Lufthansa 2000: Maintaing the Change Momentum

Essay by SVLippstadt08University, Master'sA, July 2004

download word file, 30 pages 2.3

Flinders University of South Australia

COMM 9009

International Business Policy and Strategy

Case Study Analysis

Lufthansa 2000: Maintaining the Change Momentum


Christian Gerlach (9905388)

June 2004

Table of Contents

Executive Summary 3

1.0 Introduction 4

2.0 Lufthansa - A company overview 5

3.0 Porter's Five Forces 6 3.1 Threat of new entrants 7

3.2 Bargaining power of suppliers 8

3.3 Bargaining power of buyers 9

3.4 Threat of substitute products 10

3.5 Rivalry among competing firms 12

4.0 SWOT Analysis of Lufthansa 13

4.1 Strengths 13

4.2 Weaknesses 16

4.3 Opportunities 17

4.4 Threats 18

5.0 TOWS Analysis for Lufthansa 21

6.0 Business-level strategy of Lufthansa 24

7.0 Corporate-level strategy of Lufthansa 25

8.0 Strategic Alliances 26

9.0 Strategic Leadership and German Culture 39

10.0 Evolutionary Patterns of Strategy and Structure 33

11.0 Conclusion 36

12.0 Appendices 37

13.0 References 39

Executive Summary

In 1991 Lufthansa airlines was almost bankrupt.

In 1999 the company already announced record results in its 70-year history, helped to found the Star Alliance, the industry's largest network, and is now looking to become one of the leading airlines in the world.

An impressive strategic leadership und human resource management played an important role in the transformation and in the process of strategic renewal. The implementation of an integrated cost leadership/differentiation strategy and a related diversification corporate-level strategy also contributed to Lufthansa's success.

Having had major involvement in the creation of the Star Alliance also played an important role in Lufthansa's transformation into a successful company that operates in a quite difficult industry environment. Right now, Lufthansa's future looks bright, but they should try to keep the change momentum alive and possibly apply a few new strategies such as enter the low-fare market in Europe, exploit business opportunities in non-airline related market segments, focus on...