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Transcript of IBSM Final
be a leader as
in global aviation industry? Air China American Airlines Rudy Wang Taro Tseng Trevor Chen Terry Tseng David Yu Janet Lin Genevieve Lin Grace Lo Ann Cheng Sean Jan Final of strategic management of MNCs Welcome to Air China! The global aviation industry Introduction- Air China Introduction-American Airlines Advantage Comparison Conclusion The champion in the global aviation Menu Enjoy the journey! The global aviation industry 5 force analysis Threat of new competition Extremely high cost Intensity of competitive rivalry Alliance Down-costing Deregulations of
flight policy Bargaining power of customers Low cost airline companies Threat of substitute products or services Railways or ships Bargaining power of suppliers Decreasing profit and increasing cost Lower the demand of airplanes Renting contract Compare of Advantages Performance Indicator RPM means passenger amount multiply with total mile Compare their RPM in 2011 Air China Significant growth American Airlines Only higher load factors Financial statement analysis The current ratio reflects that ability of short-term debt repayment American Airlines > Air China American Airlines Air China Reference: Air China & American Airlines annual report Trend analysis Routes overlap Air China : cost leadership American airlines : differentiation Equipment differences Air China American airlines Average age 6.7 Average age 15 High fuel consumption Huge maintenance & repair expense Money eater!! The Rise Of Asia Great potential for growth! Asia’s airline revenue increased year by year Air china’s RPM rose to 123,499 million in 2011 Rising costs American Airlines Air China Global energy price Workers' wages Net loss Relatively cheap labor Cost leadership strategy Reduce its expenses Create more cash flow Repay huge liabilities Cross-industry alliances American Airlines + downstream Accumulating flight miles Bonus Conclusion International
advantage Diversification Star
47% Cheng du
support China travel China advantage Aircraft
efficiency Strategy activity system From China to the World Strengthening its domestic airline market Tap into international flight market In the future The threat of high-speed rail create a loyalty system for members AA’s AAdvantage program Thank you for choosing China Airlines Q&A Tina Chen Paul Fang Industry trend in the future Low profit
High cost Economy Alliance
low cost First stop Air China Flag carrier,CAAC Beijing Third in China Global strategy Star Alliance Domestic International Strategic alliance Resource Destinations Planes: 400 Human Resource Well developing Training Diversification
Strategy Ground service Multi-dimension IT system Not Flag carrier, AMR Fort Worth, Texas Forth in the world Global strategy Oneworld The U.S. skies agreements Strategic alliance Resource Destinations Planes: 900 15y Human Resource Well developing training Well benefit Differentiation
Advantage AAdvantage Service Diversification Strategy Tourism Industry Customer-oriented IT system Cost advantage AAdvantage & American Airlines Vacations American airlines Cross-industry alliances Air china + China Travel Aircraft maintenance Ameco Beijing Vertical integration Entry into tourism industry Cabin attendants Petroleum, airplanes and agreements of skies cheap tickets via travel agency Company Air China China
utilization 74.3% 69.4% 70% Freight
Kilometer $3.03 $3.16 $3.44 Revenue
FTK $2.23 $1.43 $0.68 Air China RMB2,300 million 6.9% in 2011 American
Airlines 800 destinations
in 150 countries 3/631=0.4% High Low Low Low