Spirit Airline Strategic Planning

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Executive of the Sprit Airline

Spirit Airlines is a highly low cost carrier. It gives the clients many options of customizing their base tickets amounts. The company has agent print-outs known as the boarding pass. The boarding pass is used to check the input versus the doing in the online kiosk. The system checks bags and progressively increases charges for overweight bags.  By 2007, the Spirit started charging an amount of $3 for drinks. The charges increased to $5 in 2011 for passengers boarding passes printed at the check-in. According to these company, any bags that can exactly fit under the seats, are not charged. Any big bags that cause the overwhelming condition to the operators are the ones that are charged. The company ensures that the luggage does not exceed 50 pounds, and the bags are loaded up to $25. The company started in the US as a carrier to temporary to increase the passenger baggage fees (Eden, 1996).  In the states, the bag fees began with a minimal fee of $2 to attract fewer bags to the airline during traveling.  The aim of the company in discouraging passengers from carrying huge bags have resulted in another open business.

The company attains a higher competitive advantage over the higher-cost carriers. Its low prices in the market make it maintain its customers. Unlike some other companies such as the Delta Airline, US Airways and many other means of transport enterprises in the US, the stripe line has the least charges thus making many people prefer to use it. The company is also winning the competitive ability by ensuring that its bankruptcy is protected (White, 2001).  The company was recorded to be among the businesses in the US airlines that protected its bankruptcy. By so doing, it established a strong foundation in the market as compared to the other airline which was declared bankrupt in the year 2012

The attractiveness of the Airstrip industry makes customers like it. The leisure travels cost which depends on the service provided by the airstrip increases when the service given by the airline industry are active. The most significant factor that makes the airstrip gain more customers is its effectiveness.

BCG Analysis

The BCG Matrix graphically shows differences amongst Spirit Airlines’ passenger revenues and profits and non-ticket income and profits about market share position and industry growth rate. Passenger revenue is obtained from the base company’s ticket sales.  Miscellaneous income is known ancillary fees generate non-ticket profits, including but not limited to checked baggage, advance seat selection, in-flight sales, etc. Spirit Airlines’ passenger revenues and profits division fall into 1st Quadrant, the Upper “Question Mark.” Units positioned in 1st Quadrant have high cash needs and small relative market share position, although they compete in a high-growth industry. Divisions in this Quadrant require close monitoring by internal controls and are often considered “problem children.” Spirit Airlines’ passenger revenues and profits section maintain a relatively small market share position, as evidenced by the firm’s 2% market share. Also, Spirit Airlines only carries 1% of U.S. passengers. At the heart Spirit Airlines’ business model is offering the lowest base fare to its customers.

Therefore, the passenger revenues and profits division will never become a Star or Cash Cow without dramatic strategy implementation. Attractive plans for departments in the Question Mark Quadrant are market penetration, market development, product development and divestiture. Spirit Airlines has made a significant investment to double the size of its fleet by 2020, representative of a current market growth strategy. As a result, this action could allow the passenger revenues and profits division to move from a Question Mark to Star, and ultimately Cash Cows if the airline continues to operate profitability. Spirit Airlines’ non-ticket income and benefits section fall into Quadrant III, the Upper “Cash Cow”. Divisions positioned in 3rd Quadrant of the BCG Matrix compete in a low-growth industry and have a high relative market share position. The non-ticket revenues and profits division generates cash more than its operating needs. It is the non-ticket income and benefits department that allows Spirit Airlines to maintain its competitive position in the marketplace, of offering the lowest base fare ticket value. As long as the non-ticket section’s revenues and profits continue to perform at this highly profitable level, Spirit Airlines will be able to maintain its strong position in the future. Although Spirit Airlines is innovative about its competition in using this division to generate significant portions of total revenue, this is a mature market because the firm has actively pursued this strategy and has been profitable (Eden, 1994). Attractive plans for divisions in the Cash Cow Quadrant include product development, diversification, retrenchment, and divestiture. Regarding Spirit Airlines non-ticket division, product development and diversification are the most advantageous strategies to pursue. On a BCG Matrix, the size of the divisional circles illustrates overall sales volume.

QSPM Analysis

Code sharing agreements are selected, acquisition of another airline, and the addition of a new route as viable strategies for Spirit Airlines to pursue. These strategies simultaneously combat the most heavily weighted threats and weaknesses, while capitalizing on Spirit’s strongest strengths and opportunities.

 External factors and the respective ratings from the IFE and EFE matrices quantitatively suggest codesharing, acquisition, and adding a new route are the most attractive strategies to pursue. The QSPM displays each policy regarding total relative attractiveness. Dealing with a codesharing strategy is most advantageous for the firm about existing strengths, weaknesses, opportunities, and threats. Additionally, a thorough Pro/Con Analysis has been conducted. The results supplemented the results indicated by the QSPM, affirming our decision to recommend a code sharing strategy.

