United Airlines Essay.

Background on United Continental Holdings Inc.

Question:

Discuss about the Situational Crisis Communication and Interactivity.

The latest article of Wall Street Journal that is chosen here is about United Continental Holdings Inc. In the journal, the article is named as “United’s Strategy to Reduce Bookings”. United Continental Holdings, Inc. is an airline holding organization, which is headquartered in Wills Tower, Chicago. The company has so many subsidiaries, which are running their business operations in aviation industry in United States and on international level. This year, United has been in the news due to some bad reasons (Norton, 2017). The selected article states that airlines industry in United States facing an issues because about the overbooked flights. United is introducing new strategy and tactics as its strategic decision to deal with the above given issue.

This issue came in the light, when Chicago Department of Aviation forcefully removed the travellers from the flight in April this year. United was confronting the issues in handling the overbooked fights. In the month of February, the organization has delayed its approximately 500 flights as it had suffered the second problem its techniques and computer systems. United is a well-known airlines and having advantages from increased demand for air travel. In July, it was named on No. 3 in United States with the 39% increase in net income and 6.4% increase in its total revenues (Jad, 2010). The article stated that United in adopting data analytics to assist for managing the situations of overbookings strategically. In addition, it is helping it in targeting business travelers, families and vacationers with its unique and special offers.

Under this article, The Wall Street Journal has interviewed Ms. Linda Jojo, i.e. Executive vice president of technology and chief digital officer of United Airlines. She stated that the organization was facing the situations of overbooking because of different operational disruption, which reasons the organization to fly a different flight than that had planned earlier. The organization taking various efforts on digital media and it is using mobile devices to enhance the communication with its potential customers (Norton, 2017). By implementing new and digital technology, the company is running its airline in an effective manner. Establishing effective interaction will assist the airline in rescheduling and connecting with the people about that bad weather conditions and thunderstorm can affect their travel by air.

From the article, it can be analyzed that United Airlines is implementing this strategic on functional level of the organization. This strategic move of the company is planned its flights b targeting specific markets, like; business travelers, family and people, who are going on vacations. In the April month, it has announced various initiatives to enhance the customers’ experience that includes reduction of overbooking, which has assisted in decreasing spontaneous refused boardings by over 80% from previous year. Currently, the operations team is working on very important technology project, under which it is trying to incorporating the different set of features according to its target market customers, like; business travelers, family, leisure traveler etc.

Challenges with Overbooked Flights

Furthermore, another strategic decision at United Airlines is implementing the data analytics that will play an important role in managing the seats and arranging the bookings of flights. It is looking for getting the data and perceptions in the hand of airline’s employees. Under this strategic move, the travelers would be able to see airline’s attendants through their mobiles. This mobile service provides a facility to the customers of economy cabin for buying food and beverages (Ki & Nekmat, 2014). Now, the company has mobile printers and mobile devices, which are issued to customer service executives, so that they can flock a zone and service to the travelers, modify their planes if they require to and consider the information or print out the bag tags and boarding passes. In the coming future, the company will be offering the customer focused services, so that it can enhance its brand image in the country and all over the world.

Thus, from the above article analysis, it can be assessed that the strategic decision of United Airlines is effective for managing the situation of flight overbooking. Implementation of data analytics and mobile technology will assist the organization in collecting the data and information regarding the travelers. By this strategic move, the company will be able to expand its thinking to the journey of customers. It can be decided by looking at installment of advanced technologies in its airline operations (Bettis, et al, 2016). At the end, it can be clearly stated that its strategies are for developing a better travel experience, which can involve various aspects, like; enhancing process of boarding and offering better and specific information about the flights. It will assist the company in attracting more and more customers and gaining a significant market share aviation industry.

Procter & Gamble Company (P&G) is a consumer goods organization in United States, which is headquartered in Ohio, USA. The organization was established in the 1837 by James Gamble and William Procter. In the year 2010, the company was on the sixth position in the list of most admired companies in the world, but it has dropped to number 19 in list of Fortune of the year 2017. There are so many reasons behind the fact that company has dropped to lower rank than 2010. One of the major reasons is the poor quality of products and services. The organization is offering the soaps and cosmetic products with poor quality raw materials (Fortune, 2010). P&G is not very much sound financially, which is the fundamental reason for cutting the costs of materials and production. Moreover, it is not engaging in social responsibility, so people are not taking it into consideration. It is affecting the business and sales of the company in consumer products.

