Delta Airlines Affected by Globalization and Technological Changes

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Table of Contents

Delta airlines
Globalization
Technology
Industrial Organization Model
Resource-Based Model
Vision
Mission
Stakeholders
Sources

Delta airlines

The aviation sector is one of the performing industries in the world markets. Several firms have ventured into the business to provide transportation services across the globe. Delta Airlines is an American corporation that operates a large number of aircraft for both passengers and cargo carriers domestically and internationally. The business organization is based in Atlanta, Georgia, where most of its flight activities are undertaken. Rapid globalization and technological changes have greatly influenced the performance of Delta Airlines by impacting the overall business processes in air travel.

Globalization

Globalization integrates both local and international economies, people, and cultures through trade, communication, and transportation. The rapid growth of national markets has increased the interest of many corporations to venture and offer their services in such places. The performance of international markets has prompted the increasing process of globalization. The process has impacted companies positively and negatively in different ways (Hitt et al., 1, p.8). For instance, globalization has made Delta Airlines explore and establish its operations in many countries worldwide. The expansion is essential since it allows the firm to access many passengers who use its services, thus increasing its revenue.

Similarly, the rapid growth of international and domestic economies has created the need for transport services. People have to travel from one country to another to conduct business operations; this creates a market gap for the airline to offer the transportation of the commodities involved. Individuals interested in the globalized markets search for suppliers operating globally to transact businesses leading to an increase in air travel because of the continuous supply of commodities and investment in different locations.

Globalization has also impacted Delta Airlines through increased global competition.

The integration of many economies contributes to many players in the aviation industry. Many airline companies have also taken advantage of the process to expand their operations in different places resulting in high competition in the industry. For instance, Southern Airlines Corporation is one of the biggest firms that provide transportation services across the globe, thus making the market to be competitive, thus making Delta strategize its operations. The rivalry makes the firms receive reduced profit or improve their services to have a competitive advantage over the opponents.

Delta Airlines is affected by the political atmosphere in some countries, making the business organization reduce or cancel flights to most war-prone nations. The increased threat of terrorist attacks has made the company invest in training crew members on how to handle similar situations, thus increasing the organization’s expenditure. There is a decline in the number of passengers traveling because of fear due to such criminal activities making the firm register low income.

Technology

Rapid changes in technology have significantly impacted Delta Company in several ways. First, the firm has adopted an online booking system whereby passengers buy their tickets without visiting their offices. Similarly, the company uses facial recognition tech to identify and verify passengers at the airport during check-in. They also use the system to check customers’ bags to enhance their security. The approach allows the organization to minimize clients’ time while undergoing the verification of the details. Passengers, while onboard, can use Radio Frequency Identification (RFID) to track their luggage in real-time, making them feel at ease without fear of losing their belongings.

The improvement in technology has made the company an innovative flight safety app that uses big data to analyze weather patterns and provide real-time details of the flight path (Mikalef et al., 2, p. 280). Delta’s proprietary application is located in the cockpit, making it easier for navigators to identify potential turbulence on their way. The app reduces blind flight, thus lowering weather-related accidents hence ensuring the safety of passengers and the crews.

Similarly, the use of social media and eCommerce has made the firm reach most customers locally and internationally. Delta uses its website page for advertising its services, thus making it easier for customers from across the globe to choose it from other service providers in the industry. The technology has ensured it has many passengers attracted following its excellent services and communication on the online platform, increasing its sales.

The rate at which technology is changing is also a challenge to the company since most of its tech is considered obsolete, thus forcing the management to acquire the modern system. For instance, the company has currently developed a Delta check-in app that allows passengers to pre-check 24 hours before the flight (Feng et al., 3, p. 825). After using the system, customers are not expected to go through the usual procedure of boarding the plane.

Industrial Organization Model

Delta Airlines has developed a specific strategic management technique that grants it an added advantage in the aviation industry. Airline operation is majorly affected by external forces such as fluctuation of fuel prices, which increase the companies’ charges. The high cost of petroleum makes corporations spend more money, thus lowering their return. The management of Delta has its own Oil refinery, which makes it incur less expenditure on fuels making the organization reduce passenger fares below its competitors hence attracting more customers and leading to above-average returns.

Resource-Based Model

Globalization has made the aviation industry to be very competitive as companies compete to have as many loyal customers as possible. The resource-based view is a significant aspect that can be used to evaluate the performance of a firm. Delta Company has various assets, such as aircraft that it owns. The ownership gives the organization ability to pocket high revenue compared to competitors that lease the planes (Hitt et al., 1. P. 17). Similarly, it has a tremendous human capital that effectively understands how the corporation works. Its employees are not unionized, which makes it easier for the management to negotiate with them inflexible manner.

Vision

A vision statement is a significant part of an organization since it reflects the values of the firm and creates a deep connection among the stakeholders of the business. Delta’s vision is “to be the World’s Most Trusted Airline,” (Lin et al., 4, p. 160). The company’s vision assures employees and other shareholders that the company can be reliable and its services are efficient. The statement makes management put more effort and build a cordial relationship with workers to enhance their performance.

Mission

An organization’s mission statement is significant because it focuses mainly on the product and customers. Delta’s mission “we—Delta’s employees, customers, and community partners together form a force for positive local and global change, dedicated to bettering standards of living and the environment where we and our customers live and work” (Yilmaz & Flouris 5, p. 82). It portrays the positive benefits the firm intended to offer. Delta’s mission indicates how the company is dedicated to ensuring its consumers have a better life through safe and timely travel to their destinations.

Stakeholders

Stakeholders of an organization have a crucial role to play in facilitating the success of the business. Delta Company has reliable capital market shareholders that provide the firm with the necessary resources to enhance its operations. Similarly, the organization has developed a good connection with host communities by offering essential services. This act gives the company loyal product market stakeholders who choose it over other airlines in the industry. Lastly, its organizational stakeholders contribute so much to the business’s success. For instance, pilots agreed to have a pay cut during the crisis to ensure the organization remained active in the market.

Sources

Hitt, Ireland, & Hoskisson. 2020. Strategic management: Concepts and cases: Competitiveness and globalization (13th ed.). Mason, OH: South-Western Cengage Learning

Mikalef, P., Boura, M., Lekakos, G., & Krogstie, J. (2019). Big data analytics capabilities and innovation: the mediating role of dynamic capabilities and moderating effect of the environment. British Journal of Management, 30(2), 272-298. Web.

Feng, W., Tu, R., Lu, T., & Zhou, Z. 2019. Understanding forced adoption of self-service technology: the impacts of users’ psychological reactance. Behaviour & Information Technology, 38(8), 820-832. Web.

Lin, Y. H., Ryan, C., Wise, N., & Low, L. W. 2018. A content analysis of airline mission statements: Changing trends and contemporary components. Tourism Management Perspectives, 28, 156-165. Web.

Yilmaz, A. K., & Flouris, T. 2017. Enterprise risk management in terms of organizational culture and its leadership and strategic management. In Corporate risk management for international business (pp. 65-112). Springer, Singapore. Web.

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