United Airlines Objectives and Opportunities for Development - Term Paper Example

Term Paper Introduction The term paper involves research undertaken with the purpose of knowing the thoughts s of United Airlines with respect to the opportunities that the company presents to them. The objective of the paper is to describe what United Airlines’ target markets prefer. After collecting the preferred information about customers’ preferences, we assess how the information can be used to improve the company’s profitability and customer service. The age groups selected were 18 to 29, 30 to 45 and 46 to 60. United Airlines background United Airlines is the 4th biggest airline in America and one of the major airlines in the universe. United antecedent dates back to the commencement of the aviation olden times (Hameed, 2010). The main reason the paper written is to assess target customers level of satisfaction with United Airline. Researchers have done many hours of extensive study on United Airlines and have collected data from many credible sources, United’s databases. The data presented are from airline industry analysis, surveys with United’s media managers and investor relation units; and an analysis of general market (Hameed, 2010). According to Hameed findings, the airline has managed to utilize the opportunities and made it customer service attractive. Before presenting the survey results, background information is essential (Dransfield & Needham, 2005). United Airlines objective The Company characterizes its industry strategy as “Focus on Five,” which denotes an all-inclusive set of main concerns that concentrates on the basics of running a good airline. They include running on time, with clean aircrafts and well-mannered employees, delivers industry-foremost revenues and competitive prices, and does so securely and safely (United Airlines Corporation, 2010). The target of this strategy is to allow United to attain best-in-class security performance, outstanding customer satisfaction and encounter and industry-leading scope and cash stream. Building on this basis, United Airline purposes to recuperate its spot in key metrics documented by America’s Department of Transportation (DOT). It also plans to increase the revenue motivated by schedules, services and routes that are esteemed by the Company’s consumers (United Airlines Corporation, 2010). Intense competition and price discounting Airline industry is extremely competitive. The profit ranges are quite low. UAL’s business stage strategy is to battle on price, customer service, costs, effectiveness, and efficiency. Airline corporations often use discount prices to draw customers and dent their competitors. Furthermore, airlines employ low fare in a slow period of trade to cover costs and fill planes (Hameed, 2010). Opportunities Growing America airlines industry In latest years since 2001, U.S. airline business has seen a stable expansion. This trend was expected to persist through 2012 and subsequent years. In 2007, domestic voyage volume subjugated in the U.S. airline trade and resulted to 673.3 million passengers, corresponding to 80.9% of the business’s overall capacity. The US airline business was anticipated to expand with a predictable industry volume of $303 billion (Datamonitor, 2010). Such an expansion in airline trade could offer United with a chance to strengthen its system, financial spot, and acquire competitive advantage over its rivals. United can gain a globe leadership place by utilizing effectual strategies to benefit from such growth joined with acquisition of latest fuel efficient planes and union with Continental Airlines(Hameed, 2010). Global travel and tourism industry Along with business journey, airline industry is profoundly influenced by voyage and tourism tendencies. According to World Travel and Tourism Council, globe tourism and travel is anticipated to cultivate 4.3% yearly. The research stated that $13 million created from tour and tourism between 2008-17 phases. The global travel and tourism, along with many other corporations, is mostly anticipated to assist the airline business. United Airline with its big fleet is well placed to take advantage of this chance (Hameed, 2010). With such opportunities, United Airline has a strong business line that instills confidence on its customers (United States, 2004). Business Level Strategy United’s business stage strategy is to give the correct service to the right consumer at the correct price (United Airlines, 2010). In other words, the corporation utilizes both cost-efficient and differentiation approaches simultaneously. In addition, it has executed the cost reduction agenda and employee efficiency program. United acknowledges that by