United's Strategic Response

Apart from this, there are so many organizations, which can be seen in the lists of both years. These companies are, like; Apple Inc., Amazon.com, Berkshire Hathaway etc. These companies have maintained their position in both the years, i.e. 2010 and 2017. Apple Inc. is one the first rank in both the years (Hill, Jones and Schilling, 2014). This organization has maintained this position because of its unique products and brand reputation. It is offering the products with the unique and advanced features, so that it has sustained the position over the years. Despite of higher prices, the company is able to attract a significant customer base towards its products (Wilson & Gilligan, 2012).

Another company that is considered here is Facebook, which is on the 9^th rank in Fortune’s most admired companies’ list in the year 2017. This can be undoubtedly said that this organization has made a notable rank for itself in 2017. In today’s technology advanced world, Facebook has become a well-known name and most of the population is actively engaged in using its social media site (Fortune, 2017). The company has developed an effective way to communicate with the person anywhere and this creative idea led the organization to become the part of most admired companies’ list. After its establishment in the year 2004, the company has become a leading player in the world of social media. Currently, it is on the second rank in social media networking sites. Thus, these chosen organizations now have the place in the list of most admired companies (Smith & Alexander, 2013).

The below given section includes the research that is conducted on the above-mentioned organizations. The companies are such as; Procter & Gamble, Apple and Facebook. The research is stated below;

Procter & Gamble is one of the biggest and fast growing consumer products in India. Company is committed in enhancing consumers’ lives in different parts of country. The company is well-established brand in consumer product sector and headquartered in Ohio, United States. It is offering its soaps and cosmetic products all over the world. Apart from this, the company has various resources and capabilities, which have been used by the organization for creating value chain among customers. Financial resources of P&G are less than its competitors that is affecting its position in the industry (Demitrios, 2015). Company has an effective quality of management and innovative practices in its business operations. At organization, the people and human resource management are also effective, so it has managed its operations in an efficient manner. It has conducted research and development to know about the market trends and current needs and preferences of customers. These are the core competencies, which differentiate P&G from its competitors. It has created an exclusive brand image through its products and services, so that it will be able to survive in the future consumer product industry (Serena, Dulaney & Chelsey, 2015).

Interview with Linda Jojo

Strengths

• It has more than 300 brands internationally
• Better distribution of products and services
• Contribution to sports and entertainment events
• Strong brand image

Weaknesses

• Intense competition from local players
• Selling of fake products under the name of P&G

Opportunities

• Product diversification
• Mergers and acquisitions
• It can capture rural markets and enhance penetration in urban areas

Threats

• Intense competition from international and local players
• Economic crisis, recessions, changes prices of dollars
• Foreign Direct Investment in retail business

Facebook is a social networking service provider and social media company, which is based in California, United States (Young, 2014). It is one of the largest and well-known social media sites that are used by most of the people worldwide. The number of its users is its major core competency. There is no other social media website, which has this level of customer base as Facebook has. This company is offering various specifications, which are assisted in increasing its customer base. Other core competencies are like; low-cost operations, ease to use and flexibility to use (Swani, Milne, & Brown, 2013). By offering effective services, Facebook is able to establish a strong brand image and reputation among a large population. In the future, it can add some new and attractive features in its website. It will improve its business operations in future.

Strengths

• Facebook has billions of users, who are actively using its website
• Better user experience
• It can be combined with other applications

Weaknesses

• Issue of Customization of website
• Single source of income

Opportunities

• Business expansion in emerging markets and developed countries
• Revenue diversification
• Inclusion of advanced features in website
• Market penetration by enhancing the number of users

Threats

• Privacy issues
• Identity issues
• Revenue generation is slow from online promotion

To answer this question, a hypothetical business has been chosen, which will offer healthy and dietary food to health conscious people. This organization is named as Eating Well Foods. As the people are becoming very concerned about their health, so it will offer the food products with healthy and dietary ingredients (Ki & Nekmat, 2014). By this, company can attract more customers and gaining more competitive advantage in the food industry.

The mission statement of the company is to provide the tasty, great quality, healthy and vegetarian food products to the people, who care about themselves and their families’ health. Moreover, its vision statement is to create a community which will understand the health and happiness. In doing so, the company is developing a creative business model for growth and success in world of health, nutrition and happiness (Teece, 2008).

