Lufthansa

1
Lufthansa

• Kimberly Callahan
• Carly Byars
• Carley Acy
• Rachel Goggan
• Melinda Richards

2
Lufthansa

• 10 year transformation
• Initially a state-owned and unprofitable national
  airline
• Became very profitable in 1997 as a privately
  owned aviation group
• Increase cost and revenue transparency and
  revenue fragmentation in decision process

3
The Turnaround

• 1991-1992 Crisis
• Only 14 days of operating cash requirements
  available
• Redevelopment Workshops
• 4-week program
• mental change meeting
• OPS Team Operations Team

4
Trials Lufthansa Faced

• Star Alliance
• 5 founding members
• Common logo
• Shared alliance vision
• Pilots Strike
• Demanded 30 raise in salary
• 3. September 11th attack
• 13 of 28 airplanes in route to U.S. turned back

5
The General Environment

• The Global Segment
• The Economic Segment
• The Political Segment
• The Demographic Segment
• The Sociocultural Segment
• The Technological Segment

6
Five Forces Model

• Threats of New Entrants
• Bargaining Power of Suppliers
• Bargaining Power of Buyers
• Threats of Substitute Products
• Intensity of Rivalry Among Competitors

7
Main Competitors

• Oneworld, Sky Team, and Worldwide are other main
  alliance groups
• Ryan Air
• easyJet
• Members within our own alliance group
• EuroRail

8
Resources, Capabilities, Competitive Advantage

• Name, Reputation, and innovative managerial staff
• Crisis Management meetings, and Operations Team
• Respond rapidly, act flexibly, ,and withstand
  crisis

9
SWOT Analysis Strengths

• Became fully privatized
• 78 Increase from 2001-2002
• - respond rapidly
• - act flexibly
• - withstand crisis
• High reliability
• Order and Technical excellence

10
SWOT Analysis Weaknesses

• - State-owned
• - Monolithic
• - Unprofitable
• After tax loss
• Continued to increase employment
• Pilot Strike

11
SWOT Analysis Opportunities

• Seeheim Meetings
• Star Alliance
• Programm 15
• D-Check

12
SWOT Analysis Threats

• Fuel prices
• Future terrorist attacks

13
Lufthansa

• Main Problem
• - Competition
• 3 Possible Strategies
• - Cost leadership
• - Leave Star Alliance
• - Focus Differentiation
• Solution
• - Focus Strategy

14
Focus Strategy

• Business Class
• - Offer amenities
• - Europe routes
• - Special offers