Cultural Aspects Strategy

Cultural values include consist of beliefs, customs, norms, personalities, values, attitudes, heroines and heroes that exist in a company and that they describe the company. It is good to know that every organization have a culture that govern them and maintain their working relationships. Norms that can be emulated by the company define the firm’s success or failure.  It is crucial to look at the strategic management from the cultural way for the reason that the success and failure purely lies on the level of support that the strategies accrue firm’s culture. For instance if the strategies of the spirit airline company are supported by the cultural products, such as rites, rituals, ceremonies, stories, language, symbols, heroes and heroines then the managers often can make the changes more easily and with a lot of easiness. It is good to know that strategies which need less cultural changes can be more appealing because more changes take considerable time and effort to implement (Post, Frederick, Lawrence, & Weber, 1996). Therefore, for the Spirit Airlines firm to succeed, they should apply and take into consideration the cultural values of the area where the firm exists.

 

 

Grand Strategy Matrix Analysis

In 2013, the total airline revenues increased 5.06%, classifying it as a moderately rapid market growth industry. Spirit Airlines fell into 1st Quadrant of the Grand Strategy Matrix. The grand matrix is the most recommended strategies for companies in Quadrant I include in market growth Spirit Airlines has made plans to expand fleet size. This expansion will allow the firm to add services into new markets and extend operations to an underserved business environment that are already operating profitability (Lawrence, & Lorsch, 1986). There is a likelihood for serious market development due to the business’s assets and extensive amounts of available capital.

 

Recommendation

The most recommendable strategy to be used in the spirit Airline is the Grand strategy matrix analysis. It is the most an appropriate strategy since the company’s operation lies in its first quadrant, and it is this quadrant that any company has a room to extend its operations to areas that their services are profitable yet the company has not fully utilized the market share. Another important strategy is the one of scanning on the cultural aspects of the community from with the organization is operating. If the culture of a such an organization should be consider and relevant services be provided as per their needs, then the Spirit Airlines will continue dominating the market.

Critical Thinking

Analysis of the spirit Airstrip’s market is very important, it helps the company identify what its customers want and the way forward of achieving them. The use of the analysis matrices will help the company identify the best way to operate in order to realize its optimum results. The company should always consider all aspects of the community from where it operates and work to words achieving what the community needs.  The company on its strategic analysis should first consider the community’s opinion since it is through community opinion the company will understand the best way to present its products in an appropriate way that will attract the attention of the customer and thus more outcome. Analysis of the cultural aspects of the community marks the beginning of the company expanding its operation and profits.

In decision making, the company should not depend only one technique of strategic analysis techniques such BCG or any other mentioned strategy. The company should consider every important strategy mentioned and finally borrow concepts from the list from established. Combining the ideas obtained from the list will make the organization to come up with a hybrid technique of strategic planning. The implementation of such a plan will make the organization realize its full potential. Using of a single strategic analysis may provide a positive impact on the organization but the results would not be as good as the one used in the hybrid technique.

Conclusion

The spirit Airline will ever be on the lead if it implements all important aspects that are included in all strategic analysis strategies. The company should combine implement all positive aspects narrated in the BCG matrix and consider the cultural aspects to ensure that the company matches with the demand of the community. It should learn from the past experience and engineer a mechanism of fighting with any possible competition that may be coming into the market. The company will be on the lead if it maintains what its customers’ needs most

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

References

Post, J. E., Frederick, W. C., Lawrence, A. T., & Weber, J. (1996). Business and Society: Corporate        strategy, public policy, ethics.

Lawrence, P. R., & Lorsch, J. W. (1986). Organization and environment: managing           differentiation and             integration (Harvard Business School Classics).

Eden, S. E. (1994). Using sustainable development: The business case. Global Environmental                    Change,             4(2), 160-167.

White, G. W. (2001). Business ethics. Journal of Business & Finance Librarianship, 6(4), 49-49.   

Kaplan, R. S., & Norton, D. P. (2001). The strategy-focused organization: How balanced scorecard         companies thrive in the new business environment. Harvard Business    Press.

 

 

 

1. The ability to meet humanity’s needs without harming future generations is now a top priority in most corporate agenda

ethics

rules

sustainability 

righteousness

 2. This is a historically popular technique through which managers create a quick overview of a company’s strategic situation—it is based on achieving a sound fit between internal resources and the external situation.

External analysis

Value chain analysis

Internal analysis

SWOT analysis 

 3. New-to-the-world products are ________.

new products that create an entirely new market

existing products that are targeted to new geographical markets

low-cost products designed to obtain an edge in highly competitive markets

new product enhancements that supplement established products

 4. Prestige LLC, a small company that manufactures specialty cereals and energy bars, wants to launch a “green marketing” program in response to heightened consumer awareness about environmental issues. What should the company do to maximize the program’s chances of being successful?

