lufthansa business strategy

The basis of this plan is the re­structuring of the company into three pillars: premium hub airlines, Eurowings group, and aviation services (Fig. It means that we are committed to creating added value for our customers, employees and investors and to meeting our responsibilities toward the … From industry to logistics and energy, the digital transformation is a reality in every sector. Lounge access and priority boarding at the airport, additional free baggage and exclusive in-flight meals are waiting for you on board as a passenger in Lufthansa Business Class. Customer-related tasks have been combined with IT and digital activities in one Executive Board function for this purpose. Also read Lufthansa SWOT Analysis, STP & Competitors. According to this framework, traditional Lufthansa core competency has been closely associated a differentiation business strategy through offering a high quality service in premium prices. It is of German origins and is associated with the airline industry. The companies are not associated with MBA Skool in any way. On short and medium-haul routes you’ll enjoy plenty of room. Lufthansa Technik AG - Strategy, SWOT and Corporate Finance Report, is a source of comprehensive company data and information. It has chosen the transnational strategy through which the company seeks to achieve global recognition. Premium services are also offered in these two classes. This will entail, among other things, the loss of around 1,000 administrative FTE in Group Functions and the reduction of management positions across the Group by at least 20% compared with the period before the crisis. The total number of flight operations is being cut to reduce the complexity of the production landscape. Lufthansa and their Strategic Change Before the 1980s, Lufthansa was a major player in the aviation industry. This entails a reduction of the operating fleet by around 150 aircraft, as well as the currently planned reduction of the workforce by some 27,000 full-time equivalents, which cannot be maintained long-term with the lower production volumes. Dialogue with the Company’s stakeholders is also a component of sustainable corporate governance. The functional organisational structure that has proven successful at Network Airlines will be extended to direct traffic in future. Besides this, they also have agents who book tickets for Lufthansa. Disposal and partnering options for all or part of Lufthansa Technik and AirPlus are also under review, taking into account the necessary capital expenditure, synergies and value creation potential. Wherever your journey takes you: in Lufthansa Business Class you’ll arrive feeling more relaxed. In this role, the Lufthansa Group aims to continue to play a part in actively shaping the global airline market. It means that we are committed to creating added value for our customers, employees and investors and to meeting our responsibilities toward the environment and society. The ongoing optimisation of the Group fleet has been accelerated as a result of the crisis. The value contributed to the Lufthansa Group by every one of the Aviation Services is reviewed and refined continuously. All these form the product strategy in the marketing mix of Lufthansa. At the same time, production is being made more flexible in order to better balance market volatility and seasonality. Quizzes test your expertise in business and Skill tests evaluate your management traits. It uses the potential of innovation and digitalisation to develop customer-focused products and increase efficiency. By concentrating on products and services with direct relevance for the purchase decision and willingness to pay, the focus on the customer is reconciled with the necessary structural cost reductions. The main focus is on the implementation of a much smaller and more efficient production structure in all Group companies. In its product and service development, the Lufthansa Group systematically applies the principles “reduce – recycle – reuse – replace”. Based in Germany Lufthansa is one of the biggest carriers in Europe. Mit unserem breiten Spektrum an Unternehmen eröffnen wir Perspektiven in allen Bereichen der Luftfahrt, für alle erdenklichen Talente. In addition, suitable measures are to be taken to strengthen the balance sheet of the Lufthansa Group and optimise its gearing in order to obtain an investment grade rating again. This website uses cookies. 2. Meals & Drinks. The airline business is supplemented by Aviation Services that have synergies with the airlines. The aim is put customers, with their individual wishes and needs, at centre stage and further increase customer loyalty by implementing holistic measures which offer direct and tangible customer benefits. Set to launch in June 2021, the carrier will be based out of Prague, Czech Republic, and Dubrovnik, Croatia and plans to use wide-body Airbus aircraft configured completely with premium economy seats. Phasing out large aircraft also increases operating flexibility. Brand Challenges. These cookies are needed for a smooth operation of our website. Varied entertainment. In order to exploit opportunities in the long-distance leisure travel market, the range of long-haul connections from the hubs in Frankfurt and Munich aimed at private travellers is being expanded. Successfully coping with the pandemic is a prerequisite for the strategic development of the Lufthansa Group. In addition, responsible business is an integral part of the corporate strategy, which is why the Lufthansa Group is developing its corporate responsibility activities. Lufthansa’s customer relationship is primarily of automated services nature which means that the company recognizes individual customers and his/her preferences. This strategy is the foundation and shows a company the business models that could spell success in the future. In view of the fundamental impact of the coronavirus crisis, restructuring programmes are also being implemented at the Aviation Services companies to increase efficiency, cut costs and strengthen their competitiveness. Lufthansa’s cooperative strategy is non-equity strategic alliance, highly competitive flag carriers coupled with rivalry low cost carrier; star alliance was created consisting of some eighteen members, with Lufthansa being the leader and pivotal member of the largest airline alliance. So, let’s look at the challenges, goals and approach of Lufthansa’s digital brand transformation. It has been reviewed & published by the MBA Skool Team. Bericht zur Gleichstellung und zur Entgeltgleichheit, Health Management