Delta Airlines Case Study Solution
Delta Airlines was established in Atlanta Georgia in the year 1924. It is one of the major and largest American airlines which serves around 180 million customers. Delta Airlines name was even mentioned in the Fortune 50 for being the most admired companies. Delta also diversified its business by opening amusement parks and museums. The important general environment factors are the technological, social and legal factors which should be considered for the industry that would result in a positive impact. Whereas the general environmental factors which would result in negative impact on the company are the legal and economic factors. The understanding of general environmental factors is crucial for a company to analyze how the external factors would impact on the company’s performance.
The political factor positively influences Delta Airlines as many of the governments are partnering up with airlines by investing and reducing barriers which has resulted in the boosting of business revenues. Many of the governments are improving the regulation for airlines for creating suitable environment and extraordinary value. The social factor also positively impacts on Delta Airlines as the demand for air travel is increasing. The technological factor also positively influences Delta Airlines as the advancement of technology is causing airlines to minimize their cost for crafting planes.
However, there are some factors which are causing negative impact on the company’s performance such as the legal and economic factors. The legal factors which negative impact on Delta Airlines are the laws and rules such as increasing security and passenger safety. These are increasing the cost of the company. Also, the company has signed agreements to provide safety to its workers who are operating baggage vehicles. The economic factor also causes negative impact on the airline industry as during the financial crises the airline industry was deeply impacted and both the customers and passengers were forced to cut down costs.
Porter 5 forces are the tool for analyzing the industry and is measured on the weight of low, moderate and high. The bargaining power of supplier of the delta industry is low, the bargaining power of customers is high, threat of new entrants is low, threat of substitute product is moderate and competitive rivalry is high. The airline industry, however shows opportunity for new entrants as the improvement of technology is minimizing costs in the manufacture of transporting planes such as Boeing 737.
DELTA AIRLINES Harvard Case Solution & Analysis
The two biggest competitors for Delta Airline AreUnited Continental Holdings and Southwest Airlines. One of the largest airlines in the world on the basis of holding companies is United Continental holdings.The sales of the company are $36.6 billion and the market capitalization is$23.01 billion.On the other hand, Southwest Airlines is making a major impact on the airline industry as the company has sales of $20.4 billion and market capitalization of $34.02 billion. It is the second biggest competitor for Delta Airlines after United Continental Holdings. Both companies have future plans of expansion. United Airline (subsidiary of UCL) has recently added 16 non-stop routes and brought four new destinations which it does not currently serve. Whereas Southwest Airline’s CEO, Gary Kelly said that “Five years from now, we’d love to be in Hawaii and serving Canada”..........................
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