2. Agenda
• Articulate the Value Proposition
• Specify the Target Segment
• Determine Competitor
• Evaluate the Value Chain and Cost Model
• Evaluate the Value Network
• Determine the Revenue Model
• Determine the Critical Success Factors
• Analysis Grid
3. Value Proposition
• Vast network
– 3,500 flights daily
– Domestic and international flights
– New and upgraded airplanes
• AAdvantage Frequent Flyer Program
– World’s first and largest
4. Target Segment
• Premium Customers
– Business and International Travelers
– OneWorld Alliance
• The “new American”
– Innovative and Efficient
– Increased social media presence
5. Competitors
• Domestic Carriers
– Legacy
– Low-cost leaders
• International Carriers
• Substitutes
– Alternate forms of transportation
– Advances in technology
6. Value Chain and Cost Model
• Inbound logistics
– Jet fuel
• Operations
– Fuel Smart Program
• Service
• Procurement
– Planes
• Infrastructure
8. Revenue Model
• Filed for bankruptcy
– Developed the “new American”
– Merger with U.S. Airways
• Negative net income
– $2.2 billion in restructuring costs
• Premium Customers
10. Analysis Grid
• Focus on financial position
– Merger with U.S. Airways
• Targeting Premium Customers
– High-profit flights
Analysis Grid American
Airlines
Southwest JetBlue U.S.
Airways
Delta
Airlines
Value Proposition 3 4 4 4 4
Target Markets 2 5 3 3 4
Value Chain Cost
3 4 4 3 3
Model
Value Network 4 3 5 3 5
Revenue Model 1 5 3 4 3
Strategy 3 3 5 4 4
11. Final Notes
• December 9, 2013
– Merger with U.S. Airways finalized
– Set to become the largest airline in the world
12. Questions or Comments?
• Contact Information
– Chris Dale: cdale81@lakers.mercyhurst.edu
– Alex Edwards: aedwar44@lakers.mercyhurst.edu
– Brandon Thomson: bthoms45@lakers.mercyhurst.edu