American Airline Group Inc - Case Study Example

American Airline Group Inc Introduction The terminologies merger and acquisition have often been spoken in the same capa and used as if they are synonyms. However, merger and acquisition are two distinct terminologies. For instance, when one company takes over another firm and clearly establishes the operations then it is considered as an acquisition. On the other hand, merger is said to occur in a situation where two companies make agreements to combine and form a definite organization rather than to remain independent and operate separately (Kumar, 2012). In the United States, American airline group Inc was formed as a merger between AMR Corporation and the United States airways. It has been clarified that the merger of the two companies was enhanced by the fact that AMR corporation had previously encountered numerous loses. Therefore, it was within the best interest to file a case to declare the status of bankruptcy. Therefore, the engagement into a merger concept was seen as one of the best ways that would restore the organizational, financial status back to normalcy. AMR Corporation and the United States Airways Initially, American airways were recognized as one of the lucrative companies in the airline industry with up to 3100 flights departing from the United States and other different parts of the world on a daily basis. An airline company with integrated customer’s carriers employed over 32,000 aviation personnel. Having played an active role in human rights network, the organization was rewarded 100 percent by the human right corporation because of the quality index and campaign for the transgender employees. By the beginning of 2012, the airline corporation started feeling the effect of financial turbulence. As such, it was declared bankrupt by the united stain the department of justice to forge ahead for the merger by the United States airways and form American Airline Inc (Bryer & Simensky, 2002). It was considered a vital step towards reviving the organizational level of competitiveness. Therefore, AMR Corporation applied to Dallas/Fort worth court and requested for bankruptcy approval permitting merger to a United States airways group. At first the application was not very successful, but after court judge Sean Lane intervened the procedure was allowed to continue. Merits of the merger Although the two American airline companies were given go ahead to form a merger, coming up with a single certificate took some time while the newly formed organization had already started enjoying numerous benefits. For instance, the merger was perceived to as a wise decision because it has created an open way between American and the U.S airways thus enhancing a convenient access to a global network. Besides, the union has improved international connections activities to different airports across the world (Bryer & Simensky, 2002). The American airline group Inc has led to the formation of American admiral club thus enhancing various clubs benefits to the members and a reciprocal elite recognition within the airline industry. Moreover, the union facilitates loyalty program and different expansive opportunities that earn the flights a redeemed amount of miles across the network. Besides, the merger is believed to be a substantial idea because it improves employee’s benefits to the organization since it enables enjoyment of a stronger financial foundation. For instance, the authorization of the merger paved way for employees to realize full benefits in terms of compensation. Most of all, representatives of the two airline companies have continued to enjoy a mutual bargaining power irrespective of the previous distinct unions. Ultimately, the merger has enhanced value delivery of the two airline companies thus drawing much attention of the international investor. Besides, the association has drawn stakeholders from various throughout the globe having traded the organizational share under NASDAQ Global Select Market (Bryer & Simensky, 2002). International business level strategy of the American airline group Inc Wheelen & Hunger (2011) clarifies that the American airline has been one of the leading airlines within the commercial aviation industry for several decades. The organization has succeeded to overcome various obstacles characterized by aviation industry including financial recession. However, as part of the international competitive strategy, the organization is committed to socio-cultural diversity that ensures both customers and employees receive services designed by passionate members of the organization. Through an exemplary and committed board of directors, the American airline group Inc has set up an international oversight to foresee and initiate different diverse initiatives that are meant to enhance competitiveness in the global arena. The company has also established an international and local vocational advocacy that enhances international quality standards through development and mutual advancement through representative groups. Moreover, the organization has set up an inclusion of intercultural focus of multiethnic. Such a strategy has enabled the organization to improve the number of flights to more than 300 cities in over 50 countries globally. Having had a bad experience with the hedging of fuel in 2008 and 2009, the organization decided to form an international alliance with other airlines and developed policies to fight hedging fuels. From a global perspective, the development of fuel hedging policies has led to strengthening of the global economy of the airline industry. As such, there is an enhanced stability of flight ticketing and substantial demand associated by weak demand and a bad economy (Wheelen & Hunger, 2011). International corporate level strategy American airline group Inc The American airline group realized the need to improve the approach for corporate responsibility by the end of 2009. To set up the order, the organization developed an international strategic approach that was meant to foresee stakeholder’s interest and up to date with the organizational peers (Wheelen & Hunger, 2011). Despite the presence and variations in environmental citizenships within the company organization, the organization has explored mechanisms to accessing full range of stakeholders within the best interest of every group. On a more specific perspective, the American airline corporation is engaged on corporate operational flexibility by