This case tracks the transformation and transition ofTurkish Airline Company from a regional player to a global powerhouse. The management and the CEO of the airline have planned to double the size of the company and become one of the top ten industry players in 2013 by placing an order of 212 aircrafts at the start of the year 2013. As the fleet of the airline grows, it would position the company differently within the international market by allowing the Turkish Airline Company to increase its aircraft utilization, increasing the number of routes, boosting revenues by flying to more destinations and also achieving a higher cost efficiency.
Along with these advantages, there would also be a number of negative factors associated with this expansion. For instance, the planned expansion would also increase the already intense competition with the other major European Giants operating in the market such as British Airways, Air France and Lufthansaand with the fast growing Gulf Airline Companies such as Qatar Airways, Etihad and Emirates(Zalewski, 2013).
There are a number of critical questions which are faced by the CEO of the company such as how would the company sustain its profitability after the expansion, how it would manage its operational complexities and other external factors and how the management would be hiring the best of the people and continuously differentiate itself in the continuously changing airline industry. Kotil has set objectives to grow the airline by 15% per year and if this is achieved then the company will have a market share of 5% to 6% over the period of the next 10 years(Hofmann, 2013). A best strategy needs to be devised for Turkish Airline Company to make this expansion a success.
A detailed strategic analysis needs to be performed for Turkish Airline Company in order to identify the current state of the company in the middle of 2013, the future challenges faced by the company and how to leverage its critical success factors. After this, possible strategic options will be developed and the best one would be chosen for the company.
First, we begin with the brief Turkish aviation market analysis and the domestic positioning of Turkish Airline Company.
There has been a steady growth within the Turkish aviation market since the year 2004. Since the deregulation in the year 2003, there has been a tremendous growth in the year 2004 of about 60%, in which the Turkish Airline Company was able to increase its share and growth(CAPA, 2013). However, since there had been more entry into the domestic market of Turkey therefore, the domestic market for Turkey had declined by10% in 2012 along with a steeper decline of the overall domestic passenger market in Turkey. This is clearly depicted in the chart shown in exhibit 1 in the appendices.
However, despite these challenges the Turkish Airlines Company had achieved a significant position within the international and its domestic market…………………….
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