King County: A Case Study Model for Strategic Planning in College Aviation Learning

Case studies help students prepare for real-world problems, situations and crises by pmvidiig an approximation of various professional environments. Thus, through the examination of specific cases, students are given the opportunity to work issues through the Irials, bibulations, experiences, and research f idmgs of others. An obvious advantage to this mode of instruction is that it allows students the exposure to settings and contexts that they might not otherwise experience. One way to study airport issues is through the use of strategic planning cme studies. Strategic planning is a process of developing a map or route an airport will follow which identifies what products are to be provided to which customers, where they will be provided, and at what price. Based an the vision and mission staternens previously developed, smtegic planning summarizes the basic operational tasks, goals, objectives, strategies, and tactics for the airport organization. In this a paper strategic p lming, and more pmticuhly a shngths, weaknesses, opportunities, and threats (SWOT) case study analysis is used to evaluate King County International Airport (KCIA). This case study is a suggested model for development of future airport case studies to be used in the collegiate aviation learning environment. Iatmduction Sb'ategic planning for airports is a process of developing a map or route an airport will follow which identifies what products are to be provided to which ~ ~ t ~ e r s , where they will be pmvided, and at whar price. Based on the vision and mission statemenb, strategic planning summarizes the basic operational goals, tasks, objectives, strategies, and day-to-day tactics for the airport organization. The basic operational tasks are simply shorthand for what the airport's basic businem or function is-what the airport wants to accomplish (Quilty, 1999; Pearce and Robinson, 2005). Saategic planning involves establishing a mission, vision, goals, strategies, and tactics. The mission med not be measmble, but it is something the airport employees can work toward regardless of intemediateachievements. Cornparedto mission, objectives imply a shorter, measurable time period with an accomplishment that ran be measured in numerical terms. For example, an objective might be to achieve 90% hangar utilization within 2 years (Quilty, 1999). A strategy is a major course of action and implies a relatively longer time span than tactics. A smtegy is what m e is going to do and not how the airport is gomg to do it. A tactic, on the other hand is how the airport is going to ucbieve the strategy and the ultimate goal. It is a series of shorter action items that are part of the strategy. "Michael Porter, a management scholar, has identified three classes of competitive advantage smtegies. Thc classes am known as low-cost producer, differentiation, and focus" (Quilty, 1999, p. 21). The low-cost producer attempts to hold prices low by m b h k h g costs. These efforts may take the fonn of efficient scale of production facilities, product design, distribution channels, raw materials procurement, etc. Part of this saategy can involve selling in volume so that low profits par unit may be offset This sh'ategy is observed in air carriers such as SouthwestTM Airlines, but it is also practiced in general aviation fuel marketing, at airpons attempting to buy large mourn of chemicals or sand for winter use, and in the air cargo industry (Quilty, 1999). Diffmtiation saategy involves creating a unique huge of the organization's product or service so that customers may be charged for that uniqueness. Companies that employ this strategy s h s s high quality, image, or technological leadership, among other possibilities. J h A E q Spring ZOO9 1 Rankin: King County: A Case Study Model for Strategic Planning in College Published by ERAU Scholarly Commons, 2009 Kinn Coun@: A Case Study "Milwaukee International Ai ion has long stressed its airport as an alternative to Chicago's O'Hare International Airport, while many general aviation airports smss their ease of use and acceas to important business and commercial centers or recreation areas" (Quilty, 1999, pp. 21-22). Differentiation strategy can be viewed between Federal Express and United F'arcel Service, and between United Airlines and American Airlines. A focus shtegy typically targets a segment of a larger market and specializes in a particular geographic location or customer group. The focused approach attempts to serve the targeted needs so well that cornpetiton are lee with no opening to gain market share. An example is a fixed base operator WO) that specializes in specialized maintenance to the point where other FBOs in the area would not find it feasible to establish suchaservice (Quilty, 1999, Pearceand Robinson, 2005). The wncept of competitive advantage causes airpon managers to focus on meeting and anticipating the expectations of airport customers by compmhg theu airport's performance to other airports or to other aansportation modes. It requires an understanding of the competition's strengths and weaknesses through and benchmark analysis. It can also be used to assess how related businesses located on the airpoi? may respond or pursue their business activity (Quilty, 1999; Pearce and Robinson, 2005). In addition to pursuing competitive advantage, an airport may attempt to occupy a special niche in the environment that is unique to its capabilities, or which offers an opporhrnity overlooked by competitoP3. The SmQgy, in this case, is to occupy the niche and then erect barriers that prevent other organizations from challenging the unique position. Airlines and airport service companies often attempt to use this strategy (Quilly, 1999; Pearce and Robinson, 2005). Learning Objective The learning objectives are as follows: 1. Identify those elements of the shte@c management process that precede strategic decision-making at the King County International Aiiort (KCIA). 2. Identify and address the products and sewices that exist at KCIA. 3. Identify and address the customers and markets that exist at K I A . 4. Identify and address the competitive advantages of KCIA. 5. Identify and address what product and market emphasis KCIA should pursue. 6. Identify the strategy or strategies that KClA should implement and pursue. History of King County International Airport Accordiig to King County (2004), in 1928, K i County voters approved a $1 million plm to build the region's fust public airport. Today, the airport is one ofthe busiest airports in the nation and ranks as one of the most successful public investments in Washington State. The airport was named affer the founder of the Boeing Aircraft Company, William E. Boeing, and the airport helped to foster the growth of the Boeing Company throughout the 1930s. It sewed as the regjonal center for commercial and recreational avintion in the Seattle area during this era (King County A i i r t Division, 2002). Just one day prior to the bombing of Pearl Harbor, the airport was taken over by the federal government due to its strategic location and its importance as a Boeing production center. During the World War I1 era, the airport was devoted to the production of the B-17 and the B-29 bombers, which played key mles m the European and Pacific t h e w . ARer the war years, the airpon served as the primary passenger airport in the region until the consmction and completionof Sea-Tac International Airport in the early 1950s (King County Ai ior t Division, 2002). Today, King County International Aiiort (KCIA) is one of the busiest airports in the nation, serving mom than 375,000 aircraft operations per year by m a t i m a l , corporate, miliwy, and Boeing jet aircraft. The airport continues to provide limited passenger service and is the primary air cargo airport in the region. The airport is owned and operated by the Kiog County Department of Transportation, Airport Division, and receives no gmml tax revenues to support its operations. The airport is the site for the final production and delivery of the Boeing 737 and 757 aircrafl and a testing center for the Boeing 777 and military AWACS program. See Appendix A forthe facilities layout of KCIA (King County Aiiort Division, 2002). Mission, Values, and Vision Statements The mission, values, and vision statements of the King County International Airpott are as follow: Mission Statement The mission of the King County International A i o n is to suppon the economic vitality of the county, to support the national air transportation system, to encourage advanced technology, to provide safe and continuous geneml aviation airport services to King County businesses and residents and to serve as the gateway to the county. In fulfilling this mission, the Airport will be a good neighbor and environmental steward and will