Case Study about Analysis on Yunnan Airlines 2022

Running head: CASE STUDY ANALYSIS ON YUNNAN AIRLINES
CASE STUDY ANALYSIS ON YUNNAN AIRLINES
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Author Note

CASE STUDY ANALYSIS ON YUNNAN AIRLINES1
Executive Summary
As the global business environment is competitive in nature, the nature of the business needs to
be ever revolving. It is in regard to this that, all the firms who are present in the industry are
required to undertake procedures and strategies which will help them in attaining overall
organizational success. The given report is based on the case study of Yunnan Airlines and the
manner in which the firm has been evolving in the past. Moreover, the use of various strategic
management tools like PESTLE, Porters, Generic and SWOT have been made use of in order to
understand the manner in which the firm will be able to gain success. Out of the various options
which were available to the firm, the strategy which has been adopted can be understood to be
the Green strategy. In line of this, the recommendations which can be undertaken by the firm
have been provided.

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Table of Contents
Introduction......................................................................................................................................3
Case study context...........................................................................................................................4
The challenges being faced by the firm...........................................................................................5
Application of Strategic models......................................................................................................7
Porter`s Generic Strategies..........................................................................................................7
PESTLE Analysis......................................................................................................................10
Porter’s five forces strategy.......................................................................................................13
SWOT Analysis.........................................................................................................................16
Options exposed to the firm...........................................................................................................18
Most appropriate option.................................................................................................................20
Conclusion.....................................................................................................................................21
Recommendations..........................................................................................................................21
References......................................................................................................................................23

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Introduction
Strategic management can be considered to be an integral part of the organization`s
overall strategy. When any firm wants to ensure long term success in the business domain, then
in such a case, the firm would be required to apply various strategic management tools which
will enable the firm to achieve its overall goals and in line with this be able to attain a strategic
position in the competitor field. According to Aguinis, Edwards and Bradley (2017), the
Strategic Management can be understood to be the continuous planning, monitoring as well as
the analysis and assessment of the aspects which relate to the organizations overall success and
help the firm in meeting all its goals as well as objectives. The Strategic management as a
function helps the firm to meet the needs and in line with this also helps the company leaders in
assessing their overall current scenario, deploy the strategies which have been designed and
analyze the overall effectiveness of the implemented strategies. The function of strategic
management does not just involve the analysis of the cross functional business decisions but
revolves around the implementation of the same (Ansoff et al. 2018). The different functions of
the Strategic management can be understood to be centered around the formulation of action
plans, execution of the action plans, monitoring and evaluation of the action plans which have
been designed and making the changes whenever desirable. The reason why the Strategic
management as a function is considered to be very relevant can be stated to be centered around
the fact that it initiates a commitment to the overall strategic planning and focuses on the ability
of the organization to set down the short term goals as well as the long term goals.
This also contributes towards understanding the resource allocation and necessary
processes which assists in strengthening the core competencies of the organization. Hence, in

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line of this, through the formulation of a strategy, the firm will be able to take adequate steps in
the right manner and be able to keep the pace with the changing needs of the business
environment. Moreover, the firm can also attain competitive advantage and improve the overall
market share (Baumgartner and Rauter 2017). This thereby allows the firm to improve the
overall market share. The focus of the report lies on the strategic management analysis of the
organization Yunnan Lucky Air. The report will examine the overall background and case study
related aspects of the firm. In addition to this, the problem which is being faced by the firm will
be examined and various Strategic models will be applied in order to understand the overall
intentions of the firm and the emergent of the right strategy.
Case study context
The case study throws light on the overall operations and history along with the
development of the Chinese low cost carrier named Yunnan lucky air. The firm had been
established in the year 2004 and had experienced profound growth in its years of operations
(Berenguer et al. 2008). The organization was found in 2004 with an initial capitalization of
US$2.2 million and the reason why the operations of the firm was centered around Yunnan is
because, the city showed exceptional potential for growth in the number of tourists and the
arrivals between 2007 and 2008 increased from 21 million to 24 million.
Hence, the purpose was to capture this growth so as to ensure that, the firm could benefit
from the growing operations. Lucky Air had its operations based around the Yunnan province
such as the Dali and Xishuanbanna. This helped the firm to gain monotony and in addition to
this, also assisted the firm in ensuring that they are able to establish themselves as low cost, high
efficiency and adopted some key components of the South west Airline model (Bowman and

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Faulkner 1997). The reason why the airline was able to maintain its efficiency status is because,
the usage of just one type of an airline contributed towards reducing the maintenance as well as
the operational efficiency. Moreover, another strategy which was adopted by the organization
also involved operating in the secondary cities so as to avoid congestion and reduce the overall
landing costs which take place (Datta 2010). The e-commerce scenario in China had been
growing at a great extent and in relation to this, the firm aimed to take advantage of the trends in
the e-commerce industry so as to increase the overall revenue structure of the firm. The online
travel market in China was relatively very small in size and had not become a popular idea until
the firm began to also sell its tickets online. The company sold 80% of its tickets through the
various agents who are present and they were paid a 2% commission on it.
Additionally the rest 20% of the tickets were sold through the website of the firm and in
line with this, the website of the company and its related operations have been discussed
adequately (Berenguer et al. 2008). Additionally, the menu of the website offered a variety of
benefits which helped in making the website a hub of the community and in line with this, the
case study ends on the note that, the company is looking out for various growth opportunities
which would assist the firm in gaining recognition. Hence, the company was required to come
up with a relevant strategic plan to ensure growth.
The challenges being faced by the firm
The case study hinted towards a certain number of challenges which could be faced by
Yunnan airlines and in line of this, the different challenges has been discussed in the following
section.
Aligning with China`s travel industry and governmental policies