Summary of Situation
The company’s analysis shows that it suffers from some serious safety issues that should be taken into consideration:
- Recent reports show FAA safety violations, meaning that the company might have problems with aircraft maintenance (SNHU, 2021).
- The technical repairs associated with the discussed flights also demonstrate the problematic condition and the necessity to upgrade it (SNHU, 2021).
- The crew’s inability to act correctly results in clients’ dissatisfaction, which is another critical aspect that should be considered (SNHU, 2021).
Regarding these problems, the company will have to spend additional funds to manage these issues, restore its image, and improve relations with clients. It also means that the financial aspect will become worse, and the need for additional investment to respond to these problems will emerge.
Impact other than Revenue
The mentioned factors will critically influence its image, reputation, and clients’ readiness to use its services. The given aspects are fundamental for any company as they add value and ensure passengers are ready to use their services (Cook & Bruce, 2017). Under these conditions, accidents in the air presupposing the need to repair a plane might damage the company’s position in the market and precondition a severe decrease in its value. Additionally, the discovered issues might influence customer retention rates as they are attained by the quality of services and safety (Cook & Bruce, 2017). The carrier failed to provide the desired offering, meaning that it will face the need to focus on this aspect and improve it by offering discounts or rewards to attract new passengers.
Impact on Performance Analysis
The discovered information should also be considered when performing the analysis of the company. The initial research discovered technical issues that should be improved to attain better performance (SNHU, 2021). Moreover, the lack of attention to employee safety training was found as one of the critical factors leading to the high level of risks (SNHU, 2021). Regarding this data, it is vital to devote more attention to investigating the carrier and the history of its flights, human management and experience of the crew, similar accidents, and reports about the maintenance procedures (Cook & Bruce, 2017). These actions are vital for the in-depth analysis of the case and the acquisition of the entire company’s image. Otherwise, there is a high risk of missing significant factors influencing the conclusion. Additional risks include the chance that other spheres of the unit’s work might have multiple drawbacks caused by the lack of attention, poor management, or human factors.
Impact on Acquisition Recommendation
Under these conditions, it is recommended to avoid acquiring the company and monitor its performance to handle emerging safety concerns and continue its evolution. The future deal can only be considered if all discovered issues are managed and altered correctly. It is vital to ensure that personnel safety training, technical issues, and customer service are addressed effectively and are improved. Otherwise, the acquisition should be canceled as there is a high risk of a decrease in customer retention rates, reduced revenue, and a worsening of the company’s value, which will impact the results of the deal and future opportunities.
Conclusion
Altogether, safety issues in Company B influence its performance in multiple ways. These include customer retention, the brand’s reputation, its financial aspects, and the ability to guarantee safe flights. The firm will have to spend available resources to manage these issues and improve areas associated with these factors to recover. For this reason, it is recommended to avoid purchasing it to ensure these issues are addressed and problems resolved. If there are no appropriate measures, the company will collapse as new accidents of this sort will emerge and demand more significant investment and effort to respond to them.
References
Cook, G., & Bruce, B. (2017). Airline operations and management: A management textbook. Routledge
Southern New Hampshire University (SNHU). (2021). Safety issues in Company B. Web.