Executive Summary
This is a case study of Adam aircraft and the environmental analysis, a brief introduction about the company is very important. Adam aircraft is an aerospace company, a leading maker of commercial airplanes and single aircraft and missiles. Adam aircraft has seen both good and bad times in its history but with the help of excellent planning skills and management with high consideration for integrity, Adam aircraft remains a focused and profitable company. There are a large number of factors both internal and external that affect the performance of the company.
Introduction
Aviation has seen tremendous changes in its operations because of increasing technological complexity and growth in air traffic in the USA. While small customers’ aviation faces these changes more and, arguably, drives the changes, this case study addresses the trends and opportunities in Adam aircraft. Trends in complexity of the technology deployed and the growth in traffic raise concerns for safety, cost and convenience for travelers, and environmental protection that the aviation industry has to address.
Williamson, Cooke, Jenkins and Moreton (2003) argue that growth of air travel and population densities in proximity of airports continues to highlight the need for low aircraft for use. This is because of the infrastructure consisting of airports, air traffic control and management, maintenance and flying crew of the aircraft. The need to improve safety in the skies and on the ground involves improvement in aircraft design, systems that provide pilots and air traffic control better information about traffic, weather, and terrain conditions, and systems that improve the turnaround and reliability of aircraft in the air and on the ground. These improvements made by Adam aircraft aim to:
- Reduce incidents known to precede accidents through analysis and change in aircraft, operating systems, ground equipment, and operation and maintenance procedures.
- Design aircraft less prone to failures resulting from technical and human errors, and those that can ensure safety of passengers even when a failure does occur.
- Improve access and quality of information on weather, terrain and traffic for pilots and the ground staff.
External Analysis
Economic Conditions: Since the year 2001, the U.S economy has been on a downfall and the company has suffered a great deal from this economic decline. Adam aircraft has also suffered as the other companies of the industry are also in financial trouble. The business has reduced a great deal and has been forced to look at alternative ways in order to remain profitable. U.S air force recently gave Adam aircrafts a relief by patronizing their services, which has prompted the company to focus on manufacturing planes for the U.S military. The company is also looking towards foreign countries like Saudi Arabia, India, and China for business opportunities as the demand for aircraft in these countries is higher. The planning is affected greatly due to the economic factors of a country and one can be sure that the future planning of the organization is going to be based on factors like demand and global market trends.
Competitors: Competition is another factor taken into consideration by Adam aircraft and the company has to plan tactically and strategically in order to cope up with the competition. Airbus and Boeing are the biggest competition in the industry. Boeing is experiencing difficulties in their product assembly line due to certain factors and they have made a decision to change deadlines argues David (1989).
Government Regulation: The rules and regulations set forth by aviation industry and the U.S Government greatly impact the planning process at Adam aircraft as the government official visited recently. There are certain standards set by the authorities of Government that ensure that the customers are flying in a plane that is safe to fly in. There are many steps in the process of aircraft clearance hence the production line is slowed down greatly. Regulations such as these greatly affect a company like Adam aircraft, as it slows down the overall production of the aircraft. Demand has also been impacted by noise ordinances that define the hours of flight. All these factors are taken into account by Adam aircraft during the planning process, and decisions are taken to deal with the situation.
Customers: Customers have played an important role in the development of Adam’s aircraft. Even though small organizations; the customers are the backbone of an organization, as these people get companies the revenues. Maintaining good customer relations is among the priorities of Adam’s aircraft management. A lot of intensive research work and planning has been done in order to win the customers and their business. Corporate social responsibility activities always give a company edge over its competitors who are not involved in such efforts; the management realized the need for such activities.
Most customers of the company range from owner-operated to professional. The target market is one that already exists, people which fall under the following criteria. Geographically, the people who would purchase these owner-operated aircraft would live in metropolitan cities, and ranges. Demographically, the options for a value-based aircraft would incorporate several different demographics. Income levels would be on the high to moderate levels. Occupations could range across all levels between professional; managerial; clerical; sales; laborers; retired; and housewives. Behaviorally, the target market purchasing aircraft would look for both qualities as it pertains to price, and it is to be assumed their brand loyalty would be below based on price. Based on the range of customers, there is a small range of end-users. End users for the most part would be the customer as well, in certain scenarios it could also be a second or third pilot related to the customer.
