The document discusses Middle East Airline's growth strategy. It defines growth strategy and outlines possible outcomes like increased size, profits and market share. It also describes types of growth strategies like diversification and integration. The document then discusses Middle East Airline's history and current situation, including its modern fleet and destinations. It describes the airline's financial difficulties in the late 1990s and the restructuring process used to cut costs and improve productivity. This led to improved financial results over several years. The document concludes with recommendations for alliances and studying competitors.
2. Definition of Growth Strategy
• Strategy: “a plan of action
designed to achieve a long-
term or overall aim,” (Oxford
Dictionaries)
• Growth Strategy: “an
organization expands the
number of markets served or
products offered through its
current business or in terms
of new businesses,” (Robins)
12/17/2012
By: Meryan Sakr, Nadine Naji, Karim El
Ahmad, and Tarek Amro
2
3. Possible Outcomes of a
Growth Strategy
• Increase in Company
Size
• Increase in Profit
• Increase Market Share
• Introduce New
Technologies
12/17/2012
By: Meryan Sakr, Nadine Naji, Karim El
Ahmad, and Tarek Amro
3
4. Types of Growth Strategies
• Diversification
• Concentration
• Vertical
Integration
• Horizontal
Integration
12/17/2012
By: Meryan Sakr, Nadine Naji, Karim El
Ahmad, and Tarek Amro
4
5. HOW THE THEORETICAL GROWTH
STRATEGY APPLIES TO MIDDLE EAST
AIRLINES IN PRACTICE
12/17/2012
By: Meryan Sakr, Nadine Naji, Karim El
Ahmad, and Tarek Amro
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6. Overview of the Company
• One of the most modern fleets in
the world with an average of 3.9
years old planes
• Highly ranked the best
technological aircraft in the area
• More technological advanced,
More fuel-efficient and less noisy
aircrafts
• They have a unified aircraft system
• Flies to 31 destinations in the
Middle East, Europe and West
Africa
12/17/2012
By: Meryan Sakr, Nadine Naji, Karim El
Ahmad, and Tarek Amro
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7. History of the Company
• Only Lebanese Airline
(Monopoly)
• Founded in 1945 by Prime
Minister Saeb Salam
• Company’s first flight was
from Beirut to
neighboring countries
• Extended flights to the
gulf countries followed by
Europe and Africa
12/17/2012
By: Meryan Sakr, Nadine Naji, Karim El
Ahmad, and Tarek Amro
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8. About the Chairman
Mohamad Al Hout
12/17/2012
By: Meryan Sakr, Nadine Naji, Karim El
Ahmad, and Tarek Amro
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9. Middle East Airline’s Situation Before
Restructuring
• Net Loss Margin of 35% (approximately $87
million) in 1998
• Old Fleet and Equipment
• No Cash
• Excess Staff and Low Productivity
• Low Utilization of Resources
12/17/2012
By: Meryan Sakr, Nadine Naji, Karim El
Ahmad, and Tarek Amro
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10. Restructuring of Middle East Airlines
• Picked Most Promising Routes based on
economic factors and increased their flight
frequencies
• Closed down non-profitable stations
• Downsizing and modifying the working
conditions for staff and crew to increase
productivity
• Adopting cost reduction plan across all units
12/17/2012
By: Meryan Sakr, Nadine Naji, Karim El
Ahmad, and Tarek Amro
10
11. Results of the Corporate Strategy
Financial Position of Middle East Airlines over
the years
12/17/2012
By: Meryan Sakr, Nadine Naji, Karim El
Ahmad, and Tarek Amro
11
12. Further Improvements
• Alliance with the Sky Team in
2011
• Sky Team is a leading alliance in
the global airline industry
• Offering 13000 daily flights
between 169 countries.
• Wider market
• Members can benefit from 420
lounges worldwide
• Can earn cedar miles
• Customer based
• Increase in frequency of flights
12/17/2012
By: Meryan Sakr, Nadine Naji, Karim El
Ahmad, and Tarek Amro
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13. Possibilities for Future Research
• How will the competition of Low Cost Carriers
(LCC) in the region affect MEA’s growth in the
future?
• Will the Rennee Maawad Airport in Qolaiaat
open in the future and affect the company’s
strategy?
12/17/2012
By: Meryan Sakr, Nadine Naji, Karim El
Ahmad, and Tarek Amro
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14. Lessons Learnt From the Case Study
• Should be able to control unit cost
• Find highlights that may lead the company to
prosper
• Quality is more important than Quantity
12/17/2012
By: Meryan Sakr, Nadine Naji, Karim El
Ahmad, and Tarek Amro
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15. Recommendations for Other
Companies
• Be realistic about the
company’s position in the
market
• Define the company’s
specific competitors
(study the market)
• Due to Globalization, one
can’t live alone thus
companies should form
alliances to expand their
markets
12/17/2012
By: Meryan Sakr, Nadine Naji, Karim El
Ahmad, and Tarek Amro
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16. Sources Used
• Interview with Mr. Mohammad Hout and Mr.
Kamal Accad
• http://oxforddictionaries.com/definition/engli
sh/strategy
• www.mea.com.lb
12/17/2012
By: Meryan Sakr, Nadine Naji, Karim El
Ahmad, and Tarek Amro
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