External environment is very important that has huge impact on the growth of company. It includes different factors, like; political, economic, social and technological factors (Eden & Ackermann, 2013). There may be a significant political pressure on the food organization as stability of government enhances the economic activities of nation. Government has made various regulations to monitor the business operations of food organization. As Eating Well is claiming to provide the healthy food ingredients, so the quality and standards of food can be checked by the government. If the government will find it rights, then they will promote it and introduce some laws to make their operations easier. Moreover, there are some economic factors, which are influencing growth of this organization. It will impact the organization because of some factors, like; inflation, income, customer spending, disposable income etc.

Analyzing United's Strategic Decision

Social factors are very important factors for this organization and these factors can offer various opportunities to the chosen business (Bettis, et al, 2016). In today’s environment, people prefer to adopt healthy life style and turning to eat the good and healthy food products. This thinking of people will support the business of company. In addition, the company can adopt automation technologies to increase the sales of its products. Advanced technology will assist the organization in improving its business operations and functions.

Furthermore, internal environment also plays a vital role in attaining the goals and objectives of chosen company and adjusting to future needs as well. The company has effective resources and capabilities, which is increasing its competitive advantage in the industry. Human resources are the major component of its internal environment. One of the major strengths of Eating Well is to offer quality food products on comparatively lower prices (Barney, 2014). It is targeting the health conscious people. With these strengths, company has some weaknesses also, like; it is not very famous in the city. There is lack of promotion and advertising, so it is not able to generate the pool of customers. In addition, it has a limited range of food products in healthy and dietary segment. This company has opportunities to expand its business in other markets to increase its presence. Competition is major threat for the organization.

By assessing above components, the company can execute cost leadership and product differentiation strategy. These will be the best strategies for the organization to grow its business in today’s competitive business world. For implementing this strategy, the company will create an action plan, which will include all the activities and responsibilities and concerned departments.

After implementation, the effectiveness of strategies will be evaluated by taking feedback of customers and looking at the performance in the market. Under its feedback system, it will create a questionnaire, which be circulated among its regular customers, so they can analyze the performance and effectiveness of their new strategies. After evaluation, the company can implement some new strategies for making control.

References

Barney, J. B. (2014). Gaining and sustaining competitive advantage. Pearson Higher Ed.

Bettis, R. A., Ethiraj, S., Gambardella, A., Helfat, C., & Mitchell, W. (2016). Creating repeatable cumulative knowledge in strategic management. Strategic Management Journal, 37(2), 257-261.

Demitrios, K. (2015). "The Procter & Gamble Company's Best Product in 2015". Motley Fool. 

Eden, C., & Ackermann, F. (2013). Making strategy: The journey of strategic management. Sage.

Fortune. (2010). Most Admired Brands 2010. Retrieved from https://archive.fort/une.com/magazines/fortune/mostadmired/2010/.

Fortune. (2017). The world’s most admired brands 2017. Retrieved from https://fortune.com/worlds-most-admired-companies/list/.

Hill, C.W., Jones, G.R. and Schilling, M.A., 2014. Strategic management: theory: an integrated approach. Cengage Learning.

Jad, M. (2010). "United-Continental Merger Clears Federal Hurdle". The New York Times.

Ki, E. J., & Nekmat, E. (2014). Situational crisis communication and interactivity: Usage and effectiveness of Facebook for crisis management by Fortune 500 companies. Computers in Human Behavior, 35, 140-147.

Norton, S. (2017). United’s Strategy to Reduce Bookings. Retrieved from https://www.wsj.com/articles/uniteds-strategy-to-reduce-overbookings-1502676300.

Serena, Dulaney & Chelsey. (2015). "Procter & Gamble Agrees to Sell Beauty Brands". Wall Street Journal.

Smith, K. T., & Alexander, J. J. (2013). Which CSR-related headings do Fortune 500 companies use on their websites?. Business Communication Quarterly, 76(2), 155-171.

Swani, K., Milne, G., & P. Brown, B. (2013). Spreading the word through likes on Facebook: Evaluating the message strategy effectiveness of Fortune 500 companies. Journal of Research in Interactive Marketing, 7(4), 269-294.

Teece, D.J. (2008). Technological Know-How, Organizational Capabilities, and Strategic Management: Business Strategy and Enterprise Development in Competitive Environments. World Scientific.

Wilson, R.M.S., & Gilligan, C. (2012). Strategic Marketing Management. Routledge.

Young, A. (2014). Google and Facebook. In Brand Media Strategy(pp. 7-14). Palgrave Macmillan US.