Business Strategy for Jetstar Airways: PESTLE Analysis, Competitive Advantage, and Porter's Five Forces Model

Business strategy

Business Strategy: 1
Contents
Introduction...........................................................................................................................................2
PESTLE Analysis of Jetstar Airways....................................................................................................2
Competitive advantage Jetstar have for the expansion plan...................................................................4
Porter’s five forces model identify and discuss any competitive forces that might affect the expansion
plan........................................................................................................................................................5
Business level strategy the organisation might consider for its expansion.............................................7
Conclusion.............................................................................................................................................7
References.............................................................................................................................................9

Business Strategy: 2
Introduction
Jetstar is an Australian airline headquartered in Melbourne. This airline group has extensive
range of destinations in the Asia pacific region. Jetstar operates nearly 5000 flights a week for
more than 80 destinations. The group carries more than 33 million passenger in a fiscal year.
It is wholly subsidised by Quantas. Globalisation and competition shifting will continue to
build competitive forces to acquire and ensure sustainable advantage for the airlines
(Mhlanga, 2017). For attaining position in the industry, a company has to undertake
environmental analysis to identify external factors, which will influence in working of the
business. The organisation undertakes the analysis of political, social, economic,
environment, legal, and technological factors to make a strategic plan to achieve expansion
(CAPA, 2016). Other analysis such as porter`s five forces model examine various factors that
affect the existence of any airline.
PESTLE Analysis of Jetstar Airways
There is an immense growth in airline industry due to high passenger traffic because of rapid
growing tourism. Airline industry faces major challenges due to changing macro
environmental factors. By Applying PESTLE analysis on aviation industry will identify how
these macro factors influence environment –
Fluctuation in oil prices has major impact on airline profitability (Boin at al., 2017). The
aviation industry brings a number of intrinsic risks. The business risk is not just limited to
change in economic condition. The performance of benefit obligation is calculated timely. A
healthy economy fosters industrial growth. Economic indicators calculate and measure the
economic health of the country. Economic indicators such as gross domestic product,
disposal income, level of business, consumer confidence, and per capita income (Lohmann,
and Spasojevic, 2018).

Business Strategy: 3
Socio-culture factors- The demand for aviation or air travel has been increasing rapidly. This
states changing travel preferences of the young generation. Although the fare prices of
airlines are comparatively high. However, it reduces the travel time as compared to trains and
buses. The personal disposable income has been increasing with purchasing power of the
buyer. Reportedly, the last recorded of GDP per capita in Australia is at 55925.93 US dollars
in 2017, which is highest in all last years (Pearson, Pitfield, and Ryley, 2015).
Technological factors- Technology is a driver within the aviation industry. During Second
World War, technological advancement is the most prominent factor that improves safety of
the aviation industry. Important technological developments include aircraft design,
manufacturing those materials that will produce light and faster speed craft. The growth of
aviation industry includes opening of new airport infrastructure (Taneja, 2017). Technology
helps to build better infrastructural blocks, which enable development of new airport.
Engineering and maintenance systems support new aircraft and avionics. Before construction,
advance security and surveillance is imposed to handle devices.
Environmental factors- Jetstar Airways plans to accomplish and improve fuel efficiency so
that an average of 2% annually. By 2050, the Jetstar Airways focus to reduce 50% co2. The
Quantas is subject to both short and long-term climate related transition risk (Quantas, 2016).
This type of risk is intrinsic part of the business operation of an aviation industry. Climate
change is managed by strengthening the governance, and operational situation. It includes
considering the changing factors and the way these factors effect proximity of climate risks.
Legal factors- The changing industry of airline has withdrawn commonwealth from the
operation of airlines. A private owner owns and operates airport under long-term leases by
raising fund through public. Private business generally focuses on earning more profits.