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9-1 Project Submission: Acquisition Proposal
MBA 620
SNHU
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Situation Assessment
The situation analysis has helped to evaluate the business environment of
TransGlobal, including the internal as well as the external environment. In the internal
context, some of the key elements that can influence its performance and operations
are the culture, solid leadership, strong internal processes, human resources, global
operations, and strong financial performance (Straková et al., 2018). Similarly, some of
the key external variables that would play an instrumental role to influence the
business and its operations aviation market setting include high competitive intensity,
market types including the first-class, business-class, economy and luxury segments,
stringent regulatory elements, customers, suppliers, and other relevant stakeholders. The
situation analysis has played a key role as it has influenced a suitable acquisition
strategy that can be adopted by the TransGlobal Airlines firm for expanding in the
airline market setting. According to Strakova, performing situation analysis is
considered to be of vital importance in terms of the strategic aspect (Straková et al.,
2018).
Data and Analysis
A detailed evaluation of Company A and Company B has been carried out so
that it would aid in the decision-making process relating to the acquisition activity. In
the case of Company A, there are numerous elements that can add value for the
TransGlobal Airlines business, such as the positive cash position of the entity, the
provision of ample degree of flexibility to operate in the dynamic airline industry, etc.
By acquiring the company, TransGlobal will get the opportunity to enter the
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Caribbean Islands market and expand its presence in the vast market setting in a
better way. However, the evaluation of the business has helped to identify the
opportunity costs that may arise for TransGlobal. One of the major opportunity costs
is the need to spend money to provide training to the employees so that the issue
relating to staff turnover can be managed and curtailed. Training would have to be
offered in areas such as FAA basics, FAA Safety Assurance System etc. so that they
could acquire the latest skills and capabilities.
The evaluation of Company B has shown that even though its performance is
similar to that of Company A, there exist further areas of improvement. Some of the
benefits that the TransGlobal Airlines business would be able to enjoy by acquiring it
include the ability to capitalize on the aircraft which have a better average age and
the ability to operate in a flexible and adaptable manner in the evolving airline
industrial setting. Some of the key opportunity costs that may arise for TransGlobal
in case it decides to acquire Company B include the need to spend money to offer
training to the staff members and the costs relating to the introduction of an industry-
standard customer portal that will help the business to appeal to the target audience
in the market setting. The company-based data that has been captured in the balanced
scorecard tool has played an instrumental role to aid in the exhaustive evaluation of
both Company A and Company B. The detailed analysis has helped to identify the
company that the TransGlobal Airlines business must acquire in order to expand in
the unpredictable and evolving airline market setting.
Recommendation
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After performing the in-depth and thorough evaluation of Company A and
Company B by using the Balanced Scorecard tool, a feasible recommendation has
been made for TransGlobal Airlines. The company must acquire Company A because
it would give rise to increase benefits in comparison to the associated opportunity
costs. Such an acquisition strategy will enable the business to enter into the Caribbean
Islands market setting and target potential customers in the luxury vacation area. In
addition to this, by acquiring Company A, TransGlobal would be able to leverage the
strengths of the newly acquired firm and create value for the target market audience
in the airline market.
The acquisition strategy that has been recommended for TransGlobal Airlines
would support the goals and objectives of the entity. It would create an opportunity
to grow in the market setting and offer its airline solutions in new regions. In the
highly competitive airline market setting, the firm would be able to increase its
aircraft fleet and offer quality flying services to customers in the Caribbean. Thus,
acquiring Company A seems to be more beneficial and feasible for TransGlobal
Airlines to achieve its goals.
References
Straková, J., Pártlová, P., Dobrovič, J., & Váchal, J. (2018). Situational analysis and
its role in the process of strategic business management. Polish Journal of
Management Studies, 18.
