Strategy

I. The Internal Environment

 Strengths:

Ўґ Good reputation from customers in the Great Lakes region, which will help to establish future clientele.

Ўґ Good network: Has interline ticketing and baggage arrangements with major carriers.

Ўґ Increased sophistication in equipment has increased dependability.

 Weaknesses:

Ўґ High employee turnover

Ўґ Low organization morale

Ўґ Lack of training and educational programs for employees

Ўґ Lack of organizational culture

Ўґ Weak employee incentives (employees are paid below the market) which results in a lack of ownership from employees.

Ўґ Poor aircraft choices, not taking advantage of some markets widely open for opportunities (unserved markets).

Ўґ Aircraft maintenance are not properly maintained resulting in unreliable aircraft

Ўґ Cash problems are exacerbated by overhead costs.

Ўґ Ineffective organizational design

Ўґ Weak management leadership and expertise

II. a. The External Environment

 Opportunities

Ўґ With a small organizational structure, changes are easily to be made.

Ўґ Technological breakthroughs can increase safety and equipment efficiency.

Ўґ With expansion, there will be a larger choice of aircraft to choose from, which will enable the new luxury market to easily obtain new aircraft

.

Ўґ Unserved markets provide Elite airline with an opportunity to enter into a luxury market.

Ўґ Deregulation of fares and routes allow airlines to compete for customers by creating competitive fare structures and competitive routes.

Ўґ Internet advancement allows easier access to online ticketing which will lower our costs of promoting the service.

Ўґ Advanced technology = Increased ability to promote service through online services.

Ўґ $500,000 loan will provide the necessary funds to enter an unserved market, and bolster working capital.

 Threats

Ўґ New entrants: Other luxury airlines coming into the market providing similar service.

Ўґ New government regulations which may incur increased costs, and also make it hard to determine the most cost-effective level.

Ўґ Jockeying for Position: Price competition, new service providers.

Ўґ Substitute Service: Buyer propensity to substitute to other services.

Ўґ Economies of Scale: Other airlines accepting a cost disadvantage and increasing seat sales

Ўґ Labor Market: Potential employees with desired skills and abilities may be limited due to geographic area.

Ўґ Natural disasters and terrorism can cause a decrease in flying appeal.

Ўґ Rocketing oil price increases operating cost substantially

Ўґ Pilots with extensive training are hunted by larger airlines.

b. Factors that pertain to this industry:

Ўґ Competitive structure: After deregulation of fares and routes, airlines compete fiercely since the market is very price sensitive.

Ўґ Social Forces: Changes in social attitudes, marriages, lifestyle, and work may change peopleЎ¦s flying attitudes.

Ўґ Consumer