Business Strategy and Corporate Strategy Case Study
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Added on 2020-04-21
Business Strategy and Corporate Strategy Case Study
Added on 2020-04-21
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Running Head:COMPETITIVE STRATEGY1 COMPETITIVE STRATEGY By Name Course Instructor Institution Location Date
Running Head:COMPETITIVE STRATEGY2 1.What is the Spirit Airline strategy? The strategy applied by Spirit Airline is a business strategy. Typically, there are two types of strategies that can be considered in this case. The business strategy and corporate strategy. A corporate strategy relates to the decision of a firm to determine what kind of a business activity to undertake and then commit the resources necessary for the task (Barnett 2004). In this case the strategy of Spirit Airline is a business strategy because an activity have been selected. All the company need is to have a competitive advantage in the industry. 2.Assess spirit Airline strategy in terms of its fit (with its business environment and its internal resources/ capabilities). The business strategy applied by Spirit Airline have a perfect positive correlation with business environment along with capabilities to undertake the business. First, Spirit Airline is an ultra-low-cost company. This low fare airline make affordable offers to the customers so as to enable them move from one destination to another. Therefore, by lowering the costs in this business environment, Spirit Airline will be able to attract more customers as compared to other airlines. Therefore, the business strategy fit the company fully (Thomas 2009). In terms of resources and capabilities, Spirit Airline uses its ULCC business model to offer low and affordable travel fares to its customers. This is associated with a range of optional services that they offer. In that case, the customers are in a position to select the options they find fit for them from that list produced by the company. Spirit Airline have capability of lowering their travel costs and at the same time able to maintain huge profit margins. 3.Assess spirit Airline strategy in relation to its financial performance (ROE, ROA, and fuel/Turn). Spirit Airline business strategy have enabled the company to generate huge profits. The financial performance of Spirit Airline have been facing serious troubles in the past. However, by application of business strategy, the company have been able to possess an upward trend in terms of financial performance. Again, in terms of fuel, there have been some benefits associated with reduction in prices of oil. This have boosted the financial performance of Spirit Airline business to a larger extent. Again, there has been recovery of the US economy from great depression which as well play a significant part in financial performance (Saunders, Lewis & Thornhill 2009). In terms of ROE, Spirit Airline have been able to utilize ultra-low cost structure to attain a manageable operation costs which have been facilitated by utilization of
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