Pearson BTEC Business Strategy Report: AIG Transport Analysis

This report provides a comprehensive business strategy analysis of AIG Transport. It begins with an evaluation of external factors using PESTLE analysis, considering political, economic, social, technological, legal, and environmental influences, particularly in the context of the COVID-19 pandemic. The report then delves into AIG Transport's internal environment and capabilities, utilizing the McKinsey 7s framework to assess structure, strategy, systems, skills, staff, style, and shared values, alongside a value chain analysis to evaluate inbound logistics and operations. Next, Porter’s Five Forces model is applied to assess the competitive landscape, followed by a strategic overview that integrates relevant ideas, principles, and models to formulate recommendations for AIG Transport. The analysis aims to provide a clear understanding of the company's business climate and strategic direction, offering insights into its strengths, weaknesses, opportunities, and threats.

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COURSE: PEARSON BTEC Higher National Certificate/Diploma in Business
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Table of Contents
Introduction......................................................................................................................................4
LO1..................................................................................................................................................5
Evaluation of the external factors that are affecting the business of AIG transport....................5
LO2..................................................................................................................................................8
Study of AIG transport's internal environment and abilities using suitable mechanisms...........8
LO3................................................................................................................................................13
Application of Porter’s Five Forces model on AIG transport and the evaluation ofits
competitive................................................................................................................................13
LO4................................................................................................................................................16
Usage of relevant ideas, principles and models, interpretation and strategic strategy for AIG
transport.....................................................................................................................................16
Conclusion.....................................................................................................................................24
Reference.......................................................................................................................................25
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Introduction
External variables have a huge influence on any company in the industry. This report describes
the external factors that occur in AIG transport. To test the macroclimate, the PESTLE analysis
approach is used here. Via this, we will learn about the external variables that affect the external
environment of AIG transport (Ghemawat, 2013). AIG transport's internal ecosystem is also
established in this paper, applying Mackinsey's 7s and value chain analysis. Then the assessment
of competitors is studied here. At the bottom of this report, strategy preparation is also offered.
This analysis will make the business climate of AIG transport easier to interpret. At the end of
this post, a tactical overview is also given.
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LO1
Evaluation of the external factors that are affecting the business of AIG
transport
A PESTEL evaluation is a method or tool that is often applied to analyse and monitor external
factors that can have a big influence on an institution's performance. This approach is incredibly
beneficial when launching a new venture or entering a foreign market. PESTEL is a word for
political, economic, social, environmental, technological, and legal causes (Zalengera, et al.
2018). A PESTEL evaluation on AIG transport will figure out the external factors that are
affecting the business. By addressing the external variables that are actually affecting the
business, AIG transport’s decision-makers can make appropriate decisions regarding that. These
factors have been analysed here using the PESTEL analysis model;
Political
These variables are mostly about who as well as what point in the market of a particular sector a
government gets involved in. Practically, all the impacts on the organisation which a state has are
sometimes categorised here. Government policies, political peace or turmoil, taxation,
international trade policies, tax regulation, employment law, environmental regulation, and limits
on trade may be included (Srdjevic, Bajcetic, and Srdjevic, 2014). The state will also have a
profound impact on a country's learning environment, infrastructure, as well as medical
regulations. Both aspects should be taken into account when assessing the appeal of a potential
sector. In this present situation of global pandemic, the government has imposed various travel
restrictions that are affecting the business of AIG transport.
Economic
Factors of the performance of a given industry are economic factors. Variables include financial
prosperity, currency rate, recession, debt rates, household income, job rates, etc. Such conditions
may have a substantial or unintended lengthy impact on a corporation as they affect consumers'
purchasing power and could theoretically change the economic development patterns of the
nation. And, however, it also changes the way businesses market their commodities and services.
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For the COVID-19 global pandemic the whole world’s business is going through an economic
crisis so is AIG transport.
Social
This element of the general climate is reflected by the societal patterns, customs, activities, as
well as values of the society within which the company operates. It includes demographic trends
such as population growth rate, age range, earnings allocation, job expectations, security
attention, health literacy, lifestyle perceptions, as well as cultural boundaries. These factors are
particularly critical for manufacturers when addressing certain consumers (Harb and El-
Shaarawi, 2017). Moreover, it also tells much about the community workforce as well as the
ability to operate in some circumstances. For stopping the transmission of the coronavirus, WHO
has suggested social distancing and discouraged travelling. This changed the lifestyle of people
all over the world as well as the transportation industry.
Technological
These factors refer to technological developments that may have a favorable or detrimental effect
on both the organisation and the marketplace's operations. This refers to growth opportunities,
the degree of imagination, automation, and investment in product creation, technical
advancement, and the amount of technical expertise an organisation requires. These factors will
influence options for joining or not joining certain industries, introducing or not introducing
those products, or exporting overseas manufacturing operations. People will be eligible to
prevent their company from spending lots of cash on upgrading a technology that will become
obsolete very soon by knowing what's going on in innovation due to fast technological
advancements. For the COVID-19 global pandemic, AIG transport has to undergo some
technological changes. They are thinking about some innovative ideas that will keep the
coronavirus away.
Legal
While these considerations intersect with legislative considerations, they involve more particular
laws, like laws on segregation, trade laws, rules on housing, regulations on customer rights,
regulations on patents and trademarks, and policies on security and nutrition. To compete
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effectively and legally, it is apparent that firms ought to learn about right and wrong (Khan,
Mohammad Khan, and Nur Alam, 2015). When an entity works internationally, while each
nation maintains its specific system of laws and legislation, this becomes particularly
complicated. Furthermore, people need to be notified of any possible regulatory reforms as well
as the effect they will have on their company in the coming years. The government has created
several new laws and restrictions due to the COVID-19 global pandemic and along with other
industries, AIG transport has to obey them.
