SWOT and PESTEL Analysis of IAG

This document provides a SWOT and PESTEL analysis of International Airlines Group (IAG), including its strengths, weaknesses, opportunities, and threats. It also discusses the different leadership styles of IAG and evaluates the suitable leadership style for the organization. The document is relevant for business and management students studying strategic management or leadership.

CONTEXT OF BUSINESS

Table of Contents
INTRODUCTION...........................................................................................................................3
TASK...............................................................................................................................................3
SWOT analysis and PESTEL analysis of IAG............................................................................3
Evaluation....................................................................................................................................6
Compare different leadership style of IAG.................................................................................7
Evaluation of suitable leadership style for IAG..........................................................................8
Define corporate social responsibility of IAG...........................................................................10
CONCLUSION..............................................................................................................................11
REFERENCES..............................................................................................................................13
Books and journals....................................................................................................................13

INTRODUCTION
Business strategy defines the actions and decisions of an organisation which will help in
meeting the desired business goals and objectives. Business strategy depicts what actions
organisation must take which will help them in achieving the targets (Aloshyna and Kozenkov,
2018). International Airlines Group (IAG) is a consolidated airlines group which was founded in
2011 an offers worldwide services. The company further merged with British Airways and
Iberia. The services which are offered by IAG are airline services, passenger air transport
services and air freight services. This project report aims to define the external environment
factors which can create an impact on the business and determines the internal and external
factors of the business. The report will depict the different leadership styles which have been
used by the organisation and their corporate social responsibility through which thy can bring
change and organize initiatives which will be helpful for the society.
TASK
SWOT analysis and PESTEL analysis of IAG
SWOT Analysis
SWOT analysis is a technique which helps an organisation in identifying their strengths,
weakness, opportunities and threats which can influence the business environment. This
technique helps an organisation in determining their potential and determine opportunities which
will be helpful in organisational growth and helps the company in gaining competitive advantage
(Andone and Frydenberg, 2019). With the help of SWOT analysis technique, IAG can evaluate
their strengths, weakness, opportunities and threats which will help them in determining their
business position and this will help them in taking corrective measures through which they can
gain competitive advantage and enhance their position in the industry. The SWOT analysis of
IAG is mentioned below:
Strengths
 The company have a strong group
culture which helps them in gaining
competitive advantage.
 The operational and financial
Weakness
 Due to overdependence on single
brand- British Airways it has affected
the managerial functions of the

activities of International Airlines
Group help them to perform all
activities of the company effectively.
With a strong operational and
functional performance with
consistent shareholders, it helps the
organisation in making higher returns.
 International Airlines Group
concentrated on digital innovation
which helps them in facing the
changing environment and challenges
which can affect the business growth
and maintain their business position.
 The company have accomplished cost
synergies through which they can
manage the cost and maintain their
competitive position in the industry.
 International Airlines Company have
gained exclusive access to Heathrow
Terminal 5.
company.
 By the capacity expansion of
Heathrow terminal, it can affect the
business position of the company.
 Due to low presence in Asia Pacific,
the company have low market
coverage.
 The company have high fuel
consumption at London which makes
them face high cost and expenses
which majorly affects the financial
position of the company (Apenko,
2017).
 Due to failure in IT system, it affects
the functioning and operations of the
company through which they can
perform the operations of the
company. Inefficient IT system affects
the performance and overall
productivity of the business.
Opportunities
 The company can expand their
business in Africa and Eastern markets
through which they can cover wide
market share and enhance their
business position in the industry
(Bates and Robb, 2016).
 By rapidly growing air freight market,
it will help the business to expand
globally and gain more profits by
offering different services.
Threats
 Due to Government subsidy, it can
create an adverse impact on the Gul
Airline growth.
 The acquisition opportunities can
reduce the competition law of IAG
and thus, it will negatively influence
the business position of the company
in the industry and their market share.
 By having a carbon neutral role, the
operations of the company can be

