Global Challenges Facing The Company Commerce Essay

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Describe the type of international strategy the company has chosen. The company has chosen the strategy of the international market expansion. In fact, the company aims at the extension of its market share and operations that are currently conducted practically worldwide. In this respect, it is important to lay emphasis on the fact that the company is a participant of airline alliances that facilitates the penetration of new markets and expanding the business internationally. At the same time, the strategy of the international market expansion is crucial in the contemporary business environment, when the competition between airline companies grows steadily, whereas protectionist policies conducted by states tend to disappear that increases the competition even more.

2. Explain what means the company has used to expand internationally.

To implement the strategic goal of Lufthansa, the company had to focus on the development of effective strategies that could help the company to expand its business internationally. In this regard, the company used international alliances as one of the most effective ways to expand its market share fast and successfully. As the matter of fact, international alliances in the aviation industry are widely-spread in the contemporary business environment. Many companies participate in international alliances because this is often the only way to survive in a highly competitive environment. However, Lufthansa was not satisfied with its participation in international alliances. In addition, the company implemented the total quality management strategy which led to the high level of the customer satisfaction because of the high quality of services and high reliability of the company. As a result, customers grew confident in the reliability of the company and preferred Lufthansa to other companies. Furthermore, the company paid a particular attention to the training of its personnel and human resource management. In fact, the human resource management complemented the total quality management because employees working at Lufthansa should meet quality standards established by the company.

3. Identify and describe the elements and objectives of Lufthansa's cooperative strategy.

The cooperative strategy was one of the crucial conditions of the overall success of Lufthansa in international markets. The cooperative strategy allowed the company to improve its position in the market and expand its business internationally through the close cooperation with other companies. The main goal of the cooperative strategy used by Lufthansa was the international market expansion. Through the close cooperation, the company has gained the support of other companies that facilitated the penetration of new markets. At the same time, the development of the cooperative strategy allowed the company to increase the level of the customer satisfaction because customers could receive services of the higher quality at affordable prices. The cooperative strategy was carried out through the participation of Lufthansa in international alliances. On the other hand, it is worth mentioning the training of employees as a part of the cooperative strategy of the company. What is meant here is the fact that through training the company shared knowledge among employees, whereas the involvement of employees from other cooperative companies opened large opportunities for sharing knowledge and experience of Lufthansa’s employees with their colleagues from other companies. Eventually, the close cooperation contributed to the consistent improvement of the marketing position of Lufthansa in international markets.

4. Describe the uncertainties and challenges related to operating beyond the company's national boundaries.

At the same time, the implementation of the cooperative strategy and the international market expansion conducted by Lufthansa raised a number of problems and challenges the company had to overcome to succeed in its strategic plans and to meet its strategic goals. First of all, it is important to lay emphasis on the fact that Lufthansa faced the problem of the penetration of new markets through overcoming high entering barriers. In this respect, it is worth mentioning the fact that the company had to overcome not only the resistance of opponents but also the protectionist policies conducted by the state. Many states conduct protectionist policies and they had to overcome barriers established by the state and by the rivals. Furthermore, the company had to promote its brand among customers in new markets. At first glance, Lufthansa is a well-known company operating in many countries of the world. Nevertheless, customers often felt anxious to use services of Lufthansa because the company had just entered the local market. Finally, the economic recession and the permanent threat of terror attacks affected consistently the marketing performance of the company and diverted many customers from using its services.

5. Describe the potential risks of cooperative strategies.

The use of cooperative strategies opens good prospects for companies like Lufthansa because the company can improve consistently its marketing position through the close cooperation with its partners worldwide. At the same time, the cooperative strategy raises inevitably numerous risks and threats. To put it more precisely, the implementation of the cooperative strategy imposed certain obligations on Lufthansa that naturally limited the company’s opportunities to expand its market share fast. What is meant here is the fact that the implementation of the cooperative strategy implies that Lufthansa will get certain preferences and support of its business partners but, in response, Lufthansa has to provide its partners with respective preferences and opportunities using its facilities and aircraft fleet. As a result, the company needed to cooperate with other companies and to adapt its market strategy to needs of its business partners. Furthermore, Lufthansa faced the risk of losing its independence as it became the member of international alliances. This means that the company had to coordinate its policies and actions with alliance members. Naturally, this also limited consistently policies conducted by Lufthansa to the extent that the company may face a risk of being the subject to merger or acquisition.

