MBA 8411: Policy Formulation and Implementation
Hand-in Analyses: The Airline Industry
This semester, I am asking you to complete a three-part hand-in analysis on the US
airline industry and one firm in that industry (you may choose among Delta, American,
Southwest, and US Airways). You will need to do your own research on the industry and
the company you choose using publicly-available resources. Part 1 of the assignment is
due on February 24th, part 2 on April 7th, and part 3 on May 5th. Each part of this
assignment is worth 20% of your course grade, to a total of 60% of the course grade.
All of your analyses should be prepared from the point of view of a consultant hired to
advise the CEO of the company you choose to examine. Each part of the analysis should
be roughly 10 pages, double-spaced, 12-point font, plus your bibliography and
appendices containing the information that underlies the written portion of your report.
That is, the main body of your report should summarize and integrate the material
contained in the appendices. I should be able to read the main body as a stand-alone
document without referencing the appendices (but rest assured, I will read them!). The
appendices also should each stand on their own. That is, when I read each appendix, I
should be able to understand why it’s there and what it’s telling me without having to
refer to the body of your report.
By the end of the project, you should have a clear understanding of where the airline
industry is at and where it’s going, along with an equally strong understanding of the
strategy, strengths and weaknesses, and challenges facing the airline you’ve examined. I
now will proceed to outline the content for each part of the assignment:
Part 1: Industry analysis
Part 1 of the assignment looks at the industry structure of the airline industry, and
assesses the profit potential of the industry, both now and in the future. The specific
questions you need to address in this part of the assignment include:
 What does the industry structure look like?
 What are the strategic groups in the industry?
 Given this, what is the overall attractiveness of the overall industry and each of
the strategic groups you identified?
 What are the key success factors in the industry? Do they vary by strategic group,
or are they consistent across the industry as a whole?
 What are the driving forces acting to change the industry? (I.e., macroenvironmental analysis)*
 How are those changes likely to affect the industry as a whole and the different
strategic groups in the industry?*
 If the driving forces play out as you anticipate, how will that affect the
attractiveness of the industry and its constituent strategic groups?
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Part 2: Firm (internal) analysis
Part 2 of the assignment looks inside at the airline you’ve chosen to analyze. It considers
both the strategy of the firm, as well as the resource base the firm draws upon. The
specific questions you must consider in this part of the assignment are as follows:
 What is the strategy your airline is following? Be sure to include the following
components of the strategy:
o Overall strategy (Hambrick & Fredrickson typology)
o Business-level strategy
o Corporate-level strategy
o Cooperative strategy
o International strategy
 How well does the strategy seem to be working? Do the financials indicate a
successful strategy? What is your evidence?
 Do you believe the strategy will be successful in light of the industry conditions
you identified in part 1? Why or why not?
 What is the firm’s resource base? What are its core and distinctive competences?
 Consider your industry analysis from part 1. What particular challenges do these
create for the firm? What opportunities do they create that the firm might be able
to exploit? What internal strengths and weaknesses does the company have to
meet those challenges and opportunities?
 Does the firm’s resource base appropriate for the strategy it’s trying to achieve?
Why or why not?
 Overall, what are the major leadership and management issues faced by the firm?
Why did you choose them, as opposed to some other set?*
Part 3: Recommendations
Part 3 of the assignment seeks to bring together the first two parts, and have you make
recommendations to the CEO of the airline you chose to examine. The questions you
need to address in this part are:
 Based on the external challenges and opportunities and internal leadership and
management issues, what are the major problems that your firm faces? Why? Is
there any specific sequence you must address the issues in?* (E.g., we must face
leadership issue 3 before we can exploit opportunity 6.)
 What options are available for the firm to meet its most important challenges and
opportunities?*
 How would you choose among the alternatives? What are your criteria?*
 What specific recommendations do you have for the CEO?
Appendices for the paper
You will not have adequate space in the body of your paper to conduct a detailed analysis
of each question. Therefore, you will want to put the detailed analysis into your
appendices. The appendices for the assignment should be detailed and complete. They
should stand alone, in that I should not need to read them in conjunction with the body of
your paper. In them, you need not only to conduct detailed analysis, but you also need to
draw conclusions from your analysis. Those conclusions should be carried forward into
the body of your paper.
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Appendices for part 1:
1. Industry analysis – i.e., a Porter’s 5 force analysis
2. Strategic group map
3. Macro-environmental analysis:*
a. Economic activity
b. Law and ethics
c. Diversity (demographic, cultural, and social)
d. Technology
e. Environmental sustainability
f. Global issues and trends
Appendices for part 2:
1. Strategy analysis: Complete a detailed summary of the firm’s strategy using the
Hambrick & Fredrickson typology. Identify each of the 5 dimensions of strategy
(arenas, vehicles, differentiators, staging, and economic logic) and summarize
what they tell you about the firm’s strategy. Analyze the elements that make up
each part of your firm’s strategy: business-level, corporate, cooperative, and
international.
2. Financial analysis: Apply appropriate financial analysis to aid in understanding
the performance profile of the firm you chose to analyze.
3. Internal analysis: Evaluate leadership and management issues faced by the firm.*
4. Resource and competence analysis: Carefully identify all the potential resources
and competences possessed by the firm. Categorize them according to the VRIS
scale, and identify whether they are core, distinctive, both, or neither.
Appendices for part 3:
1. Analysis of problems: Identify the major problems that have emerged from the
previous analysis (i.e., including parts 1&2). Be sure to identify root causes, not
just poor outcomes. Categorize the problems based on severity and urgency to
help identify the most important problem(s) to be addressed. Identify any
temporal sequencing needed in addressing the problems.*
2. Analysis of alternatives: Identify two distinct, reasonable paths for the firm you
are analyzing. Evaluate the potential effectiveness of each in solving the primary
problem(s) identified above. Be sure to identify and evaluate the risks and
benefits of each path with respect to external stakeholders and with respect to
internal stakeholders. For each alternative, identify actions to be taken, including
changes needed within management processes.*
3. Comparison of alternatives to criteria: Compare each of the alternatives you
identified to the set of criteria you identified. Based on your analysis, decide
which alternative seems to make the most sense.
4. Timelines. Outline the specific actions the firm would need to undertake to
execute your chosen alternative. What needs to be done when? Make a plan for
the next 3-4 years, including what actions need to be taken, who needs to take
them, and how to know whether or not they’re working.
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Note: Items marked with an asterisk (*) will also be used for the program-level
assessment.
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