MGN409: Flight Centre's External Environment Analysis using PESTEL

This report presents a PESTEL analysis of the Flight Centre Travel Group, a major travel agency. The analysis examines the political, economic, social, technological, environmental, and legal factors influencing the company's operations. The political factors include political stability and changi...Read More

Management
Management theory and practices
Student’s name
9/10/2019

Management theory and practices 1
Contents
Introduction......................................................................................................................................2
Political factor..................................................................................................................................2
Economic factors.............................................................................................................................3
Social factor.....................................................................................................................................3
Technological factor........................................................................................................................4
Environmental factor.......................................................................................................................4
Legal factor......................................................................................................................................5
Conclusion.......................................................................................................................................5
References........................................................................................................................................6

Management theory and practices 2
Introduction
Flight centre travel group is one of the main and the well-known travel agency group or
it is the largest retail travel outlet on Australia. This company was mainly launched in 1982 and
till date it has its remarkable growth of around $20 Billion business containing of more than 40
types. It has corporation possessed processes in around 23 nations. Moreover, it travel
organization set-up is more than 90 countries (Flight centre travel group, 2019)
The company chief goal is to be the world’s most exciting and money-spinning travel
seller, which personally provides amazing experience to the clienteles and their partners.
Moreover, their strategy has to create or generate the new specialized brands, which allows in
capturing and grow their key market segments. Lastly, in terms of their priorities, their
employees and their clienteles with an remarkable experience generation and wonderful
merchandise with caring services are the most important aspect, which helps them in generating
success in long run (Flight centre 2014).
In terms of environmental analysis, Flight centre travel group applies strategic tool in
order to analyze the macro environment of the organization. / Pestle analysis, mainly highlights
about the political, legal, economic, social, environmental and technological aspect are taken into
considerations.
Political factor
Political factor mainly consist of political stability concept along with the changing
policies, governance system, corruption and bureaucracy, taxation, trade restriction and lastly
intellectual property protection are taken into consideration. Hence, in terms of administrative
steadiness concern, higher political steadiness delivers steady and pleasant business atmosphere
similarly in concern to flight centre travel group is linked with many countries each country have
its own political tension which majorly affects the company’s growth and also limits the
enhancement in opportunities presented in Flight centre travel group limited. In terms of
changing policies, such as government policies majorly affects the business performance by
increasing the environmental uncertainty (Hays, 2014).

Management theory and practices 3
Another aspect highlights about taxation , trade restrictions and intellectual property
rights states that when organization enter to those countries who have high taxation rates such
aspect directly affects the performance as well as profits of the company and vice versa.
Similarly, high in trade restrictions makes the organization working condition more complex and
also affects the exports as well as affects relationship with foreign trade partners. Hence for
working make more easier then, flight centre travel group needs to consider intellectual property
right and accordingly they should work over business strategies so that it helps in improving the
performance. Lastly, in terms of pressure groups ad governance system. As it is seen that close
collaboration helps in enhancing the performance and leads to achieve the long-term
organizational goal (Reuters 2019).
Economic factors
Economic factors such as foreign altercation, interest ratio, manual labor marketplace
condition, inflation rates and redeemable rates are the major determinants, which are, need to be
considered in term of economic aspects. As all such aspects helps in determining the economic
environment of the country. Moreover, it also helps in knowing growth of the organization such
as business cycle, in which for an organization who enter the maturity stage leads to more
challenging aspect all because of market saturation. Another aspect is inflation, exchange rate
and interest rates, which affects the GDP growth rate. Higher GDP affects the customers’ ability
to spend more, higher unemployment leads to a higher availability of labor at lower salaries. The
higher interest rate helps in encouraging the attitudes towards the investment and leads to the
increment in the growth of the organization in full swing (Hays, 2014).
Lastly, economic structure and financial market efficiency also are the determinants of
economic aspect. Hence, in this, flight centre travel group are majorly affected by the financial
market efficiency as it leads towards improved liquidity position and strengthen the position of
the organization so they can target the new market (Bowden, & Martin, 2013).
Social factor
Social factors mainly highlights about the societal norms, values and trends. Moreover,
inclusion of demographics trends, power structure, and customers wants, preferences and

