Continental Airlines

Case evaporateing field Continental air passage? s technical school outline Takes Off Continental skyways Tech system Takes Off Amrita Ranchhod 152109103 Amrita Ranchhod Pagina 1 Case direct Continental Airline? s Tech Strategy Takes Off connection profile Continental Airlines is the worlds fifth largest air duct. Continental, together with Continental Express and Continental Connection, has more than 2,750 daily de tellures throughout the Americas, Europe and Asia, suffice 133 home(prenominal) and 132 world(prenominal) destinations.More than 750 additional points argon served via current fusion partners. Continental has hubs serving New York, Houston, Cleveland and Guam, and together with its regional partners, carries approximately 63 million passengers per year. ascendentd in Houston, Texas, the air lane must provide an IT cornerstone to support its global r from severally one. Its IT department delivers services for internal operations as well as for its guest service and external Web applications. 0. reach a small description of the case pointing out the main focal point issues.This case study demonstrates how Continental Airlines adopted new strategies and how they got successful when well-nigh of the U. S. based air lanes were in risk of bankruptcy aft(prenominal) the 9/11. The family wasnt genuinely toweringly regarded because of its plaqueal culture and its IT and Biz. Strategy werent aline. Continental slowly reinvented itself by using new strategies, mop to First which make them one of the most admired global airline in the world. They used IT as a service centre and line up Biz. with IT. 1.Describe the external surround and Continentals strategic goals subsequently the 9/11, the nations airline industry struggled to regain altitude, because of the freeing of billion of dollars since a smaller number of lot wanted to fly which made thousands of people loose their jobs. and it is believe that the U. S. airlines were already try before the attack due(p) to broader economic and competitive issues. Also, economics problems in the U. S. and Japan and the weakening of the dollar has non assistanceed for the recovery of the airline industry. expect appendix 1) The legacy carriers Ameri quite a little Airlines, Delta Air Lines, United, Continental Northwest and US Airways had to slip new lower- bell competitors entering their Amrita Ranchhod Pagina 2 Case guide Continental Airline? s Tech Strategy Takes Off markets, and all airlines had to face soaring fuel prices over the determination years. jibe to Phil Baggaley, the senior airlines impute analyst for rating agency Standard & Poors, The legacy carriers were labored to pull back their capacity and that capableed a vacuum that the low-cost carriers could fill.I think 9/11 made a stuff difference in that way -it accelerated a trend that was already occurring. (www. money. cnn. com). This lead to an unused aircraft, demand for new planes went down which didnt help the manufacturers and their suppliers. To understand break down Continental Airlines external environment I will use SWOT analysis Strenghts ? Revenue Revenues step-up of 17. 1% from 2005 to 2006 ? pull ins in operation(p) Profit during fiscal year 2006 operational profit was $468 million, compared to operating loss of $39 in 2005.Net Profit during fiscal year 2006, net profit was $343 million, compared to net loss of $68 in 2005. ? CEO The CEO of Continental Airlines played and important power in stimulating the familiarity. The Go Forward computer programme made workable to revolve active on every aspect of the organization. ? Target Market Having a well-defined target market, Continental provides services to upper-class and occupancy travelers. ? IT desegregation ? Clear Vision Amrita Ranchhod Pagina 3 Case Study Continental Airline? s Tech Strategy Takes OffWeaknesses ? Financial Difficulties The company had slightly financial problems with great amount of debts and operating at loss. ? High Operating Costs Continental had a high operating cost because they resolute to attract consumers by offering in-flight meals preventing them from going away to other airlines. Opportunities ? Reestablishing Customer Base The airline industry is becoming normal as in returning(a) to pre-9/11 status. ? Align new market dodging, more consumer oriented, with low cost strategies. Threats ?September 11th The public lost faith in the airline industry after the September 11th and for many companies this meant bankruptcy. Even after this, the majority of the airline industry had lower profits. ? Oil prices were getting high ? Increasing Rivalry As stated in the case study, Continental Airlines was ranked at the very bottom of the list of airlines and regularly sure low marks for client service. Its external environmental was very instable and each carrier was trying very hard to save the company from bankruptcy.The company had 45 different CRM systems and the carrier had no way to verify who the most important customers were. The companys strategy was mainly to identify and increase the loyalty of continentals most important customer and excessively to visualise new customers even outside the U. S. keeping prices stable and increase routes. The way they implemented this strategy was basically creating and IT department which would improve customer services and operations. Bethunes mop to First business strategy made reorganize the Amrita Ranchhod Pagina 4 Case Study Continental Airline? Tech Strategy Takes Off companys structure by instauration new service routes. But according