Strategy Innovation Proposal #2 1 7 Strategy Innovation Yearly, the airline industry makes lucrative, financial decisions as they pertain to collecting profitable assets for the business. As of 1930, more than 30 airlines have exercised the option of merging with another; some have succeeded, some have failed, particularly on a financial aspect. Running a business requires time, money, and of course the knowledge of running a business. Some people start off small; presenting a business in which focuses on a one area at a time. Eventually, that business can expand by globalizing its brand from state-to-state, country-to-country, or wherever their product will sell. Assessing the situation: One airline in particular is American Airlines; once known as American Airways, “now American Airlines”, was founded in 1930. With an operating income of more than 300 million dollars, and total revenue of 22 billion, they are the United States number one operating airline. Although final mergers pertaining to complete destination routes, and plane makeovers, American Airlines, and US Airways will create a monstrous foundation to keep the number one spot atop the airline rankings. Assessing the situation, an unlimited amount of information is available, and discussion amongst the two airlines merging is viewable via the company’s web site, or via an Internet source. As a strategist, assessing any given situation can be tricky; mainly because of the pros and cons presented to the business. American Airlines and US Airways operated under different methods of intelligence. These methods pertain to the airlines focusing on demographics; demographics are quantifiable statistics of a given population. As both airlines initially serviced multiple countries, unwanted problems can arise at any time. These unwanted problems are usually not seen by the innovators because an innovator cannot be everywhere at the same time. Identifying of the problem and opportunity: Identifying unwanted situations can only upgrade the opportunities for the airline as a whole. Merging US Airways with American Airlines will bring the fleet size up to more than 800 aircrafts. Some people may take notice of the 800 aircrafts as a positive statement to the business, whereas others who travel for a living may beg to differ; this is mentioned because of air traffic. A fact in which some people may not know is; the owners of an airline company is not guaranteed air slots or space, all proposals must be discussed and brought to the attention the Federal Aviation Administration (FAA). Conjoining two airlines and clogging the friendly skies with airplanes is sufficiently unsafe. A good aspect and opportunity of the merger is the notion of the airline having what I like to call, “cap space”. In my own definition, cap space will allow the airline to have a certain amount of aircrafts on standby incase of mechanical or passenger overbooked situations. Creative concept development: C.

1. Strategy Innovation
Proposal #2
1
7
Strategy Innovation
Yearly, the airline industry makes lucrative, financial decisions
as they pertain to collecting profitable assets for the business.
As of 1930, more than 30 airlines have exercised the option of
merging with another; some have succeeded, some have failed,
particularly on a financial aspect. Running a business requires
time, money, and of course the knowledge of running a
business. Some people start off small; presenting a business in
which focuses on a one area at a time. Eventually, that business
can expand by globalizing its brand from state-to-state, country-
to-country, or wherever their product will sell.
Assessing the situation:
One airline in particular is American Airlines; once known as
American Airways, “now American Airlines”, was founded in
1930. With an operating income of more than 300 million

2. dollars, and total revenue of 22 billion, they are the United
States number one operating airline. Although final mergers
pertaining to complete destination routes, and plane makeovers,
American Airlines, and US Airways will create a monstrous
foundation to keep the number one spot atop the airline
rankings.
Assessing the situation, an unlimited amount of information is
available, and discussion amongst the two airlines merging is
viewable via the company’s web site, or via an Internet source.
As a strategist, assessing any given situation can be tricky;
mainly because of the pros and cons presented to the business.
American Airlines and US Airways operated under different
methods of intelligence. These methods pertain to the airlines
focusing on demographics; demographics are quantifiable
statistics of a given population. As both airlines initially
serviced multiple countries, unwanted problems can arise at any
time. These unwanted problems are usually not seen by the
innovators because an innovator cannot be everywhere at the
same time.
Identifying of the problem and opportunity:
Identifying unwanted situations can only upgrade the
opportunities for the airline as a whole. Merging US Airways
with American Airlines will bring the fleet size up to more than
800 aircrafts. Some people may take notice of the 800 aircrafts
as a positive statement to the business, whereas others who
travel for a living may beg to differ; this is mentioned because
of air traffic. A fact in which some people may not know is; the
owners of an airline company is not guaranteed air slots or
space, all proposals must be discussed and brought to the
attention the Federal Aviation Administration (FAA).
Conjoining two airlines and clogging the friendly skies with
airplanes is sufficiently unsafe. A good aspect and opportunity

