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+6-1 Milestone Two: Performance Analysis
Gerald Henry
Southern New Hampshire University
MBA-620 Measuring Success in an Organization
Mr. Mannaberg
September 8, 2024
6-1 Milestone Two: Performance Analysis
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Situation Analysis of TransGlobal Airlines Internal and External Environments
Internal Environment
Culture: The TransGlobal 2030 vision is to lead the industry in safety, excitement, and
stewardship. TransGlobal culture focuses on innovation to provide customers with an
exceptional and exciting traveling experience, always treating customers with respect, building
lifelong relationships with customers, reducing the carbon footprint, promoting an inclusive
working environment, protecting the planet, and increasing overall safety for employees and
customers.
Leadership: The company leadership team includes a board of directors, president, VP
administration, CEO, CFO, COO, VP sales, division VPs and subsidiaries (SNHU, n.d.).
Internal Process: TransGlobal internal processes includes safely reintroducing the Maxx
737 aircraft, upgrading the reservation and ticketing experience with apps that can assist with
lodging, attractions, ground transportation, and training employees on the basics of FAA’s SAS
(Safety Assurance System) through web-based training to ensure safety and compliance for all
employees (SNHU, n.d.).
Human Resources: TransGlobal Airlines Human Resource department manages 40,000
employees around the world. They handle safety and compliance with aviation regulations
amongst employees by making sure that every employee is trained on the basics of FAA’s SAS
(Safety Assurance System) via web-based training (SNHU, n.d.).
Operations: TransGlobal Airlines has 1.062 aircrafts in its fleet reaching 242
destinations serving 52 countries across six continents. The company operations are focused on
building brand awareness and customer loyalty by improving safety, reducing carbon footprint,
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adopting fuel efficient planes, alternative fuels, and upgrading the ticketing and reservation
experience.
Financial Performance: The company's financial performance shows a strong financial
position with a market share of 18% in the global market and 18.3% in the U.S. market and
ranked 2nd in both the global and U.S. markets. Furthermore, TransGlobal Airlines has an annual
gross revenue of $20.683 billion, with an annual income of $2.099 billion (SNHU, n.d.). The
company has also seen an increase in Domestic revenue, Atlantic revenue and Latin revenue in
the last quarter. This shows that TransGlobal Airlines in a good financial position to take on a
new acquisition that can help the company dominate the market and gain a competitive
advantage over American and Southwest Airlines their top two competitors.
External Environment
Competitive: Although TransGlobal Airlines has great financial strength to compete in the
global and in U.S. markets, the company must continuously innovate to keep its competitive
advantage. TransGlobal Airlines current relevant competitors are American and Southwest
Airlines. TransGlobal Airlines is ranked 2nd behind American in the global market at 18% market
share and 2nd behind Southwest Airlines in the U.S. Market at 18.3%. To gain a competitive
advantage over their competitors it is necessary to buy an acquisition to expand and increase
market share to get ahead of competition.
Market: TransGlobal Airlines runs in the global market with a dominance U.S. presence serving
52 countries reaching 242 destinations and is ranked 2nd in the global and U.S. markets. With a
global market share of 18% ranked number 2 followed by American at 18.6%, TransGlobal
Airlines holds a strong position in the global market. In addition, the company has a market share
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of 18.3% in the U.S. and ranked 2nd followed by Southwest Airlines at 19.1% of market share.
The company's target market segments are business class, luxury, first class, and economy class
customers.
Regulatory: TransGlobal Airlines must follow the rules and regulations of the Federal
Aviation Administration (FAA) and Department of Transportation (DOT) to ensure safety and
compliance of aviation operations. Federal Aviation regulations prohibit unsafe or unauthorized
operations of aircraft. If rules and regulations are not followed the airline can face profound
consequences such as possible action against the FAA- issued certificate or may be subject to
legal action against the airline (FAA, n.d.).
Customers: The company serves distinct groups of customers and has an 80% retention
rate for returning customers with a new customer growth rate of 27% annually prior to covid,
(SNHU, n.d.). In addition, the company focuses a great deal on treating customers with respect,
building lifelong relationships with customers and continuously innovating to provide customers
with the most forward-thinking and exciting travel experience (SNHU, n.d.).
Suppliers: Transglobal Airlines' relevant stakeholders and suppliers include fuel
suppliers, plane maintenance companies, catering services and technology providers. These
suppliers are necessary to ensure the quality and safety of TransGlobal Airlines products and
services (Sharma, 2023).