6. Explain the use of organizational structure and controls to effectively support Lufthansa's strategy.

The implementation of the cooperative strategy led to consistent changes not only in the interaction of the company with its partners and rivals but also to internal changes. In this respect, the organizational performance was highly dependent on the structure of the company and its policies. It proves beyond a doubt that the company was vulnerable to the impact of its cooperative strategy. In actuality, the company faced the problem of the reorganization which was needed to expand its business internationally fast and effectively. What is meant here is the fact that the company needed to increase its fleet and to purchase new aircrafts. Furthermore, the company needed to employ new specialists and to train them to match the high quality standards established by the company. In such a situation, the company had to transfer its experienced employees to countries, where Lufthansa had just started its business. They trained local employees and shared their knowledge and experience. However, it was difficult to find employees willing to transfer abroad. As a rule, the company used financial motivators to transfer employees abroad. Finally, the extension of the company provoked structural changes because the company grew larger and employed professionals than it had before the international market expansion. As a result, the company needed to adapt new approaches to management and to change its organizational structure.

7. Describe what strategic leadership actions should be recommended for developing human capital at Lufthansa.

In such a context, the strategic leadership played a particularly important part in the successfully implementation of the strategy of the international market expansion conducted by Lufthansa. At the same time, actions of Lufthansa’s leaders were not enough to reach a tremendous success. Moreover, the company still faces substantial difficulties with the maintenance of a stable marketing performance. In this respect, it is possible to recommend changing the strategic leadership of the company. First, the company needs to elaborate the strategy of its further development. However, this strategy cannot be imposed on employees by the company’s leaders. In stark contrast, leaders should stimulate employees to participate into the development of the program of strategic development of the company. In such a way, through the participation in the elaboration of strategic plans of the company, employees will support the strategic plan and they will follow the lead of managers because they are confident in their own contribution into the strategic plan and they accept this plan.

8. Describe what strategic leadership actions should be recommended for establishing an effective organizational culture at Lufthansa.

To establish an effective organizational culture, Lufthansa has to elaborate universal norms, standards and principles, according to which all employees and managers of the company should act and work. This means that the company should develop the common ethical and professional ground on the basis the personnel will work. Employees should know the code of conduct of the company and accept it. On the other hand, managers should respect needs and wants of employees to avoid internal conflicts and to create a positive ambiance within the organization.

9. Describe what strategic leadership actions should be recommended for promoting an entrepreneurial mind-set at Lufthansa.

At the same time, to keep growing, Lufthansa needs to promote the entrepreneurial mind-set. What is meant here is the fact that the company should stimulate innovative activities, the introduction of innovations and the elaboration of new approaches to business and provision of services by the company. At this point, it is worth mentioning the fact that the company should reward employees and managers introducing innovations and innovative approaches. In addition, the company should stimulate the competition between employees and managers, who can improve the organizational performance and marketing position of the company. For instance, employees and managers introducing a successful innovation or finding the way to save costs or increase benefits of the company should get the promotion and financial reward for their efforts to improve the marketing performance of the company.

10. Describe what strategic leadership actions should be recommended for reducing complexity at Lufthansa.

The reduction of complexity at Lufthansa is a key toward the successful marketing performance and implementation of its current marketing strategy. In this respect, the company has to promote team management and reduce the pressure on units of the company from the part of its headquarter. In other words, the company should grant its units with a high degree of autonomy. In such a situation, employees will be able to realize their full potential, they will develop their innovative activities to reach the goals set by the company. Therefore, the aforementioned steps are likely to lead to the optimization of the marketing performance of the company and successful implementation of its business strategy.

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