International Expansion and Management of LOT Polish Airlines: A Comprehensive Analysis

This report provides a comprehensive analysis of LOT Polish Airlines' international expansion and management strategies. It examines the company's competitive strategy, organizational structure, entry strategies, operational control, supply chain management, and human resource management across borders. The report identifies key issues and opportunities for management and provides recommendations for improvement.

Research Paper 2
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Table of Contents
Introduction................................................................................................................................3
Overview of the company and Current Operating Position.......................................................4
Review of company’s international Competitive strategy.........................................................5
Existing Organisational design structure and control issues......................................................6
Entry Strategies used to enter other regions/countries...............................................................7
Operational control, production and distribution/supply chain management............................8
Management of human resources across borders.......................................................................9
Identify key issues or opportunities for management..............................................................10
Recommendations to management for improvement..............................................................11
Conclusion................................................................................................................................12
References................................................................................................................................13
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Introduction
This report provides the complete analysis of the activities of the business and its
international expansion and the management. The organisation which is taken into
consideration to complete the research is LOT Polish Airline which trades in the areas of
Poland. It is an airline which operates in the worldwide market. This organisation is basically
indulged in the providing the travel options to various destination places. This report involves
the critical analysis and the assessment of the various tactics that are selected by the business
to enter the international market. Further, this report also provides an idea regarding the
major operations of the business and the supply chain management framework which is
selected by the business entities. This report also provides an idea regarding the assessment
of the human resources and the issues faced by the global management. Further in order to
rectify the issues the effective recommendations are also provided in the report to develop the
effective understanding.
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Overview of the company and Current Operating Position
The LOT Polish Airlines was incorporated in the year 1920 and has the 88 years history and
in the year 2017, the frequency of the company is enhanced with the involvement of the
flights in Japan. It basically offers the long haul flights to the US, Canada and China and also
builds the leadership position in Central Europe. This is an organisation which is one among
the oldest airlines in the world (LOT, 2016). It is an organisation which operates in the
international market and has received the numerous awards from the media and the industry
organisation. It is also analysed that the in the year 2014 the company is also looking for the
mobile solutions which are designed for the consumers.
It is also assessed that the current business position of the business is such which consist of
the core competencies to offer such flight and the airline services. The company basically
operates in the various regions and delivers such services which help the company in gaining
the benefits of the competitive advantages. This also aids in the development of effective
business communication and the solutions. The organisation provides such experiences which
makes the company an leader in the world.
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Review of company’s international Competitive strategy
The international competitive strategies are the aspect/tactics that are been used by the
organisation to meet the global market needs and requirements. There is a high level of
competition in the market which is having a great impact on it on the activities and operations
of the firm. LOT POLISH AIRLINE is operating in the proper manner but as it is highly
competitive it is very necessary for it to make effective strategies and plans so that it can be
able to understand the market needs and can also meet the challenges and requirements that
are present in the competitive world (Strategyatheinz., 2016). For understanding the
international competitive strategy, it is very important to do an analysis with the help of
Porter’s five force model. There are basically five elements that can be used to understand the
strategy that is required to use to sustain in the international market.
Bargaining power of buyers
The pricing is one of the major factors that is needed to be a concern by the airline's
company. The customers always want to pay less amount for the products and services that
they wish to have. For this, they use to bargain so that they will be able to use the services as
per their convenience. Mostly LOT POLISH AIRLINE use to keep an affordable pricing
strategy like penetration method where the customers can be able to afford and they can use
the services in the best and effective manner. As to face the bargaining strategy the company
is usually putting the efforts to keep the prices medium so customers cannot make any
bargaining steps.
Threats of substitutes
There are different substitutes that are available in the market, the customers or the travellers
are having several other choices that of airlines which may be the biggest threat to sustaining
in the market but due to time factor LOT POLISH AIRLINE is getting and maintaining its
market sustainability (Strategyatheinz., 2016). The flier programs and strategies are used by
the company which is helping in maintaining to overcome the threats of substitutes.
Bargaining power of suppliers
The suppliers are also having the bargaining power, they are availing the material to the
company so for that they can charge high amount which affects the business but because of
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the well-recognized brand of the market it is not getting hamper adversely by the bargaining
done by suppliers.
