Patrick CaryAnthony GuidaDillon HilleryToran NigrelliLogan Smith

Laura Zakrzewski

BACKGROUND

History19

20s

Founded by Huff DalandChanged name to Delta Airlines

1930

sDelta Air LinesOffers 1st night service

1940

s

Headquarters moves to Atlanta, GADelta Air Lines, Inc.

History19

50s

Merger1st international flight

1960

sCharles Dolson1st nonstop service

1970

s

Northeast merger50th Anniversary

History19

80s

Financial lossesWestern Airlines

1990

sWORLDSPANGlobal Airline of the Year

2000

s

Northwest AirlinesLargest product upgrade

“We Delta’s employees, customers, and community partners together form a force

for positive, local and global change, dedicated to bettering standards of living and the environment where we and our customers live and work. We are Delta’s

Force for Global Good.”

Misson

Build on traditions and always meet customers expectations while taking service to even higher levels of excellence

Expand innovatively and exceed customer expectations by providing the highest quality airline experience domestically and internationally

Vision

HonestyIntegrityRespectPerseveranceServant Leadership

Values

“Now, Delta is growing and growing fast. Yet we will never have a monopoly.

We will always compete with planes of similar speed and comfort and identical fares.

If we continue to grow, it will be because we can expand without losing the ‘difference’

that made Delta’s reputation”- C.E. Woolman, CEO 1965

Partnerships

Invest in foreign airlines

Source; Center for aviation.com

PIn the news…

ESTEL

POSITIONING

• Fortune 500• Cost advantage• Innovation• Market share leadership• Strong management team• Proven leadership and business model• Strong brand equity• Confident investors- raising capital

SWOT/ TOWS

Strengths

• Company size- acquisition restriction• Bad communication• Low R&D• Online presence• Not diversified

SWOT/ TOWS

Weaknesses

• Acquisitions• Financial markets• Product and service expansion• Takeovers• Shares in foreign airlines

SWOT/ TOWS

Opportunities

• Competition• Economic slowdown• Lower cost competitor• Price wars• Oil prices• Outbreak of disease• Terrorism• Government policies

SWOT/ TOWS

Threats

SWOT/ TOWS

Thre

ats

SO Strategy• Expand globally• Increase sales force• Increase advertising• Develop new products and services

WO Strategy• Joint venture• Acquire competitor• Expand nationally• Backward integration• Forward integration

ST Strategy• Diversify• Acquire competitor• Expand locally• Re-engineer

WT Strategy• Liquidate• Divestiture• Retrenchment• Downsize

TOWS

Oppo

rtuni

ties

Strengths Weaknesses

Group Map

Value Chain

Porter’s 5 Forces

• Extremely high• Entrance of low-cost carriers– Price is significant factor

• Constant plans for expansion

Porter’s 5 Forces

Rivalry among existing firms

• Customers• Shareholders• Aircraft providers• Fuel suppliers• Businesses• Airline partners• Employees• Non-airline partners• Sky Team

Porter’s 5 Forces

Other stakeholders

Digital

• Employees– Quality– Loyalty– Benefits

• International– Expertise– Market share

• Distinct brand image

Core Competencies

• Credit card partnership– American Express

• Member of Sky Team – only American airline in the world’s second largest

global air alliance

Distinctive Competencies

FINANCIALS

• Continue positive quarterly return• Aim for 2013 revenue of $10B• Reconsider futures/forwards- billions lost =(• Increase domestic sales with the

strengthening U.S dollar

Financial Goals

SConsolidated Income Statement

Source; Yahoo Finance

Balance Sheet

Source; Yahoo Finance

Cash Flow

Source; Yahoo Finance

Efficiency Ratios

Source; Morningstar

Market Multiples

Equity and Debt

Source; Morningstar

Ratio Analysis- Liquidity

Source; Morningstar

Recent Stock Trade

Source; Ycharts

Stock Comparison Source; Ycharts

Analyst opinion

Historic Revenue

Operating segments

Source: Delta SEC Filings-Annual Report

Revenues

Expenses

Sources; Delta Investors Relations

The Effect of Fuel Prices

• Agreement traded on and organized exchange to buy or sell assets, especially commodities or shares, at a fixed price but to be delivered and paid for later

