United Airline Holdings Implementation and Evaluation of Strategy

United Airline Holdings: Strategy selection, Implementation, and Evaluation

Introduction

From the onset, it would be prudent to note that to continue being relevant in an increasingly competitive business environment, United Airline Holdings ought to appraise the industry in which it operates, its competitors as well as its various operational aspects and thereby formulate the most effective strategies. However, given that the airline cannot deploy all the proposed strategies at one go, there is need establish which strategic option is most feasible. In this text, three strategies were proposed and prioritized. The relevant strategic management tool was then applied with an intention of selecting the most ideal strategy of the three identified. Thereafter, the best practices that would inform the implementation as well as evaluation of the selected strategy were highlighted.

Alternative Strategy Generation

a. Possible Alternative Strategies

Following an assessment of the business-level, corporate-level, and global strategy, as well as evaluation of results from the internal factor analysis and external factor analysis, a total of three strategies were identified as being viable for United Airline Holdings. The said strategies are;

i. Embrace a cost leadership strategy

ii. Get into strategic partnerships

iii. Expand into untapped markets

i. Embrace a cost leadership strategy

In essence, a cost leadership strategy happens to be one of Porter’s generic strategies. According to Godfrey (2015), this particular strategy could be perceived as the deliberate attempt by an enterprise to “project itself as the cheapest manufacturer or provider of a particular product or commodity in a competition” (174). In the case of United Airline Holdings, this particular strategy could be deployed in two primary ways or formats. To begin with, the airline could on this front seek to minimize its costs significantly, while at the same time ensuring that the prices it charges for various services (essentially passenger travel and cargo hauling) reflect the average industry prices.

On the other hand, United Airline Holdings could also seek to charge low prices (i.e. prices that are lower than industry average prices). In the latter case, the airline would be focused on increasing its market share. On the other hand, in the former instance, the goal would be to increase profit (i.e. revenues generated less expenses). A blended approach could also in this case be implemented – in which case United Airlines slashes its costs so as to offer services at a prices that are significantly lower than average industry prices.

ii. Get into strategic partnerships

There are various strategic partnerships that the airline could get into. Examples on this front could be inclusive of, but they are not limited to marketing partnerships and technology partnerships. In brief, marketing partnerships could relate to United Airline Holdings and related companies (e.g. a tour and travel services firm) assisting each other in finding customers – i.e. in which case either company refers its clients to the other. This could benefit United Airline Holdings in terms of a wider customer base.

On the other hand, technology partnerships could come in handy in efforts by the airline to rein in its costs. For instance, the company could partner with a technology company for the exclusive utilization of the said companies’ technology (i.e. computers) in exchange for discounts or free repair and maintenance services.

iii. Expand into untapped markets

There are a number of markets that largely remain untapped despite presenting great opportunities for airlines. A good example of an untapped market is East Africa. This is more so the case given that the region is deemed a fast-growing tourism and economic hub. In essence, this puts the region within the sights of global investors as well as tourists. It is also important to note that the region, especially Kenya, has a relatively well-developed infrastructure – from a technological as well as financial perspective. In effect, this particular East African country could be considered a strategic launching pad for the rest of the EA region, and later on the entire continent.

b. Cultural and Organizational Factors to be taken into Consideration

In choosing among the strategies highlighted above, there are a number of cultural as well as organizational factors that ought to be considered. Some of the factors that have been identified as being crucial in this regard are:

i. Organizational structure

ii. Organizational mission and vision

iii. Organizational culture

iv. Organizational diversity

i. Organizational Structure

To a large extent, this has got to do with the coordination as well as allocation of duties and functions across the entire organization. In most cases, it can be presented in a visual format. According to Brondoni (2018), there are a number of organizational structures that organizations typically adopt. These, as the authors indicate, could be inclusive of; hierarchical structure, functional structure, flat structure, divisional structure, etc. In the case of United Airline Holdings, it was established that the airline has in place a hierarchical structure. What this means is that the airline in this case has a clearly established chain of command from the very top where Scott Kirby serves as the CEO, all the way to the bottom of the organization whereby we have officers running various business units. It should be noted that organizational structure happens to be a crucial consideration in as far as strategy formulation and implementation is concerned. This, according to Amason (2011), is more so the case given that “the structure of an organization influences the capability of an organization to reconfigure its operations and to make quick responses through flexible decision making structures” (131).

