Competitive Strategy for Internal Resources and Capabilities

Question: Discuss about theCompetitive Strategy for Internal Resources and Capabilities. Answer: What is the Spirit Airline strategy? The strategy applied by Spirit Airline is a business strategy. Typically, there are two types of strategies that can be considered in this case. The business strategy and corporate strategy. A corporate strategy relates to the decision of a firm to determine what kind of a business activity to undertake and then commit the resources necessary for the task (Barnett 2004). In this case the strategy of Spirit Airline is a business strategy because an activity have been selected. All the company need is to have a competitive advantage in the industry. Assess spirit Airline strategy in terms of its fit (with its business environment and its internal resources/ capabilities). The business strategy applied by Spirit Airline have a perfect positive correlation with business environment along with capabilities to undertake the business. First, Spirit Airline is an ultra-low-cost company. This low fare airline make affordable offers to the customers so as to enable them move from one destination to another. Therefore, by lowering the costs in this business environment, Spirit Airline will be able to attract more customers as compared to other airlines. Therefore, the business strategy fit the company fully (Thomas 2009). In terms of resources and capabilities, Spirit Airline uses its ULCC business model to offer low and affordable travel fares to its customers. This is associated with a range of optional services that they offer. In that case, the customers are in a position to select the options they find fit for them from that list produced by the company. Spirit Airline have capability of lowering their travel costs and at the same time able to maintain hu ge profit margins. Assess spirit Airline strategy in relation to its financial performance (ROE, ROA, and fuel/Turn). Spirit Airline business strategy have enabled the company to generate huge profits. The financial performance of Spirit Airline have been facing serious troubles in the past. However, by application of business strategy, the company have been able to possess an upward trend in terms of financial performance. Again, in terms of fuel, there have been some benefits associated with reduction in prices of oil. This have boosted the financial performance of Spirit Airline business to a larger extent. Again, there has been recovery of the US economy from great depression which as well play a significant part in financial performance (Saunders, Lewis Thornhill 2009). In terms of ROE, Spirit Airline have been able to utilize ultra-low cost structure to attain a manageable operation costs which have been facilitated by utilization of aircraft services, high carrying capacity, dedicated workforce along with well-planned flight schedules. Again, there has been reduction on costs associated with sales, marketing as well as in distribution. Finally on ROA, Spirit Airline Company have been able to achieve financial performance by using the opportunities to position or to strategize itself for growth and development (Ryan Deci 2017). There has been several networks that have opened up. Thus, the market for the services offered by the company are increasing. There are still more targeted markets such as Latin America and Caribbean. The existence of niche markets along with new opportunities in Latin America and Caribbean have assisted the company to focus on financial performance. What can we learn from financial data about the sources of its performance compared to competition? The financial data offered for Spirit Airline are indicating a particular trend on operating data as well as in the financial position of Spirit Airline Company. The cash flow statement also offer substantial financial data on performance of Spirit Airline Company. Each year from 2012 to 2015, the net income generated by Spirit Airline Company tend to be an upward trend. This is a very positive trend in business (Richard 2013). It indicate that the business is undergoing growth and development. If this is compared to what the competitors have dine in this field of business, then we can be able to indicate whether Spirit Airline have achieved competitive advantage. On competition, it is very clear that airline industry tend to be very competitive. This implies that, Spirit Airline need to come up with strategies to outdone these competitors and in return gain the competitive advantage (McGregor 2012). From the financial data, it is clear and distinct that Spirit Airline have been able to outdo the competitors. This may have resulted from application of business strategy such lowering travel costs and offering a range of options to the consumers on the service list. What threats does spirit Airline face; how should it counter these threats? The main challenge that Spirit Airline face in this industry is competition. There are a number of Airline companies that are in operation. In that case, the whole industry is affected by intense competition which result to dismal profit margins (Maslow 2013). To counter this problem, Spirit Airline Company need to use business strategy to attract consumers and in return attain competitive advantage. What threats to its continuing growth and prosperity should spirit airline be most concerned with? Spirit Airline Company should be concerned with treats such as poor economic conditions that can affect business growth, instability in capital structure to expand the business and risks of uncertainty relating to airline services. What changes/ recommendations in spirit airline strategy would you recommend? My recommendation to business strategy on Spirit Airline is based on the future of Airline industry. In the near future, the world will become a global village (Weiss 2013). The company should revisit the strategy to figure out whether it is possible to offer airline services to many more destinations. The company also need to apply the modern technology in airline industry so as to facilitate the underlying operations. References. Barnett, MB 2004, Rules of the World: International Organizations in Global Politics, Cornell University Press. Maslow, AH 2013, A Theory of Human Motivation, Start publishing LLC. McGregor, D 2012, the Human Side of Enterprise, New Yolk, 21. Richard, A 2013, Job Satisfaction from Herzbergs Two Factor Theory Perspective, Grin publishing. Ryan, RM., Deci, EL 2017, Self-Determination Theory: Basic Psychological Need in Motivation, development and Wellness, The Guilford press. Saunders, M., Lewis, P. Thornhill, A 2009, Research methods for business students, Pearson. Thomas, KW 2009, Intrinsic Motivation: What Really Drives Employees Engagement, Berret-Koehler publishers. Weiss, TG 2013, the United Nations and Changing World Politics, Westview Press.