boosting employee productivity, minimizing costs, it can offer cost-effective prices to consumers. In return gain competitive advantage over its competitors (Hameed, 2010). So far, it has relieved some 9000 workers. United upholds that the workers either went on layoff or left willingly. In either method, decrease in 9000 employees is an enormous cost saving procedures. It has also stopped the pension strategy for its employees. The corporation believes that it can salvage a substantial quantity by not sponsoring the corporation pension strategy (Hameed, 2010). It is also concentrating on timeliness of the services. This plan is both differentiated and cost-effective. Timeliness will save capital between flights at the entrance, cargo, and passenger management, departing and boarding. In the interim, it would also separate United’s service based on schedule (Hameed, 2010). Revenue & Profit History United earns its profits from four categories; namely, the regional affiliate, mainline, cargo, and other. “Other” section comprises earnings from maintenance services, Mileage Plus®, and interests. However, it uses the first two categories for reporting duties (United Airlines Corporation, 2010). For the phase ending December 2009, it gained 73% of profits from mainline customers. The rest are 3% from cargo, 19% from regional affiliate customer and 5% from extra resources (United Airlines Corporation, 2010). Figure 1: United Financial Performance Source: (Hameed, 2010) Share of Market It is the 4th biggest U.S. carrier concerning Revenue Passenger Miles. By March 2010, it current market share considering Revenue Passenger Miles was 10.4% (Research and Innovative Technology Administration (RITA), 2010). United’s top rivals are Southwest, Delta/Northwest, American, Frontier, US Airways, Alaska, and JetBlue. The competitors are growing; however; United still has the advantage due to its large capacity and loyal customers (UAL Corp. 2006). Figure 2: Airline industry-Market share Source: (Hameed, 2010) VRIO Analysis - Considering a 5 point scope with "1" as "not very" and "5" as "extremely”. No = 1 or 2, Yes = 3 or 4 Hard to Organizational Valuable Rare Imitate Feasible TOTAL Source: (Datamonitor, 2010) Significance/Probability - based on a 5 point scale with"5" as "extremely" and “1" as "not very" Source: (Hameed, 2010) Customers Satisfaction Level - Significance based on a 4 point score with "1" as " Very dissatisfactory" and "5" as " Very satisfactory" . Survey Results The survey was carried to assess the thoughts of customers of United Airlines with respect to the opportunities. The above insight of the corporation makes it a good airline for customers. During the survey, 13 set of questions structured in a closed-ended format with satisfaction based on a 4 point scale. The responses were statistically summarized and presented in a table form for easy understanding. United Airlines responses for survey question   A Very satisfactory B Satisfactory C Dissatisfactory D Very dissatisfactory 1.      How does the number of times in which flights of the company operate in a day meet your vacation travel needs? (Ordinal Data) 80% 15% 4% 1% 2.      In your own estimation, how would you describe pre-departure service rendered to you? (Ordinal Data) 78% 20% 2% 0 3.      How would you describe overall on-flight experience offered by the company? (Ordinal Data) 65% 30% 4% 1% 7.      To what extent has the variety of services available at the United Airline met your traveling needs? (Ordinal Data) 86% 11% 2% 1% Average Responses 77% 19% 3% 1% Regression for customer Very satisfaction and satisfaction rates SUMMARY OUTPUT Regression Statistics Multiple R 0.987324638 R Square 0.974809941 Adjusted R Square 0.966413255 Standard Error 0.014039666 Observations 5 ANOVA   df SS MS F Significance F Regression 1 0.022883663 0.022883663 116.0946003 0.001709806 Residual 3 0.000591337 0.000197112 Total 4 0.023475         Coefficients Standard Error t Stat P-value Lower 95% Upper 95% Lower 95.0% Upper 95.0% Intercept 0.974727723 0.019791092 49.25083001 1.84326E-05 0.911743634 1.037711811 0.911743634 1.037711811 X Variable 1 -1.064356436 0.098782743 -10.7747204 0.001709806 -1.37872721 -0.749985661 -1.37872721 -0.74998566 Regression for dissatisfactory and very dissatisfactory SUMMARY OUTPUT Regression Statistics Multiple R 0.57735 R Square 0.333333 Adjusted R Square 0.111111 Standard Error 0.009428 Observations 5 ANOVA   df SS MS F Significance F Regression 1 0.000133 0.000133 1.5 0.308068 Residual 3 0.000267 8.89E-05 Total 4 0.0004         Coefficients Standard Error t Stat P-value Lower 95% Upper 95% Lower 95.0% Upper 95.0% Intercept 0.02 0.009189 2.176429 0.117743 -0.00924 0.049245 -0.00924 0.049245 X Variable 1 1.333333 1.088662 1.224745 0.308068 -2.13128 4.797942 -2.13128 4.797942 Correlation   Very satisfactory Satisfactory Dissatisfactory Very dissatisfactory Column 1 1 Column 2 -0.987324638 1 Column 3 -0.620041567 0.492518281 1 Column 4 -0.056523342 -0.081244446 0.577350269 1   A Strongly agree B Agree C Disagree D Strongly disagree 4.      