AboutLeo Lingham Expertise In Managing a business, I can cover all aspects of running
a business--business planning, business development, business auditing, business communication, operation management, human
resources management , training, etc.
Experience 18 years of working management experience covering such areas
as business planning, business development, strategic planning,
marketing, management services, personnel administration.
PLUS
24 years of management consulting which includes business planning, strategic planning, marketing, product management, training, business coaching etc.
Please help me to solve the following case study questions. I am an MBA student and getting problem with two of the case study related questions
Sir it’s very urgent for me, please provide me your kind help
Thank you
Have a nice time
1 - Southwest focuses on Unit costs
The moneymaking formula of southwest airlines leans heavily on the number 7.5. That’s how many cents the Dallas-based carrier typically pays to fly one plane seat for one mile, what airline bean counters like to call a “Unit”.
Southwest’s competitors pay 9, 10, 11 cents or more, giving the low cost airline a crucial cost advantage that has financed its three decades of profitability. But southwest is feeling inflationary pressure that could force up its unit costs. The carrier recently has signed or extended five labor contracts that include wages increases and more benefits for its workers. A sixth labor deal (for its fight attendants) could be near.
So southwest has turned to technology and automation to keep its cost at just slightly below that golden 7.5 cent mark. “That number is going to creep up and they admit it because there’s a lot of pressure on it,” said Ray Neidl, and airline analyst. But they have been doing a really good job on managing their costs”.
Spending millions on technology today will rein in costs for the long term, southwest’s executives say.” This is all about trying to do the task at hand more efficiently,” said Gary Kelly, Chief Financial officer and the technician behind the cost-containment efforts.
High tech is already paying dividends for southwest, which gets more than half its customer revenue from its online booking site, http://www.southwest.com. That’s an industry benchmark. But in other areas, such as maintenance, southwest has been decidedly low tech. until recently, each airplane repair created a huge paper trail, forcing mechanics and managers to manually enter loads of data into an outdated computer system and sort through reams of data. Now the company has installed computer programs that keep track of maintenance for the carrier’s 390 planes.
Questions:
1 – Explain whether you would classify the unit cost of flying one plane seat for one mile as a fixed cost or a variable cost.
2 – Is southwest management being realistic in focusing so much attention on the 7.5 cents figure?
3 – Other than making good use of technology, how else might southwest cut costs?
Case study - 2 – Sealed Air Corporation: Delivering Package Solutions
Sealed Air Corporation is a global leader in providing business customers with performance solutions for food, protective, and specially packaging. Best known for its bubbewrap cushioning material, the firm has pioneered a number of packaging innovations that have sustained a remarkable pattern of sales growth for more than two decades. Sealed Air derives 40 percent of its revenue from protective packaging products that provide superior protection against shock, abrasion, and vibration, compared with other forms of packaging. Such packaging solutions are embraced by the long standing customers, like Mikasa, a company that offers delicate china, dinnerware, steamware, and decorative accessories. In addition to protective packaging Sealed Air generates 60 percent of its sales from food and specialty packaging products. These materials are sold to food processors and food service organizations for packaging produce, dairy products, smoked and processed meat, fist bakery items, and related products.
Sealed Air has mot than 1200 field sales and technical support professionals worldwide, many of whom are food scientists or packaging specialists. Using a consultative selling approach, Sealed Air incorporates both packaging materials and specialized equipment to provide a complete packaging system solution. In turn, the firm supports the product development and package design activities of its customers through 35 package design and food science laboratories around the world.
Questions:
1 – Customers like Mikasa that desire protective packaging solution
2 – Customers like Oscar Meyer or Carnation that seek food packaging solutions. Drawing on the balanced scorecard and the strategy map, how would Sealed Air’s internal business processes (for example, new product development) differ for the protective packaging business versus the food packaging business? From a learning and growth perspective, are different employee competencies’ required to serve one customer group versus the other? Discuss
Answer DINESH,
HERE IS SOME USEFUL MATERIAL.
REGARDS
LEO LINGHAM
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1 – Explain whether you would classify the unit cost of flying one plane seat for one mile as a fixed cost or a variable cost.
IT IS A FIXED COST.
ALL OTHER COSTS ARE OPERATIONAL COST AND
HENCE VARIABLE COST.
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2 – Is southwest management being realistic in focusing so much attention on the 7.5 cents figure?
THE SOUTHWEST MANAGEMENT
-is not realistic, as the cost of the plane goes up,
this will also go up.
But it is an useful tool to focus on ''COST CONTROL''.
PSYCHOLOGICALLY, THIS FIGURE BECOMES THE FOCAL POINT,
AROUND WHICH THE COST CUTTING EFFORTS ARE BUILT.
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3 – Other than making good use of technology, how else might southwest cut costs?
THE USE OF TECHNOLOGY WOULD HELP
TO SOME EXTENT. OTHER AREAS THAT COULD
CONTRIBUTE ARE
-increase the percentage of sales through ''ONLINE BOOKING''.
-increase the occupancy rate [ NO. OF ''BUMS'' ON THE SEATS]
-OFFER NO FRILL SERVICE ON THE PLANE.
-improve the staff skills.
-cut the manpower to the minimum.
etc
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Questions:
1 – Customers like Mikasa that desire protective packaging solution
2 – Customers like Oscar Meyer or Carnation that seek food packaging solutions.
Drawing on the balanced scorecard and the strategy map, how would Sealed Air’s internal business processes (for example, new product development) differ for the protective packaging business versus the food packaging business? From a learning and growth perspective, are different employee competencies’ required to serve one customer group versus the other? Discuss
IN TERMS OF SELLING SKILLS,
THE CONSULTATIVE SELLING IS THE IDEAL
FOR BOTH THE PRODUCT GROUPS.
CONSULTATIVE SELLING
-this is a selling style,in which the salesperson acts as a consultant
to the prospects and offers a solution to the prospect's problems.
THE COMPETENCES THAT ARE COMMON
FOR BOTH THE PRODUCT GROUPS.
-consulting
-problem solving
-diagnosis
-evaluation
-meeting facilitation
-translating ambiguous business needs into strategies
-partnering business opportunities
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THE DIFFERENT NEEDS OF THE TWO PRODUCT GROUPS
ARE IN THE AREAS, SUCH AS
1.TECHNICAL KNOWLEDGE OF THE MATERIALS USED.
2.TECHNICAL ASPECTS OF THE PHYSICAL DISTRIBUTION
OF THE RESPECTIVE PRODUCT GROUPS.
Physical distribution can be viewed as a system of components linked together for the efficient movement of products. Small business owners can ask the following questions in addressing these components:
Customer service—What level of customer service should be provided?
Transportation—How will the products be shipped?
Warehousing—Where will the goods be located? How many warehouses should be utilized?
Order processing—How should the orders be handled?
Inventory control—How much inventory should be maintained at each location?
Protective packaging and materials handling—How can efficient methods be developed for handling goods in the factory, warehouse, and transport terminals?
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