Alaska Airline is among the leading travel facilities in the world. As the management of the company strategizes on how to increase its revenue and reach a wider market, the airline, it decides to merge with the American Virgin airline which is to the west coast of America. Other competitive companies which are also in pursuit of increasing their operations are in full force bidding for this Virgin America. To ensure that they attain their ambition of expanding their edge and growing the output, Alaska Airlines has to assess its strength, weaknesses, opportunities and threats that are vital to its success. For competitive firms in any industry, there must be well established achievable strategies that are crucial in increasing the company’s power over the others in obtaining a bigger market share. In determining the opportunities and threats, Alaska Airlines has to study various factors that are outside the company, and these factors include the environmental ones among others. On the other hand, Alaska Airlines has to determine its strengths and weaknesses through the evaluation of its internal factors. The discussion below highlights the SWOT analysis of this airline about other external airlines.
Alaska airline is a valued facility which offers a quality brand of services to its customers. The airline has a good image admired by most of its customers. It also has onboard Wi-Fi and soothing onboard purple lighting. This feature puts the airline at a competitive edge hence ensuring customer loyalty is maintained. Alaska airline also has a good financial record which positions its balance sheet cash at $ 1.3billion. In addition to this, the airline has an investment-grade credit rating which is not common on other airlines. This is a better advantage for the airline’s operations of investment as it puts a great impact in funding its expansion projects. The real estate projects owned by the airline also gives it a great investment motivation as they it looks forward to merging with Virgin America. Alaska’s financial power has also resulted into its uniqueness helping it compete with the other airlines in the merging process. For example, it gives an offer of $57 a share competing for the JetBlue airline and claiming the chance to sign the merging deal with Virgin America.
Although Alaska is seen as the potential bidder for the merging deal with Virgin America airline, some weaknesses are evident towards this opportunity. As the company struggles to achieve its main goal of becoming the premier airline on the West coast, some setbacks become common. For example, the airline is faced with the challenge of maintaining its competitive position in the market that has many major key players like San Francisco International Airport. This poses a challenge as the strategy made by Alaska must ensure that its price is lower than that of the other major competitors for it to maintain its market share in the travel services. A clear sound strategy may, therefore, be required to make the goal of this company a reality. Failure to make a proper decision may give the other airlines an advantage in acquiring the target airline.
The Alaska airline is faced with a lot of potential opportunities towards achieving its goal of becoming one of the top players in the travel industry in U.S. and America. First, the airline has a ready opportunity of merging with Virgin America, a chance that is expected to increase the revenues of the company to around $7 billion annually. Indeed, Alaska Airlines should check keenly and identify any emerging opportunity that it can grasp right away, and also identify whether there are other long-term opportunities that it can take advantage of. The above opportunity is viable given the fact that Virgin America has been operating on high financial cost, something that is hindering it from maintaining top-notch services to its clients. The company has a ready market from its loyal customers who value their services and are willing to continue working with the company. Being a competitive firm, the need to maintain its customers is vital towards achieving its success. As the company decides to increase its operations, there is always need to identify new markets through which it’s services can be expanded. The fact that Virgin America is still low regarding competitiveness and financial position, this has become a great opportunity for the company whose balance sheet records are impressive. Having a chance to establish a new airline at the coast will speed up the recognition of this airline to outside markets, a strategy that is aimed at increasing the company’s position to beat the JetBlue and clinch the fifth position in the ranking. Moreover, this company has an advantage over its key competitors like JetBlue whose financial resources are lower and hence their bidding price is less comparably. This is an excellent opportunity for Alaska airline as its shares are competent commanding a greater share in the deal.
Despite the various strengths and opportunities subject to Alaska airline’s success in acquiring the Virgin America, there are some potential harmful threats that may hinder the company from achieving its target. One of this challenge is the existence of other competitive industries like San Fransisco International Airport and Los Angeles International. According to game theory, all these firms are competing to cut down others to maintain their monopolistic power and gain higher market share in the business. Alaska is therefore faced with the challenge of ensuring that its objective has become real by capturing the Virgin America on its own. Another threat evident to this company is the investors of Virgin America. These investors are not willing to sign the merging deal as they also feel it as a threat towards their share in the airline. They term the deal as an opportunistic idea that has come up due to the challenges experienced by the Virgin America airline and therefore they are not willing to enter the transaction. Other threats include the government policy on merging of U.S and American Airlines. The Justice Department is against the merging deals and threatens to sue the American and U.S Airways. For it to win the deal at a just arrangement, the Alaska and Virgin American airlines must find best approaches of persuading the government to approve the deal.
According to this analysis, I find out that for the Alaska airline to enrich its operations and expand the market of the travel services, it must address each weakness and threats exhaustively in a bid to claim their competitiveness. There is also a need for the company to make better strategies on the deal so as to prevent losses that may be forwarded from its competitor’s contribution. A majority of companies fail to succeed owing to failure to carry out SWOT analysis on the existing significant competitors. Indeed, SWOT analysis is crucial in enlightening the management on where to position their company against their competitors. By mitigating most of the challenges that face Alaska Airlines in the deal, the company will be in a better position to succeed in its business and reach its goal of being a premier airline company to the west coast.