Air Canada Retail Management Strategies - MGMT3058 Analysis

This report provides a comprehensive analysis of Air Canada's retail management strategies, covering various aspects of the company's operations and performance. It begins by outlining Air Canada's business mission, future business plans, and key capabilities. The report then evaluates the company's performance, including financial metrics and GMROI calculations, alongside an assessment of input, output, and productivity. Furthermore, the report delves into merchandise flow, category management, branding strategies, and pricing strategies, offering recommendations for improvement in each area. Finally, the report examines customer loyalty initiatives and provides suggestions for enhancing customer retention. The analysis incorporates data from Air Canada's annual report and relevant academic sources to provide a well-rounded perspective on the company's retail management practices.

Running heading: RETAIL MANAGEMENT
RETAIL MANAGEMENT

RETAIL MANAGEMENT
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Table of content
Business mission.............................................................................................................................4
Business of the company. -..........................................................................................................4
Opinions for the future business plans-........................................................................................4
Business capabilities-...................................................................................................................4
Performance objectives.................................................................................................................5
1-Performance of the business and proofs for them....................................................................5
2- Calculation of the GMROI of the company............................................................................6
3- Performance measurement for the following..........................................................................7
Merchandise flow...........................................................................................................................8
1- Description for the merchandise flow for the company..........................................................8
2- Recommendation for the change in the merchandise flow......................................................8
Category management...................................................................................................................9
Identifying the category that the company sells...........................................................................9
Type of merchandise does category management represent........................................................9
Category’s life cycle....................................................................................................................9
Assortment plan for the category.................................................................................................9
Branding strategies......................................................................................................................10
Debating about the mix of the national brand and the private label brands sold by the company
....................................................................................................................................................10

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Discussing about the expansion or contraction of the number of private label brands.............10
Determining the private brand strategy followed by the company and recommendation for the
strategy with an example............................................................................................................10
Pricing strategy............................................................................................................................10
Description of when setting prices how company looks for the following accounts................10
Recommending two methods on how to change prices.............................................................11
Price adjustments of the company.............................................................................................11
Recommending two methods for possible price adjustment.....................................................11
Pricing strategy of the company.................................................................................................11
Recommending the change for the pricing strategy used..........................................................12
Company's current pricing to stimulate sells.............................................................................12
Recommending two methods for sale stimulation of the company...........................................12
Customer Loyalty........................................................................................................................13
Explanation Of The How Company Is Getting Customer Loyalty............................................13
Recommendations for the Increment Of Loyalty Of The Customers For The Company..........13
Summary......................................................................................................................................14
Analysis and recommendations of the following research........................................................14
Opinions for the future success of the company........................................................................14
References.....................................................................................................................................16

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Executive summary
In the current assessment there will e discussion over various aspect of a company and the ways
in which very aspects the company. The recommendations for betterment will also be provided.
The company which has been taken in the current assessment is Air Canada which operates in
Canada and is a international present company within the Aviation industry.

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Business mission
Business of the company
The company Air Canada is a largest provider of scheduled passenger services in Canada,
it also helps in U.S. transborder market to exchange goods at international level outside
Canada. The company operates passenger flights inter cities with around 1,602 daily
scheduled flights on an average to 217 direct destinations on major continents. The
businesses operates at high scales and have to deal with huge managements and
permissions (Goworek, McGoldrick & McGoldrick, 2015).
Opinions for the future business plans
The ongoing business plans are good but in order to better the performance of the
company, the company officials have some new plans for 2019. A new reservation
system will be introduced, to manage the upcoming flight and help the reschedule more
efficiently causing a hassle free for passengers (Fernie & Sparks, 2014).
Business capabilities
The company can invest in web and mobile platforms in order to get the most of the
revenue the upcoming years. The company can have partnerships with the retailers in the
market to see the capabilities of the company. Also, the company can invest in how to
make flights more convenient, pocket friendly, low assumptions of fuel and more
advertisement of the brand.

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Performance objectives
1-Performance of the business and proofs for them
In order to measure the performance of a company it is evident to look at its financial
performance in the recent which will show its overall performance in the market which can be
done through highlights presented by Air Canada in their Annual Report.
Figure 1: Performance index
(Source: Annual reports of the firm)

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The image is extract from the annual report of Air Canada which acts as an evidence of
companies performance in recent years. In the initial section of table the financial performance
of the company is measured. It seen that operating revenues have increased in the firm by 395
but the operation tin income of the company increased by from 18 to 133 this shows that
company controlled there cost. The operating margin of the company has also increased by Tree
percent. The company last year suffered loss but i the current year was le incur profit which
shows the company regained its financial profitability in the last year. In operational sense it can
be said that frequencies of Flight have increased average fleet utilization has\have increased
which is a positive operational sign for the company (Richey & Skinner, 2015).
2- Calculation of the GMROI of the company.
Particulars Formula 2017 2016
Gross
Margin
1364 1345
Inventory 91 79
GMROI Gross
margin/Inventory
14.98901 17.02532