 By new long haul brand, it will help
IAG to capitalize the opportunities in
different low- cist segments which
will be helpful in financial benefits.
influenced if planned operation are not
executed.
 By growth in low cost carriers, it can
influence the growth and financial
position of the company (Burgstaller,
Steiner and Schrefl, 2016).
 Due to volatility in the price of fuel,
this actor challenges the financial
position of IAG.
PESTEL Analysis
PEST/PESTEL Analysis is a framework which helps in determining the macro
environmental factors which will be helpful in strategic management. The PESTEL analysis of
IAG is discussed below:
Political Factors
Political factors such as political stability and government intervenes are some factors
which influences the business environment. Due to high uncertainty in the business environment
after the exit of European Union which is Brexit will influence the market of aviation which will
create a direct impact on IAG. Many other political factors such as government regulations and
uncertainty in migration laws can affect the profit margin of the company and market share
(Fleisher and Bensoussan, 2015).
Economic Factors
Economic factors such as market growth and expansion can create a huge impact on the
business growth. Factors such as low fuel price and interest rate, affects the financial position of
the company and the market growth opportunities which can be used by IAG. By high increase
in airplane suppliers, the growth of IAG can be increased which will be beneficial for overall
organisation.

Social Factors
Social factors such as employees strike and other factors can create a negative impact on
the continuous functioning of the company. By rapid growth in no frill airlines and incline in use
of social media and technology, it helps IAG to attract more customers and meet high
competition in the industry (Janich, 2017).
Technological Factors
Technological factors such as growth and technology and digital disruption can create a
negative impact if the company is not able to meet the competitive change in the industry. By
using new aircrafts which will be helpful in reducing the fuel consumption will also lead to
effective maintenance and engineering and flight operations of the company.
Legal Factors
Legal factors such as legal actions and laws which are formed by government can affect
the managerial activities of the company. Due to more lawsuits from displeased clients, it affects
the brand image of the company. By rapid consolidation in market and open skies agreement it
create a huge impact on the operations of the company and thus, any legal actions can affect the
brand image and brand value among the customers.
Environmental Factors
Environmental factors such as air quality and noise reduction can create a positive impact
as by following advanced technology machinery the company can minimize the noise level
which will be helpful for the environment (Kucharčíková, Mičiak and Hitka, 2018).
Evaluation
From the above mentioned SWOT analysis, it can be evaluated that with a strong
financial and operational performance can help in performing and using IT system effectively
and will be helpful in expanding their business in Africa and Eastern market. With the help of
strong group structure, IAG can create a strong presence in Asia pacific and can minimize the
growth of low cost carries which will be helpful in managing the work rather than depending on
a single brand. By digital innovation, it helps international Airlines Group in facing the high
competition in the industry through which they can grow their business and sustainable operate

in the changing business environment. Such strengths help the organisation in generating higher
revenues and profits.
From the above mentioned Pestle analysis, it can be evaluated that factors such as Brexit
and other government regulation shave affected the market share and created a thereat for the
company in attracting and maintaining number of customers. Factors such as low fuel prices and
interest rate has helped International Airlines group in gaining competitive advantage and offer
quality services to the customers (Lankoski, 2016). Factors such as employee strikes and
lawsuits have created a huge impact on growth of the company and brand image. Whereas, the
use of advanced technology and social media platforms, it has helped IAG in attracting more
customers and establishing their goodwill in the industry through promoting the quality services
which are offered by the company and by using energy efficient technology, it has helped the
organisation in saving costs and building a strong operational management.
Compare different leadership style of IAG
Leadership style
Leadership is an ability of an individual through which they can guide and direct
employees which will be helpful directing all employees to focus on shared goal and achieve the
targets by forming effective decisions. There are different types of leadership styles which can be
based on the personality of the individual and their approach of leading and guiding a team.
Some of the different leadership style involves:
 Authoritarian leadership- Such leadership style ensures that a leader is liable to make all
decisions and no team members can participate in forming such decisions through which
a negative workplace can be formed. Such leadership style also helps in following the
chain of command and less mistakes and errors will be made (Leminen and et.al, 2020).
Such leadership style can increase employee turnover and reduces the collaborating and
interest of employees for working in the organisation and thus, the performance of the
employees will be majorly affected.
 Delegative leadership style- This leadership style can also be known as Laissez fare
leadership style which focuses on delegating and transferring initiative and
responsibilities to other members of the team through which all work can be timely
completed and creative ideas can be valued in the organisation. Such leadership style

