Classic Airlines in Today's Competitive Business World, Essay

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Classic Airlines

In today's competitive business world, few businesses would argue that it is vital to maintain a good relationship with current customers while working constantly to gain new ones. This is particularly so in the airline industry, where both environmental and corporate climate issues have created an environment in which increased profits have become a challenge. Hence, entities such as Classic Airlines (CA) have found themselves challenged to maintain a steady corporate culture while also investing in the constant marketing required to compete viably with other players in the market

Two of the challenges the airline has been facing include overexpansion and the rising costs of operation (Classic Airlines Problem Solution, 2009). In addition to its 32,000 employees, the company experienced a 19% decrease in Rewards members and a 20% decrease in flights. In addition, the 18 months/15% cost reduction mandate implemented by the Board of Directors resulted in a 10% decrease in stock price.

Indeed, the company begin experiencing problems as early as the year 2000, when Amanda Miller was hired with a view towards her appointment as CEO in 2002 to replace Jack Broadway, who was about to retire.

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Mrs. Miller's belief in operation excellence as number one priority created a difficult corporate culture at a time when customer relationships should have been more highly valued while competitors remained strong and gaining.

In the long-term, the challenge became clear as being located in the CRM system inherent in the company's operations. The system was ineffective to a degree at which ha lack of customer value has caused the company to experience not only a steady decline in customers generally, but also those in the company's rewards membership programs, as mentioned above. Part of CA's challenge is therefore to identify market segments. This is a significantly external focus, whereas operational excellence creates a solely internal focus. The results of Miller's focus on the internal factor in terms of excellence have shown….....

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