3. of the merger is the notion of the airline having what I like to
call, “cap space”. In my own definition, cap space will allow
the airline to have a certain amount of aircrafts on standby
incase of mechanical or passenger overbooked situations.
Creative concept development:
Creating concept development is an area of interest that should
be pondered by top executives; reasoning is because strategic
innovation should be created through the knowledge of
experience, motivation, and the will to survive as a business. A
concept in which should focus on a low risk-high reward
outcome can foresee the ideation of a profit to an organization.
Another form of development to ensure a well-greased machine
is to map out the all lucrative destinations and look at the big
picture. Taking notice of the big picture helps foresee which
destinations are most popular. As American Airlines
headquarters is in the south region, with five major hubs, and
New York City as the top focal point of interest; compared to
US Airways headquarters in the west region of Arizona with
four major hubs.
Prototype development:
Prototype development is common on all business boards. The
development of a new product, plane, or disguise must go
through its testing phase before making a public appearance to
the consumer. For instance, American Airlines has the same
great customer service, but a new development has been
implemented for the consumer. With available resources, I find
American Airlines, and US Airways have developed strategic
identity for the ages; the same great “American” color (red,
white, and blue), with a small twist in the body design and
appearance is decoded.
Implementation, Validation, and Refinement:
The fifth and final step of the Innovation Business Development
Model is implementation, validation, and refinement. This step
focuses on appropriate enhancements, improvements, and an
exit strategy. An exit strategy pertains to a business leaving one

4. project, and start gathering information on another project. One
must take notice that an exit strategy cannot be utilized until the
prior obligations are met in full. American Airlines and US
Airways use the law to protect them from the United States
halting their merger. Some government officials claim that the
merger between the two companies will bring a head load of
higher fares, higher fees, less service, and less competition.
I personally agree with the government, but only partially.
Although fares may increase, by combining American Airlines
and US Airways gives the customer a wide-range of options to
choose from. Instead of two separate airlines, with their own
innovation strategies, now there is one monstrous airline with a
deep pocket of options. Combining the two validates more than
1,000 aircrafts available, more than 400 major destinations, and
close to 10 international markets to travel to and from. Other
improvements as the two airlines validate their stamp in the
industry are their commuter cities. Commuter cities service
small cities across the United States; handling aircrafts as small
as 44 passenger seat planes, up to 70 passenger seat planes. The
improvement gives the airlines a boost in revenue because of
major airports are limited in the United States. By offering
small airplanes to service urban areas, suburb areas, etc, the
airlines stock should rise because of a steady flow of revenue.
Nuance:
As most businesses should use exercise the unique nuance of
innovation strategy development, the airline industry has a
heavy stake for their sake. The Innovation Business
Development Model is followed as planned, but to ensure a
unique nuance, American Airlines and US Airways use a self-
service system called Nuance communications. Two vital
systems were implemented for use, one Natural Language
Understanding (NLU), and two, Interactive Voice Response
(IVR). In event created 400 individual jobs via three reservation
centers in the United States.

5. References
AAdavantage Geek. (2013). AAdvantage Geek. Retrieved from
http://boardingarea.com/aadvantagegeek/2013/05/15/photos-of-
the-new-american-airlines-prototype-priority-check-in-at-dfw/
American Airlines. (n.d.). American Airlines. Retrieved from
https://www.aa.com/homePage.do
Nuance. (2013). Nuance. Retrieved from
http://www.nuance.com/company/news-room/press-releases/US-
Airways-Customers-Receive-Personalized.docx
US Airways. (n.d.). US Airways. Retrieved from
http://www.usairways.com/home.aspx
Glimpse by Comparison
America Airlines
US Airways
Fleet size – More than 400
Destinations – 132
Four major hubs – Charlotte International (CHA), Philadelphia
International (PHI), Phoenix Sky Harbor (PHX), Ronald Regan
National (IAD)
Fleet size – 621
Destinations – more than 260
Five major hubs – New York (JFK), O-Hare International
(ORD), Miami International (MIA), Los Angeles (LAX),
Dallas/Ft. worth (DFW) “Headquarters”
Glimpse by Comparison
America Airlines
US Airways
•Fleet size –More than 400
•Destinations –132•Four major hubs –Charlotte
International (CHA), Philadelphia International (PHI), Phoenix