ensures positive working scenario whereas, some employees can face struggle while
easily adapting change in the process and activities (Schlegelmilch and Szöcs, 2020).
Leadership style of IAG
The leaders of International Airline Group focuses on challenging the processes which
are performed by the company and thus, such leadership activities can help in encouraging all
employees to perform the desired job roles and responsibilities. The leadership theory which
have been followed by International Airline Group is the Trait Theory of leadership though
which they can bring and guide employees for performing effectively through which they can
gain competitive advantage (Little and Deokar, 2016). As a leader in International Airline Group,
the leaders of the company have different trait skills, which involves flexibility and adaptability
to accept change and have good awareness regarding social environment. Such leaders are more
decisive, confident, conceptually skilled and dependable and majorly focuses on achieving the
desired the planned goals and objectives. The trait theory of leadership has helped the
organisation in maintaining task oriented behavior through which all employees are enough
motivated and willing to meet the desired outcome and objectives. With the help of following
trait theory of leadership, it helps IAG to enhance the skills, competencies and creativity of
employees through which they can form effective decisions and enhance the overall productivity
of the company. Trait leadership theory helps the business in creating a trustworthy business
environment through which a mutual understanding can be formed and this will be helpful in
maintaining positivity ad balance in the workplace and maintains a good organisational
environment. Some other leadership style such as transactional and transformational leadership
have helped the organisation in building an effective relationship with their subordinate through
which they can improve the performance of their employees which will be helpful in achieving
the desired outcomes and objectives and gain a competitive advantage.
Evaluation of suitable leadership style for IAG
Some of the leadership style which are helpful for the organisation through which IAG
can bring effective change in the business are explained below:
 Authoritative leadership style- By following this leadership style it will depict
confident leaders of International Airline Group who can map the approaches and
expectations which will be helpful in engaging and motivating all employees to work in

same direction and accomplish the shared organisation objective by using innovative and
constructive decisions (Sivarajah and et.al, 2020). Such leadership style will ensure that
all employee leaders are empathetic and it will enhance the flexibility and adaptability in
the organisation which will remove the barriers of change and change improvement
strategies can be easily implemented. By developing a vision, it will help International
Airline Group to build a confident working scenario which will inspire other employees
and whole organisation to meet the targets. It will also bring better clarity and direction
which will be helpful in maintaining the goodwill of the organisation whereas, leaders
can also form wrong decisions which can affect the performance and position of the
company.
 Participative leadership style- The participative leadership style of leadership is
basically based on rooted theory which focuses on encouraging all team members to
participate in decision making activities of the organisation through which they can form
effective decisions with the help of creativity and innovative approach of employees.
Such leadership style will be helpful for International Airline Group in encouraging
employees, enhancing their level of motivation which will be helpful in achieving the
targets and forming effective decisions. Whereas, this leadership style can be a time
consuming process. Through following participative leadership style, it will help
International Airline Group in forming a stronger team and productivity of the
organisation can be enhanced. Participative leadership is a time consuming process and
International Airline Group can face communication barriers which will affect the flow of
information and continuity in the business. Due to transparency in sharing for transferring
information, many issues such as security issues unreliable information can be increased
and this will lead to poor decision making.
 Democratic leadership style- Democratic leadership is a leadership style to encourage
equal participation of employees in decision making process and maintain the
consistency of workplace. Such leadership style helps in empowering group members and
encourages a collaborative approach which will be helpful in achieving success with
mutual understanding and respect (Sundberg, 2015). Democratic leadership will be
helpful for International Airline Group, as this leadership style will increase the
productivity of the staff and better decisions can be formed due to diverse ideas and

