The prevailing technology makes it possible for quick advancements to be made within the industry for the benefit and satisfaction of consumers. The use of computer design software in modelling airframe structures was a great boost to the company and industry at large.
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This saw improvement in manufacturing and tooling capabilities. Strength could be drawn from the talented and experienced staff that provided the possibility of blending superior performance capabilities. Everyone within the management team was an experienced pilot and had flown different types of aircrafts.
The employees were well acquainted with speed and innovation processes and understood so well the importance of moving with time to avoid unnecessary competition. The innovation process was scheduled to run for 24-hours on a daily basis with employees working in shifts with the management team comprising of highly motivated workers who worked under very minimal supervision (Hedberg et al 258-263)
The company’s ability to set up an engineering centre having all the characteristic capabilities of big aircraft companies made it possible for them to compete favourably within the industry. The presence of the tooling mill made it possible for renovation and change of designs to fit the recommended tasks.
The team of AAI engineers ensured the innovation of smart tunnel device which was used for the purposes of adjusting the centre of gravity and also enabled the airframe to accommodate wide range of engines of different models (Hedberg et al 263).
The company’s A500 model aircraft had the capability of serving two potential markets at the same time; this was because the model had capabilities of allowing both private and professional usage. In private flown, the owner of the aircraft had the benefits of being the pilot in command while for professional non-owners acted as pilots. The engineers had worked extra to ensure that the aircraft system could easily be accessed for inspection purposes ensuring low costs of operation (Hedberg et al 268).
The development of A700 aircraft increased the capacity of passenger carriage as well as flight operations. The speed by which it was built proved the proficiency and credibility of Adam’s engineers which was one point of their great strength. The emergence of this aircraft brought about one of the most efficient modes of air transport.
The jet was light as compared to other American models which were little oversize, hence had the capability of covering distances within less time possible. The reduction in size and weight of the aircraft made it more convenient for use as well as improving the efficiency of flight operations.
The new aircraft A700 also brought the possibility of calculating the travelling cost per passenger ensuring affordability to all travellers (Hedberg et al 271). The company has the capacity of accommodating around one hundred planes annually and has built assembly points that could accommodate over thirty five planes per year. The marketing principles employed by the company also appear to be very strong, since it utilizes the media so well (Hedberg et al 273).
The company experienced the development of heavier and more expensive aircrafts; this was below the expectations of the company. The process of bringing new airplane into the market was a challenge to Adams Aircraft Company because of the high costs involved as well as time duration for the completion of the process.
The in-flight calculations revealed that the M-309 aircraft had small empennage at first and also the position of the door made access to cabin more difficult. The company could not raise the start-up cost of nearly $250 million due to the fact that there was no eminent success in airline industry by the time the company begun (Hedberg et al 263-264).
The use of manual equipments made it difficult for the company to make appropriate designs at the first attempt. They had to perform several attempts till right design is found, this was quite time consuming and made it difficult for Adams Airline to compete with computerized companies. There was need for the company to adopt computerized industry concept which was a prerequisite to overall development of aviation manufacturing company (Hedberg et al 270).
Despite the presence of many pilots, there was lack of new products within the industry. The demand for air travel was high contrary to low services that were rendered by the few available airline companies (Hedberg et al 261).
The building of production airplanes made it convenient for those who enjoyed travelling by air. These airplanes used single engines instead of twin engines and this provided opportunity for innovation. There was also the opportunity of developing single airframe that could carry both jet engines and twin pistons.
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Other airlines had made successful entry to the market which provided opportunity for other airlines to venture based on new airframe designs. The company had the chance of utilizing the new technology by linking to approval body through internet instead of the manual process. This could help in speeding up the process and making appropriate adjustments on time. The electronic process also provides the company with the opportunity of undertaking most accurate documentation (Hedberg et al 266).
The industry has numerous underutilized regional airports that require the attention of the aviation industry. The opportunity had not been fully utilized due to little exposure observed on the side of regional travellers who were used to travelling only in small airports. There was need to beef up the air taxi system which required more airplanes to help manage the passenger capacity.
