Delta Airlines’ Business- and Corporate-Level Strategies

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Delta Airlines is among the many players in the airline industry and competes against other firms like American Airlines, Air France KLM, Qatar Airlines, and Spirit Airlines. All these firms compete against each other and practice business level and corporate level strategies to meet high competing standards. This report expounds on the business level and corporate level strategies that Delta Airlines applies. It also discusses the competitive environment and indicates how the airline would behave in slow-cycles and fast-cycles.

Business-Level Strategie

Firms prosper due to the competitive advantage they have against other competing brands. A competitive advantage allows the firm to own vital elements of running the business that customers are familiar with and cannot receive from other firms. Business level strategies are the company’s mechanisms to gain a competitive advantage. Cost leadership, differentiation, low-cost integrated differentiation, and focused differentiation are the business-level strategies that firms may apply to control operations (Hitt, 2020). Unlike other airlines, Delta Airlines has focused more on the product differentiation strategy to make their service provision more unique and remain relevant in the industry. Product differentiation comprises behaviors and packages that are unique in the industry. Delta Airlines has been a business that has focused on making its stakeholders’ experience excellent while working with them. The strategy in product differentiation has contributed significantly to the airlines’ growth by attracting more customers, maintaining employees, and boosting its public image. The strategy is critical for continued penetration into the market, widening the consumer base, and cost minimization by engaging in more efficient and unique programs.

Delta Airlines has applied a differentiation strategy by offering individual employee maintenance policies. The firm engages employees directly without using unions when making decisions. Employee management without using partnerships allows the organization to negotiate with the employees directly. Direct negotiation with the employees helps the business control its losses. It also empowers the employees with high spirits to work in line with the firm’s objectives. Personal relationships with workers have generated a good relationship between the two parties. For instance, some of the employees opted for unpaid work leaves during the COVID-19 pandemic season to help the business control the accumulating number of losses due to the increased reduction in the number of flights (Keselove et al., 2020). The business also allows its employees to own stocks in it and enable it to make better progress since employees are motivated to deliver better performance.

Another way Delta Airline has used product differentiation is in its process of acquiring fleets. Whereas many firms opt to purchase new planes, Delta Airlines focuses on buying old planes and second-hand ones. The process lowers the operating costs and maintains a high profit since fewer spendings are encountered. Additionally, the airline prefers owning fleets to leasing, minimizing the hiring costs (Merkert, 2022). Hiring planes is tedious and reduces earnings by a considerable margin, and also consumes a lot of time when signing deals. The airline industry requires a proficient player, and Delta Airlines is working aimlessly to meet the high standards. Delta Airlines promotes uniqueness in the airline industry by owning an oil refinery. The oil refinery supplies its products to Delta Airlines and other airline businesses and oil products’ users. Delta Airlines generates income from the company and receives a competitive advantage because other airlines are dependent on them. Differentiating from how other competing organization works creates a conducive environment for businesses.

Corporate-Level Strategies

Corporate-level strategies are vital for business development because they help align the business’ operation and allocation of resources. Corporate-level methods define the company’s route in terms of market definition, diversifying services, and positioning the business geographically (Akbar & Kisilowski, 2020). Delta Airlines targets its service rendering to corporate travelers because they are unique to handle and guarantee high returns. Corporate travelers seek high-quality services and treatment and are willing to pay better than non-corporate ones. Therefore, Delta Airlines strategically positions itself to offer its devices to the corporate class. The strategy will continue to provide the airline with more profits and ensure its sustainability in the market because it earns more profits.

Focusing on corporate travelers as a corporate strategy by Delta Airlines is a good choice because the goal of every business is to maximize profits, and the best way for Delta Airlines to earn profits is by offering services to travelers that do not lament about high prices. I judge it as a good motive that will continue supporting the organization because customer satisfaction receives first priority. Corporate level strategies aim at providing the management with the most profiting method to apply in their operations. Delta Airlines offers training workshops for its employees to widen their skills on customer treatment because service delivery is critical for their image. Essentially, the firm acknowledges its mandates as an influential business. Diversification in the services Delta Airline offers attracts a better audience. Consumers also appreciate the efforts and often prefer the airline when moving in and out of their current region (Kabadayi et al., 2020). For instance, the firm also has increased its fleets of movies to entertain more customers. A traveler’s journey from one region to another does not have to be depressive. Travelers’ preference motivates Delta Airline’s effort to improve the customer’s comfortability as they use their planes to travel.

Competitive Environment

The airline industry faces a lot of competition from emerging and existing firms. The competition creates many differences among the firm as they seek to serve the most customers. Though Delta Airlines is a famous brand, it still faces competition and works tirelessly to remain relevant in the market. Significant competitors in the airline business for Delta Airlines are American Airlines, Airlines France KLM, Qatar Airlines, and Spirit Airlines. Among these competitors, American Airlines is the most competing firm against Delta Airlines because it has the hugest fleet size and serves a broad base. American Airlines’ headquarters are located in Texas, United States, and it operates over six thousand flights in a day and moves around 50 countries globally (Zhang & Nozick, 2018). American Airlines has served many people since it relocated from unprofitable routes and joined the primary market where they get the most customers from.