• $1.2 billion est. losses• Hedge against spiking fuel prices • $40.00 a barrel

2015 Q1, Q2, Q3 Results

Q1 Q2 Q3$0

$200

$400

$600

2015 Adjusted Diluted EPS

2015 Quarters

Dilu

ted

EPS

Q1 Q2 Q3$0

$100$200$300$400$500$600

Profit Increases from 2014

2015 Quarters

US $

(In

Mill

ions

)

2015 Q1, Q2, Q3 Notes

• $900 million to employee pension funds in Q1• $1 Billion in Profit Sharing Expense with

employees this year.• $500 million per quarter to shareholders

through repurchasing shares and dividends.• Decreases in cost of fuel and crude oil.• Operating margins 16%-21% (all 3 quarters)

STRATEGY

• Grow domestic hubs • Create a Delta atmosphere• Luxury• Shares on international ventures• Increase value• More services provided

Strategic Goals

Overall low cost

Broad differentiate

d

Focused low cost

Focused differentiatio

n

Generic Strategy

Strategy type

• Prospector– Product innovation– New hubs– Flight monitoring for quality– Marketing to reach market

Integration strategy

• Vertical forward– Purchase more Delta Hubs domestically

• Vertical backward– Purchased an oil refinery that failed

• Horizontal– Buy out other airlines and strengthen partnerships

with international airlines

Diversification strategy

• Concentric– Transportation from airport to hotel

• Conglomerate– Credit card partnership with American Express– Possible luxury life style magazine

Intensive/ Offensive strategy

• Market penetration– Changes to website, television spots and sporting

event sponsorships • Market development– Overseas service as long term goal

• Product development– Constant innovation

Defensive strategy

• Joint venture– Sky Team, Virgin Atlantic

• Divestiture– Sell oil refinery

Hierarchy of strategy

• Focus on domestic strategy and increase domestic revenue• Temporarily start to move away from International strategy• “Invest” in employees to show appreciation for company

growth• Continue to be known as a socially and corporate responsibly

company through charity and be environmentally awareness• Expanding through joint ventures and corporate partnerships

Corporate strategy

Hierarchy of strategy

• Expansion of domestic hubs in Los Angeles, Seattle, and New York City

• Strengthen their union relations • Take a stakeholder theory approach

Business strategy

Hierarchy of strategy

• Retiring old and obsolete planes for new planes with better technology

• Make all employees aware of succession plan • Continually invest in customer service • Increase promotions and brand as luxury

brand

Functional strategy

Issues

• Sensitive to external factors• Lacks communication• Foreign dollar value• Web 2.0 and Skype

Issues

• Alternative-Reestablish relations with cheaper booking sites such as cheapoair.com- Expand internationally

TradeoffsSacrifice their quality brand imageSuffer from the dollar value exchange

Alternatives/ Tradeoffs

CONCLUSION

• Promote that they are the highest quality brand airline and replicate that in action

• Create a scent like Turkish airlines that people will be able signify with them and will feel at home

• Pandora Radio and Bose headphones in the plane to brand them as more luxurious

• Strengthen their joint alliances and begin replicating their flight services such as music playing when boarding a long flight

• Focus on domestic relations with the strengthening dollar expand hubs in the USA in order to control even more of the market

• Differentiate themselves to be seen as the biggest, best airline in the States

• Increase research and development

Final Recommendations

• He enjoys working for Delta- the morals correlate with his views• Impressed to see employees fight the possible takeover (2006)• Delta came back from bankruptcy • Hillary Clinton is wrong in her innovative statement • Proud to say Delta has avoided take overs • Increased business morale by giving a 14.5% pay increase• Delta is and will continue to the industry leader

Major Take a way's from Ed