BLC304 Procurement: PESTLE Analysis & E-Sourcing Application

This report provides a comprehensive analysis of procurement management, focusing on the application of PESTLE analysis and e-sourcing within an organizational context. It begins with a PESTLE analysis, examining political, economic, social, technological, legal, and environmental factors influencing Malaysia Airlines' strategic decision-making and overall performance, highlighting the importance of political stability, economic considerations such as global financial crises, socio-cultural aspects, technological advancements in online booking systems, legal compliance, and environmental awareness. The report then delves into e-sourcing, defining it as a process of obtaining bids from various dealers through an online gateway, emphasizing its benefits in reducing costs, improving supplier relations, and enhancing compliance. Furthermore, it discusses the advantages of e-sourcing, including increased efficiency, improved liquidity, and better integration with back-office systems, ultimately leading to enhanced supply chain management in the aviation industry. The document concludes by underscoring the role of e-sourcing in making quality purchase decisions and increasing control over the supply chain.

Management
Procurement management
Student’s name

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Introduction
A Malaysia airline is the primary hub for domestic and international flights, which covers
most of the Asia route in between Europe and Australia. In terms of external forces, which
have major influence over the organisation decisions making, affects the overall
performances and helps in building up new strategies for generating more success.
PESTLE ANALYSIS
Political analysis- In terms of airlines concern, political factors are important to regulate the
upcoming progress of the company. Malaysia is one of the famous tourist destinations or
attractive for traveller all over the creation because Malaysia is that nation which is
administratively constant. People who visit Malaysia have experienced safe travelling
anywhere throughout the various destinations visit. In political terms, the government of
Malaysia is majorly focusing and promoting its tourism assets and implementing certain
policies and legislations in order to safeguard the interest of the investors, consumers and
entire community so that every individuals visiting Malaysia should feel safe, protect and
works at ease (Szydlowska Katarzyna 2018)
Economic analysis- In terms of economics, once global financial crisis has majorly affected
the performance of the airlines business in which the companies has faced huge loss in terms
of finances. Malaysia airlines were also one of them, which got majorly affected. Due to the
global financial crisis, it has major effect over the purchasing power of the individuals in
which they think of saving money is must better option rather than getting flights booked for
business trips or family trips. For overcoming situation, airlines have practiced low fare
promotion in which attractive discounts were offered in order to attract more of customers
(Szydlowska Katarzyna 2018)
Social factors- Social factors majorly highlights about the cultural, societal and demographic
aspect, which affects the overall size of the potential market and wants of the consumers.
These factors majorly highlights about the values, morals, attitude, lifestyles and individuals
opinions. Other than this, government also plays a major role such as in order to boost the
tourism, certain campaign are initiated for maintaining the attractiveness of the place as well
as focusing over hospitality for maintaining customers (Zahari and Romli 2018)

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Technological factors- Malaysia Air Company also delivers the online facilities to their
clienteles in order to book their tickets online, various discount offers, different packages and
schemes and other commodities. Within recent times, Malaysia airlines have worked over
enhancing the online system so that it should be easier for customers to access their online
portal or booking applications. Hence, this particular system soothes the online transactions
for the customers for knowing about their flights details without travelling. Not only this,
now, customers also known about their in-plane services and system such as digitalized
entertaining screen for the designated seatings which comprises of movies system, music
system, games and collaborating presentations (Suki Norazah Mohd 2014)
Legal factors- In terms of legal aspect, legal protection of the intellectual property rights,
data protection is one of the critical issues. Malaysia airlines in such concern need to do to
meet many rules and regulations. Other than this, health and safety aspect should also be
considered. Moreover, Malaysia airlines have to consider that whether the company have a
healthy lawful and technical instrument to safeguard data against ruptures (Ayob Norizawati
Mohd and Masroni 2014)
Environmental factor- The most important factor in terms of environment are waste
management, even government has come up with the strict norms for wastage in the urban
areas. Renewable technology is also one of the major interests of Malaysian airlines. Many
government officials are also providing subsidies to invest in the renewable sector.
Nowadays, the environmental norms are changing according to innovations. Now, products
are based or formed on the basis of environmental standards and expectation rather than
catering to traditional value prepositions. Even Malaysian airlines have certain strategies
likewise, greater awareness among customers regarding maintaining environmental
awareness (Zahari and Romli 2018)
E-sourcing
E- Sourcing is the one of the process of attaining bids from the various dealers through solo
online gateway. Other than this, E-sourcing refers to internet- assisted application and
decision support tools in order to assist connections in between consumers and dealers by the
use of online portal in terms of negotiations. It is also linked with the online auctions, which
helps in reducing prices through an introduction of elements of competition. Hence, this

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process makes the procurement method transparent and clearly structured (Hsin Chang Hsin
Yao-Chuan Tsai and Che-Hao Hsu 2013) lastly, the benefits which are associated with it is-
 Helps in reducing the overall cost, by reducing the expenses for both the buyers and
suppliers particularly expenses while printing and paper costs.
 Helps in improving relations with the suppliers through speedy communication and
effective feedback system so that both the buyer and the supplier should be aware
about the current situation
 Lastly, helps in improving compliance and reduce risk
Advantages of e sourcing-
The advantage of e sourcing is that it generates superior efficiency due to the opportunity of
shorter purchaser search intervals and due to the prospect of reducing the suppliers’ reaction
times and abridging the planning method.
E- Sourcing also helps in refining liquidity and address inadequacies in the supply chains by
enabling dealings and working over cultivating business procedures. Hence, all such
activities help in providing value proposition to obtaining and supply administration in
aeronautics industry.
Lastly, E sourcing also helps in generating efficiency by reducing procurement cost, reduced
unauthorised purchases, improves or works over the fast cycle times and leads the better
integrations with the back office systems. Hence, this helps in making quality purchase
decisions and increased control over the supply chain of the aviation industry (McCue
Clifford and Alexandru Roman 2012)

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References
Ayob, Norizawati Mohd, and T. Masroni. "Issues of safety and security: new challenging to
Malaysia tourism industry." In SHS Web of Conferences, vol. 12, pp. 1-10. 2014
Hsin Chang, Hsin, Yao-Chuan Tsai, and Che-Hao Hsu. "E-procurement and supply chain
performance." Supply Chain Management: An International Journal 18, no. 1 (2013): 34-51.
McCue, Clifford, and Alexandru V. Roman. "E-procurement: Myth or reality." Journal of
Public Procurement 12, no. 2 (2012): 221-248
Suki, Norazah Mohd. "Passenger satisfaction with airline service quality in Malaysia: A
structural equation modeling approach." Research in transportation business &
management 10 (2014): 26-32
Szydlowska, Katarzyna. International Business of the Airline Industry. Strategic Alliance and
the Business Tool" PESTLE". GRIN Verlag, 2018
Zahari, A. R., and F. I. Romli. "Analysis of suborbital flight operation using
PESTLE." Journal of Atmospheric and Solar-Terrestrial Physics (2018)