American Airlines Strategic Management
The history of American Airline began in Missouri in the year 1926 under the name of Robertson Aircraft Company. The operations were mainly flying of letters from Chicago to St. Louis. In the year 1929, the integration process of the corporation began. An Aviation Corporation was created with an aim of acquiring young aviation related companies such as Robertson (Parkers 2013). The subsidiaries of the Corporation were incorporated into an aircraft carrier by the name American Airways. This contributed to the invention of the American Airlines in the year 1934 (Szurovy 2000).
American Airlines has since been the biggest airline industry in the United States of America. On June the 10th in 1939, the firm commenced trading on the New York Stock
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Its survival has been as a result of continued improvement in the manner in which the management team addresses some of its challenges. Its state of prosperity is task-dependent. This means that the corporation 's success is influenced by factors such as logical programming, marketing, demand forecasting as well as production. The firm uses competitive intelligence parameter to ascertain the suitability of the environment for demand forecasting (Robinson 2004). Since the airline is a tactical entity, the key areas it concentrates on is the maintenance of the equilibrium. The company continually makes an industrious undertaking to match its supply to demand needs efficiently. It does so when there is an anticipated demand in the …show more content…
The company is the largest in the world when ranked by the number of passengers it carries. However, it is 11th in the overall airline quality ranking. The model has explained this by making assumptions such as slow rates of market growth, a high fixed operation cost, small degrees of differentiation of its products, and entrants of other low-fare carriers (Tum, Norton & Wright 2006).
Within the model, substitution of services is only achieved when the demand is more than the supply. In the American Airline company, excess supply is being attacked by the carriers who charge low fares and continue to gain the market share (Huggins 2011).
The company faces fixed cost and oversupply challenges which serve as the basis for cheap fare charging. By use of this model, it has pushed casual travellers to become frequent travellers. This has enabled the airline industry to reshape its buyer demands (Gratton, Taylor & Gratton 2000).
The fuel has been the single largest expenditure item in the company. The model has allowed it to come up with low-fare carriers by scrapping off the frill flights. This has ensured that the flight 's costs of operation are lowered and also many travellers are
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