Project #48222 - Week 7 Discussion AND Response

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Week 7: BUS599 Discussion Item

Instructions:

1.       Create an initial Post

2.       Create a response to the post

(1)Create initial posts from the two bullet items

“Corporate-level Strategies"  Please respond to the following:

·         From the e-Activity, analyze the essential manner in which the new Southwest-AirTran merger and resulting low-cost structure strategy could maximize both companies’ long-term profitability. Support your response with at least two (2) examples that illustrate the manner in which each company would avoid risks associated with becoming too dependent upon its corporate partner.

·         From e-Activity, determine the fundamental drawbacks associated with horizontal integration. Suggest another corporate-level strategy that could redefine the Southwest business model and thus allow the company to increase its competitive advantage within a changing industry environment. Provide a rationale to support your response.

 

(2)Create a response to this post

From the e-Activity, analyze the essential manner in which the new Southwest-AirTran merger and resulting low-cost structure strategy could maximize both companies’ long-term profitability. Support your response with at least two (2) examples that illustrate the manner in which each company would avoid risks associated with becoming too dependent upon its corporate partner.

 

These airlines are both targeting the price conscious customer. It will also be pushing to help stabilize and give the competition some run for their money in the terms perhaps the prices will reduce.  The first way to maximize profitability is to be able with both airlines to expand the areas they will fly. This will help gain more profits. The second way they will do it is to not charge fees or to charge lower fees than everyone else. I think one of the first ways they would avoid risks is to work together. By being a team and conquering one they can both make profits as they were not so much in competition to begin with. Southwest bought Air Tran and with a mature business model they acquired one of the largest hubs (Atlanta) that they weren’t in. This was a strategic advantage to restart the growth model for Southwest. Each of the airlines have something to offer and because of this synergy it will help to lower the risks they essentially need each other.

 

From e-Activity, determine the fundamental drawbacks associated with horizontal integration. Suggest another corporate-level strategy that could redefine the Southwest business model and thus allow the company to increase its competitive advantage within a changing industry environment. Provide a rationale to support your response.

I think any type of integration has some drawbacks. Horizontal integration is both airlines are similar there could always be animosity when one buys one out but they still keep their identity. It can cause culture problems because they sell the same product. I think how Southwest could redefine their business model would be to take some of Air Tran’s model and incorporate it. Air Tran gave them access to newer and very large hubs that will significantly increase business. Southwest hasn’t operated in these large hubs but Air Tran has. There is definitely potential to combine what was right in both and come up with a better Southwest.

Video Source: PBS NewsHour (2010, September 27). Southwest Eyes Market Growth With AirTran Merger [Video file]. Retrieved from http://www.youtube.com/watch?v=D0d6y1xRqGU.

 

 

Subject Business
Due By (Pacific Time) 11/21/2014 01:00 pm
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