exemplu swot pestle

7/28/2019 Exemplu Swot Pestle

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PESTLE/SWOT

British Airways

British Airways is the United Kingdoms largest international scheduled airline flying

to 148 destinations around the world. The airline is considered as one of the worlds leading

scheduled premium international airlines. The airlines principal place of business isHeathrow. Aside from scheduled passenger services, British Airways also operates a

worldwide cargo business (British Airways 2009).

SWOT Analysis

SWOT analysis is a management tool that aids in the identification of organizational

strengths, weaknesses, environmental opportunities, and threats (Jones and George, 2003).

Through the SWOT analysis, the organization will be able to produce an organized inventory

of factors that are potentially relevant to the firms strategic situation (Saloner, et al 2008).

StrengthsOne of the strengths of British Airways is its acquisition of modern, top of the line

fleet of aircrafts. These aircrafts are aimed to improve the airlines product and service

offerings thereby increasing the number of passengers. The acquisition of modern aircrafts

also allows British Airways to go head to head with their major competitors and to service

wider markets. The companys human resourceis also considered as one of the companys

strengths. As a progressive, high performing organization, British Airways recognizes that

engaged employees are more committed to organizational values and more willing to

embrace change and improve customer service.

WeaknessesOne of the weaknesses of the company is its weak marketing campaign and strategy to

encourage repeat purchase and customer loyalty. There is a need for British Airways to come

up with marketing strategies that will attract more passengers.

OpportunitiesThe completion of Terminal 5 is expected to strengthen and improve customer

experience, continue to make the business more cost effective, grow British Airways

operations and make corporate responsibility a prominent part of the business. The company

is also in the process of improving its products and services, which is expected to attract

more passengers.

Threats

One threat for British Airways is intense competition. The airline operates in highly

competitive markets. British Airways face direct competition from other airlines on its routes,

as well as from indirect flights, charter services and from other modes of transport. Some

competitors have cost structures that are lower than British Airways or have competitive

advantages such as government support. Another threat is that the airlines suppliers, in

which the airline is highly dependent, are in a high risk of business failure because of the

present economic condition. The failure of a key supplier may cause significant disruption to

the airlines operation. Safety and security is also a threat for British Airways. Failure to

prevent or respond to a major safety or security incident could adversely impact the airlines

operations and financial performance. Another significant threat is further deterioration in


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the global economy. If the global economy continues to decline, the financial position of

British Airways will be affected.

PESTLE AnalysisThe airline industry is highly competitive and regulations are heavily implemented.

Aside from these, the airline industry also faces different challenges brought about by drasticchanges in customer behaviour affected by different external factors such as economic

condition.

The PESTLE analysis is used to identify forces in the macro-environment that are

affecting the business at present and are likely to continue to affect the business in the future

(Haberberg and Rieple 2008). The PESTLE analysis is used as tool for analyzing a

companys macro-environment. Macro-environmental analysis is interested in factors in the

wider environment that influence the demand for the product or service offered by a

company; demand for the product or service; the manner in which the product or service is

distributed; the price that is charged for the product or service; as well as the manner in

which organizations compete with each other (Haberberg and Rieple 2008).

Politi cal AnalysisThe airline industry is highly regulated. The airline business is influenced and

governed by tight regulatory controls. Almost every airline business operation and decision

is influenced by regulations and policies. Regulations are applied in the routes that an airline

chooses to fly, the business partners the airline works with, the airport slots it uses as well as

the fare it sets and the infrastructure costs it pays.

In recent years, the environmental impact of an airline is also subject to regulations

and policies. Governments around the world introduced a range of security measures in

order to fight the threat of terrorism and illegal immigration. Airlines continue to engage

with different governing bodies such as the European Union and national governments to

ensure safety and security while causing minimal inconvenience to customers (British

Airways 2008).

Safety Standards are strictly implemented in Europe by the European Union. The

International Aviation Organization (ICAO) is one of the governing bodies concerned with

safety standards. The European Union, being a regulatory body in Europe published a list of

airlines that failed to meet the safety standards set by ICAO. These airlines are banned in

Europe (Department of Transport 2009).

Economic Analysis

The airline business is highly sensitive to any economic downturn. Economicdownturn causes business travel, which is considered as the bread-and-butter of the airline

industry, to drop significantly. The global recession in 2008, has tremendous impacts on the

airline industry. There are a number of factors that affected the business of British Airways

prices increases in oil and commodities, collapse of sterling, unprecedented financial crisis

experienced by the United Kingdom. Consumer and business confidence on airlines declined

because of rising unemployment, uncertainty in the capital markets, a continuing squeeze on

credit, the erosion of household budgets and falling house prices.

Social AnalysisSignificant decline in consumer demands and changes in consumer behavior are

being experienced by airlines around the world. This is due to the global recession. Becauseof the decline of global economy, consumers from premium, business and individual


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categories are choosing to cut back on air travel expenses. Consumer confidence is also

declining. Though many customers continue to see a first holiday as an essential rather than

a luxury, most are cutting back on second and third holidays and short breaks.

Business travellers and individual passengers are choosing trusted airline brands.

Customers seek assurance that their journeys will go smoothly. The downturn in the economy

is also pushing the consumers to be more price-sensitive. Consumers are looking for valuefor money, demanding excellent levels of service and high quality standards at lower costs.

Consumers also tend to be less loyal than before. They are more willing to try out other or

new airlines, which offer real value. Technological advances such as the internet and mobile

phones are helping the consumers to make informed choices. Consumers are using price

comparison sites and seeking out personal recommendations on service and quality before

booking their trips (British Airways 2008).

Technological AnalysisInternet, mobile phones and PDAs are tools that passengers use in checking-in.

maintaining a corporate website which also handles customer queries and reservations is

also becoming a new requirement for airlines. Technological advances that aim to reduceenvironmental damage caused by airline operations are also increasing as well as

innovations that aim to improve service and passenger experience.

At present technological advancements especially capacity enhancing technologies

and environmental mitigation technologies are continuously introduced. Some of the

technologies that are being developed now in the aviation industry are Arrivals Management

System, Departure Manager System and technologies that address wake vortex effects.

An arrivals management system (AMS) is an air traffic management automation tool

designed to optimize traffic flow in and around the Terminal Manoeuvring Area (TMA).

There have been developments in the United Kingdom and across Europe regarding arrival

managers and associated tools. Departure Manager Systems (DMS) have also been a focus

of research and development. Boeing in the year 2000, has announced the development of

aerodynamic techniques which cause the wing tip wake vortices from an aircraft to collide

with each other a short distance behind the aircraft, resulting in them dissipating more

quickly (Little 2000).

Legal Analysis

The airline industry is becoming increasingly regulated. The scope of such regulation

ranges from infrastructure issues relating to slot capacity and route flights, through new

environmental and security requirements.

Environmental AnalysisSome of the environmental issues that the aviation industry faces are noise, air

pollution, land take, water pollution and waste management. Aircraft noise has the potential

to affect the quality of life of at least half a million people living close to UK airports.

Aircraft, airport vehicles and rod traffic to access airports emit air pollutants, such as

nitrogen oxides, fine particles, carbon monoxide and hydrocarbons. Building an airport

inevitably takes land away from its previous uses. In particular, it can affect wildlife habitats,

landscape and heritage (Parliamentary Office of Science and Technology 2003; Friends of

Earth 2006).

Like many organizations today, British Airways face several environmental issues

such as climate change. Governments and policy makers are now creating regulations and

policies that will require airlines to curb emissions growth. All airlines have to meet a


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comprehensive range of local, national and international environmental regulations (British

Airways 2007).

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