Delta Air Lines’ Business Model and Strategy

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Table of Contents

Introduction
Current Strategy of Delta Airlines
Works Cited

Introduction

Delta Airlines is one of the oldest American airlines that was founded in 1924 as a small aerial crop dusting operation (“About Delta” par. 1). Nowadays, it is a large global airline with more than 160 million customers using its services annually. Like many other airline companies, Delta faces the challenges caused by the changes in fuel prices, the frequency of terroristic attacks in the air or airports, and the necessity to stay competitive in the market. Any successful manager should understand the importance of a properly chosen strategy in the company and the worth of all actions taken and the decisions made.

In this report, Delta will be analyzed in terms of its strategic alignment, competitive advantage, marketing achievements, customer value, and profit propositions to clarify if its business model and current strategy are successful enough not to change it but promote its development.

Current Strategy of Delta Airlines

Delta Airlines spends much time and effort to analyze its current situation and the changes it can be promoted regarding the actual state of affairs. The latest reports of the company show that Delta, as well as other airline companies in the USA and the whole world, faces the problem caused by the changes in jet fuel prices. Even if these prices fell at the end of 2014 (“Delta Air Lines INC: Form 10-K” 4), fuel expenses remain one of the main problems for the company.

Therefore, Delta tries to focus its strategies on the improvement of the situation and the creation of control over such types of expenses. For example, the idea to own a refinery to contain fuel costs seems to be a unique strategy introduced by the company because Delta can manage its fuel costs in a variety of ways (Cederholm 10). For example, Delta’s attempts to purchase agreements and practice fuel hedging are not new, but the idea to operate a refinery makes it unique and competitive. Also, Delta is involved in numerous activities to reengineer the business model to promote high employee engagement and gracious customer service (“Richard Anderson: Chief Executive Officer” par. 2).

Strategic Alignment

The VRIO framework is the tool to be used to comprehend if the company under analysis succeeds in choosing actions, articulating its goals, and making the decisions that influence the quality of life of the company. Regarding the question of value (Frynas and Mellahi 121), Delta continues extending its reach to customers using partnerships with Alitalia and other trans-Atlantic joint ventures (“Richard Anderson: Chief Executive Officer” par.3) and developing the refinery strategy that helps to reduce fuel costs (Cederholm 10). Regarding the fact that not many companies can use the same strategies, the question of rareness gets a positive answer because the resources of Delta are competitive indeed. Besides, its activities are hard to imitate due to the way the company is organized and focused on the goals to be achieved.

Competitive Advantage

To stay competitive, Delta tries to distinguish it from its competitors. The idea to buy a refinery is one of the most powerful decisions made by the company because it helps to increase fuel supply, reduce fuel prices, and stay confident in the quality of fuel used (Cederholm 10). Cooperation and the establishment of productive relations with customers are the other aspects of the work done by the company. Delta has already implemented a flyer program with the help of which customers can get benefits and enjoy the opportunities offered. This program introduces the incentives to customers and increases their desire to travel on Delta (“Delta Air Lines INC: Form 10-K” 5). All these decisions and the abilities to combine the financial benefits, customer satisfaction, and employee motivation underline the efforts of Delta to resist the power of its main competitors that are Southwest, United, and American.

Market Achievements

The results that have been achieved by Delta show how effective and responsible the company can be. The demonstration of sustainable positive financial results, investments in healthy communities, and the protection of natural environments help to not only satisfy the legal obligations but also to provide Delta’s stakeholders that are all investors, employees, customers, and partners with clarity and confidence (“Corporate Responsibility” par.1).

Risk Activities

Delta has established a framework that aims at addressing and analyzing risks in the form of the ERM process (“Delta Corporate Responsibility Report” 13). Therefore, the company protects itself against the activities and unethical decisions that may put the company at risk. Intense competition, fuel prices, and dependence on the North American market are the main risk factors that should be considered. Besides, Delta has some problems with its reputation, and its brand and image have been considerably worsened during the last several years. Therefore, it is necessary to focus on customers and their possible contributions to the company.

Company’s Viability

Successful leadership, attention and respect to customers, and investigation of fuel price policies should help Delta achieve high results, overcome the challenges, and introduce the services that can impress people and save the company’s money.

Leadership

Richard Anderson is one of the successful examples of leaders in the company. His abilities to combine his personal aviation experience with the needs of the company are impressive. When he joined the Board of Directors and became CEO, he made several changes to underline the role of customers in the company and the necessity to think about cost control (“Richard Anderson: Chief Executive Officer” par. 2).

Works Cited

About Delta n.d. Web.

Cederholm, Teresa. “Delta’s Unique Strategy: Owning a Refinery to Contain Fuel Costs.” Market Realist. 2014. Web.

Corporate Responsibility n.d. Web.

Delta Air Lines INC: Form 10-K (Annual Report) 2014. Web.

Delta Corporate Responsibility Report 2014. Web.

Frynas, Jedrzej, George, and Kamel Mellahi. Global Strategic Management, New York, NY: Oxford University Press, 2015. Print.

Richard Anderson: Chief Executive Officer n.d. Web.

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