in Teradata (www. teradata. com), Bethunes Worst to First business strategy relied little on technology. Bethune began by reshaping the company with his Go Forward Plan, which still guides the business today. The Go Forward Plan has four interrelated parts, dealing with the airlines product, finances, market and people ? Fly to Win Understand what products customers want and what they are willing to fall in for. ? Fund the Future Manage costs and cash flow so the airline can continue to operate. Make Reliability a frankness Get customers to their destination safely, on time and with their luggage. ? Work Together shape a culture where people want to come to work. The second shape of Bethunes strategy, First to Favorite, the IT team decided to transform the airlines CRM systems into one which made possible to save around $6 million costs in operating costs. 2. What are the new charge capabilities and business processes? Are they information-intensive? How they work? Continentals success was due to the use of innovative technologies to improve internal operations and customer service.The realistic-time data warehouse provided data from 25 internal operational systems and both external data sources loaded into the data warehouse. The source systems included schedules, inventory, employee and work part y payroll, airline tickets, customer care, and others and it was applied to areas such as revenue management, customer relationship management, flight management dashboard and fraud detection. The CVM provided by Continentals database, allowed them to Amrita Ranchhod Pagina 5 Case Study Continental Airline? s Tech Strategy Takes Off k nowadays the most profitable customers which helped the marketing department in customer segmentation.Management understood that good prime(prenominal) information was critical. According to Jane Beeby, Continentals Senior Director, as part of its strategy to optimize service, Continental maintains unique 800 numbers for various types of customers. For example, international fliers dial a different number than do customers booking domestic flights. Rewards Program members collect their own toll-free line. To even more hardly identify individual customer needs, callers may likewise respond to a series of network-level prompts before being connected to an agent. (www. cisco. com).The new capabilities and business processes achieve by the company made possible to know more virtually their customers which lead to more profit and consequently to a better customer service. 3. Does IT have a strategic character reference at Continental? (Apply ostiarys 5 forces model) As an early adopter of new technology, Continental Airlines uses the latest information technology allowing the company to progress. I believe that IT was a brilliant opportunity to invest in the future providing real-time business intelligence which made possible to save $500 million in costs and revenues produced a ROI (Return on Investment) of more than 1. 00% (See adjunct 2). One intimacy worth mentioning is that one of the name resources at Continental were the employees. More fur-bearing employees lead to better margins. The ability to deal with problems efficiently, in turn, created job satisfaction, as employee search their efforts give way results. Ac cording to Porters analysis, The five dollar bill Forces determine the competitive intensity and hence the attractiveness of a market. Amrita Ranchhod Pagina 6 Case Study Continental Airline? s Tech Strategy Takes Off Threat of New Entrants Continental is implementing a unique strategy making hard for new companies to enter the market and uncrease barriers. Therefore, there is a low threat of new entrants because the service they are offering is unwieldy to copy ? Bargaining causality of Suppliers The bargaining power of suppliers will come because as Continental is controlling more information rough customers therefore they are offering exactly what costumers need which makes possible to build scratch awareness the bargaining power of the company increases. Threat of Substitutes The IS strategy gives to Continental Airline a competitive advantage because they control customers information therefore they are able to capture loyalty of them and besmirch substitutes. ? Bargai ning Power of Buyers Since there is a new IS the company is increase barriers for customers switching costs. The buyers are becoming more loyal and establishing a jumpstart to the company services which makes difficult for them to change. Therefore the bargaining power of buyers is decreasing. polish The information systems at Continental have a strategic repair in because they have a major positive impact in ? Increasing Industry Rivalry ? Lowering Customer Bargain Power 4. Regarding their business value analyse the IT systems mentioned positioning them in McFarlanss Matrix. According to the McFarlans Matrix listed bellow, for example CRM (Customer Relationship Management) plays a strategic role in Continentals Airline, because the existing and future expansion is bouncy to the firms success. CRM made possible the Amrita Ranchhod Pagina 7 Case Study Continental Airline? s Tech Strategy Takes Off retreat relationship between the companys customers and each employee, giving thes e last ones better information about specific needs of their customers. Loyalty is very important for them, so by using the data warehouse with real time information ensured higher customer retention. The CRM system in addition facilitated crossselling (offering customers gratis(p) products based on their previous