Strategic Management of Airline Industry | Azul Brazilian

Added on - 21 Apr 2020

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Running head: STRATEGIC MANAGEMENTStrategic Management of Airline Industry: Azul Brazilian AirlinesName of the Student:Name of the University:
STRATEGIC MANAGEMENTTable of ContentsIntroduction......................................................................................................................................31.0 Critically review organizational strategic plans........................................................................41.1 Analyze the position of the organization in current market..................................................41.1.1 Market situation analysis................................................................................................41.1.2 Porter’s five force analysis.............................................................................................51.2 Analyze the effects of existing plans on organization...........................................................71.2.1 Internal business environment- SWOT analysis.............................................................71.2.2 External business environment- PESTLE analysis.........................................................82.0Propose strategic options for the airline organization.............................................................102.1Critically discuss the relationship between corporate, business and operational strategies102.2Apply strategic models and tools to develop strategic options for Azul Brazilian Airlines112.3 Evaluation of strategic options for Azul Brazilian Airlines................................................143.0 Create a strategy implementation plan for Azul Brazilian Airlines........................................153.1Create appropriate vision, mission and strategic goals for Azul Brazilian Airlines............153.2 Propose a suitable structure for an organization that fits a Strategic plan...........................163.3 Create a resourced strategy implementation plan................................................................204.0Critically analyze the principal processes of organizational change.......................................211
STRATEGIC MANAGEMENT4.1Apply force field analysis to analyze and identify forces of change...................................214.2Critically evaluate various change management models.....................................................224.3 Apply leadership and change agent skills to implement a strategic change in AzulBrazilian Airlines.......................................................................................................................235.0Evaluate the implementation of strategic plans.......................................................................245.1 Analyze the time schedule for the implementation of strategic plans.................................245.2Design key success indicators in order to monitor the implementation of the strategic plan...................................................................................................................................................265.3 To analyze potential risks during implementation...............................................................27Conclusion.....................................................................................................................................28References......................................................................................................................................302
STRATEGIC MANAGEMENTIntroductionIn today’s world, low cost carrier airlines become a trend, therefore the airline industryapplied of strategies to grow into the market. Airline industry is chosen for this particular reportto analyze the strategic plan of the organization, Azul Brazilian Airlines. It provides withpassenger as well as cargo air transport services within Brazil1. The airline organization providesof air transportation services with connecting cities in Brazil. The company is founded in theyear 2008 with fleet size of 144. Azul Brazilian Airlines is the third largest airline within thecountry2. The airline industry utilizes of technology in order to reduce the cost and propose ofbetter service with superior expediency to passengers.The report analyses the organizational strategic plans, strategic options, creates animplementation plan for the organization, analyses the principle processes of the organizationalchanges and implementation of the strategic plans. Both internal in addition to external businessenvironment are also analyzed for implementation of the strategic plans of the airline industry.This particular report also analyzed the internal and external business environment usingstrategic models and tools. Different change management models are also analyzed to implementof changes into the organization using Koter’s 8 step change model.1Sabre.com, "Azul Brazilian Airlines implements Sabre’s distribution technology to boost sales in the USA, Braziland global markets « Sabre", inSabre.com, , 2015, <https://www.sabre.com/insights/releases/azul-brazilian-airlines-implements-sabres-distribution-technology-to-boost-sales-in-the-usa-brazil-and-global-markets/> [accessed 3November 2017].2Worldairlinenews.com, "Azul Brazilian Airlines | World Airline News", inWorldairlinenews.com, , 2015, <https://worldairlinenews.com/tag/azul-brazilian-airlines/> [accessed 3 November 2017].3
