BMGT 364 Project 1 (Week 3) - Planning and the SWOT Analysis

Purpose

The purpose of this project is to introduce you to the planning process and to complete a SWOT analysis to determine a company’s strengths, weaknesses, opportunities and threats. Using the information gathered to complete the SWOT, you will begin to build a Strategic Plan identifying and discussing the company’s goals and objectives.

Outcome Met by Completing This Assignment

• employ effective planning processes to develop strategies, goals, and objectives in order to enhance performance and sustainability

Instructions:

You recently graduated with a bachelor's degree in business. You are a new hire at Silver Airways and your manager has asked you to assist him with building a Strategic Plan to reach the goal of merging with an airline carrier serving the Northeast US. Using the course materials (weeks 1 – 3) and research on Silver Airways, you will create a SWOT table and conduct a SWOT analysis on the current state of Silver Airways to determine its Strengths, Weaknesses, Opportunities, and Threats. You will then identify goals, explain these goals and identify and explain objectives for each goal.

Your manager has provided you with the following information about Silver Airways.

Silver Airways recently announced its purchase of Seaborne Airlines that is based in Puerto Rico. Expanding its flight routes within the Caribbean, makes the company the highest volume airline to the Bahamas and the Caribbean from Florida. In addition to its Bahama and Caribbean flights, Silver Airways serves the Southeast and a few Northeast states.

In answering the requirements, you will support the reasoning and conclusions made, which means you will explain ‘why and how’ rather than relying on making statements. This is a most important requirement so do not overlook it.

SWOT Analysis of Silver Airlines and Its Merger with Seaborne Airlines

Introduction

The purchase of Seaborne Airlines by Silver Airlines will be a chance for the company to expand and increase its presence in the Caribbean Countries, especially the Bahamas. SWOT analysis and strategic analysis of Silver Airways and Seaborne Airlines aim at providing the individual strengths that each company possesses (Silverairways.com, n.d). It is also carried out as a form of analysis of the opportunities that come with the merger of the company. Some of these opportunities include the increased volume of travel and a better financial muscle that will ensure that all customers are offered superior customer service.

The contents of this paper are as follows: A SWOT analysis matrix of Silver Airways. Further information will be provided as an explanation of the reasons behind the selection of specific parameters being selected as the Strengths, Weaknesses, Opportunities and Threats that the company faces. The strategic goals and objectives of the merger will be covered in the later sections of the paper. The strategies mentioned will be what the company has intended to achieve in the long term with regards to taking full advantage of the merger (Silverairways.com, n.d).

SWOT Table

STRENGTHS

· Market Share of the Northern United States of America since the company operates flights to that area (Silverairways.com,n.d).

· A sizeable extensive staff of pilots who are properly motivated.

· The brand is highly recognizable because of the many awards it has won, for instance, the Air Transport Awards.

· Marketing opportunities for the firm

· Over 170 daily flights mean that the company has sustained revenue over and above its closest competitors.

· A large fleet of aircraft that can carry a considerable number of passengers.

WEAKNESSES

· The company has experienced delays in the flight operations leading to disappoints.

· Inability to fulfil some of the requirements set up by the regulator

· Lack of adequate customer service contact and support, leading to poor customer service (Silverairways.com, n.d).

· Several booking problems are affecting the airline.

· There is a slow process of carrying out customer refunds in the event of cancellation of flights.

· Loss of revenue due to suspension of flight services to regions such as Daytona Beach

OPPORTUNITIES

· Increased focus on its niche markets will generate much-needed revenue.

· There is more opportunity for a higher passenger volume due to the merger

· The company can take advantage of the increased bookings for the flights especially in the segment of the luxury flights

THREATS

· The increased uncertainty regarding the coronavirus outbreak continues to be a threat to the revenue earning capacity of the airline (Silverairways.com, n.d).

· Uncertainty regarding the price of jet fuel continues to be a significant revenue issue.

· Competition obtained from larger airlines in the United States.

The increased market share for the Northern region is the strength of the company since the firm has been operating fleets to and from that area for quite some time hence, it has an already established market share that can only get bigger. Silver Airways employs a lot of staff, especially the pilots, to take the operational activities of the company forward. Since there is a bonus scheme where the pilots earn slightly more compared to other pilots, these pilots are more motivated and will work marginally harder, thereby increasing the earnings of the company. The company has over 170 flights daily which can only get better with time. Because of this, there is sustained revenue.