purchases) and up-selling (offering customers premium products in the aforesaid(prenominal) category). Amrita Ranchhod Pagina 8 Case Study Continental Airline? s Tech Strategy Takes Off 5. How the process of Biz and IT alignment should be performed at Continental?Make 3 recommendations. Alignment is always going to be a moving target. melody objectives are in change, mend IT tends to move in more stable patterns. From my point of view the key recommendation is to focus on what can the company achieve now and take one step at a time. For them to be aligned there should be a balanced in terms of conference. Business people speak in business language and IT people in te chnical terms. To solve this problem, we should put this two together and make them find their own language and this involves communication, process alignment and value demonstration.These people must have the right tools and skills to work together so they can chuck out the vanquish strategies. In my point of view, creating a new department, in guess is easy save they are always full of obstacles and always busy. For example, employees profiles can be created to gather information about their competencies. Also within the organization make audit objective as ensuring a strong labor union between the business operations and the IT operations and to ensure that both the operations align with the overall business strategy. Amrita Ranchhod Pagina 9 Case Study Continental Airline? Tech Strategy Takes Off References Chris Isidore, (September 8th 2006), Airlines still in upheaval, 5 years after 9/11 www. money. cnn. com Acessed at fifteenth November, 2009 Teradata Corporation, Case-S tudy Data Warehousing www. teradata. com Assessed at 16th November, 2009 Cisco Systems, Inc, Soaring with levelheaded Contact Management www. cisco. com Assessed at 16th November, 2009 Amrita Ranchhod Pagina 10 Case Study Continental Airline? s Tech Strategy Takes Off Appendix 1 Amrita Ranchhod Pagina 11 Case Study Continental Airline? s Tech Strategy Takes Off Appendix 2 Amrita Ranchhod Pagina 12Continental AirlinesMeagan Young Chapter 10 I believe that Lorenzos confrontation with Continentals unions could have been conducted a different way. They could simply listen to each others viewpoint and not interrupt with one another(prenominal) is speaking. This way each other can hear their viewpoint and by chance understand one another better. If Lorenzo would have listened to what his employees were trying to say, he may have gotten ideas from them and used them for his company. Both these companies experient commonalities and contrasts.Both Bethunes and Southwest Airlines experie nced debt issues. Both companies were puzzled as how to deal with this situation. Both companies however had the homogeneous approaches as how to deal with the debt situations. Bethune definitely has a better management ardour than Lorenzos. this is because Bethune was willing to come up with solutions to come out of debt. He also made dramatic changes. In 1995, through a renewed focus on flight schedules and incentive pay, he greatly improved on-time performance, along with lost-baggage claims and customer complaints.Better communications was also a key component in improving employee relationships and the spirit of teamwork. Information was shared with employees through newsletters, updates on bulletin boards, email, voice-mail, and electronic signs over worldwide places. As you can see Bethune really wanted to improve Continental Airlines because he wanted what was best for the company. Bethune proved a master at changing employees attitudes and their sense of pride. a few(pr enominal) top executives ever faced such a negative workforce, reflecting the Lorenzo years. But Bethune changed all this, and in such a short time. is open-door policy and open houses to encourage employees to interact with him and other top executives was a simple gesture, but so effective, as was his opening wide the channels of communication about company plans. The incentive plans for improving performance, and the freeing up of employee initiatives by abolishing the inflexibility of formal policies, were further positives. He engendered an atmosphere of teamwork and a personal hear of an appreciative CEO. This goes to show that Bethune is a trustworthy man and cares much about his company and the employees.The paint issue shouldnt be a full-grown issue. It gave the company a new look I think. Giving employees almost kind of reward such as a bonus or incentive seems ideal. When they reach a certain goal or dowery and show they are hardworking employees, they could bugger off one of these. Before doing this I would supervise how they are working to make sure they are doing what they are supposed to. After studying their work ethics I would then determine what kind of reward I would present to them. Lack of communication is one of the biggest issues with not only top executives but anyone in the company.Im sure not all of the upper management had the same ideas for Continental, and because of this some were left behind. This could be a downfall because one of them could have had a really good idea to present to the company. Because workers are not getting paid what they should, you can offer them something else. You can offer them better company benefits. This can help the employee tremendously, especially if they have a family. You could also tell the workers that if they reach a certain percentage that they can receive a raise. All of these ideas can motivate an employee to work harder at their job.