Professional Documents
Culture Documents
Jessica Bourgoin
All images from www.aa.com
Agenda
Company History Internal Analysis
A Little More About Us Strengths
Our Planes Weaknesses
Where We Fly IFE
Vision Statement Matrix Analysis
Mission Statement SWOT Analysis
Company Ratios Space
External Analysis IE matrix
Opportunities Grand Strategy
Threats QSPM
CPM Recommended Strategies
EFE Future Plans
AMR in the News
AMR Timeline
Started in New York City in 1929 1987, Nashville Eagle was
under the name Aviation renamed American Eagle.
Corporation. It was founded by 1989, Donald Trump was
Sherman Fairchild. prevented from purchasing
1930, renamed American Airways American Airlines and new routes
after combining 85 small airlines. to Japan, Latin America, and
1934, airmail was suspended London were bought.
causing difficulty and the cause 1996, 20% of SABRE was sold
for new ideas. and a code-sharing agreement
Renamed to its current American was made with British Airways.
Airlines and the first plane to pay 1999, One world (alliance of
off itself without the need for major airlines around the world)
postal revenues was built.
was formed because of
1964, AMR introduced the first agreement with British Airways.
computerized airline ticket
reservation system (SABRE) 2000, AMR sold its shares of
Canadian Airlines along with the
1980, new CEO Bob Crandall remaining of SABRE.
introduces frequent fliers
program. 2001, AMR bought the assets of
the failed TWA for $743m.
1982, Purchase of domestic
airline. 2003, AMR was on the brink of
bankruptcy after losing $1.3B
Text Book: Strategic Management Author: Fred R. David
Location
AMR Corporation
4333 Amon Carter Boulevard
Fort Worth, TX 76155
Phone: 1-817-963-1234
Fax: 1-817-967-9641
Sector Name: Transportation
Industry Name: Airline
Employees: 92,100
Market Cap (Mil) $ : 1,724.425
Complete Financials: Dec 2004
Updated: 03/31/2005
www.AA.com
Stock Quote (AMR - NYSE)
Price $10.45
Change 0.25
Volume 3,486,700
Trades 2,773
http://www.shareholder.com/aa/stock.cfm
Vision Statement (proposed)
To become the largest airline in
the world.
Mission Statement (proposed)
AMR Corporation is committed to providing
every citizen of the world with the highest
quality air travel to the widest selection of
destinations possible. AMR will continue to
modernize its fleet while maintaining its
position as the largest air carrier in the
world, with a goal of becoming the most
profitable airline. AMR is the airline that
treats everyone with equal care and respect,
which is reflected in the way each AMR
employee is respected. AMR recognizes that
its employees are the key to the airlines
success and invests in the futures and lives
of its employees. By investing in
tomorrows technologies and by following a
strict adherence towards environmental
regulations, AMR demonstrates its
commitment to the world environment.
Customer Service Plan
American Airlines and American
Eagle are in business to provide safe,
dependable, and friendly air
transportation to our customers,
along with numerous related
services. We are dedicated to making
every flight you take with us
something special. Your safety,
comfort, and convenience are our
most important concerns.
www.AA.com
See Our New Campaign, We
Know Why You Fly.
www.AA.com
Our Planes
Airbus A300-600
Boeing MD-80(S80)
Boeing 737-800
Boeing 757
Boeing 767
Boeing 777
www.AA.com
Our Planes
www.AA.com
Boeing MD-80 (S80)
Seats: 131
Lavatories: 3
www.AA.com
Boeing 777 (777)
Seats: 245
Lavatories: 9
www.AA.com
Where we fly
USA (North & South West)
Method Average
2,282,984,429
Key Company Ratios
Company Industry Sector S&P 500
Valuation Ratios
Beta 2.77 1.38 0.62 1.00
Price to Sales (TTM) 0.10 1.24 1.62 3.33
Price to Cash Flow (TTM) 11.86 10.03 13.19 17.32
% Owned Institutions 95.00 70.90 59.87 64.19
Growth Rates %
Sales (MRQ) vs Qtr 1 Yr Ago 3.93 12.97 9.04 13.40
Sales (TTM) vs TTM 1 Yr Ago 0.12 12.79 8.27 11.90
Sales - 5 Yr Growth Rate -0.09 8.39 6.94 9.30
EPS (MRQ) vs Qtr 1 Yr Ago N/A 48.32 -4.57 28.69
EPS (TTM) vs TTM 1 Yr Ago NA 70.64 1.92 21.92
EPS - 5 Yr Growth Rate NM -2.27 6.80 12.15
Capital Spending - 5 Yr Growth Rate -21.91 5.49 0.82 4.06
Financial Strength
Quick Ratio (MRQ) 0.52 1.20 1.18 1.26
Current Ratio (MRQ) 0.71 1.43 1.42 1.76
LT Debt to Equity (MRQ) 285.35 1.09 0.51 0.68
Total Debt to Equity (MRQ) 302.83 1.19 0.59 0.85
Interest Coverage (TTM) -1.20 4.86 19.24 11.86
Key Company Ratios (cont.)
Profitability Ratios % Company Industry Sector S&P 500
Size of fleet
Number of routes
Partnerships
IT infrastructure
Government relations
Weaknesses
Financial position
Cost structure
Unprofitable routes
Too many divisions
Reliance of business fares
IFE Matrix
Key Internal Factors Weight Rating Weighted
Score
Strengths
SPACE Matrix
CA IS
Y axis
*Financial strength 1
1.Retrenchmnet *Environmental
2.Diversification stability -5
3.Divestiture Y axis: 1 + (-5) = -3
4.Liquidation
X axis
*Industry strength 2
*Competitive
Defensive ES Competitive
advantage -5
X axis: 2 + (-5) = -3
The Internal-External (IE) Matrix
The IFE Total Weighted Score
Market Penetration Strong Average Weak
Market Development
Product Development 3.0 to 4.0 2.0 to 2.99 1.0 to 1.99
High I II III
Medium IV V VI
1.0 to 1.99
Grand Strategy Matrix
RAPID
MARKET
GROWTH
COMPETITIVE COMPETITIVE
POSITION POSITION
American
1.Retrenchmnet Airlines
2.Diversification
3.Divestiture Quadrant III Quadrant IV
4.Liquidation
SLOW MARKET
GROWTH
QSPM (Internal Factors)
Strategic Alternatives
Key Internal Factors Weight International Domestic
Expansion Expansion
Strengths AS TAS AS TAS
1. Size of fleet 0.10 --- --- --- ---
2. Number of routes 0.10 4 0.18 1 0.12
3. Partnerships 0.15 1 --- 2 ---
4. IT infrastructure 0.10 --- 0.20 --- 0.20
5. Government relations 0.05 --- 0.24 --- 0.18
Weaknesses