IU Professional Opportunities Orientation Program (Strategic Planning)

• About ATA

• Strategy Concept

• Strategic Planning’s Role in Business

• A Day in the Life

About ATA(Growth and Diversification)

1973 J. George Mikelsons founds Ambassadair Travel Club in Indianapolis

1978 Deregulation of U.S. Airlines

1982 ATA begins Charter service, total revenues of $30.5M

1986 ATA begins Scheduled service, total revenues of $185M

1996 Strategic Planning forms, total revenues of $750M

1999 Revenues exceed $1B; ATA is certified as a major carrier

2000 Projected revenues to exceed $1.3B; Placement of $2B aircraft order

About ATA(Corporate Structure)

ATA is the 11th largest U.S. airline and the number one passenger charter airline in the Western Hemisphere

1999 ACTIVITY 1999 ACTIVITY

10,913,081,000 Revenue Passenger Miles 7,773,444 Passengers 157,481 Block Hours Flown 400+ Airports Visited 50,207 Departures 78,602,678 Miles Flown (=3,156 times around the world)

AIRCRAFTAIRCRAFT

24 Boeing 727-200 Advanced 13 Boeing 757-200 Extended Range 14 Lockheed L1011-50/100 5 Lockheed L1011-500 56

EMPLOYEESEMPLOYEES

3,000 Crew Members 694 Reservationists 1,113 Airline Mechanics 1,823 Corporate Staff 6,630

About ATA(Company Profile)

Emergence of Fact-Based Decision Making

Strategic Planning groups emergeMBA programs surgeProliferation of the PC1990s

Tom Watson, CEO of IBM estimatesglobal computer demand to be 5

Arthur Andersen’s GLICIACaccounting computer

1950s

1970s Ascendance of strategy consulting US firms falter in international competition

Great Society educates more of the emerging workforce than at any other time in history

IBM sells thousands ofSystem/360 mainframes

BCG develops framework to quantify strategy1960s

SEC begins to protect investors Financial performance and operating statistics publicly disclosed 1930s

Engineering principles applied to organization structure and production efficiency

McKinsey forms firstmanagement consulting firm

1920s

US Army leads research in industrial organization and psychology

Principles of Scientific Management

Management definedas creating worker productivity1910s

PIMS study scientifically connects relative market share to financial performance

Visicalc/Lotus 123 revolutionize investment banking1980s

Customers

Capabilities Costs

Competitors

Give customers what they will pay for in a way that is tough to imitate

• What business are we in?• What do we do better than

anyone else?• What other customer groups

will pay for our capabilities?

• For what will they pay how much?

• How many are there?• How many will there be?

• What are our costs relative to our competitors?

• What are our costs relative to what our customers are willing to pay?

• Who are they now?• What do they do better or

worse than we do?• Who could they be?

Financial Performance

Competitive Advantage = Sustainable Financial Performance

Strategy is Conceptually Straightforward

0%

7%

14%

1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 18 20

Per

cen

tage

of

Com

pan

ies

Strategic Planning Profile(Group Size)

Source: Corporate Strategy Board research

Half of the leading strategic planning groups have six or fewer professionals...

8%

4%

12%

9%8%

6%

2% 2%1% 1%

2%

6%

9%

7%

3% 3%

2%

3% 3%

9%

+

48%ATA

1998 1999

6 12

2000

11

21%

42%

60%

36%

76%

40%

19%

20%

37%

0% 50% 100%

Venture Capital

Knowledge Management

New BusinessDevelopment

Internal Consulting

M&A

Business Unit Planning

External Scanning

Corporate Planning

Special Projects forCEO, Board

Secondary

Primary

Strategic Planning Profile(Responsibilities)

Source: Corporate Strategy Board research

…but tackle a broad range of high impact projects

ATA

20%

10%

10%

20%

19%

19%

23%

49%

50%

13%

52%

78%

78%

30%

10%

Strategic Planning Process

Research

• Internet

• Libraries

• Proprietary databases

• Trade press

• SEC information

Analysis/Modeling

• Economic modeling

• Regression

• Risk Adjustment

• Excel

• Optimization Software

• Access

Understanding

• Group sessions

• Brainstorming

• Hypothesis testing

Communication

• Simplify

• Encapsulate

• Logical

• Story

Strategic Planning- Team oriented

- 55 Hrs per week

- 5-10% travel

- Opportunity to work

with other departments

Strategic Planning Profile

Proforma

Financials

FINANCE

Process

Diagrams,

Labor

Negotiations

OPERATIONS

Market

Analysis

MARKETING

Database

Building

INFORMATION

SYSTEMS

• Seek significant value for company/shareholders

• Detail evolution of potential value

• Highlight historical information and project future developments

• Consider competitive picture

• Create detailed business plans– Income statements– Balance Sheets– Cash flows– Operating statistics

A Day in the Life(Sample Strategic Planner Contribution)

• Desire to work hard and create an immediate impact

• Enjoy numbers and analysis

• Understand goals of a particular assignment

• Conduct comprehensive research to build relevant database

• Develop rational assumptions where data not available

• Build economic model using data and assumptions

• Communicate solution– restate goals– review analysis steps– provide clear graphical representation– make recommendations– calculate economic value added

How Do I Succeed?

Indiana University Schedule

DATE EVENT TIMES

11/03 On Campus Interviews 6:30 pm – 8:30 pm

11/02 Information Session

12/10 thru 12/20 Offers Made

7:00 pm – 8:00 pm