For Lufthansa, the connected revolution has truly begun. 4.2 Spreading Risks by Business Diversification 8 More than four years have passed since the acquisition of Germanwings was completed in January 1, 2009 and this timeframe is sufficient enough to be able to make some statements about the actual outcome of acquisition initiative relative to expectations. This report investigates a range of business issues related to the acquisition of the budget airline Germanwings by Lufthansa German Airlines in 2009. At the same time, continuing economic challenges within the European Union, the US and other parts of the world (Gali, 2012) may be interpreted as a triggering factor for the popularity of budget airlines to further increase. Specifically, in accordance to its chosen business strategy of differentiation, employees at Lufthansa are encouraged to be innovative in the search of new sources of competitive advantages. 4.1 Increasing Market Share in Global Airline Industry 8 The merger between two telecommunication companies Alcatel and Lucent to form Alcatel-Lucent in 2006 can be mentioned to illustrate this point. Strategically speaking, Norwegian would fit well with Eurowings, Lufthansa’s low-cost brand, the source added. 2.3 Overcoming Entry Barrier in Budget Airline Sector 4 This will make it possible to systematically make use of the opportunities arising from trends and changes to the market. This strategy has proved to be effective in a way that Lufthansa traditional core competitive advantages have not been compromised after the acquisition. Lufthansa expectations in relation to its acquisition of Germanwings are straightforward and they are directly related to primary objective of the organisation as a business entity, which is profit maximisation. The Strategic and Organisational Fit between Lufthansa and Germanwings 5 The extent of strategic and organisational fit between Lufthansa and Germanwings plays an important role on the performance of Lufthansa Group upon the completion of acquisition. We are committed to increasing our clients’ efficiency and effectiveness. Read more Lufthansa can look back on an eventful history. His publications include articles on behalf of the German Ministry … Synergy is “the increase in performance of the combined firm over what the two firms are already expected or required to accomplish as independent firms” (Sirower, 1997, p.19). The data gathered for the study was examined by document analysis. History is always a reflection of people and their times. (© Lufthansa Technik) Figure 3 Porter’s Generic Strategies (1985) 11. Its goal is to recognize, which activities are the most valuable (i.e. As a general rule, carriers tend to Downloads. It includes a number of independent group and affiliated companies with business segments in passenger airlines, logistics, aircraft maintenance, catering, tourism and IT services. Although, Lufthansa has been operating in airline business for several decades the company skills inventory lacked competencies and experiences in dealing with budget airline, and this gap has been eliminated with the acquisition of Germanwings. Organisational culture is a way of doing things within a specific organisational setting (Bhattacharyya, 2010) and differences in organisational culture between Lufthansa and Germanwings can have a highly negative impact on Germanwings performance after the acquisition is completed. LUFTHANSA/ SN AIRHOLDING Only the English text is authentic. In 1965, Joe Sutter left the 737 development program to design the 747, the first twin aisle airliner. Strategic Logic, Cultural Fit, Research Evidence (i) Strategic logic. After introducing the 707 in October 1958, Pan Am wanted a jet 2 1 ⁄ 2 times its size, to reduce its seat cost by 30% to democratize air travel. Once the configuration is fully defined, and at the appropriate time, Lufthansa-Technik will transfer these components to N7316C’s interior. Mergers, acquisitions and formation of alliances are commonplace in global airline industry and they are fuelled by the search of competitive advantages in order to achieve long-term growth. Lufthansa resumed dividend payments of €0.50 per share for 2015 after halting them in 2014. A description of the four com­ ponents of the VRJO framework follows. The level of organisational and cultural fit between these two companies, on the other hand, is … Apple Inc has started the assembly of iPhone 12 in India, the U.S. tech giant said, as the company ramps up manufacturing operations in the world's second-biggest smartphone market. Lufthansa top level management has recently announced a major re-branding and restructuring initiatives in relation to its Germanwings arm. Lufthansa Cargo has a clear strategic advantage with the Pharma Hub in Frankfurt". Conclusions 14 (2010) “Cross-Cultural Management” PHI, “Can the new CEO end a culture of clash after a merger?” (2008) Financial Times, September 10, 2008 Issue, Deckstein, D. (2012) “Cost-Cutting at Lufthansa: German National Carrier Undergoes Mass Restructuring” Der Spiegel, Issue 18, 2012, Facts and Figures (2012) Germanwings, Available at: http://www.germanwings.com/downloads/Germanwings_Facts_and_Figures.pdf, Gali, J. Germanwings is wholly owned by Lufthansa since 2009. Download now. Organisational fit, on the other hand, relates to “the complementarity of partner firm’s ‘soft’ organisational traits, such as goals, experiences, and behaviours that facilitates cooperation” (Peng, 2008, p.277). Reports and essays offered by research-methodology.net are professionally written samples in their respective areas. Reports and essays are intended to be used as guides and sources of secondary data for reference purposes. 