Case study on Business strategy: Lufthansa’s Financial Strategy

Companies with a global reach benefit from advantages of globalization but also face challenges that require effective management for success. Trading in diverse markets for instance offers a firm with a shield against country-specific adverse effects of the economy. External markets however provide challenges for the companies in respect of political, economic, social, technological, legal and environmental (PESTLE) differences between home and foreign markets. These challenges may for instance relate to international marketing issues, human resource management issues, and global management aspects. Other challenges facing global entities are ethical issues and financial management aspects such as foreign exchange fluctuations. To enhance their market success companies must thus evaluate their strengths and weaknesses as while as the opportunities and threats that the external environment presents.

To familiarize with the challenges that face global companies, a case study of Lufthansa – the German flag carrier in the global airline industry – is presented in this paper. The paper will first give a history of the company and then identify the company’s financial strategy. In respect of the identified strategy, the paper then presents a SWOT analysis and identifies the PEST issues that are important to the airline. The role of the finance and accounting department and individual person’s duties at the department are discussed. Finally paper will evaluate ways through which the company can better its marketing strategy. Go to part 2 here.

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