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Strategic Factor Analysis
Duration
Strategic Factors Weight Rating Weighted Score Short Intermediate Long Comments
S1 High Market Share 0.15 4.0 0.6 X AA has the highest market share
S2 Strong Alliances and
Acquisitions 0.15 3.5 0.525 X X Good cooperative strategies
S3 Good Distribution and Accessibility 0.10 4.0 0.4 X X Alliances and market share
W4 Financial Performance 0.10 2.5 0.25 X X Not strong
W5 Decrease in Jobs 0.05 3.0 0.15 X Result of performance
Off Forming National and International Alliances and Partnerships 0.15 4.0 0.6 X X
Survival
Off Advances in Technology 0.05 3.0 0.15 X X Affect everybody
T3 Competition 0.15 3.0 0.45 X X Very Strong
T4 Increase in Government Regulations Due to
Possibilities of Terrorist Attacks 0.05 4.0 0.2 X X For all competing firms
T5 Increase in Jet Fuel 0.05 3.0 0.15 X X Affects all competing firms
1.00 3.48
Here are the most important strategic factors that American Airline is facing at this time.
While examining strengths of American Airlines it is clear that one of the biggest strengths
that they have is their market share. American Airlines has a twenty one percent market
share and it is an industry leader. Downturn in the airline industry has resulted in its overall
slowdown. Being an industry leader certainly puts American in a better position. Perhaps
they can concentrate on maintaining their market share instead of trying to increase it.
American has had and continues to have many successful alliances, acquisitions and
partnerships. This cooperation strategy is one of their biggest strengths. This has a strategic
importance to American Airlines not only because of the market share, but it provides them
with a more efficient distribution channels. By combining its resources with other
companies American Airline was able to dramatically increase its accessibility and its
distribution channels. Wide distribution and availability of the products gave American
Airlines a great competitive advantage. Alliances also enable companies to combine
resources without paying a high expansion cost. Some of the most important benefits are
the ability of code-sharing, frequent flyer programs, reciprocity and other joint marketing
activities.
During the development of United States airline industry starting in 1930 the whole bunch
of small companies have merged together forming the Major Carriers. American Airlines
have successfully acquired Trans World Airlines and American Eagle Airlines. It had a
very important effect on their competitive position and we believe that their high market
share is the direct result of their acquisition and innovation decisions.
Alliances and acquisitions play a very important role in international traveling. Many