3. Integration of various business processes is perceived to be easier in acquisitions as compared to mergers and alliances mainly due to the lack or absence of arguments within top level management. Mr. Mazurowicz holds a Master of Business Administration and bachelors in business from the University of Kiel. Nevertheless, as it is the case with any type of financial investment, acquisition of Germanwings by Lufthansa is associated with the risks of not being able to generate desired output. Deepak Krishnamurthy, chief strategy officer and executive vice president at SAP, who is also acting as the executive sponsor of this challenge, said: “SAP is excited to partner with Lufthansa on this startup innovation challenge to reinvent the traveler experience, airline operations, and … In record time to the container of the future. As Marketing Manager for Lufthansa Group: Austrian Airlines, Lufthansa, SWISS in the Nordic and Baltic countries my focus is optimising our brand awareness and positioning in the region. 33 students received an initial training and used the Chair’s strategic foresight toolkit in small teams to work with companies of different sizes, countries and industry, including Lufthansa from Germany, Strabag from Austria and Côté Nature a local chain of garden centres in the North of France. The A350 has become the beacon of hope of passenger airlines worldwide thanks to its range and efficiency, and Lufthansa Cargo is ready to provide service infrastructure for the aircraft worldwide. Make your journey even more comfortable with our additional services. Lufthansa Group is a global airline company that employs more than 120,000 workforces that have contributed to generate 713 million EURO through serving 100.6 million passengers during the year of 2011 alone (Annual Report, 2011). By connecting to your partner’s network and markets you will attract more of your partner’s passengers to your own flights. Moreover, the acquisition of Germanwings has provided Lufthansa with necessary skills and competencies in order to be able to operate in a new segment of airline sector. The outcomes relative to expectations 13 The major potential gain associated with the acquisition of Germanwings by Lufthansa relates to the increase of the global market share to a significant extent. Synergy can be achieved to benefit Lufthansa Group through combining skills and capabilities within the two companies in order to increase the levels of operational efficiency and achieve higher level of cost reduction with economies of scale and other relevant measures. Im Profil von Pia Hochgerner sind 8 Jobs angegeben. According to Porter’s Generic Strategies (1985) the sources of competitive advantage can be broadly divided into two categories: cost leadership and differentiation. Moreover, according to their scope they can be further divided into cost focus and differentiation focus groups. Strategic fit refers to: a. 2 COMMISSION OF THE EUROPEAN COMMUNITIES Brussels, 22.06.2009 C (2009) 4608 final COMMISSION DECISION of 22.6.2009 declaring a concentration to be compatible with the common market and the EEA Agreement (Case No COMP/M.5335 – Lufthansa… Founded in 1990, eXcent, a conceptor and integrator of industrial solutions, supports the industrialization projects of the largest contractors in the aerospace, automotive, railway, energy, defense space or naval industries. Lufthansa’s financial strategy is aimed at securing a freedom of action for the Group in regards to its operations, finances, and strategic performance. Together with HRForecast, Lufthansa Systems Hungary conducted a strategic skill management project with the aim to bring transparency into the existing skill supply, the future skill requirements, resulting skill gaps as well as tailored measures to tackle the gaps. Figure 1 Development of Lufthansa revenue in EURO millions. Mergers, acquisitions and formation of alliances are commonplace in global airline industry and they are fuelled by the search of competitive advantages in order to achieve long-term growth. The strategic objective of the Lufthansa Group is to continuously align its services, business models and organisational structures with the complex and dynamic market environment. These analyses are primarily concerned with matching specific strategic options with an organisation’s market situation and its relative strategic capabilities (or core competences). 1. Moreover, Lufthansa Group is further divided to 11 individual divisions each responsible for a specific aspect of business (Annual Report, 2011). 4.3 Taking Advantage of Synergies 9 A more simple, secure, and faster web browser than ever, with Google’s smarts built-in. In other words, in mergers and acquisitions strategic decision making is facilitated with the participation of both parties and this leaves room for negative impact of internal politics that might be caused by clash of personalities at top level. Lufthansa top level management has decided to avoid merging Germanwings and Lufthansa into a single private entity, rather, Germanwings has been kept as a separate brand within Lufthansa Group portfolio. This market tendency is even starker in Asia Pacific and Middle East regions, where the share of no-frills airline has reached 29 per cent. Moreover, critics associate recent Lufthansa poor performance with ineffectiveness of strategic decision making during the last several decades, indirectly referring to the decision to acquire. “Takeovers are always a question of strategic value, the price and anti-trust,” he said. Acquisition of Germanwings has allowed Lufthansa to increase its market share to a significant extent that this has had a positive correlation with the level of revenues. REGULATION (EC) No 139/2004 ... operate a route is a strategic business choice depending on various factors, ... catchment area, yield, fit in the network etc. Moreover, this report addresses potential gains and risks faced by Lufthansa due to the acquisition of Germanwings. They lead and support projects that seek to drive cultural change within the Lufthansa Innovation Hub as well as the Lufthansa Group together with our Transform and People & Organization teams. At the same time, Germanwings revenues during 2011 has totalled to EURO 687 million, an increase of 9 per cent compared to the level of revenues generated in 2010. 