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Case Study: Garuda Indonesia

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Majid Sarip

on 21 February 2014

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Transcript of Case Study: Garuda Indonesia

Time Context and Viewpoint
January 6, 1988
Mr. Mohammad Soeparno
In what way can Garuda Indonesia strengthen its policies and increase its operational success in order to establish a good reputation in the industry?
Alternative Courses of Action and its Analysis
Current Operational Plans
Image by Tom Mooring
Statement of the Problem
Case Study: Garuda Indonesia
Short-Range Objectives
• To establish a policy which could change the company’s bad reputation by the end of the quarter.
• To be more professional in commercial air transport by the end of the year.
• To increase the financial condition by reaching 5% profit before tax.

Long-Range Objectives
• To become one of the world’s Top 10 airline company.
• To have a technologically advanced aircraft fleet in order to become the largest airline in terms of plane number.

Major Policy Statement
Garuda Indonesia is the 2nd largest airline service company in terms of plane fleet that aims to be the world’s top 10 by 1998.
• Better designed souvenirs
• Expanded wine list on international flights
• Resumption of serving snacks and soft drinks on short domestic flights.
• Promotes “Executive Class”.
• Change of logo and whole livery.
• Introduced “Visit Indonesia Air Pass” with 3 different packages.

• Owns 77 Aircrafts
• In-flight immigration inspection on Tokyo-Jakarta Bali flights.
• Interchange agreement with Continental Airlines.
• New convenience in purchasing tickets using American Express cards.

• Lease of training facilities to other airline companies.
• Recorded a net income of 300 million rupiah from its activities.

To continue Mr. Lumenta’s successful policies

- Financial Support from the government
- Continuously generating profit
- Status Quo
- Government interferance
Formulate new set of policies


- Recovery and improvement
- Low cost but high quality of services
- Time constraints
- Government approval
- Limited funds available


- Decision-making
- Profit-sharing
- Potential Investors
- Approval for future proposals
- Maturity and independence
- Loss of privileges
- Requirements in privatization
- Setting up a fund
Decision Statement
After analyzing the alternatives, the best solution for the problem is for Garuda Indonesia to privatize. This was chosen for it would screen up loopholes and improve of the previous policy. It could take the opportunity to come up with a more effective promotional strategy that will promote Indonesia’s beautiful hot spots. Unlike if we choose alternative 2, where in there is a slow growth rate of the policy implemented and ineffective policy resulting to low operational output. While in alternative 1, the enterprise might not have a room for improvement thus affecting its operations.
Implementation Program
Long-range Plans
1. Expansion of business operations.
2. Establish business relation with other international airlines.
3. Make a network with related industry to strengthen marketing strategies.

Short-range Plans
1. Make use of the funds for investment proposals.
2. Conduct a meeting with the government regarding the company’s plan of privatization.
3. Prepare a written contract of agreement with the government.
4. Present a business plan for potential investors.

Management Lessons
1. Self-analysis
2. Resilience
3. Business is a three-way function
Full transcript