Running head: COMPANY PROFILE MATRIX

Competitive Profile Matrix: The U.S. Airline Industry Steve Brindza, Rita Sprouse, and Terra Thompson Ohio Dominican University

COMPANY PROFILE MATRIX Competitive Profile Matrix: The U.S. Airline Industry Introduction to Individual Airline CPM Results This section outlines the results of the Competitive Profile Matrix (CPM) for Southwest

Airlines, JetBlue, and Delta Airlines that are illustrated in Appendix I, Table 1.1. The content of the CPM was based on individual External Environmental analyses (EFE) done for each of the aforementioned companies. This matrix gives an overall look at each airlines strategic position as well as an overview of the airline industrys position (David, 2009, pg. 95). The criteria of the CPM include both opportunities and threats that face most airlines. All three firms have been compared and scored based on the same scale. Although the companies are scored in exact points, that does not necessarily mean one firm is an exact percent greater or less than another firm. The numbers produced from the CPM are relative. In Davids article, the author confirms the aim is not to arrive at a single number, but rather to assimilate and evaluate information in a meaningful way that aids in decision making (David, 2009, pg. 95). After the information is gathered in the CPM, it is used to perform external audits. Southwest Airlines CPM Results This section gives the overview of the Southwest Airlines portion of the CPM. Southwest rated the highest in building alliances and merging with other airlines. This is due to the September 2010 buy-out of AirTran ((Bachman, Schlangenstein, & Hughes, 2010). In purchasing AirTran, Southwest also expanded its flights into cities the former airline once covered. Southwest was the weakest in the area of dealing with new airline security measures. This is the one area that all of the airlines on the CPM struggled with. Since the terrorist attacks of 9/11, the airline industry has taken stringent measures to tighten security and prevent future attacks. Overall, Southwest Airlines has a total weighted score of 2.72 on the Competitive

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Profile Matrix. This means that Southwest is slightly above average in its strategy of exploiting opportunities and neutralizing threats in the airline industry (Barney& Hesterly, 2010). JetBlue Airways CPM Results The following portion provides a glimpse of JetBlues competitive profile within the airline industry. The CPM shows JetBlues was able to recover from the recent recession and increase the number of flights. According to an article in the Journal of Air Transportation, JetBlue has been able to establish a viable strategic position in the market by finding an appropriate strategy that acts as a mediating force between them and the environment in which they operate (Flouris, & Walker, 2005, pg. 40). Although JetBlue is capitalizes in some areas of the CPM, there are obvious missed opportunities in other areas. JetBlue, like the rest of the airline companies, struggles with the strict airline industry security measures and new regulations. The firm is also struggling with the increase in the price of jet fuel. On the whole, JetBlue has a fairly balanced competitive strategy based on the CPM data. JetBlues total weighted score is 2.27. This score is slightly below average but still comparable with the rest of the airline industry. Delta Air Lines CPM Results The following segment contains the CPM results for Delta Air Lines. Based on the CPM, Delta has its increased number of flights that resulted from the firms recovery from the recent recession and mergers and/or alliances with other airlines. One particular opportunity that Delta capitalized on was its merger with Northwest Airlines. According to a case study by Krishna Kumar, on April 14, 2008, Delta and Northwest Airlines confirmed the rumors going around in the airline industry and specified their coming together, a $17.7 bn merger that would make them the biggest airline in the world (Kumar, 2008, pg.59). Delta does face the same threats as the

COMPANY PROFILE MATRIX rest of the airline industry. According to the CPM, Deltas greatest threats are the new security measures and stricter airline regulations. The total weighted score for Delta is 2.77. The score

reflects that Delta is doing an above job of capitalizing on opportunities and minimizing threats. CPM Results for the Overall Airline Industry This portion gives the CPM results for the overall airline industry based on the collective results of the aforementioned individual airlines. According to the CPM, the major threat to the airline industry is the tightened security regulations. The newly implemented regulations have a considerable affect on all three airlines in the matrix. Although the strict regulations are a hurdle in the industry, many of the airlines are able to overcome it and capitalize on existing opportunities in the industry. The CPM shows that the airline industry is profiting from the countrys economic recovery and forging mergers and alliances. The total weighted score for the Airline Industry is 2.59. This score is above average and shows that the industry has a strong foundation to seize opportunity and reduce threats.

COMPANY PROFILE MATRIX References Bachman, J., Schlangenstein, M., & Hughes, J. (2010). Why Southwest Air Is Bulking Up. Bloomberg Businessweek, (4198), 22-25. Retrieved from EBSCOhost. Barney, J. B. & Hesterly, W. S. (2010), Strategic management and competitive, advantage: concepts and cases. 3rd ed. Upper Saddle River, NJ: Prentice Hall. David, F (2009). The external assessment. Strategic Management (12th edition). Upper Saddle River, NJ: Pearson. Flouris, T., & Walker, T. (2005). Confidence in airline performance in difficult market conditions: an analysis of jetblue's financial market results. Journal of Air Transportation, 10(1), 38-57. Retrieved from EBSCOhost. Kumar, K. (2008). Delta-northwest airlines: a strategic merger. ICFAI Journal of International Business, 3(4), 59-74. Retrieved from EBSCOhost.