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Entr 3100 Definition of Success & Critical Issues

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Definition of Success & Critical Issues

OurPLANE’s would need to achieve a margin of the initial investment of 10% and maintain an average annual operating margin of 25% by December 2009, enabling the company to grow. In order to do this, OurPLANE’s must address the following issues:

  • The economy is entering into a recession which has caused inflation in oil prices causing the costs to increase and resulting in a decrease in the hourly margins;
  • Due to the recession, multiple business and individuals have filed for bankruptcy, including a supplier of OurPLANE’s providing the company an opportunity to take advantage of this situation to grow to the next step;
  • With the economy downfall and no appropriate medium to reach their target market would result in OurPLANE’s becoming stagnant and unable to grow or a decline of business.

Situational Analysis

With the current economic crisis emerging would result in an increase in cost for the company for monthly maintenance as well as hourly cost resulting in a decrease in margin of the “selling price” would remain the same, the company’s operational strategy of gaining margins on all three fees would lose its speciality, negatively affecting profits and retained earnings as the company already isn’t meeting a few of the three margins.

This downfall has resulted in many businesses folding, which is a small foreshadowing for OurPLANE’s to be vigilant with their finances as a decline in profits resulting in the company to fold. However, the result of businesses filing for bankruptcy has led the company’s supplier also filing for bankruptcy, providing OurPLANE’s the opportunity in increase their fleet.

Although the opportunity aforementioned would increase the company’s fleet and help OurPLANE’s achieve the low cost leadership strategy, the economy downfall has left many individuals and corporations becoming hesitant to acquire a share of an aircraft.

Casson and “his team” has taken to themselves to  create a marketing strategy which would bring more clients. However, without the appropriate marketing personnel, recreating a marketing strategy to attract more clients would ineffective, resulting in an inability to reach an appropriate number of new clients which disallows the company to grow.

With their current promotion, 100% of the shares are not sold for each plane which is resulting in a loss of investment. If the company does decide to invest in increasing their fleet, without a suitable promotional plan, the company would be unable to generate a profit as there would be none to limited shareholders for each plane.

Although Casson is looking to grow the business via many means, it should be his least worries due to the upcoming global recession

Decision Criteria

A feasible option must include the following:

  • Must address the environmental and economical issues
  • Must maintain a average margin of monthly fees of 86.5% and margin of hourly fees of 10% by December 2009
  • Must provide OurPLANE’s the ability to grow

Options Analysis

Option 1 - Status Quo With Price Increase

This option would allow OurPLANE’s to stay status quo, and only address the


  • Offers 3 types of aircraft to their shareholders which other of the competition do not as well as lease back and VLJ Manage services
  • Has the lowest prices from all the other competitors, catering to their market which looks for the most efficient and cheap service
  • Has operational excellence by providing the shareholders with good quality products at a lower price than the competition
  • Provide decent customer service by ensuring the shareholders receive their wants and needs
  • Currently in good financial standing with about $10 – million sales and are receiving a margin close to their target.
  • Has a 5-year contract with the shareholders which provides OurPLANE’s with security


  • The current pricing strategy does not meet some of the margins set by Casson.
  • Does not have the appropriate promotion to reach to their target market (Corporations and wealthy individual)
  • Current promotion shows no means of address the environmental issues.
  • Not cost leadership, but has the lowest rates from the competition resulting in low margins
  • 100% of shares are not sold for each plane resulting in a loss in investment and a negative margin.
  • The bronze package of the Cirrus and Cessna not being sold resulting in OurPLANE’s not meeting the initial investment of 10%.


  • Invest in promotion & advertising to increase brand awareness
  • - Take advantage of discounted aircraft

Critical Opportunities

  • Increase products & services being provided
  • Invest in promotion plan 


  • Economy is entering into recession, many individuals and corporations will be conservative with their spending as aircraft is a luxury
  • Customers pressuring companies to leave a smaller carbon footprint and asking for bailout money from government leading to some companies not using such services
  • Potential inflation of oil prices due to global recession
  • Multiple bankruptcies: there’s a possibility of OurPLANE’s shareholders filing too, resulting in a decline in margins and profits
  • 3 direct competitors based in the US with the same target market and same type of products which leads to competitive pricing.

Critical Threats

  • Economy entering into recession will cause inflation in oil prices which leads to OurPLANE’s margin decreasing and not meeting their target
  • Due to the recession, multiple companies and individuals have filed for bankruptcy leading to a few clients with a potential to also file for bankruptcy which would decrease the margins and profits
  • Without the appropriate medium to reach to target market, and the recent economy downfall can lead to OurPLANE’s becoming stagnant and unable grow



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