Environmental
This is a recent issue. The growing lack of resources, emissions goals, and carbon emissions
goals established by policymakers have made them significant. These factors include biological
aspects like geography, economics, climate compensation as well as global warming, which will
have a particular effect on industries such as travel, forestry, agriculture, and insurance. The
understanding of the potential effects of global warming also affects the way businesses run and
the items they market (Dahlhamer, 2019). As AIG transport is has a great impact on this, they are
also concerned about these environmental issues. This has contributed to more and more
engagement by many firms in activities like organisational corporate responsibilities and
conservation.
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LO2
Study of AIG transport's internal environment and abilities using suitable
mechanisms
The internal environment and capabilities of AIG transport can be explained thoroughly using
McKinsey's 7s model and operational clarification step by step value chain analysis will add
sophistication to the explanation of the company's capabilities. Using the mentioned two
frameworks the relevant discussion regarding AIG transport's internal business environment and
capabilities is given below;
McKinsey’s 7s Framework
McKinsey 7s framework is a method that evaluates the organisational architecture of the
enterprise by examining 7 main internal components to determine whether they are coordinated
successfully and help the organisation to meet its goals.The purpose of the concept was to
illustrate how the business's 7 aspects can be integrated collectively to achieve productivity in an
organisation (Hanafizadeh and Ravasan, 2016).The key concept of the framework is how all
seven aspects are intertwined and can be used by the majority of an organisation to work
efficiently, a transition in one region needs change in others too.
Figure 1: The elements of McKinsey’s 7s Framework
Source: (Dahlhamer, 2019)
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Structure
AIG transport has developed a progressive business operational structure. even though the
advantages of following such a structure are lucrative the drawbacks cause incompetent inter-
departmental communication resulting in disrupted long-term objectives or targets of the
company.
Strategy
AIG transport follows authoritative marketing and promotional strategies. The management of
the company is trying to optimise the customer satisfaction level. Thus the company is trying to
acquire a long-term sustainable competitive advantage over its rivals to maintain the productivity
of the company.
Systems
Systems are an organisation's processes and protocols, revealing the daily actions of the
corporation and the stages of decision-making within the business. The company's area that
dictates how deals are executed and the primary priority during change management for
managers (Ravanfar, 2016). In AIG transport the company offers dispatch and fright planning
services following OTR system operation. In this way, the management takes the position of its
employees.
Skills
Skills apply to the qualities that the corporation's workers practice very well. Also, skills and
eligibilities are included. The dilemma often comes from an organisational change as to what
expertise the organisation will need to expand its existing strategy or a revolutionary system. The
employees of AIG require to have teamwork tendency, experience in a certain field, flexibility,
and stress handling ability.
Staff
The employee factor is related to the type and quantity of workers needed by an organisation and
the aspects in which employees are appointed, educated, motivated, and paid. To the workers of
AIG transport, teamwork is the core motto. The staff is hired in a competitive manner
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considering competency and expertise over certain fields according to the job requirement of
AIG transport.
Style
Style demonstrates the forms the company is managed by top-level executives, how they
interact, what actions they perform and their symbolic significance. The management strategy of
the institution's members deals with the interpersonal form (Channon and Caldart, 2017). In
AIG, the management follows democratic styles considering the opinion of managers and
employees of the company.
Shared Values
The pre-determined norms as well as standards guiding the employee behaviour along with
organisational actions are the core shared values of the company. this element works as an
organisational foundation and within AIG transport, the management shares the value of
providing great service to its customers with the most effective transportation quote.
Value Chain Analysis
Evaluation of the value chain is a method in which a company identifies its principal operations
that add benefit to its finished item and then analyses these operations to decrease costs or
enhance differentiation. The supply chain reflects the inbuilt activities in which a company is
engaged when converting inputs into outcomes.
Figure 2: Value chain analysis framework.
Source: (Ghemawat, 2013)
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Inbound Logistics
Inbound logistics deal with the materials purchased from the manufacturers of the company and
to be utilised for the production of the finished product (Kaplinsky, 2020). In the inbound
logistics for AIG transportation, the carriers and owner-operators have a partnership relation with
the company.
Operation
Through this process, the raw materials are converted into finished final products. As the
production of the goods finishes, the management expects that the product will add value to the
customers of the company. Once, AIG transport receives an order, the company contacts its
transportation partners to execute that order.
Outbound Logistics
After the goods or products are properly processed, the manufacturer of the goods sends those
products to the distribution centers from where the goods will be supplied to its users. The
distributors of the product include wholesalers, retailers, agents, etc (Hergert and Morris, 2019).
In AIG transport, through the operational process, the quotes for specifies orders are developed
and the company contacts its partners for relative supports. Once the process is done, the
management of AIG transport sends the propositions and other significant factors to the
customers as the outbound logistic activity.
Sales and Marketing
During this stage of the value chain, the company makes sure that the offered goods and services
are targeted to the right customer group marinating a balanced marketing mix to establish a
productive strategy. In AIG transport the management focuses on the customers requiring cargo
and auto-shipping quotes, dispatch services.
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Service
After the products are send off to its buyers, the companies must track the order and provide
after-sale service to maintain a good relationship with the customers of the company. The after-
sale service includes training, warranty, guarantee, etc (Donaldson, Ishii, and Sheppard, 2014).
AIG transport offers to book to delivery service toits customers and as for the after-sale service;
the company introduces insurance service as well.
Along with the above mentioned primary activities of AIG transport, the company managers the
supporting value chain activities like proper procurement process, infrastructural capabilities,
human capital management, and finally the technological touch to its operational and
management process.
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