Chad Lanaus
STOA-603
Assignment #1
Word Count: 2774
September 10, 2017
Coach Conor Vibert
Table of Contents
Introduction and Background 1
1. Historically, what was this company's competitive advantage? 1
2. Conduct an analysis of the external environment and provide some rationale for the negative impact to the organization. 2
3. What was the organization's strategy and structure? Were there signs of structural deficiency? 3
4. How did the organization measure effectiveness and was this measure inadequate? 4
5. Make 3-4 recommendations that, in hindsight, might have helped the organization stop the decline. 5
Vision, Mission, Strategy and Scorecard 5
High Performance – Employees First 5
Maintain position 5
Innovation 6
Conclusion 6
6. References 6
Introduction and Background
Pan American Airways (Pan Am) was the United States’ principal international air carrier from the late 1920’s until its demise in late 1991. Founded by Juan Trippe, an avid flying enthusiast and pilot, Pan Am ‘took off’ because of wealthy investors and powerful government officials from Trippe’s personal acquaintance list. Beginning in 1927 as mail carrier from Key West to Havana for the US Post Office, Pan Am was awarded a contract through the US government to become the sole overseas carrier firm and soon found itself operating a near monopoly operating international routes. Mexico, Central America, the Dominican Republic, Haiti, and Puerto Rico were added to Pan Am’s destinations list and thousands of people could fly directly from the continental US to these international destinations without relying on ships (Grace, n.d.).
In the early 1930’s Pan Am expanded to reach destinations as far away as Hawaii, Guam, the Philippines, and Hong Kong. The company supported the US and its allies’ efforts during WWII by flying over ninety million international miles on behalf of the US government and military. In the years following WWII, the world saw enormous growth in international tourist travel, and Trippe capitalized on it through a largely expanded destination list and through its position as the first airline to purchase and operate passenger jet aircraft. Cutting travel time in half and with huge advancements in comfort and smoothness of flight, aircraft from Boeing and Douglas Aircraft were operated by Pan Am for its inaugural, international passenger jet flight from New York to Paris in 1958 (Grace, n.d.).
In the late 1960’s, Trippe invested in high-capacity, long-haul aircraft through the purchase of a fleet of Boeing 747’s. The purchase coincided with a sharp decline in demand for international air travel which severely impacted Pan Am’s top and bottom line results. Over the next 20 years, Pan Am continued to suffer and ultimately declared bankruptcy in December 1991 (Grace, n.d.).
Historically, what was this company's competitive advantage?
As a pioneer in international passenger flights and later a pioneer in trans-Atlantic jet airliner flights, Pan Am’s competitive advantage was initially through a near monopolistic business model as a result of a pioneering ambition from the company’s founder, Juan Trippe. The first to offer numerous flight routes, trans-Atlantic routes, and passenger jets, Pan Am competed with virtually no other company. As competitors emerged in the industry, Trippe positioned Pan Am as global leader in international travel through its brand identity as a high-society, glamourous and luxurious travel adventure (Staff, 2010). “Pan Am, with its stellar fleet of “Clipper” ships, its international routes, it’s stewardesses in black high heels and tailored uniforms, and it’s dashing pilots, was the most exciting of all. It was, in fact, the very symbol of the romance of flight. The people who worked for the airline loved what they did. They had a passion for flying, and their passion was infectious. Service was a high priority. Passengers were well cared for. And, yes, these passengers actually got dressed up to fly” (Adamson, 2012). Pan Am leveraged a highly-skilled, highly-engaged workforce to create a customer experience like no other airline in the world.