Mergers and acquisition are the two aspects of strategic management that deal with amalgamation of different corporations to aid in the rapid growth of an enterprise. An acquisition or takeover pertains to a predicament where one company purchases another one without the formation of a new company (Gillepsie, 2013). A merger takes place where two distinct corporations combine to form a new company. The research paper will take a closer glance at two different public corporations with one having a history of mergers and acquisitions with its operations extending to the international arena while the other operating within the U.S.
Merging between US Airlines and AMR Corporation
Merging between US Airways and AMR Corporation has led to the creation of the world’s biggest airline the American Airlines Group. The strategy that paved the way for the amalgamation of the two airlines was aimed at creating space for the low-cost carriers and raising competition within the airline industry. The competition will stem from the different strategies between different airline companies that are in the quest of attaining a competitive edge. Additionally, due to merging of the two airline companies developed an ample network combination. It provides consumers with an assurance that the airline company is willing and able to take them whenever they want, especially now, when the amalgam has become more stable (Kozami, 2005).
The merging strategy was a wise choice because the customers will now be in a position to connect to an expanded network through a codeshare with between the airlines, which will allow the companies to sell seats on each other’s flights. Moreover, the impact of the merger is the creation of a stronger airline that will offer great schedule options, a fuel-efficient fleet and access to more destinations all across the globe (Gillespie, 2013). American Airlines will also roll out new benefits towards their customer base. An example of these benefits that the clientele will receive is to earn and redeem miles for both airplane carriers, as well as the reciprocal lounge access.
The new airline will be of assistance in beefing up the American’s network especially in the East Coast where the major player had been the US Airways. The two companies were also feeling that merging would substantially cut down their costs and bring the American Airlines out of the bankruptcy that had taken place back in 2011 (US Airways, 2015). The merging decision was also a better strategic plan because it allowed US Airways to exit the star alliance and become part of the one world. One world has been a rival alliance that has been anchored by British Airways, Japan Airlines, as well as American Airlines.
American Airlines Group generates more revenue as a result of the consolidation as it operates 6,700 flights on a daily basis and flies to more than 300 destinations in more than forty-five countries. Employment opportunities have also gone up because the labor force will give place to more than 10,000 employment vacancies.
Cracker Barrel Old Country Store
Cracker Barrel Old Country Store is an American chain that has a combination of gift stores and restaurants with southern country theme. The appearance and décor have been developed in such a manner that it resembles an old-fashioned general store (Cracker Barrel Old Country, 2015). The restaurants create an atmosphere with country music does, comfort and familiarity. However, based on the operational strategies of the company and the products and services it offers, it is evident that Cracker Barrel Old Country Store focuses more on the old-fashioned people and the older population, in general. The country music performance will only entice the older generation as the companies go an extra mile of creating partnerships with country music musicians to please its target market.
Cracker Barrel Old Country Store will find it more profitable to merge with Starbucks because the merging benefits will be diversified. Starbucks is a company that operates coffee shops worldwide and mostly targets the younger population because of the nature of its services. The coffee company offers fast foods and other services such as free Wi-Fi, which well suits the technology savvy clientele visiting the stores. The nature of music is also enticing because the company had partnered with Google to offer unlimited music through an all-access streaming. The amalgam between the two will create an optimum business atmosphere in the sense that the new restaurant will attract both the young generation and the older generation.
A major competitive strength that will boost the merged company to its success is the ability to roll out new products, as well as initiatives, through the combination of what the youths and teenagers like while pleasing the older generation, as well. Apparently, the two restaurants offer music facilities; they can thus combine the old country music, offering high-speed internet access and custom music CDs to attract a wider customer base. Cracker Barrel Old Country will also expand to international markets in 2008 through product diversification that will counteract stiff competition in the international markets (Gillepsie, 2013). Becoming a first mover even in the domain of international markets will be an excellent way of the amalgam between Cracker Barrel Old Country and Starbucks to attain a competitive edge and enhance customer loyalty by upholding its image as an inventive and innovative company. Starbucks would be a profitable target to merge with Cracker Barrel Old Country because its enterprise strategy and mission contribute to the success of the company since the company is a disciplined innovator and well manages its innovation timeline.