forming international growth alliance by developing an expansive network selection. Besides, the airline has developed an exemplary international partnership by forming a union with other airlines to help improve the bargaining power towards the realization of a competitive strategy. American Airline Corporation has been rated among the best business class airlines for over three years. High ratings above have been enhanced by the venture of the organization into better amenities across the airline flights globally. Besides, the organization has created a stronger brand loyalty and an increased dollar value for the global customers. However, the organization should consider acquiring other smaller airline companies so as to expand the territorial of coverage. Such as a strategy will not only improve the business competitiveness, but also enhances full gain of the organizational returns (Wheelen & Hunger, 2011). The Empanada Corporation According to Business Guides (2010), Mr. Empanada is a restaurant at Tampa in the United States. The organization carries out production, sale and distribution of food items to individuals and other organizations within the United States. The company had gained popularity through the organizational owned processing machine that produces panadas before they get transported to various outlets across the United States where the final processing takes place and then served to customers. Historically, the organization has enjoyed excellent reviews from Tampa through premier publications such as Tampa tribune and the weekly planet. Empanadas mean anything served in a pastry. The concept of empanada has been exhibited in different parts of the world for several decades. However, majority tend to love empanada because of the simplicity. The most important point of concern is that Mr. Empanada does not operate internationally and has not formed a franchise or merger with any other organization. Having been into pastry business for a long period, the organization can improve competitive advantage by forming a merger with Mc Donald’s company because they deal in the same line of products. The most important considerations for the investors is to improve competitive advantage of the company’s. Therefore, when Mr. Empanada forms a merger to mc Donald Company it would enhance chances to keep up with powerful competitive advantage. Moreover, such a merger will provide an expansive capital to the empanada to expand the business outlets into the global arena (Business Guides, 2010). If a merger strategy can be implemented between the two organizations then, empanada will be able to solve most of the employee’s related problems. Besides, the rest of the personnel will be motivated to improve the organizational productivity. Proposed business level strategy In order to improve the organizational business level advantage, the organization should consider developing an expansive network outside the city of Tampa. From Such a strategy, the organization will enable to fit the class of other restaurants like Burger dome serving the cities of Florida with sandwiches from Cuba. An empanada being a pocket of dough stuffed with various ingredients; the organization should consider putting definite ingredients as per the taste and preference of inhabitants of a particular locality. Since a greater percentage of the organizational products are mostly sold as a take – out product, Mr. Empanada should consider improving the dining capacity. Such a provision would draw a bigger percentage of customers thus improving the organizational returns. Besides, the organization should consider launching lunch activities at different outback or steakhouse locations because such activities will improve the organizational market share. Moreover, it is considered a vibrant step to enhance the opportunity to grow up the dining concepts across different occasions (Business Guides, 2010). For an organization to maintain consistency of purchase from customers, there should a consideration to improve on the customers service. The above strategy is important because the interaction between customers and the sales persons between the counter and the dining stable will create a straight record towards customers’ loyalty (Business Guides, 2010). Therefore, the organizations should create more emphasis on important elements regarding customer service such as staffing, scheduling and setting positions for the crew. Proposed corporate level strategy for the organization Corporate level strategy is mostly implemented by the organization to target long term position of the company. Right before the merger, it is proposed that Mr. Empanada should consider concentrating on pastry as the main line of business since it will enhance a stronger competitive position within hotelier industry. However, it is advisable for the organization to embrace related diversification because it is vital towards the realization of synergistic functions of the firm while competing to build up assortment strategies. Ultimately, it is advisable for the organization to venture into a global business since it would enhance serving the markets of the other nations and in turn improve the organizational productivity (Business Guides, 2010). Conclusion There are several reasons that can make an organization to consider to either form a merger or to maintain an independent operation within the national boundaries. With a demonstration of the AMR Airways Corporation, the paper has illustrated that it is an organizational failure to achieve the best competitive returns. Besides, there are several considerable benefits that an organization receives by venturing into a franchise business. Ultimately, Mr. Empanada that operates solely within Tampa region has also seen the need to venture into a merger business so as to offer best services to customers and to improve competitive advantage within the global arena. References: Top of Form Top of Form Top of Form Bottom of Form Bottom of Form Bottom of Form Bryer, L. G., & Simensky, M. (2002). Intellectual property assets in mergers and acquisitions. New York: Wiley. Business Guides, Inc. (2010). Directory of chain restaurant operators. New York, N.Y.: Business Guides, Inc. Kumar, B. R. (2012). Mega mergers and acquisitions: Case studies from key industries. Basingstoke: Palgrave Macmillan. Wheelen, T. L., & Hunger, J. D. (2011). Concepts in strategic management and business policy. Pearson Education India. Read More