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Running Head: STRATEGIES AND RECOMMENDATIONS FOR ALASKA AIRLINES 0

Strategies and Recommendations for Alaska Airlines

University of Phoenix

05/22/2017

The Alaska Airline’s Strategies and Recommendations

Alaska Airline Company uses strategies that have ensured it to make large profits and sustainable development. Its strategies have also ensured the company to operate without merging or collaboration with other companies or joining any alliance in the airline business hence it has remained afloat. In 2012, Alaska Airlines realized a profit increase of 20%. For the company to achieve all these, it adopted various strategies that enhanced business operations in airline business which has several risks such as escalating fuel prices and financial meltdown. Alaska Airline has also made substantial, sustainable moves that have made it leading airline company in the United States. Thus the success of Alaska is based on its capacity to maintain a competitive cost structure, offer low-cost fare to the clients which are vital in developing a close relationship with the customers and providing safe and reliable air transport (Dalton, 2011, p. 74). This success can only be achieved if the company not only its performance but also the community and the environment.

The corporate reputation of Alaska Airlines is considered as a vital measure that has increased its operations. Grounded on the company’s strong financial performance, the stock price of the company has increased since 20018. Alaska Airlines has built a positive corporate image through giving the Alaska community the best services. The topography and climate of Alaska make the airline transport the preferable transport alternative to connect places within the state. Furthermore, due to the good corporate image of Alaska, the company has involved unique advantages in the provision of its services, and this is represented the Eskimo Logo of the company. The logo is strategically placed on the tail of Alaska Airline’s planes.

The company has the most experienced pilots because of the training they are subjected to. The pilots of the company are trained under harsh climate and poor terrain which has contributed significantly to the safety of the company transport. The terrain and climate make it harder to adopt the traditional ground-based radar; hence Alaska Airlines has employed the latest technology in satellite navigation which has led to the reliability and safety of the company services (Kaiser, 1994, p. 184). Alaska Airlines is facing less competition in the region due to vast finance it has invested in its operations. Furthermore, the deregulation has enabled Alaska Airline to expand to other countries such as Hawaii, Salt Lake City, West Coast and Mexico and this has made the company enhance its profits and income.

Based on marketing information system and pricing, Alaska Airlines lacks serious competitors hence it’s charging significantly high prices for the services it offers. The company has developed a system that identifies 50,000 points of data in order to enhance the just-in-time (JIT) performance and as well to save money. Thus, this system is capable of saving of up-to approximately $30 million for the company annually.

The company also has a collaboration in marketing with other air transport enterprises for code-sharing and reciprocal regular flyer mileage credit. Alaska Airlines has developed relationships with other airline companies such as Qantas, Air France, Delta Airlines and American Airlines and they have formed an agreement that has helped Alaska Airlines to widen its network. The Delta and American Airlines can sell their tickets on Alaska planes since it’s entitled to from the global frequent flyer program, reservation system and networks (Seybold, 2012, p. 261). Since Alaska Airlines has distribution destinations boosted to 62, it’s now able to undertake its operations on the global arena through the help of Delta and America Airlines.

The company has also embraced technology where there is an online booking. The customers can now get their travel tickets via company’s website as well as via online and traditional travel agencies that use the global distribution system in acquiring their inventory information or data and fare. The company has enhanced its customer experience by strategically placing its reservation call centers. These call centers are located in Idaho, Boise, Phoenix, Washington and Kent which have the high population with several businesses going on hence has a high number of customer destinations.

The company also uses advertising strategies to access more customers. Alaska Airlines have invested heavily in the advertisement to expand its market and the investment in advertisement increases annually (Douglas, 2011, p. 25). For instance, in 2014, the company used $49 million as compared to $55 million in 2015. Alaska Airlines has been able to take advantage of the opportunities of the markets where other airline companies pull out and dominate them. For example, when Air California pulled out of Seattle-to-Spokane route, Alaska Airlines quickly took the opportunity expand its service to Southern California.

Recommendation

The Alaska Airlines has various weaknesses that it needs to solve for it to remain dominant in the market for long. For instance, Alaska Airlines has a weakness in its marketing mix which is based on its promotion strategies. The ads of the company have a long history of being clever and funny nonetheless; they seem to be limited during the past few years. Since the company has found out that they use a lot of money in ads, they have reduced this to remain profitable. Due to this scenario, Alaska Airlines need to enhance communication to its customers otherwise it risks losing customers due to intense competition in the airline's industry. The other thing is that Alaska needs to reduce the travel costs. Customers would take risks by moving to companies that offer the same services at low costs even if the services are of poor quality. Through this, Alaska Airlines risks losing customers to its competitors. Furthermore, the company working independently without joining global alliances puts it at risk of losing its good corporate image should other companies turn against it. Negative competition strategies can make other airline companies to falsify Alaska Airlines of engaging in risky activities, and as such, it can have a hard time trying to protect itself. In this case, it’d be nice if Alaska Airlines joins the associations for airlines for strategic reasons.

Even though Alaska Airlines has been so successful and has had opportunities to expand to various countries, the company has failed to exploit the lucrative Asian markets. Alaska has been unable to expand to Asia despite its financial performance. Therefore, the company needs to find ways of expanding to Asian markets which can through joining the global airline alliances or enhancing the technology to enable customers in the Middle East to book online.

References

Dalton, S. (2011). Alaska Airlines' PBN experience. 2011 IEEE/AIAA 30th Digital Avionics Systems Conference. doi:10.1109/dasc.2011.6096311

Douglas, E. J. (2011). The Pricing And Competitive Strategies Of U.S. Airlines. Journal of Applied Business Research (JABR), 5(2), 23. doi:10.19030/jabr.v5i2.6357

Kaiser, K. J. (1994). Improved Operational Reliability and Safety with HUD - The Alaska Airlines Experience. SAE Technical Paper Series. doi:10.4271/942114

Pearson, J., & Merkert, R. (2014). Airlines-within-airlines: A business model moving East. Journal of Air Transport Management, 38, 21-26. doi:10.1016/j.jairtraman.2013.12.014

Seybold, P. (2012). Managing Customer Innovation at Alaska Airlines. doi:10.1571/sp05-31-12cc