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 Porters 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 an 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...…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.

Step 2: Performance measurement

The evaluation of actual performance will in this case be benchmarked against the set performance standards. There are a wide range of approaches that could be deployed in performance measurement. In this particular case, we could make use of expenditure ratios. Ratios of relevance in this case, given the choice of strategy (i.e. embrace of a cost-leadership strategy), are inclusive of, but they are not limited to; efficiency ratio (expenses/revenue) and current ratio (current assets/current liabilities). For control purposes, it should also be noted that there may be need to establish the frequency with which the performance measurement method or approach would be used, i.e. quarterly or annually.

Step 3: Variance analysis

Established performance standard will be compared with actual performance.

Step 4: Action

When actual performance does not match desired performance, then there would be need to make the relevant adaptations.

When it comes to the appropriate evaluative measures, it would be prudent to note that in seeking to evaluate the extent to which the strategy highlighted in this text is effective, there will be need to deploy an ideal strategic evaluation technique. One ideal technique that could come in handy in this case is gap analysis.

Strategy evaluation participants will be inclusive of the board of directors whose role in the review process will be indirect in the sense that they will be interested in assessing the airlines results and performance. The airlines CEO will also be a crucial player in evaluation. This is especially the case given his pivotal role in directing the implementation process. Others who will be involved are inclusive of functional heads as well as the heads of the airlines strategic business units. These will be key sources of feedback and also remain key players on the operational control front. As a consequence, they will also be instrumental in undertaking corrective action. Corrective action could be taken if and when the need for the same arises.

Conclusion

In the final analysis, this particular analysis has clearly demonstrates that of the three strategies proposed, the most ideal strategy would be the embrace of a cost-leadership strategy. The Quantitative Strategic Planning Matrix (QSPM) came in handy in this regard. Following an assessment of the internal and external environments of United Airline Holdings, and the subsequent weighing of each strategic factors pros and cons, this particular tool helped in the identification of the strategy highlighted as being the most relatively attractive strategy. However, it should be noted that the deployment of this particular strategy could be a rather challenging task owing to the fact that to remain competitive, United Airline Holdings would have to minimize costs at all levels. The airline must also ensure that the quality of services it offers its customers is not negatively impacted. This is more so the case given that success with this particular strategy, by definition, means that United Airline Holdings has to offer services whose quality is acceptable at prices that are lower than those charged by other players in the industry. In the end, the effective deployment of this…