ii. Organizational Mission and Vision

In as far as the organizational mission is concerned, United Airline Holdings is committed to the promotion of the dignity of employees via the establishment and advancement of an inclusive work environment, and ensuring that employees are empowered to meet and exceed customer needs (United Airline Holdings, 2022). On the other hand, the vision of the airline happens to be the finding of solutions that could be deemed effective as well as innovative in the advancement of its operational agenda (United Airline Holdings, 2022). According to Morden (2006), the vision and mission of an enterprise are often the key directors of organizational strategy. This, according to the author, is more so the case given that the ‘building blocks’ of strategy happen to be the goals and purpose of an organization – which are often clarified by the organizational mission and mission.

iii. Organizational Culture

This could simply be defined as the aggregation of values as well as principles and beliefs that could be ascribed to organizational members (Kotler and Lane, 2019). These, in effect, are the characteristics of an organization. One outstanding aspect in as far as United Airline Holdings’ organizational culture is concerned is innovation – i.e. with regard to the readiness and pace at which the organization embraces change and new ways of doing things. This is to say that employees are encouraged to come up and share solutions that are deemed creative and innovative. In a study seeking to establish whether there is any relationship between organizational culture and strategy, and the nature of the said relationship, Janicijevic (2012) made a finding to the effect that “organizational culture influences the strategy formulation by determining the gathering of information, perception and interpretation” (127). It is also important to note that the author further established that strategy implementation could be facilitated or disabled via the legitimization process which is influenced by organizational culture.

iv. Organizational Diversity

This, according to Wilkinson and Kannan (2013) could be perceived as the extent to which diversity is embraced in the workforce. In this case, diversity could relate to a wide range of individual differences between employees, i.e. in relation to religion, ethnic origin, race, gender, etc. An assessment of the makeup of United Airline Holding’s workforce reveals that there are some areas where the organization fails in as far as its embrace of diversity is concerned. This is more so the case in relation to gender diversity – in which its top managerial team appears to be largely male-dominated. The organization also performs poorly in as far as racial diversity is concerned. Wheelen, Hunger, Hoffman, and Bamford (2018) point out that organizations that have in place a hugely divers workforce often benefit in terms of the formulation and implementation of superior strategies owing to the diverse perspectives that inform the said processes. More specifically, according to the authors, “assembling a diverse workforce usually contributes to a global company's ability to meet its key business objectives...” (Wheelen, Hunger, Hoffman, and Bamford, 2018, p. 210).

Strategy Prioritization

In choosing among the alternative strategies highlighted above, I opted to take into consideration the various organizational and cultural factors indicated. Other considerations in this case were inclusive of, but they were not limited to, how the strategy would enhance the airline’s competitive advantage going forward and how it would contribute to the long-term performance of the airline. The table below summarizes the prioritization process and offers a rationale for the same.

Prioritization

Rationale

I. Embrace a cost leadership strategy

This approach would also come in handy in efforts to enhance the airline’s abilities to navigate downturns in economic activity. Further, given that United Airline Holdings has a clearly stated preference towards innovation (i.e. as stated in its mission/vision), the embrace of cost effective operational formats would further enhance its competitive advantage and in the long run outperform its competitors.

II. Expand into untapped markets

This strategy could be instrumental as the company seeks to further enhance its probability of superior long-term performance by expanding its market size. However, it should be noted that there are numerous other factors that could stall United Airline Holding’s progress in other markets including, but not limited to; political instability, hostility of markets to foreign companies, etc.

III. Get into strategic partnerships

This strategy appears to have the least benefit in terms of enhancement of United Airline Holding’s competitive advantage and promotion of the probability of superior performance going forward.

Table 1: Strategy prioritization

Strategy Selection

In as far as strategy selection is concerned, the ideal tool will be the Quantitative Strategic Planning Matrix (QSPM). Harrison and John (2013) point out that in as far as strategy selection is concerned, the QSPM helps the user identify which strategic option could be deemed most feasible. It is important to note that the said tool will especially be instrumental in the evaluation of the three possible alternative strategies that have been identified elsewhere in this text. The most feasible strategy will in this case be prioritized over the two other alternative strategies. The development of the QSPM below took a total of six steps.

