Eastern Airways: Strategic Analysis of Macro and Internal Environments

This report provides a comprehensive business strategy analysis of Eastern Airways. It begins by examining the macro environment using PESTLE analysis, considering political, economic, social, technological, environmental, and legal factors, and the SWOT analysis. The report then delves into the internal environment, applying the McKinsey's 7S model and VRIO framework to assess the airline's capabilities and strategic advantages. Furthermore, it utilizes Porter's Five Forces model to evaluate the competitive forces within the airline industry. Finally, the report discusses strategic planning for Eastern Airways, incorporating various theories and concepts to devise a strategic plan aimed at achieving competitive advantage and sustainable growth. The analysis covers various aspects, from the airline's missions, visions, and objectives to the impact of external factors like Brexit and the COVID-19 pandemic, providing a holistic view of Eastern Airways' strategic position.

BUSINESS
STRATEGY

Table of content
Introduction......................................................................................................................................3
Part A...............................................................................................................................................4
P1 Analyzing the impact and influence which the macro environment has on an organization
and its business strategies............................................................................................................4
P2 Analyze the internal environment and capabilities of a given organization using appropriate
frameworks..................................................................................................................................9
Part B.............................................................................................................................................11
P3 Applying Porter’s Five Forces model evaluate the competitive forces of a given market
sector for an organization..........................................................................................................11
Part C.............................................................................................................................................14
P4: Applying a range of theories, concepts and models, interpret and devise strategic planning
for a given organization.............................................................................................................14
Conclusion.....................................................................................................................................17
References......................................................................................................................................18
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Introduction
All business organizations have many operations to perform every day. They also comprises
mission and vision for setting their goals and objectives. They adopt many strategies for their
company to achieve those goals and objectives. They adopt number of techniques and strategies.
By those strategies they can achieve competitive advantages. As the business are now more
competitive. So organizations need to study the market very frequently and need to make
strategies according to that. This report has been prepared to explain all those strategies by which
an organizations can achieve competitive advantages. The strategies are explained according to
the porters five forces model and also a strategic plan are prepared with the help of different
theories and concept. The discussion of this report will be in the basis of the leading airline,
Eastern Airlines.
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Part A
P1 Analyzing the impact and influence which the macro environment has on an
organization and its business strategies.
Business Strategy:
Business strategies refers to some plans and actions or decisions which are taken to reach the
goal of business and to achieve success in business. Strategies are long term plan which are
created on the context of the current business situation and the changes which can happen in
some recent years. These strategies also help to decide some hiring and resource allocation
process and also help the organization to secure a competitive position in its industry (Botten,
2006). Business strategies contains business goals and objectives to satisfy its customers, run its
operation and to generate profit. The strategies help the business to grow economically. And it
also fulfills the customers need by facilitating goods and services they desired.
Eastern Airways made a three years strategic plan which will help them achieve their goals,
provide better services to customers. It was founded in 1997. It has 15 destinations. It is now one
of the leading airline in UK. They have 25% market share in the domestic market. Their yearly
revenue is £93 Million. So by these strategies they will achieve efficiency and they can perceive
and utilize new opportunities. They can also secure an advantageous position in its industry
(Chen, 2005).
Figure 1: Eastern Airways logo (Eastern Airways, 2019)
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Strategic Analysis of Eastern Airlines
Missions: The missions of Eastern Airways is to provide a hassle free safe service which is in
short haul air travel. They also ensure customers that by choosing Eastern Airways they choose
most reliable and convenience air travel.
Visions: Eastern Airlines vision is to be a known as a responsible airline of the world and they
also want to expand the business as much countries as they can. They also adopted some
principles to achieve this goal.
Objective:
 To established a suitable growth plan for Eastern Airways which will include many new
destinations with new flights.
 To examine all kinds of effect, such as internal and external environment, stakeholders
expectation and the challenges they have to face from competitors.
 To secure a position.
Analytical frameworks for the macro environment
There are a numbers of framework which can be used to analysis the macro environment of
Eastern Airlines. One of them is Stakeholder analysis which helps to find out relevant issues
which are related to stakeholders of the business (McKay, 2004). And by the stakeholder
mapping Eastern airlines can find out the potential and existing stakeholders for their
organizations. Another process named as stakeholder matrix can help the organization to find out
the needs and demands of the stakeholders and also helps them to achieve the ways of those.