Demonstrate that the products will benefit both customers and the society in the long-term. 

Focus on the efforts and costs incurred by the company to bring these “green” products to consumers.

Emphasize benefits to the consumer rather than environmental benefits.

Explain the rules and regulations laid out by governmental agencies to protect the environment.

 5. BMW’s “The ultimate driving machine,” American Express’ “Don’t leave home without it,” New York Times’ “All the news that’s fit to print,” and AT&T’s “Reach out and touch someone” are all examples of ________.

brand personality

brand slogan 

brand vision

brand mission

 6. A company that attempts to lead its industry in price and convenience by pursuing a focus on lean and efficient operations is pursuing what strategy?

Product leadership

Operational excellence 

Customer intimacy

Low-cost leadership

 7. This is an important structural decision and resultant separate activities need to be coordinated and integrated back together as a whole so the business functions effectively.

Preferencing

Differentiation 

Diversification

Broadening

 8. Marketers need to identify the hierarchy of attributes that guide consumer decision making in order to understand different competitive forces and how these various sets get formed. This process of identifying the hierarchy is called ________.

market valuation

market partitioning 

brand association

market estimation

  9. When performing this analysis, it is good for strategic planners to consider similarities between the benefits the customers derive from the products and services that other firms offer.

Company analysis

Customer analysis

Competitive analysis 

Business analysis

 10. Leaders galvanize commitment to embrace change through clarifying strategic intent, building an organization, and

shaping organizational culture 

developing a mission

developing a vision

planning strategy

 11. Large-scale, future-oriented plans for interacting with the competitive environment to achieve the company objective refers to its

goals

strategy 

competitive analysis

dynamic policies

 12. Under which of the following conditions is the frequency the most important factor in media selection?

When there is high consumer resistance to the product 

When going into undefined target markets

When introducing flanker brands

When launching infrequently purchased brands

 13. Which component of a marketing audit includes major developments in income, prices, savings, and credit that affect the company?

Economic 

Cultural

Political

Technological

 14. This is designed to check systematically and continuously whether the premises on which the strategy is based are still valid

Strategic surveillance

Premise control  

Implementation control

Special alert control

 15. With ________ as a target market strategy, the firm concentrates on serving many needs of a particular customer group.

product specialization

selective specialization

single-segment concentration

market specialization 

 16. What is the perceived monetary value of the bundle of economic, functional, and psychological benefits customers expect from a given market offering because of the product, service, people, and image?

Complete marketing benefit

Ultimate service benefit

Total customer benefit 

Total management benefit

 17. These social responsibilities are those that are voluntarily assumed by a business or organization. They include public relations activities, good citizenship, and full corporate social responsibility.

Economic responsibility

Employee responsibility

Legal responsibility

Discretionary responsibility 

 18. When diversification involves additions of a business related to the firm in terms of technology, markets or products, it involves

concentrated growth

vertical diversification

concentric diversification 

horizontal integration

 19. One of the ways to change the course of a brand is to modify the product. Under product modification, ________ adds size, weight, materials, supplements, and accessories that expand the product’s performance, versatility, safety, or convenience.

feature improvement 

style improvement

technological improvement

quality improvement

 20. Firms using this generic strategy attempt to build customer loyalty by stressing a specific product attribute above other product qualities.

Differentiation 

Focus

Cost leadership

Concentrated growth

 21. A set of ideas on organizational control based on the belief that the separation of the ownership from management creates the potential for the wishes of owners to be ignored refers to

Adam’s theory

the moral hazard problem

agency theory 

ethical responsibilities

 22. A firm must know where to position its product based on price and 

Quality 

region

communication

promotional efforts

 23. A valuable result of task environment analysis with respect to geographic, demographic, psychographic and buyer-behavior factors is called

vendor profile

financial position

competitor profile

customer profile 

 24. Which control should periodically reassess its approach to the marketplace with a good marketing audit?

Ethical control

Performance control

Marketing control

Strategic control 

25. The strategic factor that involves the beliefs, values, attitudes, opinions, and lifestyles of persons in the firm’s external environment, as developed from cultural, ecological, demographic, religious, educational, and ethnic conditioning.

Social factor 

Stakeholder factor

Political factor

Economic factor

 26. A company can learn a great deal by analyzing the degrees of brand loyalty. For example, ________ can show the firm which brands are most competitive with its own.

switchers

shifting loyals

hard-core loyals

split loyals

 27. How do functional tactics compare to business strategies?

Functional tactics are more focused on the general direction of the firm than business strategies.

Functional tactics are more long-term than business strategies.

Functional tactics are more focused on a commitment to corporate strategy than business strategies.

Functional tactics are more specific than business strategies. 

