American Airlines’ Strategic Position Analysis

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Competing in the internal market is the primary goal of American Airlines. The company’s strategic position can be understood through doing an HR analysis, financial resource analysis, and operational resource analysis. The first point is going to look at the HR analysis. Human resources are the most important assets that every company should have to remain competitive within the business environment. Employees hence are considered as essential stakeholders in American Airlines, who are given priority. Evaluating competencies in American Airlines is one of the HR concerns (Cook & Billig, 2017). The primary aim is to improve the employee’s performance and acts as a significant tool for change and entering into the futures markets. Competencies among the employees make them deliver and achieve the objectives set aside by the organization. The competence evaluation in American Airlines is composed of various tests to ensure that the right employees qualify for the job. The competence program has enabled American Airlines to get the right employees, who have immensely contributed to the company’s success.

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The other possible strategic analysis entails financial resource analysis, where, for any organization to be successful in its operations, resources are always the basic requirements needed. Financial resources are always significant because they will help the organization to meet its set objectives (Cook & Billig, 2017). From the financial information of American Airlines as of March 2021, there is a massive drop in the income statement (WSJ, n.d). This is due to the impacts of the pandemic that resulted in the ceasing of transport activities within and outside the country. The sales and revenue growth remains at -52.93%, which is the lowest compared to the previous years (WSJ, n.d). However, American Airlines still realized revenue of 4.01 billion (WSJ, n.d). The profitability ratios reveal a negative outlook, but these are due to the increased pandemic.

The last strategic position entails operational resource analysis, comprised of the systems, policies, processes, and procedures within American Airlines. The Federal Government controlled the principles an American Airlines through the Civil Aeronautics Board (CAB) in the year 1978. During this time, most of the Airline companies were operating on fare regulation, restrictions in the routes, and limited air travel. American Airlines also uses a centralized and automated system in making related organizational decisions. The system has improved the procedures and processes within the company, especially when making decisions. Through such policies in place, American Airlines has been in an apposition to increase revenues because of the convenient services offered to the customers. Also, the organization is guided by some policies, which ensure that the employees and every stakeholder of American Airlines expect to find within the company. The internal controls ensure that there is the protection of the information relating to the customers. It increases trust among the major stakeholders within the company.

Strategic Choices

Corporate Level Strategy

American Airlines is a company that has integrated a low-cost strategy. This implies that it puts into consideration the low cost of passengers’ transportation as well as the differentiation of the services that the organization offers. By offering low prices, American Airlines is in a position of attracting new more customers. The fees that it provides to the customers depend on internal efficiency and decisions from the managerial level. It also gives a wide variety of services within the company, including transporting the passengers and reservation of the hotels and restaurants.

There are various advantages that this particular strategy brings to the company. The first one is that it has enabled American Airlines to adopt multiple environmental changes in the market. Also, through the wide range of services provided by the company, it is in a position to achieve its goals. This is a strategy that is helping American Airlines in attaining the long terms goals. When most people can access the services of the organization, and at low costs, they are more likely to increase their loyalty to the company. It has used the strategy to achieve a competitive advantage worldwide and even in the international markets.

International Strategy

Going international/global is the goal that every corporate wishes to achieve in its daily operations. The current technology has changed the way business activities are carried out and the need to explore more foreign markets with the aim of achieving a competitive advantage and increasing the revenues of the company (Alnoukari & Hanano, 2017). American Airlines is one of the companies that have expanded their operation in international markets. One of the best international strategies that American Airlines has adopted is that it has engaged in joint business agreements in the trans-Atlantic and trans-Pacific to access a broad market for its services. The trans-Atlantic and trans-Pacific have enabled it to establish strong routes for the company, where it can easily navigate with little to no restrictions (Alnoukari & Hanano, 2017). Also, it applies joint ventures, where it directly cooperates with other companies in various countries to form their destiny. The other focus is to revamp most of the international routes so that they are easily manageable, to enhance easy accessibility to the foreign markets.

References

Alnoukari, M., & Hanano, A. (2017). Integration of business intelligence with corporate strategic management. Journal of Intelligence Studies in Business, 7(2).

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Cook, G. N., & Billig, B. G. (2017). Airline operations and Management: A Management Textbook. Rouledge. (1st Ed.)

WSJ. (n.d). American Airlines Group Inc. Web.

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