Strategic Tools for Analyzing Garuda Indonesia's Competitive Strategy

Institutional Affiliation(S)
Competitive Strategy
Garuda Indonesia
Student Name
[Date]

P a g e | 1
Strategy development tools are also known as management planning tools
that includes various business analysis models for enabling strategic decision
making in organisation for present as well as future growth and sustainable
development (Hanson, et al., 2017). This essay proposes to make a comprehensive
discussion of four chief strategic tools, PESTEL, Five Forces, SWOT and Generic
strategies. This essay will apply these strategic tools to analyse strategic
management of Garuda Indonesia while operating in airline industry. Garuda
Indonesia is one of the successful airline company who has been able to maintain 5-
Star ratings from Skytrax since 2014 from an international air transport rating
company (Garuda Indonesia , 2018).
PESTEL analysis
PESTEL analysis is yet another simple and powerful tool that helps
organisations in analysing political, environmental, social, technological, economic
and legal factors within business environment. This tool assists while comprehending
forces of changes that remains exposed to the firms and how to take advantage of
the opportunities present among them. A detailed analysis made of macro-
environment ascertains managers and strategy developers as to what extent is their
current market position and where they are heading to in future. The environmental
or external factors covered in PESTEL analysis denotes series of actions which
affects industry directly or indirectly (Gupta, 2013).
Political instability in markets Garuda operates in along with diversity seen in
regulatory prices impacts its business operations. Economic stability, availability of
infrastructure and economic performance of Indonesia brings additional benefits to
the firm. Social factors like concern for health and safety, power structure, gender
roles and leisurely interests often impacts Garuda’s businesses. Though Garuda
considers technological innovations, intellectual property rights, technological
disruptions seen along with research and development seen in both micro and
macro levels in Indonesia somehow impacts Garuda businesses. Environmental
factors impacting the company are waste management techniques, extreme weather
resulting in higher operational costs and scrutiny of environmental agencies.
Enabling health and safety law along with data protection and other business-related
laws have made Garuda meet every norm while operating in airline industry (Talib,
2018).
Five forces analysis
Michael Porter’s Five forces analysis examines business competitiveness in
the marketplace. Since contemporary workplace strategies remains highly dynamic,
Porter introduced competitive strategy to explain firm’s complex strategic
environment and industry position. Five forces analysis provides insight to both
offline and online enterprises competitive environments that influences business
operations. The forces which are analysed under this tool are: potential and existing
companies, buyers, suppliers, substitutes of products or services offered and
customers behaviour. Porter’s development tool provides businesses with in depth
analysis rather than looking upon general industry information and trends thereby
assists in developing successful marketing and competitive strategies for sustainable
development (Oramana, Azabagaoglua & Inan, 2011).