Balance Scorecard Analysis of Company A
Cost Benefit Risk Analysis
The benefits of buying Company A can result in an increase in market share, increased
customer satisfaction, increased revenue, and improved operations. The company also aligns
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with TransGlobal Airlines strategic goals such as expanding its market and expanding its
customer base. Company A cashflow is well positioned to make transitions and strategic
investments, making this company an ideal company to consider for acquisition. The company
shows a steady growth in revenue year after year signifying a strong financial performance. This
company is a premium upscale provider that needs to broaden their customer base, attract
younger customers, and modernize their planes and customer facing technologies (SNHU, n.d.).
To improve operations, efficiency and customer satisfaction for company A, TransGlobal
Airlines would need to upgrade their reservation system to current cloud-based upgrades and
improve customer check-in and ticketing process speed by implementing digital apps to ensure a
seamless and exciting travel experience for customers. Also, a frequent flyer program would
need to be implemented to ensure customer satisfaction and that customers are continuously
being awarded for flying with the airline. In addition, implementing a bookkeeping system will
make the bookkeeping process more efficient, and this will allow the company to keep a more
correct record of financial transactions in a systematic orderly, and logical manner.
Opportunity Cost: The opportunity cost for TransGlobal Airlines to buy this acquisition
is that TransGlobal Airlines will need to invest money in research and development, modern
technology, and added resources and personnel to improve operations and customer satisfaction
for company A. Therefore, this opportunity can affect TransGlobal Airlines bottom line if the
return on investments is not reciprocated.
Risk: The risk this acquisition poses is medium because TransGlobal Airlines will have
to invest in improved system upgrades and improved operations that can negatively affect the
company bottom line in the beginning leading to lower profits and revenue in the short-term.
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TransGlobal Airlines strong financial position in the global and U.S. markets and company A
current strong financial position makes this opportunity a medium risk.
Balanced Scorecard Analysis of Company B
Cost Benefit Risk Analysis
The benefits of buying company B include market expansion, a potential increase in
profits and strong relationships with the theme park industry. The company shows
inconsistencies in revenue growth year after year mostly due to their high debt of $90,000 that
the company is struggling to pay off resulting in high interest (SNHU, n.d.). The image of the
company is cheap transportation with a low customer retention rate of 40%. The company is
looking to improve their brand image with a focus on agile problem solving and a clean working
environment (SNHU, n.d.). Company B has high turnover rates compared to other airline
companies and has a tough time hiring and keeping maintenance workers. In addition, the
company needs to improve plane cleanliness, amenities, food and beverages, reduce in-flight
noise, improve safety training and improve on-ground operations (SNHU, n.d.).
Opportunity Cost: The opportunity cost to buy company B would include TransGlobal
Airlines investing a substantial amount of money in research and development, training and
development, skilled and trained personal for maintenance crew, plane cleaning crew, improved
food and beverages, and improved amenities. Doing this can have a negative impact on the
company bottom line leading to decreased profitability and creates a financial strain on the
company due to its already high debt, and investing more money into fixing these issues can put
the company in a tight position to generate profitability resulting in more debt.
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Risk: The risk this acquisition poses is a high risk due to its fluctuating revenue growth and high
debt ratio. This acquisition can cause financial implications, and operational challenges that can
negatively affect the company's success and overall market strength. If TransGlobal Airlines
invest money into these issues the company has a great chance of losing market share and
profitability.
References
FAA, (n.d.). Understanding Your Authority: Handling Sightings and Reports.
https://www.faa.gov/uas/public_safety_gov/sightings_reports#:~:text=Federal
%20Aviation%20Regulations%20prohibit%20the,unsafe%20or%20unauthorized
%20drone%20operations
Sharma, S. (2023). Airline Industry Analysis, Airlines Industry Value Chain Analysis.
https://shailesh-sharma.medium.com/airline-industry-analysis-airline-industry-value-
chain-analysis-airline-industry-porter-5-99646ef05d42#:~:text=Suppliers%20include
%20aircraft%20manufacturers%20
SNHU, (n.d.). MBA 620 Transglobal Airlines Financial Information.
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https://docs.google.com/spreadsheets/d/14ZT0R3FFUBRcoy5rExo7kTKDIrSRhrEr/edit?
gid=196560837#gid=196560837
SNHU, (n.d.). MBA 620 Company A Financials.
https://docs.google.com/spreadsheets/d/14uQiLmVAA6z_PaHOBtoUzEfu1GCLCQoA/
edit ?gid=1169337342#gid=1169337342
SNHU, (n.d.). MBA 620 Company B Financials.
https://docs.google.com/spreadsheets/d/14sjQyzz8niUPlWxhLxGU8ECMi49upIGs/edit?
gid=1487197658#gid=1487197658
