Funding Pitch

Funding Pitch

Hello, welcome to today’s presentation. I am glad to be part of this gathering as one of the speakers. Today, I will present my pitch for funding. My objective is to convince you, potential investors, to provide funding for the implementation of the proposed idea. The organization that I will feature in this pitch is the American Airlines Group Inc. Let us get started!

Value Proposition

After extensive research, I settled on implementing low-cost flights at American Airlines Group Inc. Low-cost flights are a service expected to enable the airline to survive and recover from the effects of the COVID-19 pandemic. The service is expected to cater to the market share that requires economical flights and cost-conscious clients. It will include a reduction of the flight charges to ensure that the targeted market is able and willing to pay. Hire our assignment writing services in case your assignment is devastating you. Our team of experts is ready to help.

When we look at the airline sector, other players have been primarily offering low-cost flights. This service is usually characterized by short turnaround times, minimal inflight services, point-to-point models as opposed to the usual hub-and-spoke model, and the use of a single fleet, among other aspects. These aspects are designed to ensure that clients have easy access to the service and achieve convenience. Client loyalty is targeted while the airlines achieve low maintenance costs and almost standard margins (Muduli & Kaura, 2011).

However, the idea is different from the low-cost flight services offered by other players, such as Southwest Airlines. American Airlines Group Inc. intends to provide low-cost flight service with more luxurious benefits. The company will utilize current fleets that are used for premium services. This should change along the way as the carrier plans to acquire a separate fleet that will serve the new target market. The accompanying inflight services will still match the existent benefits that accompany other products. This should ensure that clients are easily attracted to the service as the airline exceeds their expectations and market conditions.

The company plans to utilize existing human resources and assets to offer the service. This means that the remaining employees will be engaged entirely before new staff members can be hired. In addition, current fleets will be utilized prior to purchasing new caravans in the short term. The existing airports and systems will be helpful in ensuring that the service is offered successfully.

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Competitive Advantage

The selection of low-cost flights as the ideal service was motivated by the need for cash preservation and the provision of economic benefits. The company will gain cash preservation at a time when other players are struggling to remain operational. Since American Airlines has financial obligations to attend to, it needs to have some cash. Low-cost flights will provide the much-needed cash flow, an aspect that most organizations lack at this time.

In addition, cash preservation is one of the carrier’s strategies. The main avenue toward this end is the reduction of operating costs. The airline will contribute to a decrease in operation costs by downsizing its human resources. Reducing labor costs will allow carriers to recover from the pandemic’s effects with less pressure. It will also be able to reposition itself in the market strategically. At the same time, the savings will be diverted towards continuous servicing of debts, thus eliminating any potential dangers to the business.

Finally, the organization will gain a larger market share. Previously, the entity has concentrated on the provision of premium flight services to the high-end market. As we have observed, the organizations’ high-end market was also affected by the pandemic. Thus, the company needs to tap into a different market and ensure that it remains operational. By the time the recovery period is complete, American Airlines will have expanded its market base, leading to greater profitability.

Risks and Opportunities

American Airlines Group expects the low-cost flights to interrupt the current markets significantly. It will introduce a change in the strategies that carriers use to exceed the client’s expectations. It will set a new trend in the styles that airlines use to offer value-added services to low-cost flights. The airline intends to offer low-cost flights with accompanying inflight services that are more prestigious than they have been in the past.

This model will pose some risks, which include a lack of acceptance by clients and failure to generate profit initially. Clients may not accept the concept if sufficient marketing is not achieved. In addition, the airline could make low profits or fail to break even if high volumes are not fulfilled.

Growth Opportunities

American Airlines is set for growth. Already, it enjoys significant and strategic partnerships with other players. Implementing low-cost flights should promote the company’s ability to reach out to a broader client base. The new target market will ensure that American Airlines is more appealing to clients from different economic and social statuses. The achievement of cash preservation, greater market diversity, and increased profitability will ensure that the organization gains an edge over other players who do not modify their services.

Identify the growth opportunities within the company.

