation •Marketing •Human Resource •How?
Copyright © 2009 FreeWay Consulting, all rights resvered
Background
Question
Analysis
Solution
Implement
Forecast
Financial (Do pont)
Average data rate (97-06)
PROFIT
ROA
ROS
÷ ×
RVENEUE
ROE
×
ASSET
EM
÷
EQUITY
Key information: BA experienced a fluctuate ROE, ROA and ROS, thus ROE is mainly affected by the operation.
Passenger load factor
Species
72.4%
15
Low passenger load factor refers to low income
Cause large expenses of upkeep and training
Copyright © 2009 FreeWay Consulting, all rights resvered
Copyright © 2009 FreeWay Consulting, all rights resvered
Background
Question
Analysis
Solution
Implement
Forecast
Evaluation
From all the analysis above Plan C is the best!
Average (96-05/05) 6%
74%
Analysis
Low profit margin refers to high cost ratio 1.Complex operation system 2. Immature system of problem solving
Operating margin
Fight or Flight？FIGHT！
FreeWay Consulting
Content
Background
Question Raising
Case Analysis
Alternative Plans
Plan Implementation
Forecast
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