Strategic portfolio management for Delta Air Lines competitive positioning

¶ … Portfolio Management

The current business trends in the airlines industry have the Delta Air Lines Inc. In dire need to exploit on its opportunities while minimizing on its threats and weaknesses. Thus, after various consultations, it is essential to establish a comprehensive strategic business unit (SBU) to propel the company to the top of the industry. The portfolio of the company allows it to venture into various activities that will enhance the productivity of the company while favoring the shareholders and other stakeholders in the company. In line with its vision and mission, the airline is at liberty to strategize in various ways, improving its current services, re-inventing the existing services, or executing a new business strategy. Therefore, the strategic business unit I propose is a new unit to propel the company to the top of its operations.

The industry and aspects of the environment of that industry

The airlines industry is along the line of the transportation business. This is a remarkably endowed industry as it incorporates hundreds of thousands of competitors, from the road, rail and water transport to the air transport. Therefore, the wide scope of the transport industry is an immense task for any company established or not established, to encounter without proper competitive advantage strategies. The airlines sector is the focus of Delta Airlines Inc. within the environment of operation of this company it faces various challenges, the greatest being the competitive nature of the sector. However, the company operates from its hub in Atlanta, and has several destination ports to which it provides services of air transport. The environment is quite challenging as competition is increasing on a daily basis. There are so many other airline companies in the industry. Additionally, there is monotony of services provided across the airlines; hence, the competitive advantage of any airline in the industry is minimal. This leaves the company's ability to compete at the mercies of the passengers. Additionally, the industry lacks creative innovations to improve on the quality of airplanes and other services involved in the business operations. Therefore, as Delta Airlines Inc. The company is in the process of capitalizing on the available opportunities to spice up the industry and the environment of the air sector.

The mission and strategies of the strategic business unit (SBU)

The strategic business unit I propose aims to capitalize on the growing market of the aircraft maintenance, repair and overhaul. The mission of this unit is to establish diversity in the operations of the airline. The current concentration of efforts y the company on the actual flight operations is causing the company to miss a mild opportunity to expand its services. Therefore, the mission aims to create diversity in the operations of the Delta Air Lines Company. The strategy of the unit is to capitalize on the growing demand for aircraft maintenance and repair market. This unit aims to acquire qualified aeronautical engineers to ensure it provides quality maintenance and overhaul services to the customers. It also has the strategy to tap into other airlines that do not have their own aircraft-servicing bay. Therefore, the strategy is not only the delta airlines airplanes, but also extension to the wider airlines market. The unit is taking the opportunity presented by the market to capitalize on the growing market of air travel sector.

The existing organizational structure

The leadership consists of the president, who is also a director and chief executive officer, who is also a director. The chief financial officer is also a senior vice president, chief operating officer who is an executive vice president and a chief legal officer. The chair of the board and a vice chair of the board also join in the decision making leadership. The leadership works in conjunction with each other to ensure that the company achieves the set targets and mission of the company. The leadership facilitates the human resource and network planning of the company to ensure that it provides quality services to the people. The company further employs correlated and consultative approach to decision making. This propels it to the top in its procedure of achieving its objectives via the various strategies.

The proposed portfolio process

The initial steps of executing the proposed strategic business unit incorporate the following process. The company is to provide executive sponsorship to the business unit. In addition to this, as the proposer of the project, I formed a team of experts that include the project manager, a supervisor and the working engineers and mechanics to execute the overall work involved in the unit. The team consists of about twenty personnel, but is due to grow with the demands of the market. The process requirements for executing the plan include construction of an extensive servicing bay, from where the unit will be operating. Other inputs include the acquiring of the material needed for spares and other repairs works. These will include the sheets for aircraft manufacturing, and other engineering parts for the work. Moreover, the overall facilitator will need to establish offices for the team near the vicinity of the unit operations. The roles of every person in the team remain defined as outlined in their job description. Every person hired will need to execute their responsibilities and account for their actions.

Currently, the executive team sees the need for a new business strategic unit; hence, obtaining the executive approval is not an issue. They consented to the idea from the proposition stage. In implementing the plan, there will be advertising within and outside the boundaries of Delta Airlines to ensure that, the unit kicks off with proper publicity. The team has the briefing thus executing the strategies of the unit will not present a hard task. Relative training will be taken to familiarize the incoming and current workmates to merge with each other in their operations.

Project selection criteria and process for applying the criteria and managing the portfolio

The company has a strong and growing revenue generation through the incomes from the services it gives to the people. However, this new project unit is viable for the company in view of revenue generation, as it will minimize the cost incurred by the company in maintenance and repair of its own airplanes. Additionally, the other airplanes from different air companies will pay a surcharge for services; hence, generating more revenue for the Delta Airlines Inc. The operating margin of the new unit is quite large as the costs of inputs for the unit; and the operational charges such as salaries and others are minimal compared to the incoming revenue from the unit. The efficiency of the assets used to run the business is high as most engineering works are sufficient in recycling and reusing the materials available. The stakeholders have unwavering confidence in the company's ability to excel in the future. Therefore, this strategic business unit will boost the stakeholder confidence further. Through these four value drivers, that is revenue growth, operating margins, asset efficiency and expectations, the portfolio selection criteria are competently applying the best criteria for implementing and managing the strategic portfolio.

Committed Project description for the SBU

In the proposed business portfolio, the project section of maintenance is to counter and protect the market share from aggressive competitors. The maintenance of the airplanes will allow the company to improve the quality of its service. This will guide the company to attain competitive advantage over the competitors who also have the same product line of aircraft maintenance and repair.

Secondly, the company also used to have an effective advertising strategy using its website. This section remains a successful plan in the market place. Therefore, I propose a project of aggressive re-advertising and exploration for the website project usage to keep the company top in the market. Additionally, the website product is also useful for the SBU as it will showcase the portfolio project proposed.

In the third category of the project that had initial success, I propose to support the project initiated to expand the airport stations. The project failed due to financial constrains. However, with the strategic business unit proposed, the company will attain financial stability, allowing it to re-introduce that project and make it as successful as planned before it collapsed.

Lastly is the project proposition of employing a new project to replace the outdated version project. This features the proposed portfolio project of aircraft maintenance and overhaul. The company does not have its own section of repairs and maintenance of airplanes; hence, this new project will guarantee the company savings on income as it will repair and maintain the crafts planes, replacing the outdated version of taking repair and maintenance services from other service providers. This project promises to be remarkably viable in the future. This project is as described in the proposed strategic business unit described in the text in the part of the mission and strategy of the proposed strategic business unit.