innovation in workplace. By encouraging all employees to participate in managerial
activities and decision making of the business, it will help in forming a stronger team
which will ensure employee engagement and enhance the employee morale through
which they can effectively perform in the company and encourage teamwork. Several
challenges such as slow decision making process and lack of expertise can be faced in
democratic leadership which can affect the productivity of International Airline Group
(vom Brocke, Zelt and Schmiedel, 2016). Due to lack of expertise and communication
gap, ineffective decision can be formed in situations which can create an adverse impact
on the business.
These are some of the leadership styles which can be opted and practiced by International
Airline Group as these leadership styles will be helpful for the organisation in making a strong
and effective workforce through which they can gain competitive advantage a maintain their
business position in the industry.
Define corporate social responsibility of IAG
International Airline Group aims to become the world’s leading airline group and focus
on sustainability. Sustainability is one of the major factor which is focused by the company in
their business strategies which are formed by the organisation and thus, such strategies will also
be helpful in long-term growth of the business. The corporate social responsibility of IAG
focuses on forming quality procedures and programs through which they can bring change and
improvements in the sustainable performance of the global aviation industry. The corporate
social responsibility of IAG majorly focuses on resolving material issue through which they can
manage such conflicts and create a low carbon transition pathway through which they can bring
a sustainable change in the society (Zhao and Mafuz, 2015). Such management incentives help in
delivering a low- carbon transition plan through which a responsible improvement can be made
and environment can be protected. There are several leadership activities sand campaigns which
are organized by the company through which they can encourage and promote reduction in
carbon leaks. By making investments in sustainable aviation fuel, they focused on using fuel in
accurate and appropriate quantity through which they can sustain such resources and can manage
optimum utilization of such resources. International Airline Group focused on accelerating
progress towards sustainable aviation fuel, future aircrafts and low carbon technologies through

which they can save resources and maintaining the quality of services and performance standards
of the company. The corporate social responsibility of IAG focuses on their different targets and
objectives which have been planned climate change by the company through which they can
bring sustainable change in the industry which will completed by the years 2025, 2030 and 2050.
A new Board committee for safety have been formed by the company through which they can
fulfill their environment and corporate responsibilities.
The corporate social responsibility and sustainability programs of the company are
regularly coordinated from group level which will be helpful in developing and executing
planned strategies and ensure that all governmental regulations are timely followed by the whole
organisation. The target and major objective of the company focuses on climate ad noise for
which they take non-financial measures through which they can determine wastage, energy
efficiency and customer net promoter score. The main objective of the company is to deliver zero
emissions by 2050. The target of company involves 10% reduction sin noise transmission while
take off and lading by the year 2020 and 2050. The plans and policies of the company are
developed by the company tough which the can allocate resources for reducing environmental
risk and manage all risk factors which can be faced by the organisation (Zhu and Zolkiewski,
2016). Such team and committee will be helpful for the company in evaluating new climate
related risk and opportunities. The vision and main objective of the company is to bring
innovative change in the operations of the company through which they can sustain the
environment and can make optimum utilization of resources through which such resources can
be used for longer san of time with the help of such effective bard members and committee.
CONCLUSION
From the be project report, it can be concluded that business strategy is one of the
essential activity of business which helps in accomplishing the planned organisational objectives.
Such business strategies define the course of action of an organisation which will be planned and
followed through which the company can accomplish the organisational objectives and gain
competitive advantage. It can be seen that there are several techniques such as SWOT analysis
which helps a business to identify their strengths, weakness, opportunities and threats of the
company. Whereas, marketing technique such as PESTLE analysis helps the business to identify
external environment factors such as political, economic, social, technological, legal and

environmental factors which can create a positive as well as negative influence on the
organisation.

REFERENCES
Books and journals
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