MKT 5093: Marketing Management

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Running head: MACRO-ENVIROMENTAL ANALYSIS
2.3 BMP
Week 2
Guilherme Calache
BUS 5093
MKT 5093: Marketing Management
Dr. Daw Olson.
December 15, 2021

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MACRO-ENVIROMENTAL ANALYSIS
Macro-Environmental Analysis
Brazil is the largest economy in Latin America, and its continental size makes aviation
essential for the aggregation of territories, connecting small capitals with their cosmopolitan state
capitals. This has led the country to have the largest air transport market on the continent. As an
emerging economy, it recognizes that airport development is helpful in supporting the country’s
ambitions to expand tourism and global trade. According to a recent IATA report, “The Value of
Air Transport in Brazil,” the aviation sector contributes $ 18.8 billion to Brazil’s GDP and
creates 800,000 jobs. With demand doubling in the next 20 years, the airline’s economic
contribution to the Brazilian economy could increase to more than the US $ 8.8 billion a year,
with more than 1.4 million jobs.
The crisis is one of the most challenging things in airline history. However, there are
some issues specific to Brazil. For example, all carriers in the United States, Europe, and the
Asia Pacific received financial support but not government support. At the same time, there was
a significant devaluation of the local currency, a 25% to 30% devaluation, and the capital
markets closed. We soon realized that we had little money to cover. Azul has gone from about
1,000 flights a day to just 70 flights a day. There was negative cash flow. So, the companies had
to bring everyone together, from employees to fuel suppliers, lenders, and manufacturers.
Azul also takes partnerships and codeshares more seriously. The airlines that have the
right to exist will survive. Azul now serves more cities in September 2019 than in September
2019. The company found that a wider network works better for the market than a higher
frequency in a limited number of markets. Azul airlines want to bring more people into the flying
world. Creating this demand is very different from the competitors.
Market Analysis
With the pandemic, Brazil has been excluded from the United States, and it is not easy to
reach Europe either. International travel was affected, and in consequence, a big difference in the
number of demands for international flights has decreased during this time. However, domestic
travel benefited. Orlando and New York were effectively closed to Brazilians, so they explored
their own country. As a result, our national economy is booming. What needs to be addressed
now is the visa situation. There is a huge backlog of US visas. Even when the borders are
opened, there will be a slow recovery in travel to the United States because of this. And for the

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MACRO-ENVIROMENTAL ANALYSIS
Brazilians Airlines market, this is one of the main reasons why there was a slowdown in the
international flights to the US.
Industry Analysis
There will be more significant consolidation and a larger global partnership in the future.
This is good because the value in the airline has never been to the airlines. Azul can have more
partners as an industry among all partners, providing efficient services to customers, reducing
costs, and improving as an industry. It is an opportunity and a challenge ahead. The main goal of
Azul SA Pref’s technicians and leaders is to help the organization create a sustainable
competitive advantage and prevent competitive challenges from other players in the aviation
industry. To compete with these new players, local companies are betting on other benefits for
their customers. “The national trend is for current companies that aren’t low-cost to invest more
and more in loyalty to deal with this new wave” (Lima, 2019).
Porter’s five forces applied to the airline industry: 1. Azul SA Pref’s Bargaining Power
and the Transportation Industry: While buyers have strong bargaining power, they generally tend
to lower prices, limiting Azul SA Pref’s potential for long-lasting profits. 2 Threat of new
entrants in the airline industry, if there is a potent threat from new entrants in the airline industry,
current players will be willing to make lower profits to reduce threats from new entrants. 3
Bargaining power of suppliers in the airline industry: If suppliers have strong bargaining power,
they will extract more prices from Azul SA Pref. This will affect Azul SA Pref’s potential to
maintain above-average earnings in the airline industry. 4 Threat of substitute products and
services in the air transport sector: if the threat of substitution is high, Azul SA Pref must
continually invest in R&D or risk losing out to industry disruptors. 5 Rivalry between existing
players in the airline industry: If competition is intense, then it becomes difficult for existing
players, such as Azul SA Pref, to achieve sustainable profits.
Competitor Analysis
Brazil’s aviation market has changed significantly over the past year, demand growth has
weakened, unprecedented capacity regulation has taken hold, and the economy is stabilizing.
This industry has reached new heights. Faced with financial losses nationally, the two major
airlines have restructured their operations and adopted a number of new strategies. How are the
four leading players - Goal, Latam, Azul, and Avianca Brazil.