Internal Analysis
As far as internal analysis is concerned, Coulter (2002) has defined it in such words,
‘…an internal analysis is the process of identifying and evaluating an organization’s specific characteristics including its resources, capabilities, and core competencies… The whole reason for doing an internal analysis is to assess what the organization has or doesn’t have (resources) and what it can and can’t do (capabilities)—in other words, its strengths and its weaknesses.
Strengths and Weaknesses of Adam aircraft
Strengths:
- The company offers competitive priced owner operated aircraft
- They have a convenient distribution location
- Right aircraft, quality and reliability
- They have ongoing innovation to improve quality that something gives them added advantage.
- The management is committed and confident
- Low cost of setting up because the partners in the business are well-trained professionals in various fields.
- Low cost of production
Weaknesses:
- Use of Software and other technological equipment to design and creation aircraft that are used in the market.
- More training of the staff to familiarize without the design program software
- Large competitors like Boeing offering the same services.
- There will be barriers to entry to the market because of regulations.
Competitive Analysis
The Company will be operating in an environment with stiff competition from rival companies who offer similar services this is because no single company in the world today is operating without competitors. Competitors offer challenges to businesses and ensure there are fair prices in the market for the benefit of the customers. In this case there are many competitors like Airbus and Boeing. However the company has come up with structures that will enable them remain in business, this will include product differentiation and cost reduction strategies. They have also used focusing strategies.
Value chain analysis
Activities where value has been created and costs reduced include procurement of raw materials, Human Resource Management and Technology development. Other areas include Research & Development, Sales, and Marketing that have been adopted by Adam aircraft. Value is also added when it comes to outbound logistics.. The benefits/value of the exercise is enhanced by recruiting and hiring staff of high integrity, professionalism and expertise by the management.
Core competencies
- Target market: their aircraft are unique and target professional and owner operating customers. These target groups will form a large portion of the target market share.
- Distribution: the aircraft are distributed in the USA and other parts of the world.
- Service: Quick and available single-engine aircrafts.
- Capabilities: The Company has enough resources that ensure that they become a success. The proprietor is a trained pilot and staff team is made of professional that helps deliver the products.
Evaluation of Opportunity
In spite of the weak demand, the company’s continuous product innovation efforts allowed it to seize lucrative opportunities. Adam aircraft has invested billions in technology and expertise to handle new innovations. The global market is growing Adam aircraft should be in a position to take up the market.
Another significant insight from the Adam aircraft experience is the systematic approach to strategy that emanated from the company’s vision, mission, and objectives, which soon developed into corporate, business, and functional strategies argue Thompson, Strickland, and Gamble (2008).
Consequently, the company established corporate objectives to attain the vision and mission and these are to: a) help clients succeed in delivering business value by becoming more innovative, efficient, and competitive through the use of business insight and IT solutions, and b) provide long-term value to shareholders. With these corporate objectives, the company implemented the overall Adam aircraft’s corporate strategy of becoming a Globally Integrated Enterprise aimed at capturing two opportunities in the global market – one is the rapid growth of the aviation industries. These two opportunities presented economies of scale, cost advantages, and a foothold on emerging, growing aircraft markets for the company.
Recommended and Justification
The Adam aircraft needs to change its designs, marketing strategies and expand the target market by investing more in technology and research and development. These will help them understand why the customers prefer competitors and will assist in planning corrective measures that ensure their plans, policies, products, and services are as per the customer’s requirements. The corrective action that needs to be carried out should include pricing strategies, production cutting, pressure on salesforce, incorporating public relations in dealing with customers’ complaints.
References
David, F (1989) Strategic Management, Columbus:-Merrill Publishing Company.
Dressler, G. (2008). Strategic Human Resource Management and the HR Score Car: Human Resource Management (11th ed.). University of West Alabama: Pearson Prentice Hall.
Grant, R. M. (1991). Contemporary Strategy Analysis: Concepts, Techniques, Application. Cambridge, MA: Basil Blackwell.
Porter, M. (1985). Competitive Advantage: Creating and Sustaining Superior Performance: The Free Press.
Starr, M.K., (2007). Foundations of production and operations management. Ohio: Atomic Dog Publishing.
Thompson, A., Strickland, A.J. & Gamble, J. (2008). Crafting and Executing Strategy: The Quest for Competitive Advantage: Concepts and Cases (14th ed.). McGraw-Hill.
Williamson, D., Cooke, P., Jenkins, W. & Moreton, K. 2003. Strategic Management and Business Analysis. New York: Butterworth-Heinemann.