5.1 Financial Implications 10 [paiddownloads id=”3″ return_url=”https://research-methodology.net/thank-you/”], Interpretivism (interpretivist) Research Philosophy. This small mosaic part is of strategic importance to Lufthansa. They completed a 10,000-step competition, an idea of the Lufthansa crew, to stay fit during the first week of room quarantine. There are substantial differences between Lufthansa and Germanwings organisational structure and these differences mainly stem from the sizes of respective organisations. Lufthansa traces its history to 1926 when Deutsche Luft Hansa A.G. (styled as Deutsche Lufthansa from 1933 onwards) was formed in Berlin. There are some differences in organisational culture between Lufthansa and Germanwings as well. 8 were here. Free adjacent seat. Berufsbegleitende Aus- und Weiterbildung. 4. Lufthansa Group has been experiencing financial losses for the past several quarters in a row. All carry-on baggage must fit under the seat in front or in the overhead bin and adhere to the following: max dimensions of carry-on: 55 cm x 40 cm x 23 cm (22 in x 16 in x 9 in (length x width x height) max weight of carry-on: 8 kg (18 lb) Appendices 21 In other words, Lufthansa management has been able to avoid compromising the company brand image associated with high quality for premium prices through associating the brand with no-frills budget airline in the perception of its customers. From a fast fit of equipment to increased customer satisfaction and retention, together with a revenue boost, this future-proofed global connectivity solution is an apt fit for a company that can comfortably lay claim to being one of the world’s leading digital airline groups. On the contrary, Germanwings organisational culture values cost-saving and this is reflected on a wide range of organisational processes. Within this framework, differences in company values and mental models might have negative implications on the success of Lufthansa Group after the acquisition. Print page; Add page; View added page(s) Chart Generator. In 1963, the United States Air Force started a series of study projects on a very large strategic transport aircraft. Germanwings is wholly owned by Lufthansa since 2009. However, the implementation of mergers, acquisitions and formation of strategic alliances in practice can be associated with a set of complex challenges that might include differences in organisational culture, clash of personalities within top level management, lack or absence of strategic fit between the two companies and others. First (offered on most Lufthansa long-haul aircraft: Airbus A340-600, A330-300, the front part of upper deck of Airbus A380s, the main deck nose section of Boeing 747–8s).Seats convert to 2-meter (6 ft 7 in) beds, and also include laptop power outlets and entertainment facilities. admiral.digital strategises, architects, builds and operates marketing technology. This week, Lufthansa introduced a new logo, identity, and livery designed in-house in collaboration with Munich-based Martin et Karczinski. Based in Germany, Lufthansa flies to 211 destinations in 74 countries with a fleet of close to 350 planes and is the largest European operator of the Airbus A380. The report is concluded with assessing outcomes relative to expectations in relation to this specific airline acquisition. References 19 (2012) “Monetary Policy and Unemployment: A New Keynesian Perspective” CCBS Workshop, Gro, S. & Schroder, A. Being a large multinational airline company Lufthansa Group is led by Chairman of the Executive Board and CEO, currently Christopher Franz. Lockheed originally built this airframe for Trans World Airlines (TWA) in 1957. REGULATION (EC) No 139/2004 MERGER PROCEDURE Article 8 (2) Date: 22/06/2009 . strategic HR inc. can assist with your Benefits and Compensation needs by: Analyzing competitiveness of your current employee benefits; Identifying creative alternative benefits (i.e. Organisational culture in both companies is heavily impacted by its chosen business strategy. A thinner ring makes the crane look more elegant, bringing it into the foreground and granting it more space. According to OAG Report (2011), the share of budget airline carriers in global airline industry is increasing steadily and has amount to about 26 per cent on August 2012. Lufthansa's bias towards financial value over strategic value is indicative of its squeezed market position and catering to shareholders, but it must be careful not to divest or retract from sectors with weaker margins that are strategically crucial to supporting core-functions (such as Cargo). * Two airlines in talks about cross-shareholdings - paper (Adds newspaper report, bullet point) In the future, it will be slimmer and fit for the digital world. We will send the report to you as an e-mail attachment. & Kupper, V. (2012) “Low-Cost Carrier Industry: A Focus on Germanwings Strategy” GRIN Verlag, Schein, E.H. (2010) “Organisational Culture and Leadership” John Wiley & Sons, Sirower, M.L. According to the official company website “on 1 July 2013, the ‘new Germanwings’ will launch a completely new brand and product concept allowing all passengers to enjoy ‘a la carte flying’” (About Germanwings, 2013, online). Thanks to its design offices and field engineers, eXcent is able to adapt itself to its customers’ needs by internalising or outsourcing its skills. Get more done with the new Google Chrome. Over more than a decade we have been empowering managers to make their strategic decision making more anticipatory, agile and robust.