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TransGlobal
Airlines
Part 1: Presentation
Situation
Analysis of
TransGlobal
Airlines:
Internal
Culture: TransGlobal Airlines prioritizes customer
relationships and inclusivity
Leadership: Well-structured leadership team and
comprehensive plan, TransGlobal 2030
Internal Processes: Robust internal processes and special
operations for efficiency
Human Resources: Focus on building an inclusive
workplace culture and achieving a top-10 ranking in the
2030 World's Best Workplaces list
Operations: TransGlobal Airlines serves 242 destinations
across six continents and operates in multiple market
segments
Financial Performance: Strong financial performance with
annual gross revenue of $20.683 billion, annual net income
of $2.099 billion, and an operating margin of 14.08%.
Situation
Analysis of
TransGlobal
Airlines: External
Competitive: TransGlobal Airlines faces intense competition from both international and
domestic U.S. airlines.
Market: TransGlobal Airlines operates in the global airline industry, serving 242 destinations
across six continents.
Regulatory: The airline industry is highly regulated, and TransGlobal Airlines must comply with
FAA regulations and other regulatory bodies.
Customers: TransGlobal Airlines' customer segment includes first class, luxury, business class,
and economy travelers, with an 80% return customer rate.
Suppliers: The airline industry relies on various suppliers, such as aircraft manufacturers, fuel
suppliers, and maintenance providers.
Other Relevant Stakeholders: TransGlobal Airlines considers the planet and brand awareness as
other relevant stakeholders.
External Environmental Factors: The COVID-19 pandemic had a devastating impact on the airline
industry, with passenger traffic plummeting by 96% system-wide in April 2020 compared to April
2019.
Situation Analysis of TransGlobal Airlines
Strategic Objectives:
Expand business offerings and customer base in the Caribbean
market
Access smaller aircraft to expand regional fleet capacities
Support stewardship and sustainability goals by adopting fuel-
efficient aircraft
Potential Benefits:
Leverage existing operations and customer relationships of
acquired firms to expand private charter services
Gain access to smaller, more fuel-efficient aircraft not currently
operated by TransGlobal
Improve competitiveness and become a more well-rounded
aviation company
Increase revenue potential by entering new market segment for
private chartered flights
Accelerate adoption of alternative fuels to reduce carbon footprint
Enhance brand reputation and loyalty by aligning with sustainable
and environmentally conscious practices.
COMPANY A
COMPANY B
COMPANY A
BALANCE
SCORECARD
COMPANY A
BALANCE
SCORE CARD
COMPANY A BALANCE SCORE CARD ANALYSIS
Balanced Scorecard Analysis:
Company A has identified strategic
objectives in four categories and has
a cost-benefit-risk analysis that
justifies the costs of acquisition.
Opportunity Cost: Potential
opportunity costs of moving forward
with objectives include losing
revenue or productivity if changes
don't go as planned.
Risk: Risks associated with
implementing changes are medium
and need to be carefully considered
and planned, especially regarding
market, financial, cultural, and
operational environments
COMPANY B
BALANCE SCORE
CARD
COMPANY B
BALANCE SCORE
CARD
COMPANY B
BALANCE
SCORE CARD
ANALYSIS
Balanced Scorecard Analysis: Company B has well-aligned objectives and
KPIs, but a cost-benefit-risk analysis shows that the benefits of the
acquisition may not justify the costs.
Opportunity Cost: Acquiring Company B would cost a high purchase
price and integration costs.
Risk: The risks associated with the acquisition of Company B score a high
risk in terms of market, financial, cultural, and operational
environments. The balanced scorecard analysis indicates that Company
B has identified appropriate objectives and KPIs. However, careful
consideration of cost-benefit-risk analysis and opportunity costs needs
to be evaluated before moving forward with the acquisition.
PROPOSAL
Recommendation:
TransGlobal Airlines
should acquire
Company A to
support its strategic
objectives.
Rationale: Acquiring Company A will support TransGlobal
Airlines' financial, market, and competitive objectives.
Company A has identified strategic objectives to increase
revenues, customer retention rates, and satisfaction levels
while reducing COGS and employee turnover rates. These
objectives align with TransGlobal Airlines' objectives to
increase profitability and competitiveness in the market.
Additionally, Company A's infrastructure investment will
improve TransGlobal Airlines' operational efficiency,
supporting the company's long-term success.
ASSUMPTIONS:
WORST-CASE
SCENARIO
Worst-case scenario: In the event of
unexpected external factors such as a global
economic downturn or a natural disaster,
TransGlobal Airlines may experience a
decline in demand for air travel. This decline
may result in a decreased need for the
services offered by Company A. However, in
this scenario, TransGlobal Airlines'
acquisition of Company A would still provide
the company with increased operational
efficiency and a more decisive competitive
advantage, allowing it to weather the storm
better than if it did not acquire Company A.
ASSUMPTIONS:
BEST-CASE
SCENARIO
Best-case scenario: In the best-case plan, the
acquisition of Company A would exceed the
anticipated targets and assumptions. The
strategic objectives of Company A would be
achieved faster and with tremendous
success, resulting in increased revenue,
customer satisfaction, and operational
efficiency. This outcome would position
TransGlobal Airlines as a leader in the
industry, attracting more customers and
further strengthening its competitive
advantage.
References
Hayes, A. (2022, November 4). What is cost-benefit
analysis, how is it used, what are its pros and cons?
Investopedia. Retrieved March 12, 2023, from
https://www.investopedia.com/terms/c/cost-
benefitanalysis.asp
Office, U. S. G. A. (2021, November 9). Covid-19
pandemic: Observations on the ongoing recovery
of the aviation industry. COVID-19 Pandemic:
Observations on the Ongoing Recovery of the
Aviation Industry | U.S. GAO. Retrieved March 12,
2023, from https://www.gao.gov/products/gao-22-
104429
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