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Table 1: GMROI of the company
(Source: Self generated)
GMROI of the company has decreased from last year this means the return over inventory within
the merchandise has decreased but still the company is incur cost over its inventory value i\
which is a positive sign for the company.
3- Performance measurement for the following
Input
As the firm operate in Aviation sector and is a service providing company expenses for the
purpose of rendering service and operating will considered as input which was measured at $
14,888 million in the year 2017 which increased from $ 13,332 million in the year 2016.
Output
The output can be measured using the flight frequency and average fleet utilization which has
increased from the last year as well.
Productivity
As the operational efficiency of the company has increased the overall productivity of the firm
has increased due to the increase in overall fleet utilization and aircraft frequency which has
increased the overall prevue of the company (Varley & Rafiq, 2014).

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Merchandise flow
1- Description for the merchandise flow for the company
Merchandise flow is the flow of good which is to be bought and sold for the operations of the
firm. It can be said that as Air Canada is operate in the aviation sector the company has to have
fuel as inventory in order to successfully operate in the market. As fuel is major inventory kept in
stock by the company the merchandise flow of the company are as follows:
Flow of merchandise = Opening inventory - Closing inventory + Purchase
= 79 - 91 + 2927
= 2915
The merchandise flow of the company is high which show that companies maintain proper stock
in inventory for its future operational activities (Bartlett & Ellis, 2017).
2- Recommendation for the change in the merchandise flow.
As it can seen that merchandise flow within the company is high and that the company is able to
maintain order stock in for their future operation there are no such recommendation which to
help the company in order to effectively maintain effective stock. As the purchases are to high it
is recommended that stock is properly used before further purchase are made for fuel (Choi &
Shen, 2017).

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Category management
Identifying the category that the company sells
The company sells the comfort of the passengers to travel to a different city within the
country or outside the country. This category needs huge management in terms of the policies,
permissions and ability.
Type of merchandise does category management represent
The companies represent itself as the best Canadian airline passenger transport company
in Canada. The Air Canada needs to manage a lot from the international markets, teams,
international air support, airports, etc in order to maintain the continuous uninterrupted flow of
flight.
Category’s life cycle
The life cycle of the management of flight will last until the company operates the flights
and help customers to travel to their destinations.
Assortment plan for the category
The assortment plan for the company Air Canada could be like to provide more
comfortable rides to their destinations by offering some or introducing new features in
the cabin areas. Air Canada is a aviation brand which is known for its high quality air
travel services and the company should look o increase the following further. If customer
have any kind of problems ( such as time management , cancellations or could be
anything ) they should be prioritized first . The basis for any company are their customers
regardless of the fact that which kind of company it is , works in small or big scale,
therefore should be prioritized first (Gupta, 2018).

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Branding strategies
Debating about the mix of the national brand and the private label brands sold by the
company
The national brand promoted by Air Canada is Suncor Company, Canadian National Railway
Corporation and Star Alliance.
Discussing about the expansion or contraction of the number of private label brands
Now being the biggest airline company in the country there various private label brand which
have approached Air Canada to promote the brand of their products.
Determining the private brand strategy followed by the company and recommendation for
the strategy with an example
The private brand strategy which used by the company is to promote brand international and
create an brand position to enter the international airline i place in which Air Canada is not
present. It would be recommended that Air Canada should also brand them as an private label
brand in the international market to expand the dimension of operating in the branding segment
(Shin, Moon, Oh & Kim, 2017).
Pricing strategy
Description of when setting prices how company looks for the following accounts
 Cost: Cost of the operation is taken in consideration in the initial phase as its helps the
company to determine the cost which will incurred for running fleets from place to
another. This setup the cost which is be taken by one passenger to go from one place to
another.
 Demand: Demand is also a major factor which affects the pricing strategy of the
company. No it can be said that when the demand of certain destinations and flights are

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high the price is also set high which ultimately increases the revenue of the company
(Pole, 2015).
 Competition: As operating in an highly competitive market Air Canada takes into
consideration fo prices offered by its rivals in the airline industry based on which the
pricing is done to make it formidable which gives its a competitive edge over others in
the market.
 Legal considerations: the company also follows the government norms to make the price
accordingly and not set prices which is not affordable by the population the country.
Recommending two methods on how to change prices
Cost plus pricing and markup pricing will be two most suitable pricing method which can be
used by an organization in order to change prices and offers more attractive prizes to the
customer which will increase the consumer ase as well as the revenue of the company.
Price adjustments of the company
Price adjustment and price protection policy which is company follows is differs on the type of
refund. If the refund is needed for cancellation of ticket percentage of price adjustments are made
where as when refunds are demand for fault service the refund depends on claim made by the
consumer. On the other hand demand price adjustment used by the company to price the
products (Anitsal, Moon & Anitsal, 2015).
Recommending two methods for possible price adjustment
The two methods which can be used by the company to promote the sales are discount and
allowance as well as segment pricing as this will be suitable for the company to increases sales
and profit.