However, there is an effective framework to analysis the macro environment which is known as
Pestle analysis. It contains the external factors of a business environment, which includes
Political, Economic, Technological, environmental factors. These factors are explained below:
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Figure 2: PESTLE framework (Sadler, 2003)
Political Factors: To operate a business in a country the organization needs to follow several
rules. So political conditions play a vital roles in the making of business strategy for Eastern
airlines. The political condition of UK is stable for an Airways business (Sadler, 2003). But there
is a problem regarding with BREXIT. It losses some business for this reason. An issue is, due to
recent terrorists attack the security is tighter now. So they have to face strict rules and
regulations.
Economic Factors: The economic situation is not good due to some international crisis that is
Covid-19. It creates a bad impact on Airlines business. People are now travelling less before
then. In 2019, around 80,000 passengers used this service. But in this year the number of
passenger is almost half in numbers. And for some months flights were fully stopped. Also for
the recent recession the price of ticket and other things are reducing. So Airline companies are
also reducing the travelling. Besides this there are some more issues to consider, they are
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inflation rate, foreign exchange rate, interest rate (Scholes, 2016). Eastern Airline must consider
all of these factors to make a good strategies plan.
Social Factors: The culture and the lifestyle has a great impact on the business of Airlines. So
Eastern Airlines must consider this factor. So if the population increase then it will be a benefit
for the Airways business. An employment rate changes can increase or decrease the use of
Airlines. Such as if more people of a country is unemployed then will travel more for getting a
job in foreign countries.
Technological Factors: This factors also have positive and negative sides. It is an era of modern
technology. So the Airline Company must have to be updated and they have to be developed
themselves to give online customer service (Sadler, 2003). People now compare price on online,
they visit different sites to compare the price and service. And by that they have gained more
bargaining power. Eastern Airways tech stacks are Google Analytics, LXC, and Sectigo etc.
Environmental Factor: Environment have a great impact on the Airlines business. Airline
business mostly depend on the environment. If the weather remains bad then they have to cancel
the flight. Due to the policy of saving environment can increase the cost of operation. There are
some other factors, which is the Airline business are increasing day by day, so Eastern Airlines
cannot increase the business as much as it wants due to the shortage of free land.
Legal Factor: All the business of a country must follow the rules and policies of that country.
The changes of the legal system of UK can cause trouble for Eastern Airways. For example, due
to Covid-19 UK added many new rules and regulations for the Airlines business (Chen, at el
2005).
Beside the PESTLE analysis there is SWOT analysis which is also an important analysis tool. It
It helps to identify the strengths, weakness, opportunities and threats which any business
organization can possess.
Table 1: SWOT analysis of Eastern Airlines:
Strengths
Goodwill: The company achieve a brand
value because of its quality products and
Weakness
High price: The price is comparatively high
than many other companies which is a
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services.
Alliances: They have created many alliances
and also partnership with many other
companies which will give some benefit to
the company.
Good quality service: They provide very good
quality services to its customers.
Customer loyalty: The customers of Eastern
Airlines are loyal to this company. That is a
strength for the company.
weakness for the company.
Lacking in IT: The company is not that much
advanced in IT. For these lacking they can
lose many customers.
Innovative technologies: As it is an era of
technology, so all company must try to
introduce innovative technology to be
competitive in this business.
Opportunities:
Quality development: They can increase the
quality of the system.
New markets: They can expand their business
in new emerging markets and also new
destination.
Alliance: In 12 January 2020 they have made
an alliance with Aero design limited. This
will create some opportunity for them.
Attract new customer: They can attract new
customers and also young customers.
Threats:
Sudden crisis: They can face some problem
like Covid-19, which will cause of loses many
customers.
Competitor: There is a risk to loose customer
because of the competitors.
BREXIT: Because of the BREXIT incident
they lose many customers.
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P2 Analyze the internal environment and capabilities of a given organization using
appropriate frameworks.
The strategic capabilities have six components which are discussed below:
Analytical tools: This components are basically the frameworks which helps the organization to
analysis the internal business. Such as SWOT analysis.
Strategic purposes: This is another key components of the strategies ability. It is the reason
behind to make a strategic plan.
Vision: It helps to determine the right path or direction to achieve some goal.
Goals: The goals are mainly the aims or the objectives, which the organizations targeted.