 28. Company X’s principal strength is its inbound and outbound logistics system; its relative weakness, however, is after-sales service. Its competitor, Company Y, however is often plagued with lagging shipments and an inflexible distribution setup. Company Y remains successful because it maintains a fully staffed service department and, as a result, the company is known for its dependable service. This type of analysis allows them to identify ways to build on relative strengths and avoid dependence on capabilities at which the other firm excels.

Industry comparison

Past performance comparison

Benchmarking 

Disaggregating

 29. The marketing manager needs to know the cost of the research project before approving it. During which stage of the marketing research process would such a consideration most likely take place?

Step 1 – defining the problem

Step 4 – analyzing the information

Step 5 – drafting the report

Step 2 – developing the research plan 

 30. What type of strategy consists of geographical pricing, price discounts and allowances, promotional pricing, and differentiated pricing?

Fixed pricing

Altered pricing

Regular prices

Price adaptation 

 

This is another paper with the same requirement do not mix it up with another posting

 

Resource: Performance Report Template

Use the Performance Report Template provided and research specific project management metrics (ex -Earned Value, Return on Investment, etc.) to become familiar with those on the template.

Create a full performance report for the case study from Week 2 (OLLO) using the modified (based on instructor feedback) information from previous weeks (ex – WBS, Change Management plans, communication plans, etc.).

Indicate the stakeholders who would receive the report.

Include specific metrics on the performance report to demonstrate if the project was successful or not at the time of reporting

Include an approximately 200- to 250-word explanation in each area on the template to help indicate what each of the metrics demonstrate, lessons learned, team functioning throughout the project, etc.

Week 9 discussion 

“What is important in your elevator pitch?”

Please respond to the following:

• Watch the following Lynda.com videos from the video serious Giving Your Elevator Pitch with Todd Dewett:

• “Benefits to an Elevator Pitch” (2:01)

• “Making an Initial Connection” (2:43)

• “Structuring your Pitch” (3:57)

• Then, rank the following factors in order of importance when developing an elevator speech, and provide a rationale for your response.

• Speech is confident, not arrogant

• Use of positive and compelling words

• Short in duration

• General to the industry in question

• Specific to the company’s mission and company’s values

Assignment 4: Presentation

Due Week 9 and worth 70 points

After you have fleshed out your business plan you will have the information you will need for a slide presentation (e.g., PowerPoint). This 12-slide presentation conveys the most important aspects of your business in a short time. More sophisticated investors, such as angel investors and venture capitalists, will typically not look at your written business plan until they have seen your slide presentation.

Presentation (MS PowerPoint or equivalent)

1 Create a 12-slide presentation. Follow the outline on pp. 343–346 for the critical slides of your presentation and their placement. Click here for help accessing a specific page number in your eBook.

• Hints: Include the highlights of your elevator pitch, which shows that you understand your business. The elevator pitch is a concise description of your company—its product, market, competitive advantages, and so on. Whether pitching your business to an investor or describing it to a potential connection at a networking event, you need to be able explain your business succinctly to someone in the amount of time it would take to ride up a few floors in an elevator. Use the worksheet in the text (p. 362 | Your “Elevator Pitch”) to develop your elevator pitch.

• Hints: You must limit your presentation to twelve (12) slides. You do not want to overwhelm your audience with too many slides or bore them with information they already know.

2 Cite three (3) resources you have used to complete the exercise.

• Citations and references must follow APA format. The reference page is not included in the required page length

The specific course learning outcomes associated with this assignment are:

• Describe strategic planning techniques used to formulate alternative strategies designed to achieve stated business goals.

• Create a plan to implement a firm’s strategy and manage the change from current operations.

• Analyze strategies for exerting the internal leadership needed to drive the implementation of strategic initiatives and improve operating excellence.

• Use technology and information resources to research issues in strategic management.

• Write clearly and concisely about strategic management using proper writing mechanics.

Peregrine Exam (100 points)

What is the Peregrine Exam and why do I have to take it?

At the end of the course, you will complete a Program Assessment exam called the Peregrine Exam. The exam is designed to assess the foundational business knowledge that you have acquired throughout the duration of your program at Strayer. By completing this exam, you are not only evaluating your competency and understanding on each topic you have learned throughout your program but also helping to ensure that Strayer University maintains the highest quality of education in the business programs that we provide to our students.

This exam can be completed in weeks 9, 10, or 11, but the certificate of completion must be submitted through the “Submit Peregrine Assessment” link located in week 9.

Masters Student Registration Instructions:

1 Click the “Take the Peregrine Exam” link above.

2 Enter your Student ID and select your Program.

3 Click “Confirm”

4 To take the exam:

a Select the hyperlink under “Thank you, your course/exam is ready”, then “Begin Exam”

b When finished, save the completion certificate and upload via the Submit Peregrine Assessment link in week 9.