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Lufthansa 2000: Maintaing The Change Momentum

7552 words - 30 pages

Flinders University of South AustraliaCOMM 9009International Business Policy and StrategyCase Study AnalysisLufthansa 2000: Maintaining the Change MomentumAuthor:Christian Gerlach (9905388)June 2004Table of ContentsExecutive Summary 31.0 Introduction 42.0 Lufthansa - A company overview 53.0 Porter's Five Forces 6 3.1 Threat of new entrants 73.2 Bargaining power of suppliers 83.3 Bargaining power of buyers 93.4 Threat of substitute products 103.5 Rivalry among competing firms 124.0 SWOT Analysis of Lufthansa 134.1 Strengths 134.2 Weaknesses 164.3 Opportunities 174.4 Threats 185.0 TOWS Analysis for Lufthansa 216.0 Business-level strategy of Lufthansa 247.0 Corporate-level strategy of Lufthansa 258.0 Strategic Alliances 269.0 Strategic Leadership and German Culture 3910.0 Evolutionary Patterns of Strategy and Structure 3311.0 Conclusion 3612.0 Appendices 3713.0 References 39Executive SummaryIn 1991 Lufthansa airlines was almost bankrupt. In 1999 the company already announced record results in its 70-year history, helped to found the Star Alliance, the industry's largest network, and is now looking to become one of the leading airlines in the world.An impressive strategic leadership und human resource management played an important role in the transformation and in the process of strategic renewal. The implementation of an integrated cost leadership/differentiation strategy and a related diversification corporate-level strategy also contributed to Lufthansa's success.Having had major involvement in the creation of the Star Alliance also played an important role in Lufthansa's transformation into a successful company that operates in a quite difficult industry environment. Right now, Lufthansa's future looks bright, but they should try to keep the change momentum alive and possibly apply a few new strategies such as enter the low-fare market in Europe, exploit business opportunities in non-airline related market segments, focus on improving in-flight entertainment and customer service, offer Lear jets for lease and improve their hedging against fluctuations in the areas of exchange rates, interest rates and fuel prices.1.0 IntroductionThis report will take a closer look at the turnaround of Lufthansa airlines which went from near bankruptcy in 1991 to a now profitable airline. The evolutionary patterns of strategy and structure are identified in this report as well as how strategic leadership and German culture contributed to the turnaround. Furthermore, this paper will analyse the airline industry in terms of Porters five forces and will also take an extensive look at Lufthansa's current situation by means of a SWOT and TOWS analysis. Additionally, Lufthansa's business-level and corporate-level strategy will be identified and the Star Alliance, the world's most important airline alliance, will be discussed in detail.2.0 Lufthansa - A company overviewThe Lufthansa Aviation Group is considered to be one of the world's leading air transport...

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