Mid Continent Airline Case: Adapting Strategy Essay

2863 words - 11 pages

Table of Content1.Introduction32.Identification of the main problem(s)42.1Summary42.2Identification of the main problem(s)53.Description of current situation63.1 Significant internal processes63.2 Organizational structure83.3 Critical success factors93.4 SWOT analysis103.5PESTEL analysis103.5Porter's five forces124.The alternative courses of action134.1 First strategy134.2 Second strategy144.3 Third strategy145. Decision and reasoning156. Implementation of the decision167. Conclusion188. Reference list191.IntroductionMid-Continent Airline is a well known airline in the Great Lakes region. This company provides air service to cities and towns with a small or medium population size and limited facilities at the local airports. It has the role of a commuter and regional airline, since it fills the gaps left by large carriers and it creates their own mini-hub operations. The airline competes with other commuters and some national airlines.In this case report an analysis will be performed in order to assess the airline and how it relates to its environment, to gain a broad understanding of the starting position of the airline in the Airline Simulation Game. Furthermore, a new strategy needs to be designed in order to improve the current situation of MCA. This will be done by use of the five-step method as described in the Module Book (Stenden University, 2008).2.Identification of the main problem(s)In this part of the report a summary will be given on the Mid-Continent Airline case as described in the book Airline; A Strategic Management Simulation by Smith & Golden (2007). Furthermore, the main problems occurring in the airline company will be identified.2.1SummaryMid-Continent Airline is a well known airline in the Great Lakes region and provides air service to cities and towns with a small or medium population size and limited facilities at the local airports. MCA has the role of a commuter and regional airline, since it fills the gaps left by large carriers and create their own mini-hub operations. The airline competes with other commuters and some national airlines. At the start of the airline they transported only 2,710 passengers which grew to 90,000 passengers in 2000, owning three Beechcraft 1990s with a capacity of 19 passengers at that point. MCA counts 81 employees divided into five small departments; operations, flight, maintenance, passenger service and administration. Coming to the financial part, MCA has fixed assets in the range of airplanes, ground equipment, maintenance hangars, office facilities and computers, which are financed through several channels. The year 2002 brought the MCA into a difficult position. Two options were available at that point, namely to receive a loan of $ 500.000 and give 30 % of the common stock of the corporation to the lender, or to sell the company to a large holding company to receive a high book value. Of course it is not easy for an airline to make such an important decision. For that reason,...

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