and Occupational Safety, Financial strategy & value-based management, Corporate Governance Declaration, Section 289f HGB, Declaration of compliance, Section 161 AktG, Information on corporate governance practises, Board of Management and Supervisory Board procedures, Compensation of the Executive Board and Supervisory Board, Law on the equal participation of women and men in executive positions, Articles of Association and Rules of Procedure, Shares held by members of the Executive Board. Lufthansa airlines' staff is trained well to communicate and give best on board experience to all its travelling customers. In the case of Lufthansa growing financial strength for the Group, mirrored by growth amongst its business units illustrates that Lufthansa's diversification strategy has proved a positive addition thus far. Booking is no more a cumbersome process. Examples include the termination of flight operations at SunExpress Germany and of passenger flight operations at Germanwings. It therefore builds continuously on its environmental commitment, is dedicated to many social issues and treats its employees responsibly and fairly. Here the aim is to replace disposable plastic products with environmentally friendly products wherever possible and to reduce plastic packaging overall. For Lufthansa, this means deploying the new product on something already in its fleet, such as the A350 or 747-8, or something that’s due to arrive soon, like the 787. We offer you menus that suit your departure time and destination. For instance, automated and contactless processes, such as the self-service baggage drop and check-in, assistance in the event of flight irregularities and general interactions with customers make travelling easier for passengers. As any other business Lufthansa needed to expand outside Germany, its market … Implementation of the sustainability strategy is further supported by its embeddedness in Executive Board remuneration and the audited disclosures in the non-financial declaration. Once that happens, it will install that new business class on its older aircraft, with the exception of … Lufthansa Technik is developing passenger-to-cargo conversion programs that temporarily reconfigure passenger aircraft as “auxiliary freighters” capable of transporting cargo on the passenger deck. Company mergers and new business models create an enormous market dynamics. Structuring the Group along the airline value chain helps to maximise synergies between segments and makes it possible to scale business from external markets at the same time. Lufthansa German Airlines and SWISS will continue to set standards for quality and cost-effectiveness in these areas in future. This will allow the Lufthansa Group to establish faster, more direct decisionmaking processes, particularly between Group Functions and the subsidiaries. The products and services of partners will also be used in areas in which the Lufthansa Group cannot provide them cost-effectively itself. Its headquartered in Cologne, Germany. Marketing Mix of Lufthansa analyses the brand/company which covers 4Ps (Product, Price, Place, Promotion) and explains the Lufthansa marketing strategy. Here competitive pricing is followed as the customers compare prices with other airlines and go for the best price. Corporate responsibility, that is to say sustainable and responsible entrepreneurial practice, is an integral part of our corporate strategy. It has chosen the transnational strategy through which the company seeks to achieve global recognition. The central importance of sustainable business for the Lufthansa Group is reflected in the fact that it is represented by a dedicated Executive Board function. The content on MBA Skool has been created for educational & academic purpose only. ReOrg serves to implement a more efficient organisational structure, including turning Lufthansa German Airlines into an autonomous company as well as restructuring the Group Functions and matrix process organisation. At the same time, the intention is to make the travel experience as simple, flexible and individual as possible. The promotional and advertising strategy in the Lufthansa marketing strategy is as follows: Lufthansa come up with TV ads which focus on the quality of service it offers to its customers. This will make it possible to systematically make use of the opportunities arising from trends and changes to the market. It is the largest traveler loyalty program of Europe with more than 25 million members. Economies of scale will be realised consistently and flight operations with competitive structures and a good operating performance will be scaled up. Together with Lufthansa, we went on a journey to find a way to a strategy of self-sustaining brand implementation and to master this (and future) transformation. The site of Lufthansa is user friendly. The Lufthansa Group aspires to lead the airline industry with high standards of responsibility. In connection with its positioning as an airline group, the Lufthansa Group not only assesses the attractiveness of the individual market segments, it also determines whether it is the best owner for the respective company on the basis of existing or potential synergies. Group strategy - Annual Report 2020 / page 17. 4 Lufthansa's new strategy In order to improve its competitiveness, the LH Group released its new strategy program "7to1 - Our Way Forward" in 2014. Lufthansa also engages in digital and social media marketing. Let us start the Lufthansa Marketing Mix & Strategy: The product strategy and mix in Lufthansa marketing strategy can be explained as follows: Lufthansa airlines are among the leading airline carriers in the world and offer domestic as well as international flights to its customers in its variety of its carriers. Corporate responsibility, that is to say sustainable and responsible entrepreneurial practice, is an integral part of our corporate strategy. The Lufthansa Group positions itself among the largest airlines in the world and assumes the role of leading European airline group. With Eurowings, the Lufthansa Group has an innovative and competitive offering in direct traffic, which addresses both price-sensitive and service-oriented customers with low-cost basic fares and additional service options that can be booked flexibly. Pricing also depends on the time the customers book the flights. Lufthansa will debut a new business class offering with more space, as well as aisle access for every seat, when it begins flying new Boeing 777X aircraft next year, Birlenbach said. Products will continue to be made more