International Business

Significant Resources

1. Constructive and supportive management.

AA was very supportive and responsive in encouraging and listening to its employee for any ideas in reducing cost. This made the employees more productive and creative in doing their performance.

2. Highly skilled employees.

They were the source of all capabilities that AA possessed. The experience and knowledge which they had were hard to imitate by other competitor. It is important for AA management to compensate these people well, as to reduce probability for other competitor to hijack them.

3. Capabilities to reduce cost.

These were the competitive weapon that would be used by AA to corner other competitor. Their effect in reducing cost boosted AA to be one of the top in low cost air carrier competition.

Capabilities

These were the product of AA employees’ creativity. All the capability that AA possessed required high skill from its conductor. Without sufficient knowledge, it will only give small benefit to AA.

1. Quick turnaround time

The longer aircraft on the ground means that the less productive it will be. By shortening the turnaround time, AA was able to gain more profits. It was gained by removing frills service and removing chair booking and extensive crew drilling on performing quick turnaround. (Shari,2003)

2. low-cost short haul

Management also conferred with mechanics on how to coddle spare parts so they can last longer. For example: to extend the landing gear usage time, mechanics advise pilots to take a shallow approach on landing (Shari, 2003). By doing such things, AA was able to lower the cost on short haul. It was because less part would need