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Business Strategy Assignment - Sri Lankan Airlines

   

Added on  2020-10-23

22 Pages6927 Words74 Views
STRATEGIC REVIEW

EXECUTIVE SUMMARY With the help of below report it can be seen as Sri Lankan airline is facing issues inprofitability and expanding its business on a global scale. It can be seen as the airlines is facingmajor troubles in improving its services due to a rise in competition. Also, the company is facingcore competition in providing unique services, cheap ticket pricing etc. because its competitorsare having large consumer base that is hard to attract. The company is doing well in increasingits consumers gradually. Though it can be seen as the company is doing better in gaining newmarkets worldwide. Better advertising and promotion has provided the company with newconsumer markets. The company is having its reputation within the country and its neighbouringcountries as well. There is a wide scope for Sri Lankan airlines to improve its business qualityand overall business. Also, the airline can be seen as improving its services and products to enterin new markets.

Table of ContentsEXECUTIVE SUMMARY .............................................................................................................2INTRODUCTION............................................................................................................................31. Identification of the current business strategy used by Sri Lankan Airlines with the help ofPorter's generic Strategies............................................................................................................32. The PESTEL framework showcasing the macro-environment analysis of Airline Industryand Sri Lankan Airline.................................................................................................................63. Industry attractiveness analysis ..............................................................................................94. Strategic capabilities of Sri Lankan airlines cargo ...............................................................125. Organisation ability to manage change .................................................................................16CONCLUSION..............................................................................................................................17REFERENCES...............................................................................................................................181

INTRODUCTIONAs being appointed as a “Junior Strategy Consultant” of SriLankan Airlines. The belowreport identifies the key strategic issues of SriLankan Airlines and its capabilities, itssustainability and the suitability of the business strategy pursued by the airlines. The report'sfocus has been implemented on the Strategic Business Unit of the company. Launched in 1979,SriLankan Airlines is the largest airlines of Sri Lanka. The Airline operates in 114 destinationswithin 48 countries. The report based on Sri Lankan Airlines explores the current businessstrategy followed by the organisation with the help of Porter's five forces generic model. Also,the report discusses the impact of micro environment on the airlines with the help of PESTELframework in which the airlines operates. The explained value chain analysis distinguishesbetween threshold and unique capabilities. Along with it, the evaluation of sustainability of theoverall strategy pursued by the Strategic Business Unit of Sri Lankan Airlines is also explainedwith the help of conducted analysis. At last, the report concludes with the recommendations inwhich the Airline can improve itself and its services and the factors that has been identified toimprove its strategies and management. 2

1. Identification of the current business strategy used by Sri Lankan Airlines with the help ofPorter's generic StrategiesPorter's generic strategies are used to evaluate the direction of Sri Lankan Airlines. Porteruses the four type of strategies that an organisation can choose from. The belief here is that thecompany should select a clear course in order to make itself able to beat the competition. The four types of Strategies are:a. Cost leadershipb. Differentiationc. Cost focusd. Differentiation focusCost Leadership: While developing cost leadership, Sri Lankan Airlines targets a marketwhich is broad and with a large demand. This allow the Airlines to understand the market it ischoosing to target(Abraham, 2015). The company identifies its customers needs and demandsbefore to understand what actually drives them. This evaluation makes the organisation to reachcloser towards its consumers. After the identification of consumer's needs the course movetowards its next step which is to keep the costs as minimum as possible or to ensure that theAirlines is having a large share of market with prices that are average.Keeping minimum prices and a large market share allows the Airlines to provide better servicesto the overall market and to the consumers of all classes. This strategy can make the organisationin reaching to a large consumer base with fulfilling their expectations. The consumers also canmake use of these services, and if provided effectively they are able to make the airline reachingto its organisational goals and objectives(Carlos and Pena, 2015). The point of this strategy is to keep the cost of the company as low as possible. Sri LankanAirlines is focused on the internal processes while applying this strategy, along with it, thecompany tend to have substantial capital investment at their disposal, low cost and efficientlogistics when it comes to labour and materials. Differentiation: In the differentiation strategy Sri Lankan airlines tends to target a marketwhich is broad and have high demands and provides its services or products with features that3

are unique. In this strategy, the airlines makes its products much exclusive and attractive than theproducts which its competitors are serving to its costumers. The strategy requires a good researchand development, high quality product delivery and innovation in its success. In Differentiation,the airline is focused on its people and is having a creative approach in providing them with bestof the services and products. If a consumer is being attracted with the capabilities of a product,he might shift his focus from its current service provider to Sri Lankan airlines(Chadha andMuni, 2014). This can help the overall organisation to achieve a new and good consumer baseand if the organisation tend to keep providing the services with the best research anddevelopment it can keep a hold on its consumer base for a long term. Also, it is important tohave effective marketing to make the market understand the unique products benefits. Sri Lankanairlines tends to perform flexible and adaptive as per the changing environment otherwise there'sa possibility of the competition beating the company. Cost Focus: In cost focus, the company tends to target a market with niche focus such asa focused market, a market that serves very less competition, higher consumer likingsetc(Harrington, Cosgrove and Ryan, 2014). In this the airlines sets the lowest possible prices anddecides to aim at a clear niche market after understanding the dynamics of it(market) andconsumers wishes. Cost focus allows the company to understand the market needs of a consumereasily, with this the customer also understands what services the Airlines is providing and howthey are different from its competitors and the providers from which they are buying the servicesfrom. Along with it, with this approach the Sri Lankan airlines can determine the needs of itsconsumers on a small level which can be used in techniques such as trend forecasting,evaluating methods to providebetter services etc. This can help the organisation in long-termdetermination of its customers needs and wants in a short span of time. The strategy also keephelps in keeping its consumers updated with providing the best of the services from time to time.Understanding the competitive advantage makes the overall organisation more resourceful andfunctioning smooth. Differentiation Focus: Differentiation focus also targets a niche market such as withvery less competition and a market that is focused in understanding its consumers environment.This also requires the services and products of Sri Lankan airlines to have unique features.4

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