Threats of new entrants
The loyalty of customers towards the company is high and there is a great influence of this n
an organisation (E. Dobbs, 2014). This is the strongest part of the company as this is helping
is competing and managing the threatening problems of the new entrance in the market.
Competitive rivalries
The company is planning and managing effectively and making strategies regarding the
competitive sustainability (Dälken, 2014). The competitors are having their own strategies
but due to different loyalty programs LOT POLISH AIRLINE is able to retain its market
position and customers
Bargaining power of buyers High Threat
Threats of substitutes Medium Threat
Bargaining power of suppliers High Threat
Threats of new entrants Low Threat
Competitive rivalries High Threat
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Existing Organisational design structure and control issues
Organisational structure plays a key role in the management of the business framework and
also helping the business in its success and victory. This organisational structure helps the
business to effectively use the innovation practices in the organisational environment and also
helps in attaining the maximum competitive advantages. The business of LOT Polish Airlines
is such which presently follows the traditional hierarchy (Deresky, 2017). In this form of the
system, there is a copy of the other elements of the other structures also. It is also assessed
from the research that the business success is dependent upon the factors such as innovation
and the effective operations.
The features of the structure which is used in the working of LOT Polish Airlines are
provided thereunder:
Product based grouping: In this form basically the VP and presidents are made who
controls the service specification in the LOT Polish Airlines. This helps in the organisation of
the varied management structure to formulate the business proceedings and the works.
Function-based grouping: It is a method which is basically exercised by the higher level
hierarchy of the management. In this form, the management basically takes the decisions on
the basis of the level of the functions performed by the organisations.
Spoke and Wheel hierarchy: This is a hierarchical system in which the operations of the
business are linked in such manner which covers the main and the basic operations of the
company linked in such manner.
The structure which is possessed by the business is such which helps the business in
enhancing its position and the market. But there are involved several issues which develop
the problem for the business. The issues are in relation to the managing the current operations
of the business (Monczka, et. al., 2015). This develops the problem in the international
expansion and the market growth. The structure which is used in the business of LOT Polish
Airlines is such which develops the problems related to the flexibility and the management of
the services related to the flights. The main issue which is faced by the business is such which
includes the management of the lower level hierarchy of the employees. This affects the level
of the working and the enhanced operations of the business in other areas.
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Entry Strategies used to enter other regions/countries
LOT Polish Airlines is an organisation which operates around the world and is a global
leader. The marketing tactics help in the business expansion and the growth. The various
forms of the marketing tactics and the strategies are used in the working of LOT Polish
Airlines which are provided thereunder:
Foreign services: This is considered to be one of the most successful strategies which are
used by the organisation in order to enter into other countries. Herein the main unit or the
department is settled in the main market while the others are set in the competitive market
(Deresky, 2017). The various forms of the promotional activities are held by the
organisations in order to enhance the support for the acts of the organisations.
Target market: LOT Polish Airlines takes into consideration the various market factors
which help in an easy entry of the company in other areas. This also helps in the easy set-up
of the organisational services and the market in all the other areas.
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Operational control, production and distribution/supply chain management
There are involved several tactics which is required in the control and which helps in the
management of the operations of the business. The issues which arrive in the organisational
environment of the business are such which helps in the management of the business
framework. These measures are provided thereunder:
Supply Chain Management: The effective supply chain management theory is effectively
practised in the working of LOT Polish Airlines (AWS, 2018). The effective compliance of
this strategy helps in the fulfilment of the demands raised by the consumers. This helps in
enhancing the business operations of the business. This helps in enhancing the level of the
services and the competences of the business.
Operational control: It is provided that all the processes used by the LOT Polish Airlines
are such which are related to each other and performs the operations with the centralised
control. LOT Polish Airlines is such which helps in the management of the effective business
framework for the services.
Production/distribution strategy: Herein the distribution framework used by LOT Polish
Airlines is such which helps in the offering the travellers to book the tickets from the place
which is desired. The mobile solutions which are used by the LOT are such which helps in
the easy access to the information and the also providing to the customers an effective travel
experience (Adams, 2016). The effective application used help in enhancing the level of the
sales of the tickets and also helps in enhancing the level of the motivation for the consumers.