Although American Airlines is earning its revenue through tickets sales, it also gains more profit through cross-selling. Cross-selling comprises the business-level strategy where the business sells alternative goods in their planes (Zhang & Nozick, 2018). For example, the company offers other commodities like food products. It also provides other in-flight sales like cars for delivering travelers to and from airports. The cross-selling strategy also attracts customers because it is less stressful to use this company since it is all packaged. American Airline’ offers is also favorable for tourists because it has ideas of the best places people may visit; hence booking a flight with them is less tiring and provides the best selection.

However, despite American Airlines’ effort to provide other services to increase their revenue, the differentiation strategy by Delta Airline is the best. Delta Airline identifies the economic class it serves and finds all the ideal approaches that will maintain them by offering the best customer experience in the flight. It is aware that targeting a specific group of people will earn them more profits. Many corporate workers worldwide travel by air, and filling this market opportunity would profit any firm that understands the group’s needs. Business level and corporate level strategies applied by Delta Airline will serve immensely in its expansion and existence in the long run.

Market Cycles

Business level and corporate level strategies are affected by how long they can last without interference from competing firms. Slow-cycle markets are markets that are protected from interference from other competing firms (Hitt, 2020). The interference may be in the form of imitation or accessing factors of production. When a company has a slow-cycle market, it has control over the aspects of production and is shielded from other competitors’ activities that may negatively influence its customers. This form of market control is more of a monopoly where only one firm has the highest command of the market powers. Conversely, fast-cycle markets are markets that are easy to interfere with by competitor firms.

Fast-cycle markets do not allow individuals to control the market for long due to imitation from other firms or their ability to access and control other resources. Slow-cycles may be facilitated through control of resources, protection by government laws, or high cost. On the other hand, fast-cycle markets lack entry regulations, easy accessibility of resources, and affordable charges (Anh et al., 2020). A firm’s survival in the market depends on the number of competitors existing in the same industry.

Delta Airlines has traversed many nations and built a problematic brand to bring down. The airline embraces technology in its operations, creating difficulty for other firms to compete (Gokhale, 2018). The firm has also ensured it offers the best services to its customers and maintains a good relationship with its employees. It is difficult for other growing firms to provide the same level of services. However, Delta Airline’s weakness is purchasing old fleets. Other companies with new fleets may quickly take over the market by influencing customers that their fleets are comfortable. Therefore, the purchasing of aging fleets should be a concern for this business. The airline is unique and difficult to imitate in all aspects, whether in service provision or control of critical resources. Delta Airlines has already built a reputation that is difficult to compete against by other firms. The choice of Delta Airline as the most successful firm in the airline business would not change in both slow-cycle markets and long-cycle markets.

Delta Airlines is a leading air travel and transportation airline globally. It controls vast market segments and efficiently incorporates all of its workers in making impactful decisions about the organization. It also promotes the growth of its employees by ensuring they can also participate in stock ownership. The airline also has efficient business-level and corporative strategies that aid in its continued development to meet the growing demand for air travel.

Sources

Akbar, Y. H., & Kisilowski, M. (2020). To bargain or not to bargain: Airlines, legitimacy and nonmarket strategy in a COVID-19 world. Journal of Air Transport Management, 88, 101867.

Anh, T., Duc, T., Thi, T., & Hong, N. (2020). Evaluating the determinants of Vietnamese frequent flyers’ loyalty in civil aviation industry: The case of Delta AirLines. Management Science Letters, 10(2), 391-398.

Gokhale, J. (2018). Information Technology System Failure and Value of Airlines: A Case Study of Airlines in 2016. Journal of International Finance and Economics, 18(4), 116.

Hitt, A., M. 2020. Strategic Management: Concepts and Cases: Competitiveness and globalization (13th ed.). Cengage Learning.

Kabadayi, S., O’Connor, G. E., & Tuzovic, S. (2020). The impact of coronavirus on service ecosystems as service mega-disruptions. Journal of Services Marketing.

Keselova, M., Svab, P., Staricna, N., & Hanak, P. (2020). Coronavirus-aviation’s biggest challenge. In 2020 New Trends in Aviation Development (NTAD) (pp. 131-135). IEEE.

Merkert, R. (2022). The impact of engine standardization on the cost efficiency of airlines. Research in Transportation Business & Management, 100797.

Zhang, Y., & Nozick, L. (2018). Investigating the pricing impacts of the American Airlines and US Airways merger. Transportation research record: Journal of the Transportation Research Board, 2672(23), 15-19.

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