Management theory and practices 4
purchasing and spending pattern, which affects the organization performance and profitable
aspect in long run. Similarly, knowing more about the demographics characteristics choosing the
right market strategies and segment so that the company performs well than before. Other than
this, in today’s time the use of social media has encouraged people to do online shopping. Such
increase in mobile phones and social networking sites leads to an increment in marketing as well
as communication strategies for the success of the Flight travel group (Hays, 2014).
Other than this, social aspect also considers the customers’ purchasing power and their
wants, preferences and taste at large. Hence, Flight centre travel group should make an effort to
understand the degree of the customers wants and preferences , their leisure interest so that
company should make an effort to enhance the customers experience and start with some newer
offerings over the traditional offering which will again leads to the betterment of the organization
in terms of profit and success.
Technological factor
Technological aspect helps in achieving the business advantage, likewise, growing
productivity, and enhancing modernization procedure and leads to the enhancement in operative
competence. In this, if a company adopts technological innovations, this will helps in bringing
major transformations in the organization along with the alternation in success rules for the
market players. Other innovative techniques such as adoption of social media aspect also helps
flight centre travel group to perform well. Lastly, technological aspect also affects the firms’
value chain and cost structure in which the company should capitalize in disorderly machineries
to capitalize on its incomes and then re-invest in technology to earn more (Robinson, et al,
2016).
Environmental factor
Environmental aspect majorly highlights about the climate conditions, standards laws
and regulations across the different markets. In relation to flight centre travel group, adopts the
various recycling and waste management strategies and practices in order to protect the urban
areas. Moreover, it is also seen that weather and climate condition also majorly affects the
business efficiency, the customers spending patterns and affects the performance of the

Management theory and practices 5
organization in longer run. Moreover, adoption of green business practices by Flight centre travel
group also helps in winning trust of the stakeholders. Hence, such practices lead to betterment of
the companies offering and reputation. And if the company in this aspect starts investing in
renewable machineries leads to the extensive period sustainability and along with this, expansion
of customers base leads to the enhancement in brand image (Gregorić, 2014).
Legal factor
Lastly, legal factor such as violation of customers, employees as well as environment are
the major consideration likewise, flight centre travel group follows the stern principles to
safeguard the workers security, providing the safe working atmosphere to entire labor force.
Moreover, in terms of intellectual property laws helps the company in protecting companies
patent and valuable ideas, which will further helps in resulting an competitive advantage and
strengthening the position of the company against the other market competitor. Lastly, flights
centre travel group also provide protection to their customers from any fraudulent marketing
claims, therefore such aspect helps in maintaining the customers loyalty in long run and thus,
improve the overall performance of the organization (Hays, 2014).
Conclusion
From the above report, we can conclude that pestle analysis is that business tool which
helps in knowing about the companies’ environment and helps in shaping the future business
aspect that leads to generation of success in longer run. In political concern, government role and
political stability plays a greater role whereas, in economic terms customers spending aspect is
considered which further leads to increment in GDP. Similarly, enhancement in technological
helps flight centre group for more generation of success. Whereas, social aspects include
adoption of social marketing, looking more over customers buying behavior also affects
company. Thus, all aspects helps the company to further set their strategies and earn more
success than usual.

Management theory and practices 6
References
Bowden, J., & Martin, A. (2013). The Influence of Empowerment on Organizational Success: A
Case Study on Flight Centre. Global Cases on Hospitality Industry, 141.
Flight centre.(2014). About flight centre. [Retrieved from]
https://www.flightcentre.com.au/about-us
Reuters.(2019). Flight centre travel group ltd. Retrieved from:
https://in.reuters.com/finance/stocks/company-profile/FLT.AX
Robinson, P., Fallon, P., Cameron, H., & Crotts, J. C. (Eds.). (2016). Operations management in
the travel industry. Cabi.
Flight centre travel group. (2019) about flight centre travel group. Retrieved from:
http://www.fctgl.com/about-us/
Hays, K. (2014). Flight centre travel group. Retrieved from:
https://prezi.com/uonwf_bkocfg/flight-centre-travel-group-ltd/
Gregorić, M. (2014). PESTEL analysis of tourism destinations in the perspective of business
tourism (MICE). In 22nd International Congress, Tourism & Hospitality Industry 2014,
Trends in Tourism and Hospitality Management.