Running Head: STRATEGIC ANALYSIS

Strategic Analysis: Adrenaline Air Sports Name of Writer Name of Institution

Strategic Analysis Strategic Analysis: Adrenaline Air Sports

The Case study is presented on sky diving business and how they should develop from a new start-up organization to a full time business. The organization has many unusual internal and external environmental concerns that they are required to get over with if they want to expand. Every year sky diving sees a growth of 2%. In order to increase the number of sky divers the company should focus on targeting new customers that want to experience the rush of sky diving, and this require the need for it being in a scenic place far away from major metropolitan areas, which acts as a major external concern for the business. The organization is located in a little resort city; however, during the peak season, it enjoys getting 10,000 new visitors every week. They are situated within 40 miles from the in the Roanoke area, which has a population base of 120,000 individuals. Students play a vital role for the business and are the largest proportion of the target population for the business. The company should look to target students located in Blacksburg area. However, they dont come back to attempt a second or third jump, due to costs. Around 80 miles south of the business is the town of Greensboro, which also has a large population. The biggest moneymakers for the organization are first time divers and those that get their licenses. The skydiving industry has a 3% rate of returning customers and the ones that do return continue to stay in the sport. Their competitors are far from them but offer superior service to the customers like faster and larger planes , which the company should mathc in order to stay in the market. Moreover, their competitors are also open on weekdays which gives them an edge over Adrenaline Air Sports. Hence, it is vital to get customers to come returning since they bring most of the profits to the industry. On the whole, the costs for parachuting are a little lower then both the competitors of Adrenaline Air Sports. Moreover, the Landscape of

Strategic Analysis Adrenaline Air Sports also gives them an added advantage over their competitors. It is the internal atmosphere of Adrenaline Air Sports that has several concerns. One of them is that all employees of Adrenaline Air Sports including the owner Billy Cockrell are part timers and do not want to work more than the weekends in which the organization is currently operating (Alexander, et al). For the purpose of getting the business to full time, Billy Cockrell, owner of Adrenaline Air Sports should look into the time that he is willing to spend on his business and how enthusiastic is he about the business. His business has been there for quite some time and has seen considerable success even though the business was operating on a part time basis. In order for him to go full time, he would need to invest all his time or may be even more time to his business. Moreover, he needs to hire a group of full time employees and would have to buy advanced equipment so that the incoming customers are satisfied and willing to come back. Furthermore, in order for the company to get more customers and retain more customers the company would need to look into either hiring professional marketing consultants that would ensure that the company is marketed well among its potential customers and target market.

Another alternative for this would be to hire marketing staff on the companys payroll. However, this would not be much reasonable for the company as of yet since the company does not want its fixed costs to increase. The business plan and marketing strategy of the business should define its customer groups and target marketed properly. For the type of business that the company is in, it needs to focus on the customer groups of college and university going age people, since they are the ones that are more interested in extreme sports activities such as sky diving. Hence, the companys advertising and promotion activities should only focus on the customer group that is in the age

Strategic Analysis group of college going people and who like to enjoy extreme sports, since not all college going people would be interested in extreme sports as well. Hence, the focus should exactly be on the college going people that are interested in extreme sports.

Looking at the financial side of the company, the company is based on greater volume of fixed costs rather than variable costs; hence, the company should look at using its resources efficiently and by reducing the variable costs the company can increase its revenues. Moreover, the company should focus on reducing its prices for returning customers so that more customers are attracted towards coming back. The company should also look to attract more first time jumpers by reducing their prices for first time jumpers, since they are the ones that bring in huge revenues for the company, and by reducing the prices it would attract more customers and more customers would be encouraged to try the new and exciting adventure sport of sky diving. A brief income statement for the year 2001 of the business is given below: Revenues Costs & Expenses Profit $ 154,000 $ 100,000 approx. $ 54,000

Strategic Analysis References

Alexander, L. D, Cockrell, B. & Charlton, J. Adrenaline Air Sports: Where the Speed Limit is 120 miles per hour or More. From Cases in Strategic Management. Houghton Mifflin Company. 2004.