There have been causes for me to feel insecure travelling with United Airlines (Ordinal Data) 6% 6% 18% 70% 5.      The services and cost that come with United Airline meet my spending needs (Ordinal Data) 78% 10% 8% 4% 6.      The attitude of the airline in handling and resolving problems is ethically acceptable (Ordinal Data) 68% 29% 2% 1% 8.      United Airlines is very time conscious (Ordinal Data) 58% 36% 4% 2% 9.      There is more that needs to be done to improve innovation at the airline (Ordinal Data) 7% 22% 31% 40% 10.  Expanding the destination of the airline will help serve my needs better 10% 23% 53% 14% 11.  I am very likely to recommend United Airlines to other people due to my satisfaction level (Ordinal Data) 78% 10% 8% 4% 12.  I shall use the services of United Airlines again whenever another opportunity presents itself (Ordinal Data) 80% 12% 6% 2% 13.  I shall agree to pay more for the same service due to its high satisfaction level (Ordinal Data) 78% 20% 2% 1% Average Percentage 51% 19% 15% 15% Regression for strongly Agree against Strongly Disagree SUMMARY OUTPUT                                 Regression Statistics               Multiple R 0.808033               R Square 0.652918               Adjusted R Square 0.609532               Standard Error 0.197671               Observations 10                                 ANOVA                   df SS MS F Significance F       Regression 1 0.588032 0.588032 15.04928 0.004679       Residual 8 0.31259 0.039074           Total 9 0.900622                                 Coefficients Standard Error t Stat P-value Lower 95% Upper 95% Lower 95.0% Upper 95.0% Intercept 0.687395 0.076779 8.952936 1.93E-05 0.510343 0.864447 0.510343 0.864447 X Variable 1 -1.12794 0.290755 -3.87934 0.004679 -1.79842 -0.45746 -1.79842 -0.45746 Correlation   A Strongly agree B Agree C Disagree D Strongly disagree Column 1 1       Column 2 -0.030913547 1     Column 3 -0.801391978 0.013921 1   Column 4 -0.808033179 -0.38054 0.3966105 1 Correlation: Running a correlation assessment between general satisfaction, and every other variable will permit researcher to compute the strength of the association. Each variable has to satisfaction, and thus recognize which ones emerge to have the most impact or influence on overall customers’ satisfaction. Customer’s satisfaction was measured on a one to four scale with four being highly satisfactory or strongly agrees. Not only did the corporation want to calculate how satisfied protesters were with every variable, they sought to acquaint with which variables impacted the most to satisfaction (Bee, 2011). The outcomes show that most of the participants were satisfied with the schedule, customer service, prices, and management. In the first set of data, approximately 96% of customers were satisfied with the United Airline services. This is an indication that the airline has used the opportunities to capture customer requirements and services (Albright, Winston & Zappe, 2009). Regression: Multiple regression permits researcher to answer the query “what are the suitable predictors of variables.” While correlation assessment assesses the strength of the association between two elements, regression evaluation assesses the combined influence all variables have on the dependent variable (DV). The customers’ satisfactions were dependent on services and opportunities that United airless gave them. These numbers are the confines of a confidence interval for the grade of the regression procession. The upper and lower limits were at 95% confidence. The 95% confidence limit is a variance of values that one can be 95% sure has the true significance of the population (Albright, Winston & Zappe, 2009). It estimates scale, the relative significance, and statistical implication of the involvement of each of the determinant variables to the DV (Bee, 2011). It can be concluded that United Airline services and opportunities influence the thought of customers satisfactory. The outcome of the second average percentage gave approximately 70% agreeable results. This mean that most of the services and opportunity asked favored the clients. Correlation illustrates an association while regression analysis forecasts a value. Regression assessment can be determined to forecast prices, market share, buying patterns, profitability, and the influence of marketing strategies (Bobko, 