modular, as with different Business Class seat types or the introduction of an individual, high-quality catering range for sale on short and medium-haul flights in Economy Class, because this makes it possible to align them even more closely with customer needs. The aviation industry is defined by dynamic markets and competition, even when not facing a pandemic. The Passenger Transportation business segment includes Lufthansa Passenger Airlines, SWISS and Germanwings, as well as the equity investments in British Midland (bmi), JetBlue and SunExpress. Lufthansa airlines' physical attributes are seen from many aspects. Customer-facing employees will also have greater decision-making authority in order to offer passengers an even better service. The travel restrictions imposed in reaction to the pandemic and the global economic slump pose fundamental challenges for the industry and the Group. Financial strategy aims to increase Company value The financial strategy of the Lufthansa Group seeks to increase its Company value in a sustainable manner. It operates in 18 domestic and nearly 200 international destinations across the globe. 4). All the processes are automated with latest technology. Copy the code below and embed it in yours to show this business model canvas in your website. Seamless cooperation with our partners strengthens us in a volatile environment. Following is the distribution strategy of Lufthansa: Lufthansa has booking options on its website through which a customer can schedule and book flights according to the needs. The report covers the company's structure, operation, SWOT analysis, product and service offerings and corporate actions, providing a 360˚ view of the company. The plane ambience is really good and maintained at its best. ReFocus aims to focus the Lufthansa Group even more sharply on its core airline business, so that the portfolio of operating segments is made up exclusively of synergistic units. They offer loyalty programs to retain and engage its loyal customers. Key targets are the systematic renewal of the fleet to cut fuel consumption, reduce carbon emissions and trim the number of aircraft models by retiring and phasing out older, less efficient aircraft, such as the Airbus A340-600 and A380. This entails adapting the structure of the programme, for instance, and making the Miles & More partnerships broader and deeper in order to make the programme even more attractive. This is vital for retaining committed employees who can tackle future challenges and for ensuring that the Company is competitive and successful. Those have two functions: On the one hand they are providing basic functionality for this website. They had pictures of Bayern Munich football team as they travelled to and back to champions league final, on Facebook. This article has been researched & authored by the Content & Research Team. In case of any complaints and queries, response time is very less. As any other business Lufthansa needed to expand outside Germany, its … It has an approximate fleet size of 270. Disposals of other non-airline companies are also under review. Lufthansa airlines is global airline player and service quality is given utmost importance. Business and strategy ; Leading MRO provider; Numerous new products launched; Lufthansa Technik is the world’s leading independent provider of maintenance, repair and overhaul services ( MRO ) for civil commercial aircraft. Business and strategy ; Passenger Transportation is the core business segment in the Lufthansa Group. In terms of social responsibility, the Company promotes greater equality of opportunity for disadvantaged people worldwide via the financial and material support for educational establishments and training provided by helpalliance, the Group’s own aid organisation. Marketing Mix of Lufthansa analyses the brand/company which covers 4Ps (Product, Price, Place, Promotion) and explains the Lufthansa marketing strategy. On the other hand they allow us to improve our content for you. As a consequence of the market disruption caused by the pandemic, all the airlines in the Lufthansa Group are implementing restructuring programmes to cut costs and permanently secure sufficient profitability. It operates on Frequent Flyer Program “Miles & More”, a part of Star Alliance strategy. However, Lufthansa had “a strong focus on technology combined with bureaucratic values from its rule as an agent of the state” [3] since 80% of its stock were held by the West German government. Indeed, passenger connectivity is just one aspect of Lufthansa's sweeping digital strategy. The Lufthansa Group aims to maintain the leading market position of its airlines going forward. ReNew guides and coordinates all the restructuring activities on the basis of four modules: The strategic objective of the Lufthansa Group is to continuously align its services, business models and organisational structures with the complex and dynamic market environment. Consistent use of the potential for innovation and digitalisation is the foundation for increasing customer satisfaction and boosting efficiency in an operating environment determined by higher customer expectations and pressure to be efficient. Lufthansa SWOT Analysis, STP & Competitors. The Marketing Mix section covers 4Ps and 7Ps of more than 800 brands in 2 categories. ReStructure combines the decentralised restructuring programmes for the airlines and Aviation Services. Lufthansa Group operates using a multi-brand strategy with more than half a dozen airlines in the portfolio. The Lufthansa Group is a global aviation group with a total of more than 580 subsidiaries and equity investments. The existing commercial integration of the airlines is being intensified to exploit potential synergies to the fullest and minimise the need for coordination. In such an environment, the Lufthansa group established itself as one of the leading airlines through its use of a potent multi-brand strategy. If the demand is very high especially during the festive seasons, then the prices are higher than the normal days. The pace of recovery is subject to great uncertainty, however, especially concerning the spread of the coronavirus and its mutations, the availability of vaccines, and potentially lasting changes in travel patterns. These include new data-driven decision-making tools that have an increasing influence on airlines’ distribution and increased activity from aircraft and engine manufacturers in the maintenance business. The comprehensive restructuring programme ReNew was set up for this purpose. Pricing also depends on the demand. Lufthansa