The Case of Alaska Airlines: Strategic and Business Insights

Alaska’s mission is “to be one of the most respected airlines in United States of America by its customers, employees and all the stakeholders”. Alaska Airlines believes that they will only be able to succeed as safe air transport is only by harnessing loyal relationship with customers and providing them with competitive pricing consistently. Alaska’s objective is to be a socially dependable organization that qualities their execution, as well as their kin, locale, and conditions. Alaska was founded in year 1932 by Linious McGee and then it was named as McGee airways which was only operational from Anchorage in Alaska. In year 1944, it was named as Alaska Airlines. Currently, Alaska Airlines is fifth largest airlines in United States and has been ranked as one of the best airlines in US by various online companies. Alaska Airlines Operates out of its biggest hub- Seattle Tacoma International Airport.

Alaska is a company that strongly believes that While aircrafts and innovation empower them to give air transportation to its customers, they perceive this is in a general sense a business about individuals. At Alaska, their representatives keep up and reinforce associations with their clients, and their prosperity relies upon its employees cooperating to effectively execute on system. With such a strong vision and mission, the company has been through tremendous turbulence and came out as a triumph. Good and effective leadership is very fundamental in the determination of the performance of each and every company. This is because challenges are inevitable in any business environment. A company that does not properly evaluates the various setbacks that are affecting its performance and address the root cause of those challenges is bound to incur huge losses. Thus, the management of the company should play a big role in addressing that challenges that are detrimental to its performance. In this case, Alaska Airline various issues that affected its performance in the Airline industry. Its management was not well effective in projecting some of these issues despite it talking various efforts to fix the issues. These challenges impacted the operation of Alaska Airline making it incur a loss for a long time. Starting in early 2000’s, US economy was at the greatest depression and Alaska was on the verge of bankruptcy. From the basic operating statistics, it is clearly evident that Alaska Airline realized a loss from 2002 to 2008. However, the various response measures taken by the management of Alaska Airline to address the issues not only made the company survive heroically by facing unforeseeable situations but make really tough and bold decisions. As success never comes without pain, by the end of the decade in 2010’s Alaska overcame all the turbulence and was awarded as the best and most profitable commercial carrier across the nation.

One of the most important steps in getting aware of issues both internal as well as external to an organization is to start with effective communication. It includes identification of different communication methods, technology and channels. Communication can be both formal or informal. Some of the important tools which can be used for executing appropriate communication channel can be, meetings, using latest communication technologies, project reporting, collaboration tools like instant messenger, etc. In order to increase awareness of internal and external issues, the management of Alaska Airline Company could have used the following tools.

SWOT Analysis

This tool is an industry famous very effective tool for the analysis of the data both internally i.e. strength and weaknesses and external, i.e. opportunities and threats. For example, some of the strengths of Alaska Airlines are its steady and continuous growth, customer relationship and ultimate focus on domestic markets. Some of the weaknesses are higher costs and too much focus on shorter routes. Some of the opportunity areas are business related travels and increase in automated services and reducing manual efforts. Competition and higher fuel costs are some of the threats to the airlines. If management would have used SWOT Analysis to determine these factors, they could have taken better measures and decisions to avoid any failures in business.

Balanced Scorecard

The balanced scorecard is one of the most utilized tools in many organizations currently. It can be defined as a tool for strategic planning and management utilized in businesses, industries, and organizations globally. It is used in aligning the organizational activities to vision and strategy, improvement of both internal and external communication, and monitoring of the organization’s operations. By using the balanced scorecard, the management of Alaska Airline wound have monitored the trends in the operations of the company and identified some of the issues that are undermining the performance.

Benchmarking

This tool could have enabled the management to compare the performance of Alaska Airline and that of other successful Airline companies. In this process, the management could have identified what is being done differently in other companies to fix the internal and external issues.

Employee Engagement Surveys

Based on the challenges that Alaska Airline experienced over the years, it is clearly evident that some of these issues were contributed by poor employee engagement. The majority of the decisions were made by the company's management without the participation of the involvement of the employees. Thus, Employee Engagement Surveys could have created an awareness of some of the internal issues that are making the employees not perform at their level best.

Customer Relationship Management

The customers are the cornerstones of the success of each and every business because they are the actual consumers of the products or services being offered. Customer satisfaction is the priority of every company that targets to remain competitive in the market. In the case of Alaska Airline, some of the internal issues that demoralized many of the customers include the delays in the departure and arrival of flights and mishandling of the passenger bags. Using a Customer Relationship Management would have enabled the management to address some of the concerns that were making the customers feel uncomfortable with the provided services due to the delay of their flights and mishandling of luggage.

The management of Alaska Airline might have come up with a projection model or plan containing all the possible impacts of implementing any decision before recommending the same. One possible way could have been, implementing beta project with certain changes and implementing it across only after success of that phase. This might have prevented some of the setbacks that resulted because of the implementation of certain decisions blindly without evaluation of the probable impacts of the decisions.

The aspect of Alaska Airline’s organizational culture that reinforced what occurred in this state is that culture of “just good enough”. This is because there was an assumption that things are just okay as long as Alaska Airline still has the best customer service in the industry even though flights were delayed and the customers’ luggage was mismanaged. The pride which the employees and management developed pertaining to the position of Alaska Airline in comparison to other airlines totally misled even the ability to identify the real issues that were draining the company both internally and externally. There was a general assumption that things are just well and not need to worry much yet the whole operating system of the company required an urgent fix. Company was taking pride with its loyal customer line and they were totally fine with losing over 20 customers out of 1000 and 50% of the times flights were delayed.

Thus, a focus on transforming this culture of assuming that things are okay and well might have averted some of the issues that Alaska Airline was faced with. For instance, instilling a culture that admits that there is a problem might have pushed the management to come up with a plan of addressing some of the issues rather than waiting for the company to be faced by the issues first before drafting on what to do.

I might have challenged the team to observe inclusivity when dealing with serious issues affecting the company. This is because there was no inclusivity in the manner in which issues were being handled by the management. The employees were not much involved since most of the decisions were made by the management of Alaska Airlines. This contributed to more issues such as lack of morale and strikes since they were not given an opportunity to give their contributions and views such that they can feel as part and parcel of the company. Thus, my challenge might have been towards leading by an example. Another challenge would have been to tackle situation in the form of Epics where each major obstacle could be one epic which can be broken down into smaller user stories and one person can be responsible for their own user stories. And, in a stipulated time duration it would have been the responsibility of higher management to see if we have a work product available or not. This approach would have helped them tackle the problem in a much-organized way. So, I would have trained them on using Agile methodology effectively. Another area of advice back then would have been to make sure all overhead costs of the company are cut down and make an informed decision around labor workers versus replacing them with third party vendors.