Most of the weaknesses of Silver are based on its lack of excellent service to the customers. The airline has had to suspend service to some of the profitable areas of the business; this service suspension has led to reduced revenue earnings of the company. In some airlines, the slow customer response has made some customers become a disgruntled lot because they do not expect such poor service to come from an airline as reputable as Silver Airways. This weakness of inadequate response to the customer's queries has made the airline to lose some of its customers to its competitors.

The company, just like other airlines throughout the world, is being threatened by the Corona. Lockdowns in the several Caribbean and American countries means that there is very minimal movement of people and goods from one area to another, hence low revenue (Tranberg, 2018) There is a competition threat from the other established airlines in the United States which have been in the Industry for a longer time compared to the Silver Airways industry that has only been in the Industry for the past ten years and American airlines such as the South-Western Airlines offer a lot of competition because it has been in the Industry for a long time. It has a more significant market and infrastructure, especially the number of fleet and human resources. The uncertainty regarding the prices of fuel causes a lot of jittery in the Industry. High rates of fuels often lead to low revenue of the company because it increases the overall operational costs (Tranberg, 2018).

The company has an opportunity of increasing high revenues if it continues to focus on luxury flights, which are in high demand by the individuals who earn considerable high-income levels. For the luxury or the leisure flights to make more business sense, the company ought to increase the number of light services that it operates to the different countries, especially those nations which have sandy beaches. The increase in the name of destinations is an opportunity for the company to shore up its income. The company has a chance to increase operations in the Southern American regions. More opportunities are available if the company can focus on the long haul flights by operating flights from far-flung destinations. The higher the distance between one area to another, the more money that the airline can earn in terms of flight ticket sales.

The primary strategic objectives of the company are as follows:

Strategy Goal 1: A distribution strategy

Increase in the distribution network of the products sold by the company. The company’s ultimate aim of increasing profitability of the products offered to the consumers must follow a distribution strategy (Tranberg, 2018). Since the two airlines have merged, there is needed to come up with a distribution strategy which will accomplish the following: centralize the customer service and ensure that the customers purchase as many tickets as possible (Hemmerdinger, 2019). The two main objectives that will drive this strategic goal are: ensure that the tickets are available to the consumers at the needed time, ensure that the cards reach the consumers within the correct time (Hemmerdinger, 2019).

Strategic Goal 2: Conduct an upgrade of the fleet

The anticipated high number of customers means that the current fleet will not be able to accommodate the numbers. The new fleet of the aircraft is estimated to have a robust, ergonomic design that is popular with the passengers. The increased passenger seating area will accommodate a vast number of people (Hemmerdinger, 2019). The fleet will be large enough to give allowance for the airline to introduce some luxury installations (Hemmerdinger, 2019). The objective of this increase and upgrading of the fleet is to increase customer comfort so that the company can maintain its number of customer of customers. The company can only manage a high number of customers if it can cater to their needs, and the customers will not have any reason to go and join other airlines. The second objective is to increase the capacity of the airlines to meet the growing needs of the customers (Hemmerdinger, 2019).

Strategy Goal 2: Increase marketing activities

This strategy will enable the company to become even more known, especially after the merger. Two objectives will guide the procedure; the company has an aim to getting more customers from the rival airlines (Hemmerdinger, 2019). Marketing activity is about increasing the market share of the company (Hemmerdinger, 2019).

Conclusion

The merger between Seaborne Airlines and Silver Airways will increase the competitive advantage of the two companies. However, SWOT analysis of the company will determine the areas where the firm needs to improve and the opportunities for growth. Some of the strategies and goals will enhance the growth prospects of the company and make it move forward in prosperity.

References

Hemmerdinger, J. (2019). Silver- Seaborne Merger Advances a Distribution font

Retrieved from: https://www.flightglobal.com/strategy/silver-seaborne-merger-advances-on-distribution-front/134094.article Accessed on 18/3/2020

Silverairways.com (2019). Silver Airways Doubles Pilot Hiring Bonus to $12,000

Retrieved from: https://www.silverairways.com/about-silver/press-room/article/2014/04/03/silver-airways-doubles-pilot-hiring-bonus-to-$12-000

Accessed on 18/3/2020

SilverAirways.com. (2018). A Tale of Two Tails

Retrieved from: https://www.silverairways.com/about-silver/seaborne

Accessed on 18/3/2020

Tranberg, K. (2018). The Top 10 Risks Facing the Airline Industry

Retrieved from: https://blog.satair.com/ten-risk-in-aviation-industry

Accessed on 18/3/2020

References