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Management of human resources across borders
There should be followed the effective strategies in the management of the human resources
in an effective manner. The various strategies help in the effective administration of the
organisational framework and also the employees (LOT, 2016). This helps in enhancing the
level of the comfort for the customers and the employees both. Some of the tactics which are
followed in the LOT Polish Airlines are provided thereunder:
 The operations of the different headquarters are monitored in such manner which does
not involve the intervention.
 It is also taken care by the organisation that the cultural differences are not faced by
the employees.
 The payment and appraisal systems are such which is followed effectively and helps
in the reduction of the conflicts.
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Identify key issues or opportunities for management
The organisation is facing some issues along with this there are several growth opportunities
in the market that LOT POLISH AIRLINE can be able to attain in an effective manner. The
competition is one of the biggest issues that is been faced by the company is there are several
technologies and opportunities that are willing to get attained by all. The organisation has to
analyse the entire market situation and the competitor’s strategy so that they can be able to
manage the threats and issues (Holloway, 2017). The other issue is about the seasonal
demands, any time it is creating many issues and problems which is influencing the working
and operations.
Innovation is one of the major aspects which will assist the management and organisation to
carry out the work in an effective and well-managed manner. The organisation can be able to
adopt the market opportunities by making a move towards expansion and diversification
(Eaton, 2017). Different tour packages can be offered with special benefits to the respective
people. The organisation can also make alliances with other companies to attain strong
retention in the competitive world.
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Recommendations to management for improvement
The management of LOT POLISH AIRLINE is performing effectively and in an appropriate
manner. Though there are several things that are needed to be considered by the organisation
so that it can be able to carry out the work in the proper and in an effective manner there are
some suggestions that s needed to be taken into consideration about the fact regarding the
operations and other strategies. It is recommended to LOT POLISH AIRLINE is that
travelling fairs have to be set in a proper manner as there is all the level of people who have
to be managed and making them satisfied is also very important. The human resources have
to be skilled and knowledgeable. Also, the food availed to the customers has to be reasonable
and of good quality.
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Conclusion
From the discussion, it has been understood that there is a high need of business strategies
and plans so that the firm needs to understand and analyse. LOT POLISH AIRLINE need to
make effective strategies and plans so that the market competition can be able to get managed
and understood in the proper and in an effective manner. The design and structure of the
organisation and its issues have been effectively and appropriately understood which is
helping in knowing about the problems which have to be managed and resolved. There are
several strategies that can be used to get into a new market that has also been understood in
this report. The human resource management is very necessary to be done by the organisation
as when entering in an international marketplace there is a high need of HR which is one of
the greatest aspects that needs to be managed and handled.
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References
 Adams, V. (2016). Global vs. Local Marketing. An Analysis of the Usefulness for
Global Companies.
 AWS, (2018). AWS Case Study: LOT Polish Airlines. Available at:
https://aws.amazon.com/solutions/case-studies/lot-polish-airlines/ [Accessed: 25th
May 2018].
 Dälken, F. (2014). Are porter’s five competitive forces still applicable? a critical
examination concerning the relevance of today's business (Bachelor's thesis,
University of Twente).
 Deresky, H. (2017). International management: Managing across borders and
cultures. Pearson Education India.
 E. Dobbs, M. (2014). Guidelines for applying Porter's five forces framework: a set of
industry analysis templates. Competitiveness Review, 24(1), 32-45.
 Eaton, J. (2017). Globalization and human resource management in the airline
industry. Routledge.
 Holloway, S. (2017). Straight and Level: Practical Airline Economics: Practical
Airline Economics. Routledge.
 LOT, (2016). ABOUT US. Available at: https://corporate.lot.com/pl/en/about-us
[Accessed: 25th May 2018].
 Monczka, R. M., Handfield, R. B., Giunipero, L. C., & Patterson, J. L.
(2015). Purchasing and supply chain management. Cengage Learning.
 Strategyatheinz., (2016). Porter's Five Forces: Airline Industry Analysis. [Online].
Strategyatheinz. Available at: http://strategyatheinz.blogspot.in/2016/03/porters-five-
forces-airline-industry.html. [Accessed: 25th May 2018].
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