STRATEGIC MANAGEMENT1.0 Critically review organizational strategic plans1.1 Analyze the position of the organization in current market1.1.1 Market situation analysisAzul Brazilian Airlines is the third largest airline within Brazil. With the purchase of “63airbus group NV (AIR) A320neo jets”, Azul is being poised in order to operate their largestplanes on the domestic routes. The airline organization is going to offer 3000 more seats thanother foremost airlines. Currently, the airline organization has largest airline network in terms ofcities served, with service more than 100 destinations as well as 792 daily flights3.Items20122013201420152016Passengerstransported12 million20 million21 million22 million24 millionAircraft intoservices118133138138139Destinations100103105106107Market share15%17%17%18%19%Table 1: Key drivers of continuous growth of Azul Brazilian Airlines(Source:4)3Voeazul.com.br, "About Azul", inVoeazul.com.br, , 2015, <https://www.voeazul.com.br/en/about-azul/about-azul> [accessed 3 November 2017].4United - Newsroom, "United Airlines and Azul Brazilian Airlines Form Long-Term Strategic Partnership",inUnited - Newsroom, , 2015, <http://newsroom.united.com/2015-06-26-United-Airlines-and-Azul-Brazilian-Airlines-Form-Long-Term-Strategic-Partnership> [accessed 3 November 2017].4
STRATEGIC MANAGEMENT1.1.2 Porter’s five force analysisUsing this strategic business planning tool, it analyzes the external factors of theorganization consists of decline into passenger traffic, increase into operational expenses, higherprice of fuel and greater maintenance cost5. Following are the factors of Porter’s five forceanalysis:Supplier power:There is vast supplier power within the airline industry based on threeinputs such as fuel and labor. Those are affected by the external environment. The price of fuelleads to fluctuations into global marketplace of airline. Labor is also subjective to power assometimes unions bargain and gets unfair and expensive allowances from the airlineorganization6.Buyer power:It is moderate. With the process of online ticketing, the filers are no longerdependent on agents for booking of tickets. Entry of the low cost carrier also benefited the fliers.The buyers are engaged into price discovery means there is fluctuations into price as they arevarious channels through which the passenger can book their tickets.Entry and exit barriers:It is high. The airline industry, Azul requires huge capitalinvestment in order to enter into airline industry and make a competitive advantage. Theorganization requires higher infusion of capital and sophisticated expertise to compete into theBrazilian marketplace7.5P Thaichon and T Quach, "From Marketing Communications to Brand Management: Factors InfluencingRelationship Quality and Customer Retention", inJournal of Relationship Marketing, vol. 14, 2015, 197-219.6K Moller and P Parvinen, "An impact-oriented implementation approach in business marketing research",inIndustrial Marketing Management, vol. 45, 2015, 3-11.7T Ritter and H Andersen, "A relationship strategy perspective on relationship portfolios: Linking customerprofitability, commitment, and growth potential to relationship strategy", inIndustrial Marketing Management, vol.43, 2014, 1005-1011.5
STRATEGIC MANAGEMENTThreat of substitutes:It is at moderate level. With use of train, bus, car people can travelfrom one state to another. The switching cost is low for those transport channels as compared toairline. The people may not switch to other transportation system as the airline provides of freeWi-Fi, passenger amenities provided by full service8. They are also induced to minimum fare.Threats of competitive rivalry:It is high. Azul is competitive airline organization as thebarriers to entry are low cost carrier and tight regulation of the industry. The industry is regulatedto supply side as compared to demand side.8D Baker, "Social Influence and Contextual Utilization of Customer Relationship Management Technology in anInternational Field Sales Organization", inJournal of Relationship Marketing, vol. 13, 2014, 263-285.6Supplier powerBuyer powerEntry and exit barriersThreat of substitutesThreat of competitive rilvalry012345678985757Porter's five force analysis
STRATEGIC MANAGEMENTFigure 1: Porter’s five force analysis(Source:9)1.2 Analyze the effects of existing plans on organizationBoth internal and external business environment is analyzed for determining the effectsof the existing plans on Azul Brazilian Airlines. External business environment of the airlineindustry is analyzed using PESTLE analysis whereas internal business environment is analyzedusing SWOT analysis.1.2.1 Internal business environment- SWOT analysisSWOT analysis of the Azul Brazilian Airlines provides with strategic report of the airlineorganization with operations and position of the organization into current market of Brazil.StrengthsWeaknessesAzul Brazilian Airlines has skilledworkforceHigher profitability and revenue10There is higher growth rate of theairline industryThe airline organization is focused onfuture cost and income structureHigher competitors11OpportunitiesThreats9A Mumuni and K O’Reilly, "Examining the Impact of Customer Relationship Management on DeconstructedMeasures of Firm Performance", inJournal of Relationship Marketing, vol. 13, 2014, 89-107.10M Wiśniewska, "Key values of business-to-business relationship marketing", inModern Management Review, ,2014.11O Kilic and D Miller, "Exploring the Influence of a Salesperson's Selling Approach on Buyer-Seller RelationshipOutcomes", inInternational Journal of Customer Relationship Marketing and Management, vol. 5, 2014, 1-15.7
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