6. Sky Harbor (PHX), Ronald Regan National (IAD)•Fleet size –
621
•Destinations –more than
260
•Five major hubs –New York
(JFK), O-Hare International (ORD), Miami International (MIA),
Los Angeles (LAX), Dallas/Ft. worth (DFW) “Headquarters”
Proposal #1
Running head: STRATEGY INNOVATION PROPOSAL
1
STRATEGY INNOVATION PROPOSAL
5
Strategy Innovation Proposal
The company that I have chosen to write about is the Wal-Mart
Corporation; this is a company that has had the leading edge in
the retail industry for many years. With new competitors
popping up every day it is important for Wal-Mart to be
constantly developing new innovations to keep their competitive
advantage. Some of the competitors that Wal-Mart faces today
are companies that offer their products online with shipping to
their customers’ homes. This gives these companies a
competitive advantage because they do not have the same

7. amount of overhead that regular brick and mortar store has.
With a lower overhead these companies are able to sell their
products at a much lower price. The innovation that I am
developing is a service that would allow our customers to place
an order for anything that we sell in the store and have it
delivered to their house. The innovation that I am developing
would go one step further and make it possible for our
customers to even order regular groceries and have them
delivered to their homes.
One situation that our customers face today is a lack of time to
do their basic shopping or their regular grocery shopping. With
the additional demands on everyone’s time and our customers
being pulled in a bunch of different directions, I feel that our
customers would really benefit from this service. One situation
that we are going to face at store level is that we are going to
have to revamp our website due to the increase in traffic that
this is going to create. Another situation that we are going to
face is that we are going to have to move our associate structure
around in order to free up some associates that are going to be
able to pick and deliver these orders to the customers. We are
going to have to be able to deliver these orders in a timely
manner as some of these orders might be necessary for the
customers to have in order to prepare their evening dinner.
With this innovation put in place we as a company are going to
face many problems and innovations. One of the problems that
we are going to face is hiring the additional associates in order
to keep up with the traffic of the new orders from our
customers. We are also going to have to hire associates that are
proficient with the programs that are necessary to receive the
customers’ orders and to pick the customers’ orders out of the
computers and out of the store’s inventory. Another problem
that we are going to face is the liability that we face with
having one of our associates delivering this merchandise to our
customers’ homes. There could be accidents that could harm our

8. associates and we are also sending our associates to peoples
home that they do not know, this also could pose a risk. With
the addition of this innovation we are also going to gain many
opportunities. One of these opportunities will be that we are
going to gain a larger customer base. There may be customers
that are not able to leave their homes due to illnesses or
handicaps that are able to shop online. This innovation would
allow these customers to shop on our websites and we can then
deliver their merchandise to their homes. This could give these
customers a sense of independence that they may have not had
before.
Communication is very important in the retail industry, with all
of the competition out there it would be very easy for our
customers to get their needs met at one of our competitors if we
are not meeting their needs. In the creative concept
development process we are finding out what are customers’
needs are and the process that we need to take in order to meet
these needs. In this process is where we are evaluating the
customers’ needs and develop different prototypes or processes
to discover the best method to meet their needs. It is very
important to come up with the best methods as quickly as
possible since process testing is very expensive. The plan is to
roll this out to some select stores in order to see if this is a
process that our customers will be interested in participating.
We will also have to gather some feedback from the customers
that do use this service in order to see where we may need to
make some improvements. In this process testing method we
will provide a survey for the customer to fill out online when
they place an order so that we can see where the customers feel
that we can make some improvements.
In the process testing we will select some stores that already
have a large amount of customer orders on our pick up today
website. This is a website that allows our customers to place
orders for select merchandise and they can then pick up this

9. merchandise at their convenience. We are going to add a
selection to this website that will allow the customer select to
have this merchandise delivered to their house and it will also
expand the merchandise selection to allow the customers to
select groceries and have them delivered to their homes. We
will have to put a fee on the delivery unless it is over a certain
dollar amount and then we can offer free delivery, this amount
will be tested during this process. We will also be testing
whether it would be more beneficial for these stores to purchase
a couple of vehicles for use in the delivery or to have associates
use their personal vehicles and compensate them for this use.
This also will be tested in the stores with some stores
purchasing a couple of vehicles and some stores having their
associates use their personal vehicles and compensating them.
Since we will be live testing this on an existing website and in
stores that are already in operation this should have a smooth
rollout if and when we determine the process is used by our
customers and a profitable innovation for the company. If we
can show the other stores how much more profit they can
generate from this process I am sure the store managers will
promote this innovation to their associates and promote the use
of this innovation to their customers. It will take some
advertising to our customers but I think it will really catch on
once they get the hang of it and word spreads amongst our
customers.
In conclusion I feel that this will be a really successful
innovation and our customers will really see the benefits of
being able to order their household needs and have them
delivered to their homes at their convenience.