Distinguish as a New Product or Innovation

Strengths Improving domestic flights Ease of reserving tickets High customer satisfaction Market leader	Opportunities New consumer trends Low rates of inflation New technology for expansion
Weaknesses Poor financial planning level of debt High attrition rate loss of key personnel Declining sales/revenue Discrimination Limited infrastructure	Threats Covid-19 spread Reducing demand Deteriorating economic conditions Competition Terror attacks

 Based on the SWOT analysis, the low-cost flights will address multiple threats and weaknesses. First, the service will tackle the reduced demand for traveling due to poor economic conditions that were exacerbated by the pandemic. Secondly, the service will enable the organization to service its debt obligations continually. Thirdly, the declining sales and revenue will be diminished as the new market provides consistent income.

Target Segment

The targeted clients vary in age, nationality, and gender. They can be employed or have business clients. However, they are cost-conscious and seek convenient and comfortable flights. American Airlines Group will successfully target clients who seek economic flights. This will ensure that the company’s portfolio expands to include both premium and economy flights.

Speculate Sales

The airline had gross revenue of USD 29,882,000 by the end of 2021. This revenue was more than the previous year and less than the pre-pandemic years. Consequently, it shows a significant recovery of the airline’s operations. Offering low-cost flights to cater to the basic economy will increase the volume of flights, which will lead to a further increment of the revenue that the airline realizes. The expectation is that the payment will return to the pre-pandemic amount of at least USD 45,000,000 (Yahoo, 2022). The main risk associated with the projections includes failure to meet the sales due to the low volume of travelers. This could mean that the airline will not achieve the competitive advantage that is sought through low-cost flights. The expected ROI is 2.5, which is obtained after dividing the profit by the investment cost.

Speculate Profitability

American Airlines Group’s financial performance over the next two years is expected to be gradual (Yahoo, 2022). The company is not likely to make significant profits. Instead, it is expected to reduce its losses, which were incurred in 2021. The company’s new product, low-cost flights, is expected to enable the carrier to remain afloat as it recovers from the pandemic’s effects. Since business has not entirely healed, huge profits are not likely. However, the airline will have lower administrative costs because of the reduction in employees. The salaries will reduce significantly. These monies will be directed toward motivating the remaining staff members and ensuring that the expenses and loan obligations are serviced as expected. Income from other business activities is expected to remain stagnant because the volume of clients is significantly low. The cost of goods sold is expected to remain high over the two years because the company will still be expected to maintain current assets that are used for service delivery. Implementation of the service is expected to stimulate the marketing department to achieve extensive promotional activities to reach the target market. The sales department will have to package the service attractively and work collaboratively with the marketing section to position it strategically in the market. The finance department will have to review the company’s costs to ensure that the prices do not exceed them. The department will also ensure that the sales and marketing units are informed about the financial translation of their efforts.

CSR Plan

Low-cost flights fulfill the company’s CSR objectives by ensuring that all target markets are included (American Airlines, 2020). The inclusion of diverse stakeholders in the company’s plan allows the new target market to access these benefits. I am convinced that a good CSR plan is essential in improving the airline’s competitive advantage. It will create a more favorable public image for the organization.

DEI Plan

American Airlines Group has a DEI policy that guides its actions. The policy highlights

aspects such as listening and relationships, learning and aligned values, as well as intentional

recruitment and advancement. The company has demonstrated significant intentionalism in

ensuring that the DEI policy is implemented into daily business practices. The feedback that

team members provide enables the company to make gradual improvements (American Airlines,

2021). A diverse, inclusive, and equitable project team should include people from multiple

races, nationalities, physical abilities, and genders. This creates diversity as all members of the

organization are formed through their representatives. Similarly, the company intends to attend to the needs of diverse clients in the market. The diversity that the new service contributes is the difference in socio-economic status. The cost-conscious clients belong to different economic groups. This means that the company will cater to a more diverse market with its diverse team.

Conclusion

Based on these details, I am convinced that this service will benefit the organization, its employees, the stakeholder groups, and the market at large. As an investor, the company will require your input in the purchase of new fleets that will be used for the service. The service will be provided on a long-term basis. Thus, the investment will increase the company’s returns once the premium flights resume. Thank you for your time!

References

American Airlines. (2020). Environmental, Social and Governance Report.