International Business-Level Strategy, Corporate-Level Strategy and Recommendations for American Airlines Group
The business level strategy for American Airlines Group is cutting down on its cost through focusing on capacity reduction such as doing away with the unprofitable routes worsening the revenue problem. American Airlines Group also conforms to social responsibility even during the tough economic times and remains viable because it pledges to always become part and parcel of local efforts to bring people together and create positive changes (Gillespie, 2013). It also finds it easier to minimize environmental footprints by tackling climatic changes while inspiring others to do the same. In wellness facet, social responsibility is viable because the company dedicates wellness means to support efforts and policies that will improve the health of communities at large and offer balanced beverage options and food to its customers.
The corporate level strategy for American Airlines Group is focusing on their control networks and fuel efficiency through the adoption of jets. Corporate level strategies are set in place to surpass the competition within the industry by reducing costs and maximizing profits. The corporate level strategy thus focuses on the jet market. Product differentiation is also put into practice in the quest of attracting customers through seat modification or creation of personal suits around the seats.
The recommendations I would make for the improvement is for the airlines to focus more on the customer needs as well as the customer experience derived from the flight, for example, by offering on-board snacks and beverages all in the name of enhancing customer experience. It should go an extra mile to offer entertainment and enough leg room. Another thing is to focus on the time and resources for the adoption of a better global position and perspective, as well. Such customer enticing services should also be offered such as door-door baggage delivery. The other strategy that I would recommend is focusing time and resources on embracing a global position and perspective. In order to succeed in the contemporary airline industry with such an economy, American Airlines Group will have to adopt a dynamic approach by thinking radically. The business should focus on solidification and market penetration.
Business-Level Strategy and Corporate –Level Strategy for Cracker Barrel Old Country
Cracker Barrel Old Country adopts business level strategies to maximize customer profits and raise customer satisfaction. A business-level strategy that has seen the company through its success is embracing product market diversification to counteract the stiff competition. In order to remain at the top, Cracker Barrel Old Country will have to maintain innovative skills, ethical values and investing in its active partners. It may also downsize by franchising its unproductive stores so as to increase the market share and profitability (Gillespie, 2013). Cracker Barrel Old Country has also acquainted itself with promotional mix elements such as sales promotions and internet marketing which heightens the competition between the two competitors. Additionally, the company has been adhering to social responsibility even during tough economic times. The company also ensures premium brands by motivating its innovation timeline.
However, Cracker Barrel Old Country will not make a profit after reducing its prices because it will be vulnerable to commoditization. Commoditization is often a perception and not a reality. It is the natural result of customers persistently pressuring corporations to bring down their prices. In the event of companies lacking necessary sales skills and structures to resist that pressure, they will end up giving in to the pressure by competing mostly on the basis of price and thus end up being commoditized.
Corporate level strategy of Cracker Barrel Old Country involves the expansion of a wider market base through product diversification that will counteract stiff competition in the international markets. Becoming a first mover even in the domain of international markets will be an excellent way to attain a competitive edge and enhance customer loyalty by upholding its image as an inventive and innovative company (Kozami, 2005). Marketing techniques strategies are essentially the techniques applied in the managing a company’s marketing resources, which is a corporate level strategy.
Marketing management remains confined to employment of various tools such as competitive strategy to scrutinize the context of the industry under which the company operates. The case, for this reason, relates to marketing management in that Cracker Barrel Old Country utilizes the relevant marketing techniques to attain its competitive strategy. Without these marketing techniques, the company will be more likely to lose its market share (Gillespie, 2013). The utilization has been evident in the target market that the company focuses. It even partners with country music musicians so as to entice its target market that comprises of the older generation.
The merger between US Airways and American Airlines has led to the creation of the world’s biggest airline. For the other corporation, Cracker Barrel Old Country Store, it is an American chain that has a combination of gift stores, restaurants, and a southern country theme. The strategies that the two corporations have set in place revolve around the development of business practices and establishing a competitive edge. However, Cracker Barrel Old Country Store would become more profitable by merging with Starbucks because it will attract both the young generation and the older generation.