Delta B - Harvard Business Case
MGNT 3010 – Organizational Behaviour Delta Air Lines: The Launch of Song, Case Assignment Fabian Schulze Wierling, Exchange Student, Germany
Student ID: 1155065598, f.schulze-‐wierling@whu.edu
Tasks
1) What is the main problem (apart from the general financial issues) facing Delta in this case? 2) What is Song’s overall guiding policy and what do you think about that policy? Was it the right one to choose, given the competition?
3) How is the actual implementation of that policy going? Is the implementation consistent with the guiding policy? What did they do right? What did they do wrong?
4) What about any HR-related issues and their outcomes?
Answers
1) The main problem facing Delta in this case is a strategic issue. The original problem, however, resulting in the design of a new subsidiary, is the threat to Delta’s bottom line by low-fare airlines who occupy important market share in that low-cost segment.
Delta initially failed the establishment of Delta Express as a major low-fare airline and was not able to compete with JetBlue or Southwest Airline.
The attempt to establish its own low-cost airline had not worked out as the Express line had not properly been seperated from the Delta mainline and still was too intertwined with the mainline to be considered a successful subsidiary. The combination of poor seperation and unclear differentiation was the main problem facing Delta in this case, resulting in the introduction of Song to become competitive in the low-fare segment again.
2) From what the case describes, the overall guiding policy of Song seems to be an integrated strategy which aims at both differentiating the low-fare airline from competitors and offering this service at lower cost than competitors. By introducing
Song, Delta tries to
Student ID: 1155065598, f.schulze-‐wierling@whu.edu
Tasks
1) What is the main problem (apart from the general financial issues) facing Delta in this case? 2) What is Song’s overall guiding policy and what do you think about that policy? Was it the right one to choose, given the competition?
3) How is the actual implementation of that policy going? Is the implementation consistent with the guiding policy? What did they do right? What did they do wrong?
4) What about any HR-related issues and their outcomes?
Answers
1) The main problem facing Delta in this case is a strategic issue. The original problem, however, resulting in the design of a new subsidiary, is the threat to Delta’s bottom line by low-fare airlines who occupy important market share in that low-cost segment.
Delta initially failed the establishment of Delta Express as a major low-fare airline and was not able to compete with JetBlue or Southwest Airline.
The attempt to establish its own low-cost airline had not worked out as the Express line had not properly been seperated from the Delta mainline and still was too intertwined with the mainline to be considered a successful subsidiary. The combination of poor seperation and unclear differentiation was the main problem facing Delta in this case, resulting in the introduction of Song to become competitive in the low-fare segment again.
2) From what the case describes, the overall guiding policy of Song seems to be an integrated strategy which aims at both differentiating the low-fare airline from competitors and offering this service at lower cost than competitors. By introducing
Song, Delta tries to