American Airlines. (2021). Diversity, equity, and inclusion. Retrieved from https://www.aa.com/i18n/customer-service/about-us/diversity/inclusion-and-diversity.jsp

Muduli, A., & Kaura, V. (2011). Southwest Airlines Success: A Case Study Analysis. BVIMR Management Egde, 4(2), 115-118.

Yahoo. (2022). American Airlines Group Inc. (AAL). Retrieved from Yahoo Finance: https://finance.yahoo.com/quote/AAL/financials?p=AAL

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Competencies
In this project, you will demonstrate your mastery of the following competencies:

-Determine how an organization gains a competitive advantage
-Determine organizational risk and growth opportunities in order to develop a strategic plan
-Defend business decisions in support of an organization’s strategic plan

Scenario
It’s the moment of truth: your opportunity to demonstrate why your new product or service is worth funding. You have done the research and know that the financing you seek can be a game changer for the company. Not only will it produce revenue and profitability, but more importantly, it will strategically set the company apart from its competition.

***You have to convince senior management.

In preparation, you have created a checklist for yourself to use in compiling information that includes research, feasibility of the idea via the BMC, scope of project (timeline included), project risk mitigation, DEI, CSR, and 24-month pro forma.

You know that anything can happen in a funding pitch. With this in mind, you are prepared to answer questions that encompass all aspects of the project.

Directions
Create a pitch for funding. In this pitch, you will have to convince senior management to greenlight the new product or service. Aspects of the rise that must be addressed:

-Value proposition: Describe the company’s current value proposition in the market.

-Describe the selected company’s main product or service.

-Discuss the company’s overall strategic plan.

-Competitive advantage: Describe the competitive advantage the company will gain by funding the project.

-Describe how you discovered an opportunity to do something better than your competitors.

-Determine how the new product or service shifts the value proposition of the company.

-Risks and opportunities: Establish the risks and growth opportunities of the company.

-Determine if the new product or service could disrupt the current industry.
-Identify the risks associated with the development of this new product or service.

-Growth opportunities: Describe the areas of potential growth for the company.
Identify the growth opportunities within the company.
Explain how the competitive advantage allows for growth.
Distinguish as a new product or innovation: Distinguish the new product/service as an innovation or improvement on an existing product/service.
Determine if the product or service fits within the capabilities of the company.

Note: a company’s SWOT analysis or 10-K is an indicator of whether the new product or service could be feasible.
Explain how the new product or service adds to the portfolio of the company.

Target segment: Describe the targeted part.
Identify the target customer.

Explain your blue ocean strategy.

Note: The new market is identified here.
Speculate sales: Speculate on the projected sales.
Justify your product or service by the numbers; discuss your projected revenue gain.

Note: it MUST have an ROI that justifies the project for investors and senior management.
Explain the risks associated with projected sales.
Speculate profitability: Speculate on the profitability of your proposed product or service.

Determine if the project is profitable.

Note: In this pitch for funding, senior management has to know that the project, based on market research, is speculated to be profitable.
Use the company’s current income statement to project how the company’s profitability will be affected. Look to other companies in the marketplace with products or services similar to the one you are proposing as a basis for your projections. Note: these numbers are purely speculative.

Determine the impact on the functional areas of the business (accounting, marketing, sales, and so on).
CSR plan: Outline the plan to service the community or customers that purchase the product or service.
Discuss how the idea demonstrates corporate social responsibility (CSR).
Identify what the company has invested in as it relates to the communities they serve.
Discuss how a good CSR plan helps the company gain a competitive advantage.
DEI plan: Summarize how the project will include a variety of perspectives to get a better, unique value proposition.
Determine if the company has a corporate culture built on DEI.
Discuss how the project’s DEI plan fits into the company’s overall strategic plan.
What to Submit
To complete this project, you must submit one of the following:

Funding pitch video or audio recording
Film a 15-minute camera-facing or audio-only recording. It must be submitted as one of the following file types: SWF, MPG, MPEG, RM, MP3, MP4, M4V, M4A, AVI, WAV, RAM, ASF, MOV, RA. You must also submit a speech outline in a Word document with the topics listed in order and a References page. Sources should be cited according to APA style.
OR
Funding pitch script
Your script should be written as if you were delivering the speech and submitted as a 6- to 8-page Word document. Sources should be cited according to APA style.