................................................................................................................................................. 1
Overview of Airline ...................................................................................................................................
1
Key Simulation Objectives ........................................................................................................................
2
Team Organization ...................................................................................................................................
5
Peer Evaluation ........................................................................................................................................
5
The Strategic Planning Process ...............................................................................................................
5
The Airline Manual ...................................................................................................................................
7
Section 1: The Airline
Case ....................................................................................................................... 9
Section 2: Airline Operations Guide ......................................................................................................
25
Detail of Menu Choices ..........................................................................................................................
27
STARTUP .......................................................................................................................................... 28
DECISIONS ....................................................................................................................................... 32
ANALYSIS ........................................................................................................................................ 46
COMPANY ........................................................................................................................................ 50
INDUSTRY ........................................................................................................................................ 57
Section 3: The Strategic Planning Process .............................................................................................
65
Analyzing an Industry .............................................................................................................................
65
Establish Goals and Objectives ..............................................................................................................
66
Organizing Your Team ...........................................................................................................................
67
Record Keeping ......................................................................................................................................
69
Functional Decision-Making ..................................................................................................................
71
Finance ............................................................................................................................................... 71
Marketing ........................................................................................................................................... 81
Human Resources ............................................................................................................................... 83
Operations / Planning ......................................................................................................................... 84
Appendix ....................................................................................................................................................
89
Guide to Common Costs and Values ......................................................................................................
89
Worksheets and Analysis Forms .............................................................................................................
92
Glossary ................................................................................................................................................
107
Index .........................................................................................................................................................
111
Print Date 7/2/2012
Welcome to the exciting world of simulation! Unlike most education and training exercises, this
simulation provides you and your team the ability to practice managing all the aspects of running
a business, in this case, a regional airline carrier. You will have the unique opportunity to make
decisions, see how the decisions work out, and then try again. Thus, you will get a "hands on"
experience with manipulating key strategic variables in a dynamic setting.
In this simulation, we have attempted to illustrate the strategic challenges facing an airline in the
real world, but simplified somewhat to make it a manageable task.
Overview of Airline
You will be managing a regional airline that will be competing with other teams (up to a
maximum of 12 total teams). So, you will have the opportunity to design and implement a strategy,
make decisions in a team environment, and learn business by experiencing it first-hand.
In the real world, managers must make decisions without perfect information, under conditions of
uncertainty, and within time constraints. Of course, it is also important that you understand the
rules of the simulation.
Each team will manage their own firm in the simulation. Typically, the team's organization is left
up to the members of the team. Teams are expected to establish objectives, plan their strategy, and
then make the decisions dictated by these plans.
After all team’s decisions are made, you will make a presentation about your firm’s strategic
management plan, and future expectations based on your decisions.
It is recommended that you not use the "stab in the dark" method of making decisions but rather to
think carefully about the variables you change and their particular impact. A thoughtful process
will allow you to better determine which elements are more effective in obtaining desired results.
All teams will make a few mistakes throughout the simulation but mistakes happen in the real world,
too. Remember to keep your enthusiasm and competitive spirit high and do not allow a few setbacks
to affect your play.
Key Simulation Objectives
Your team's performance might be judged against the goals you have formally or informally set,
However, remember that at the end of the day, an airline must eventually make a profit, have
positive cash flow, and create a positive return for investors in order to stay in business. As in the real
world, your firm will not have enough funds to implement every available option. You will have to
make strategic choices regarding investing limited resources.
After reviewing information about your firm, the environment, and the competition, your team
will decide how to manage your company in light of your strategy. This “management” must be
translated into a set of decisions
In the words of management guru, Peter Drucker, “The important decisions, the decisions that really
matter, are strategic . . . but more important and more difficult is to make effective the course of
action decided upon.” In other words, having a good strategy is essential, but the real challenge is
implementation. Implementation is what often separates a successful firm from the rest of the pack.
At the end of the simulation, you will be able to see how your firm performed over the entire game
and view comparative results with other teams.
Analyzing information and determining an integrated strategic plan is a complex task. It is important
to take time and reflect on the information, especially when working in groups.
Competing firms will be following their own strategies
Getting off to a good start is critically important in managing a firm or participating in a simulation.
Your team should be organized as soon as it is formed. Specific duties should be assigned with each
person to be held accountable for his/her responsibilities. It is recommended that you assign a "lead"
person to head up the team, perhaps with the title of President or CEO. This position could be
assigned on a rotating basis to give everyone an opportunity to take a leadership role.
But If you want, u can decide to operate as a self-managed work team as well.
Picture your team functioning as a team, rather than as a "group"—can you visualize the difference?