Delta Leadership

In 2005, under the leadership of Leo Mullin, Delta Airlines, the 3rd largest airlines in the U.S.entered into bankruptcy.  The terrorist attacks  of 9/11 rocked the industry to its core; accompanied with high fuel prices and competition from low-fare competitors, leadership had no other option.

Strategies that led to Bankruptcy

• 2001 Labor deal with pilots that paid salaries in the $300,000 range.
• launch of Song discount airlines to compete against JetBlue (very high exit barrier costs)
• Management always had to have the biggest and the best, it was "The Delta Way"

"The Delta Way" almost caused Delta Airlines to not exist.

With the dismissal of Leo Mullin, Gerald Grinstein stepped in as CEO and had to get all employees on board to believe in his strategy.  Signs of a good leader is to lead by example.

• Deep pay cuts for everyone. (he took a 25% pay cut)
• Working with creditors

By 2009 Delta Airlines was out of bankruptcy and with a new CEO, Richard H. Anderson.  Under his strategic leadership Delta Airlines has maintained growth with the merger of Northwest Airlines.

Strategy

• Joining forces with Northwest added strength in Asia combined with their stronghold in Europe.
• Built around paternalistic culture

The strategic leaders of Delta Airlines continue to lead by example in making the right decision at the right time.

  http://www.businessweek.com/magazine/content/09_21/b4132036798289.htm

Chap 1

From its humble beginnings in 1924 as a crop dusting operation, Delta Airlines company perspective has given them a competitive advantage built on safe and reliable air travel, unique customer service, and Southern hospitality.  Their vision is what sets them apart from other airlines because of the willingness to go above and beyond in providing superior customer service and always exceeding customers' expectations in their transportation service. 

When using The Business Strategy Diamond, Delta Airlines is able to answer 5 major questions to make sure that their strategy fits together.

Arenas:

• Currently Delta Airlines operates as a passenger, cargo, & mail carrier and provides 13,000 daily flights.
• They pioneered the "spoke and hub system" meaning they provide service to smaller cities (the spoke) and instead of flying them to their destination non-stop they bring passengers, mail, and cargo to major cities (the hub). This allows for more a more efficient use of resources. 
•  To read more go to http://en.wikipedia.org/wiki/Spoke-hub_distribution_paradigm
• The market segment is divide into 2 targeted segments
• Business Travelers - the most profitable
• Leisure Travelers - not as profitable

Vehicles:

• From the beginning Delta Airlines used acquisitions or mergers with other carriers as a strategy to grow their operations to what you see today.  Below are the airlines that have been acquired over the years.
• Chicago and Southern Airlines
• Delaware Airlines
• Northeast Airlines
• Western Airlines
• Pan-Am Airlines
• Northwest Airlines (most recently)
• Delta has continued to expand their operations through joint ventures with Air France-KLM and Alitalia. 
•  http://www.delta.com/about_delta/corporate_information/index.jsp

Differentiators:

• Delta Airlines has a long standing tradition of providing excellent customer service
• They are looked upon as a leader in the industry.
• They are not a low-cost leader and create value through pricing. 
• The product that is offered is reliable.

Staging & Pacing:

• In the 90's Delta Airlines acquired Pan-Am Airlines and expanded their presence as an international carrier with new European routes. 
• With the recent acquisition of Northwest Airlines, Delta has expanded into the Asian markets.

With answering all these questions Delta Airlines is able to shape an Intended Strategy into a realized Strategy that will help in the implementation process.

Welcome To Tamera's Blog

The company that I plan to discuss on my blog is Delta Airlines.  I look forward to you reading what I have to say and your comments are appreciated. Now let's get this semester started.