Key Factors

Weight

Cost leadership strategy

Strategic partnerships

Untapped markets

Opportunities

AS

TAS

AS

TAS

AS

TAS

Global expansion

New products and services

Technology advancements

Strategic alliances

Social media marketing

Threats

Global recession

Regulation

Political instability

Terror threats

Competition

Total

Strengths

Brand image

Fleet size

Innovative culture

Competent management

Loyalty program

Weaknesses

High employee turnover

Lack of diversity in its managerial team

Financial decline/Decline in profitability

Price rigidity

Marketing department inefficiencies

Total

Sum total attractiveness score

Table 1: QSPM matrix

Discussion

Following the QSPM analysis above, it is clear that the most attractive strategy happens to be embracing a cost-leadership strategy. This is as per the sum total attractiveness score – which in this case was 5.14 for the cost-leadership strategy. The next most attractive strategy was expanding into untapped markets with a sum total attractiveness score of 4.46. Lastly, we have strategic partnerships which had a sum total attractiveness score of 4.29. It therefore follows that the most feasible strategic option for United Airline Holdings is the embrace of a cost-leadership strategy. This is the strategy that should be prioritized.

Strategy Implementation

Procedures

It should be noted that there is no standard strategy implementation procedure. What this essentially means is that various authors have in the past developed a wide range of procedures in efforts to ensure that this undertaking of turning plans into actions runs smoothly. In this case, I will borrow heavily from the procedure for strategy implementation offered by Neumann (2021), who indicates that there are seven crucial steps that ought to be followed on this front. The said steps will be briefly explored below.

Step 1: Setting of goals and objectives that are clear

In this case, there would be need to first formulate goals that could be deemed SMART, i.e. specific, measurable, achievable, realistic, and time-bound. There will be need to also list the obstacles that could get in the way of achieving the goals and objectives identified. This will especially be instrumental in efforts to come up with a contingency plan.

Step 2: Roles determination

Here, there will be need to ensure that the entire team is familiar with the crucial aspects of the strategy. Ensuring that the implementation plan is well communicated minimizes changes of confusion.

Step 3: Assignment of tasks

In this case, the various tasks and responsibilities will be assigned to specific members of the team. There will also be need to ensure that team members are aware or familiar with crucial deadlines. It is at this point that the questions of ‘who’ and ‘when’ will be addressed.

Step 4: Execution (and monitoring) of the strategic plan

There will be need to ensure that all the resources necessary for the execution of the various tasks are available. There will also be need to ensure that progress is actively monitored.

Step 5: Adjustment and revision

If deviations from the intended outcomes are identified, there will be need to institute corrective measures.

Step 6: Closure

Following successful implementation of the strategy highlighted elsewhere in this text, there will be need to ascertain, as a team, whether all aspects of the strategy as originally conceived have been captured. A report to the relevant stakeholders can be prepared at this point, i.e. a report to the BOD.

Step 7: Review

There will be need to use this undertaking as a learning opportunity so as to ensure that the implementation of future strategies is conducted in an even more effective manner.

Discussion

The CEO will be in charge of the implementation process. He will, in essence, be the strategy champion as the most visible stakeholder. However, strategic map creation is in this case to be a collaborative engagement – which in effect means that the senior team will be roped in. The senior team is in this case inclusive of the relevant executive vice presidents and senior vice presidents. Together with the CEO, the said senior team will be instrumental in following through the strategic focus areas. All this will take place at the corporate level. Next, at the business level and functional levels, the various heads of strategic units as well as functional heads at United Airline Holdings will come in handy in efforts to ensure that strategic priorities are translated into actions.

Strategy Evaluation

In this case, there will be need to establish just how well the implementation process went and the extent to which the strategy implemented is effective. In basic terms, this will be an appraisal as well as review of the process of implementation. It will also be an opportunity to assess whether the organization is benefiting from the strategy. Procedures that will come in handy in this regard have been highlighted below:

Step 1: Standards establishment

To begin with there will be need to establish the most ideal standards by, amongst other things, identifying the key performance areas and setting performance indicators.