Values: It is the culture of the organization in which Eastern Airlines operate.
Action plans: When an organization implements a plan then they need the action plan. They
must need the action plan because only planning is not sufficient (Murphy, 2009).
McKinsey’s 7S model
A lot of organizations have adopted the McKinsey’s model like Eastern Airlines. By that model
they can manage all the operations done. The use of this framework for Eastern Airline is shown
below:
Structure: Eastern Airline is one of the biggest Airline in UK. The structure of this Airline is
hierarchical.
Style: Eastern Airline tries to satisfy their customers by all means, so they maintain their staff
and management like this (Kearns, 2008). This is possible when effective communication and
interaction are there between employees and management.
System: The organization system of this organizations is checking passengers, handling their
luggage system and also the complaint handling system.
Strategy: They follow the strategy to satisfy customer, creating reliability. They use information
technology to create higher customer satisfaction.
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Skills: To prepare the staffs they provide proper training for them. So that they can provide the
proper service to the customer.
Staffs: They always hire skillful staffs for their organizations who can provide proper service.
Shared values: They follow their own principal, values and norms. This values help them to
achieve success.
VRIO Framework
This framework help the organization to get competitive advantages over their existing
competitor (Murphy, 2009). The analysis are shown below:
Value: The Eastern Airlines provide all information for free of costs to their staffs for improving
their skills.
Rarity: They provide quality services, which is the reason for their success.
Imitability: For the quality service and products Eastern Airlines is very difficult to imitate.
Organizing: The organization of Eastern Airline is very structured. And they very hard to
maintain these organizing capability (Scholes, 2016).
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Part B
P3 Applying Porter’s Five Forces model evaluate the competitive forces of a given market
sector for an organization.
The Business environment is very competitive now a days. The number of business are
increasing day by day in an industry, so competition is also increasing. So it is getting difficult to
exist and sustain for an organization and achieve its goals and objective. That’s why Eastern
Airways needs competitive advantage to sustain in the existing competition (Colli, at el 2003). In
this case Porter’s five forces model is very helpful for any organizations. This model helps an
organization to get their desired type of competitive advantage. This model is explained below:
Figure 3: Porters Five Forces model (Johnson, et al 2011)
 Threats of new entrants: As many new organizations are entering in the business every day
so this is a common threat for every existing organizations. New organizations can snatch
customers from existing organizations. So Eastern Airlines needs to develop their product
and services according to recent market trends and market demand. So all the customers
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demand can be fulfilled by their services and that’s how they get a competitive advantages
over all other competitors in the industry. Though in this industry threat of new entrants is
low because here setting cost of a new business is very high. So anyone cannot enter in this
business.
 Threat of substitution: Substitute means some other category products but giving the same
kinds of customer satisfaction .This a threat because customers can switch from Easter
Airlines to other services. Such as bus, trains, cars etc. But the threat of substitute is medium
in this industry because for businessmen time is more important. If they use the substitute
products then they will need more time in travelling. So for saving time they will use airways
even if the price is higher (Schoening, 2005). So the threat of substitution is medium in this
industry. Because still there are some people who wants to save money by travelling in trains
or car.
 Bargaining power of buyers: If buyer’s number is large then they are more powerful and
want to reduce the price as much as they can. Then the profit for the organization will be
lower. Now a days with lot of technological advances customers can easily compare the
quality and price of the service in different organizations to get the best deal with less price.
So the bargaining power of buyer is higher in this industry. The solution of this problem is to
provide sales, discount and many attractive offers to the customers. Then customers will be
attracted to Eastern Airline.
 Bargaining power of suppliers: When suppliers are in large number in an organization the
bargaining power of supplier is high. Then suppliers include: manufacturers of aero planes
and spare parts suppliers, labor market etc. The option to switch from one supplier to other is
very less (Scholes, 2016). So the bargaining power of supplier is higher in this industry. And
because of the high bargaining power of supplier the rate of the ticket price is normally
higher. Eastern Airlines main suppliers are
 Rivalry among existing firms: Rivalry among existing firms occur when there are similar
categories firms are available and they want to snatch each other’s customers. The rivalry
among Airlines is very common. Because there are not large number of airlines in UK. And
they all have similar number of shares. So rivalry among these airways is very common. To
retain existing customers and also to attract new customers Eastern Airways can introduce
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