Continental Airlines, Inc

Topics: Airline, Lufthansa, Los Angeles International Airport Pages: 6 (1191 words) Published: November 6, 2009
Continental Airlines Inc. Analysis
Strategic Management

Vision Statement
Continental Airlines Inc. seeks to lead its industry in superior customer service, innovative technology, employee satisfaction, and environmental advances, at home and abroad. Mission Statement

At Continental Airlines Inc., we strive to obtain excellent customer service and satisfaction through technological advances in on-line bookings and e-ticket purchases. We have strict security measures to ensure our customer’s safety. Our international flights cater to our customer’s cultures, with language, food choices, and movies. We have committed to making the lives of our customers, employees, vendors and as efficient as possible, through environmental advances we are dedicated to reducing fuel waste by cost effective innovation of smaller jet fleets. The use of high quality products and services will create a decline in cost to us, therefore we will be able to pass the savings on to our customers and increase benefits to our employees with on-going extensive training. We have committed to enthusiastically utilize technology without losing sight of our original goal to negotiate cost-effective deliverables. We will maintain ongoing research to improving our products and services globally, and eliminating non-value-added costs. Our commitment remains innovated by updating and improving “The Go Forward Plan”, with specific global and environmental issues added.

External Analysis
I.Political/ Legal Forces
A.Chapter 11 bankruptcy
a.Bankruptcy Laws in place to protect companies.
b.Company became more cost efficient and competitive by filing a.Able to achieve substantial cost reduction through
i.Discharge of debt
ii.Lease and pension obligations
iii.Wage and benefit reduction


a.Companies not filing had increased financial competition and hardship

b.Purchase of replacement planes would challenge Continental’s young, fuel-efficient fleet. B.Government Restrictions
a.Security measurers increased -screening of passenger and luggage b.Each bag must be matched with a passenger
c.Increase passengers sense of safety
a.Security costs has increased- screen all bags for explosives b.More restrictions on the contents of carry-on baggage
c.Reduction in bookings, due to inconvenience to passengers II.Economic Forces
A.Fuel Costs
a.Use hedging strategies to control fuel costs
a.Largest cost category at 25.7% of the 10 largest U.S. carriers i.Increased fuel costs
ii.Increased labor cost
iii.Increased political cost
b.A serious market risk for all airlines
c.Confrontation with Iran could cause prices to rise
III.Technological Forces
a.Reduced cost of ticket sales
b.Fares are booked online
c.24% of it revenues comes from its website
d.The use of electronic tickets has cost, as they can be printed from home or e-ticket machines at airports. e.Saves time
f.Improvement in plane efficiencies.
a.Customer can shop around for best prices.

IV.Social Demographic Forces
1.Passengers looking for the best prices.
2.Passengers safety concerns about flights

V.Barriers to Entry
1.Regional Jets
a.provides a cost efficient overall route system
b.attract more travelers
c.greater range and more comfort
d.offers service to smaller markets
2.Foreign Markets
a.Easy entry into these markets
b.Less competitors

a.Increased rates
b.Use of replacement jets

VI.Intensity of rivalry
A.Low-cost carriers
a.Increased intensity
b.They have cost advantages
c.They have merged with other airlines for shorter flights

VII.Substitute Products
A.Low-cost carriers
a.AirTran Airlines
b.JetBlue Airlines
c.Southwest Airlines

VIII.Bargaining Power of Buyers

Bibliography: “America’s Most Admired Companies 2007”, Fortune Magazine, 2007,
Carpenter, Dave, “United’s CEO Says Merger Still a Goal”, Associated Press, June 13, 2007.
Continental Airlines, “About Continental”, company Web site,
Peterson, Kyle, “U.S. Airlines Bide Their Time as Fleets’ Needs Grow”, Reuters, June 12, 2007.
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