Strategy Development for Survival & Growth of MRO Company during & Post Covid-19 Pandemic (Case Study: GMF Aeroasia)

Indonesian Aviation Market 2020 was predicted to grow around 7.0% compared to 2019. It gave Indonesian MRO industry an optimism at first, at least in the beginning of the year, before WHO declared COVID-19 pandemic in March 2020. The COVID-19 pandemic has a dire impact on the aviation & MRO industry. As of July 2021, flights still haven’t reached 50% compared to pre-COVID era. Many MRO companies, including GMF AeroAsia, must face an unprecedented situation that caused the market to shrink significantly, and enter the financial distress zone. Several initiatives have been taken by the company. However, with the protracted pandemic conditions and the uncertainty of Indonesian Aviation Market recovery, further strategies are needed to survive and growth. This study aims to analyze the company and develop a strategy based on 2 stages, namely the retrenchment phase and the recovery phase. The retrenchment phase will focus on the survival strategy, while the recovery phase will focus on the growth strategy using scenario planning because the future is still uncertain. From the analysis and interviews, several initiatives and strategies for survival and growth were developed. Several initiatives for survival include headcount cuts, operational efficiency, product elimination, liquidation & divestment, equity for debt swaps, and renegotiate with lenders. While the growth strategy was developed based on 4 scenarios, namely Flying Through Thunderstorm, Flying with Engine Failure, Flying with Broken Wings, and Flying Zig-Zag.

Product Elimination in German Industrial Companies: A Comparison Study with US and UK Industrial Companies

This paper focuses on the product elimination in German industrial companies, especially in the mechanical engineering sector. The Product Life Cycle (PLC) theory is based on the typical curve, which shows the different stages a product experiences over the time. The last stage, the so-called decline or elimination phase, is characterized with decreasing sales figures, low market share and shrinking profits. Therefore, it sounds logical that such products should be eliminated. This study is analyzing if these indicators really are the only reasons to start the elimination process of a product, or if there are other reasons triggering this decision too. This paper is based on results of personal structured interviews (n = 102) with representatives of German mechanical engineering companies. The data was processed with use of statistical software SPSS, mean values and standard deviations were calculated, and Spearman's rank order correlation value analysis was applied. The results of this study were then compared with other earlier studies: Avlonitis (1984), Hart (1988), and Mitchell et al. (1998). The main findings suggest that the data from the new German study are highly correlating with the data from the United States (Mitchell et al., 1998) and the United Kingdom (Avlonitis, 1984; Hart, 1988). The results show that the reasons to phase out a product have not changed over the time; neither are the reasons different in different economics.

Exploration of the product phase-out process in manufacturing firms

Purpose In today’s dynamic environment with shortened product life cycles, phase-outs because of product elimination are becoming increasingly frequent. Research on the phase-out process is still scarce. The lack of formalization of the process, especially from the labor perspective, leads to disturbances in phase-out execution. Therefore, the purpose of this paper is to analyze how phase-out is organized in industry to derive a generic labor phase-out process. Design/methodology/approach This research identifies manufacturing firms that have eliminated products in the past as an adequate sample. Data collection relies on exploratory cross-industry after-the-fact interviews of entirely finished replacement and closure phase-outs. Findings The labor phase-out process consists of four stages and each stage of several activities. There are two types of activities: rational and emotional, which should be combined to support companies in implementing a successful phase-out. Research limitations/implications Phase-out is a sensitive process, and many experts from industry do not like to discuss phase-outs, in particular closure phase-outs. Although cross-industry coverage could be achieved, companies that intend to apply the developed process should individually adapt it to their own requirements and their own context. Practical implications The presented labor process supports companies in formalizing phase-out, while identifying best practices. Originality/value This research sheds light on a phase of the production cycle – the phase-out – that has been neglected so far in the extant literature and generates insights for manufacturing companies how they can formalize this process and how they can deal with it more systematically.

Outcomes of decision speed

Purpose – This paper aims to consider decision speed’s role in the largely neglected decision area of product elimination. Design/methodology/approach – Drawing on an inter-disciplinary theoretical background (e.g. organisational, decision speed and product elimination theories), the authors develop and test a framework for decision speed’s effects on the market and financial outcomes of a stratified random sample of 175 consumer product eliminations. Findings – In contrast to decision speed research that hypothesised (and often failed to confirm) linearity, results show inverted ∪-shaped decision speed-to-decision outcomes relationships, with curvatures moderated by product importance, environmental complexity and turbulence. Research limitations/implications – Findings are suggestive of several implications for the above theories (e.g. contribution to the dialogue about performance-enhancing value of rational vs incremental decision-making; evidence that excessive decision speed may become too much of a good thing). Certain design limitations (e.g. sampling consumer goods’ manufacturers only) point at avenues for future inquiry into the product elimination decision speed-to-outcomes link. Practical implications – Managerially, the findings suggest that product eliminations’ optimal market and financial outcomes depend on a mix of speed and search in decision-making and that this mix requires adjustments to different levels of product importance, interdependencies with other decision areas of the firm and environmental turbulence. Originality/value – The paper makes a twofold contribution. It enriches decision speed research, by empirically addressing speed’s outcomes in relation to a decision area that is not necessarily strategic and represents the first explicit empirical investigation into outcomes of decision speed in product line pruning decision-making.