Comprehensive Analysis of Aurum Air: PESTEL, Porter, SWOT, Bowman’s Clock, VRIN Analysis

Running head: AIRLINE SIMULATION
Airline Simulation
Name of the Student:
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Executive Summary
The paper has carried out a comprehensive analysis of Aurum Air, focusing on external and
internal analysis. With the usage of tools like PESTEL, Porter, SWOT, Bowman’s Clock, VRIN
analysis an overview has been provided to understand the potential risks, threats and the
advantageous points of Auburn Air. The analysis will furthermore help in future investments and
strategic implementation to foster its growth and make it survive under difficult market
scenarios. The conclusion and recommendations are given after a thorough analysis of Aurum’s
case study and U.S airline market as well.

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Table of Contents
Introduction......................................................................................................................................3
Strategic analysis.............................................................................................................................3
Outlook – Trends and Key Drivers in the Airline Industry.............................................................3
PESTEL Analysis............................................................................................................................3
Porter Five Forces............................................................................................................................5
Attractiveness of Industry................................................................................................................6
INTERNAL ANALYSIS.................................................................................................................7
Competitive Advantage – VRIN Analysis..................................................................................7
• Distinctiveness of the Firm............................................................................................................9
• CRITICAL EVALUATION OF BUSINESS STRATEGY AND PERFORMANCE.................9
STRATEGIC OPTIONS AND MODE OF ENTRY.....................................................................10
SWOT Analysis.............................................................................................................................11
Threats-..........................................................................................................................................12
Porter’s Generic Strategies............................................................................................................12
Ansoff Matrix................................................................................................................................14
Business and marketing strategy vs. Performance........................................................................15
Business Strategy- Bowman’s Strategic Clock.........................................................................15
Marketing Strategy – 4 P’s Framework.........................................................................................16

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Sustainability, Acceptability and Feasibility.................................................................................18
Scenario Analysis – End of Quarter 12.........................................................................................19
Conclusions and Recommendations..............................................................................................20

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Introduction
The airline industry is an unpredictable one and annually needs to invest a sumptuous
amount to ensure that it is not losing customers to other rival firms. There are a number of
factors that determine the growth and success rate of the aviation sector thereby promising it
good returns. Industry analysts use a number of tools like VRIN, PESTEL and SWOT to devise
strategies to enhance the growth of aviation sector. An understanding of the entire market is also
crucial before implementing any strategy.
Discussion
Outlook – Trends and Key Drivers in the Airline Industry
As the case study points, one of the key drivers of the sector are the steady growth in air
travelling since the global economic recession that took shape around 2008. Ever since, the
airline companies have striven to reduce operational costs and achieve best resource utilization.
As analysts have pointed, some of the major outlooks that would re-shape the airline industry are
rising number of passengers due to a globalized economy as well as revamping in cargo demand
which will elevate the business to a secured level. The other factors are intensification in the
entry of low-cost carriers which will therefore induce a change in the existing strategies of
Aurum Air. These factors will also consequent the airline companies in venturing into new
routes and new market acquisition. The industry will become more technology oriented in order
to cater to customer expectations (Ciliberto, Murry and Tamer 2016).

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PESTEL Analysis
Political factors- Aurum Air can be affected by the political scenario of the country, for instance
terrorist attacks which can influence the number of passenger and their choice of transport.
Consequently, Aurum Air has to shift the price of its tickets in order to sustain in the market,
invest a significant amount in promotional to induce the passengers in boarding Aurum Air
which ultimately falters their economic stability.
Economic Factors- the economic factors shed light on the nature and state of economy within
with the industry is operating and includes factors like interest rates, gross national product, labor
costs, fuel prices which have a massive impact on the economy of the airlines among others.
Fuel Costs- owing to the unpredictable nature, contract based fuel purchase or fuel hedging can
help Airlines from swinging towards a decline in profit rate. It can also increase the competitive
edge of Aurum Air by keeping it prepared to face periods of high fuel cost.
Technological Factors- Internet and online booking has paved the way for an increase in ticket
sales. As far as Airlines is concerned, approximately 75 percent of its sale was sold by online
booking. Airline has amassed profit due to the technological factors that has catered the
customers with convenient booking of air-tickets, flight information. An ease in communication
will help in the growth of air passengers and flight tickets. Airlines can further see a growth in
their sales by a strategic planning and advertising like investing more on promotional activities,
coupons and vouchers
Environmental Factors- The emissions of aircrafts are injurious to the quality of air that living
beings respire in. Aurum Air should therefore adopt to friendlier measures like green flying and
focus more on social responsibilities and CSR activities.