Some of the threats faced include the rising maintenance and travelling costs within the industry. There was also the threat on how to develop a new culture within the industry that could accommodate every performing sector. Threat also came from other powerful aircraft builders who invented powerful design machines driven by very expensive mainframe computers (Valentin; Hedberg et al 266)
Another threat was working with FAA, the authority that ensured type certification process. FAA was never moved by the design but by the surety that the model was safe for consumer use. This process required lots of finances and was also time consuming posing one of the greatest challenge to the company. There was also the disadvantage posed by the gridlock due to the congestion within the airline system.
The presence of critics offered some threat to the company; they would sell the ideas negatively to consumers making it a big challenge for the company to reverse customer’s negative thoughts about their designs and improvements. Besides, the achievement on the network coverage required high operating costs to ensure success (Hedberg et al 266).
Implications of the Analysis using Porter’s Five Forces Model of Competition
Porter’s uses the five forces to give appropriate strategies that help in analyzing company’s position against any competitors within the market. The forces used include; the power of suppliers, new entrants, threats posed by substitutes, customers power and rivalry.
Threats posed by new entrants
The aviation industry is one of the industries with extremely high start-up costs which guarantees low rate of new entrants. Adams Aircraft Company has explicitly utilized their technological know-how and the experiences of the few staff members. The company has basically based their sales on stable brand name based on viable technology which has made it difficult for the new entrants to penetrate the industry (Davenport).
Status of the suppliers within the market
The business within the aircraft industry is maintained using constant supply of airframe parts from few suppliers within the market. The larger companies like Lancair and Cirrus, introduced computerized design and modelling software.
Adams airline made the position within the market to be low since they were still using manual equipments that could be cheaply obtained like physical scale models. Since most of the companies within the industry switched to computerized models, the suppliers of manual equipments had to adjust on their prices and quality of their models in order to attract bids from the big companies. This clearly shows that the competition was too high leaving the suppliers with tough decisions to make (Porter).
The status of Buyers within the market
Consumers demand for top service designs and aircrafts that are easy to maintain. Professionally flown aircrafts focuses on lots of issues that would ensure comfort to the passengers. The focus is geared towards seat designs, availability of luggage area and other sanitary and requirements and also the presence of entertainment system. There is also the need to include pressurized cabin to make the plane all weather, besides all these the overall design must look attractive to the consumers (Hedberg et al 268).
The costs involved when switching to any option is low making the consumers to move at will. This is brought by the differences in cost, quality and services provided. This has made the power of buyers to be strong within the aviation industry. The companies can only find it difficult when differentiation is done within the computer operating systems (Porter).
There are numerous substitute aircrafts within the industry that are readily available for sale. This calls for Adam’s Airline to put extra effort in order to convince customers of the superiority of their airframe designs. The use of the computer has increased the possibility of switching individual units keeping other things constant (Boone and Kurtz).
Level of Rivalry
Adams Airline Company faces other competitors with the potential of commanding larger portion of the market share. These include Lancair, Cirrus and Beechcraft amongst others. The competition remains high since the switching costs are very low making it very tricky for expansion of the company (David).
Boone, Louis and David, Kurtz. Contemporary Marketing. Fort Worth, TX: Dryden Press, 1992.
David, Fred. Strategic Management: Concepts and Cases. 13th ed. Vol. 306. Upper Saddle River, NJ: Pearson Prentice Hall, 2007. Print.
Davenport, Thomas, “Putting the Enterprise into the Enterprise System”. Harvard Business Review 76. 4 (1996):121-132.
Hedberg, Carl, Hamilton, John and Bygrave, William. Case 13; Adam Aircraft. Babson College, 2004. Print.
Porter, Michael, Competitive Advantage: Creating and Sustaining Superior Performance. New York, NY, 1985. Print.
Porter, Michael, “What is Strategy?” Harvard Business Review 74. 6 (Nov Dec., 1996): 61-78.
Valentin, Erhard. “SWOT analysis from a resource-based view”. Journal of Marketing Theory and Practice 2. 9 (2001): 54-68.