HNA case study Essay

1. What domiciliated to HNAs success in the China Airline exertion? 1. Chinas prosperous market conditionsRising middle crystalise (rising per capita income)Entry into WTO growth in imports and exportsMigration of rural population into urban citiesinflux of foreign investment2. Deregulation of civil aviation market3. strategical DecisionsUnconventional approach for a regional start up air lane chose to compete as a trunk line feeder discipline of feeder routes in Western China consistent with government proposal to develop the Silk Road Effective acquisitions that helped them to inflate faster4. Effective physical exercise of capital markets (internal and external) to expand operational scale and piteouser ope grade be 5. CultureEncompasses Chinese culture and Western modern management slow Ant Theory and Swapping System6. QualityExcellent flight safe standardsPunctuality rate is first in China7. Clear dodge To be low woo providerFocused on cost structure and operatin g efficiencyCost per ASK was very lowLower maintenance costSimilar model of planesRan aircrafts longer enthronisation in technologyLower staffing cost per ASK8. Started outside CAAC did non have to adhere to government standard. Forced them to be more competitive 9. Strong Interrelation among the blocks of military controles contributes to increase revenue for their respiratory tract business 2. What be the challenges that the company faces at both the business and corporate aims? Business building blockPrice of Oil (airline)High financing costs (airline)Entry of cipher hotel competitors (hotel)Entry of upscale international franchise (Hilton etc) into hotel industry (hotel) Credit rating firm downgraded the airline to second lowest ratingCorporate levelHigh debt level puts the company into difficulty of raising funds to expand Relative industries block important to maintain relevance to its airline business 3. Was the companys increasing breadth a distraction to the airli ne business or a route to competitive advantage? The increasing breadth might work in favor for HNAs airline business as they seek to revamp itself into Grand China Airline.By increasing its breadth, it can help to strengthen the new airline label name to other parts of the world. Particularly for the hotel business, HNA can utilize them to get along the brand presence of its airline business to tourists. However, HNA need to be mensurable of the breadth of business it can extend to. It should be kept deep down the boundaries of the airline industry such that whatever industries it is trying to expand to, it should contribute directly to its airline business (obvious synergy). For example, the departmental store business does not create synergy with the airline business.