2001). The background assessment of United Airlines gave a conviction that the airline has prevailing conditions for competitive advantage. The results of the survey can correlates with the corporation statistics. To run a numerous regression analysis the application of statistical software, such as SPSS, is necessary (Bobko, 2001). However, for this study statistical analysis software that was used is Excel. Survey data gathered and entered in the spreadsheet arrangement with cases being rows and variables being columns. The DV and IV are then chosen, the analysis executed, and the output is generated (Bee, 2011). The software makes the data collected during the survey presented as information that is understandable for the reader The key reason of using regression assessment in customer experience job is to approximate which factors influence overall contentment. The strategy will enable the corporation to concentrate their resources on the main drivers of satisfaction, and not squander these capitals on sectors that might seem significant, but, in fact, not (Bee, 2011). Regression executes by manipulative a line of best fit through survey respondents’ answer to one or extra ‘input’ queries and a solitary ‘output’ query. By using this slope of best fit, one can then foresee what any presented respondent’s feedback to the ‘output’ query will be, based on the responses they give to the ‘input’ query(s) (Bee, 2011). Target Age and Income Selection 14. What is your age range? (Ration Data) A 18-29 B 30-44 C 45-60 D 61-75 15. What’s your income range? (Ratio Data) A $50,000 - $70,000 B $70,001 - $90,000 C $90,001 - $110,000 D $110,001 - $130,000 E $130,001 - $150,000 Conclusion In conclusion, United Airlines targeted customers are satisfied with their company opportunity usage and customer service. The survey gave positive correlation between opportunity/customer service and customer satisfaction. In the first set of data, approximately 96% of customers were satisfied with the United Airline services. The customers’ satisfactions were dependent on services and opportunities that United airless gave them. These numbers are the confines of a confidence interval for the grade of the regression procession. The upper and lower limits were at 95% confidence. The 95% confidence limit is a variance of values that one can be 95% sure has the true significance of the population. It estimates scale, the relative significance, and statistical implication of the involvement of each of the determinant variables to the DV. The Company characterizes its industry strategy as “Focus on Five,” which denotes an all-inclusive set of main concerns that concentrates on the basics of running a good airline. They include running on time, with clean aircrafts and well-mannered employees, delivers industry-foremost revenues and competitive prices, and does so securely and safely. References Albright, S. C., Winston, W. L., & Zappe, C. J. (2009). Data analysis & decision making with Microsoft Excel. Mason, Ohio: South-Western/Cengage Learning. Bee, J. (2011). Using Regression in Customer Experience Analysis. White Space Insight 1: 1-5 http://whitespaceanalysis.com/uploads/files/Using_Regression_In_Customer_Experience_Analysis.pdf Bobko, P. (2001). Correlation and regression: Applications for industrial organizational psychology and management. Thousand Oaks, [Calif.: Sage Publications. Datamonitor. (2010). UAL Corporation. November 22, 2014, from Ebscohost: http://web.ebscohost.com/bsi/pdf?vid=2&hid=119&sid=5080339c-8160-4c3a-958b-39efb3dbb649%40sessionmgr112 Dransfield, R., & Needham, D. (2005). Applied business: AS level for Edexcel. Oxford: Heinemann. Hameed, K. (2010). Company Analysis: United Airlines Corporation. Lawrence, Kansas. WordPress.com 1:2-23 RITA. (2010, January). Performance Measures: United Airlines Compared to All Network Carriers. Retrieved July 2, 2010, from Department of Transport: http://www.bts.gov/programs/airline_information/performance_measures_in_the_airline_industry/html/individual_air_carrier/network/united_2007_q1.html UAL Corp. (2006). 10k - 2006 Filings. Retrieved July 1, 2010, from UAL Corp: http://library.corporateir.net/library/83/836/83680/items/236222/UALCorp_2006_AnnualReport_v2.pdf United Airlines Corporation. (2010). Form 10-K and Annual Report. Retrieved November 22, 2014, from United Investor Relations: http://phx.corporate-ir.net/External.File?item=UGFyZW50SUQ9Mzc0NDY0fENoaWxkSUQ9MzcyNjAzfFR5cGU9MQ==&t=1 United States. (2004). United Airlines/US Airways merger: Hearing before the Committee on Commerce, Science, and Transportation, United States Senate, One Hundred Sixth Congress, second session, June 21 and 22, 2000. Washington: U.S. G.P.O. Read More