Competitive Intelligence Report, American Airlines, Fall 2013 - Worked with a team of three to research, analyze, and report a competitive profile, financial analysis, SWOT analysis, macro-environmental analysis, business model analysis, and other analyses.
2. –‡ŽŽ‹‰‡…‡‡’‘”–
December 10, 2013
Authored by: Christopher Dale, Alex Edwards, Brandon Thomson
Mercyhurst University Institute for Intelligence Studies
3. A m e r i c a n A i r l i n e s C o m p e t i t i v e I n t e l l i g e n c e R e p o r t | 1
For Questions or Comments, Please Contact the Authors:
Christopher Dale Email: cdale81@lakers.mercyhurst.edu
Alex Edwards Email: aedwar44@lakers.mercyhurst.edu
Brandon Thomson Email: bthoms45@lakers.mercyhurst.edu
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CI Profile Dashboard ........................................................................................................
Porter’s 4 Corners .............................................................................................................
History / Background.........................................................................................................
Management Profiling .......................................................................................................
Products / Services.............................................................................................................
Marketing...........................................................................................................................
Operations..........................................................................................................................
Strategies............................................................................................................................
Financials ..........................................................................................................................
Corporation Current Events ..............................................................................................
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9 Forces Model ..................................................................................................................
Analysis of Competing Hypotheses.....................................................................................
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Critical Success Factors ...................................................................................................
SWOT Model.....................................................................................................................
Strategic Mapping.............................................................................................................
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x Restructuring of American
Airlines, “the new American.”
x Implementation of cost cutting
programs including the
purchasing of new airplanes.
x Rely on the AAdvantage Loyalty
Program to be the backbone of
our consumer base.
Response Profile:
Current Strategy:
x In a bad financial position, but looking to emerge from
bankruptcy and dominate the market.
x Introducing new airplanes that are technologically
advanced and will help in reducing costs, most notably fuel.
x Merger with U.S. Airways will increase an already expansive
route system.
x The AAdvantage program will grow with the pending
merger and increase loyalty among business travelers.
Capabilities:
Strengths
x Part of the oneworld alliance.
x Approximately 900 aircrafts that serve
3,400 flights daily.
x Largest airline loyalty program.
Weaknesses
x Negative net income.
x Filed for chapter 11 reorganization.
x Will be disorganized due to the
merger initially.
Future Goals:
x Implement innovative ideas and
wise investments to minimize
our environmental footprint.
x Become the largest airline in
the world.
x Increase international presence.
Assumptions:
x Fuel costs will continue to rise.
x The merger with U.S. Airways
will return American Airlines to
financial prosperity.
x Passengers will seek more
technologically friendly airlines.
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much money the business has tied up in assets
for each dollar of sales revenue. A higher
ratio is better, as it indicates that the business
is effectively using its assets to generate sales.
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The accounts receivable turnover ratio is
used to show how effective a company is at
extending credit and collecting debt. A
higher ratio is better because it indicates
that the business is efficient at extending
credit.
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ratio shows the relationship between the
money used to fund operations and the
money generated from those operations. A
higher ratio is better, as a higher ratio
means that the business is generating a
higher amount of sales from the money used
to fund those sales.
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The average inventory investment period is
the number of days that it takes to convert a
dollar of cash used to purchase inventory
into a dollar of sales. A smaller time period
is better, as this means that the business has
to invest less of their cash in inventory.
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'HEWWR(TXLW±The debt to equity ratio
compares how many funds are provided by
creditors and how many funds are provided by
owners. A low debt to equity ratio is good, as a
high ratio indicates increases in debt.
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shows how many assets are funded by creditors
and how many are funded by owners. A low
ratio is better, as this indicates that the
company did not have to take on much debt to
purchase their assets.
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compares a company’s current assets and
their current liabilities. A higher ratio is
better, as a company with more liabilities
than assets is a higher financial risk. Ratios
greater or equal to 2 indicate that a
company is able to meet its short-term
obligations.
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current ratio, however, instead of using all
current assets, it only uses cash, short-term
investments, and current receivables, a
company’s most liquid assets. A higher ratio
is better and any ratio higher than 1 is
considered good.
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how well a business is using its assets to
produce income. A higher ratio indicates
that the company is using its assets well.
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ratio compares a company’s net income to
the company’s stockholder’s equity to
determine what return that company is
providing. A higher ratio is better, as it
indicates that the company is producing
more income with less stockholder’s equity.
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company is making more income off of its
sales.
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makes for each share of stock it has issued. A
high earnings per share ratio is better than a
low one.
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the projected earnings of a company. It is
calculated by dividing the current market
value per share by the earnings per share.
The ratio indicates the market price of $1 of
earnings, with a high ratio indicating high
projected earnings.
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