Kuwait Airways: Strategic Analysis Using Bowman's Clock and PESTEL

This report evaluates Kuwait Airways' competitive strategy using Bowman's Clock, highlighting its focus on perceived value and price. A PESTEL analysis reveals challenges in social and political factors, while Porter's Five Forces assesses the airline's competitive position and profitability. The report also examines Kuwait Airways' vision, objectives, and value chain, emphasizing the company's transformation plan and new digital practices. Furthermore, it identifies the target market and discusses how these strategic elements contribute to enhancing business profit. Desklib offers a variety of resources, including solved assignments and past papers, to support students in their studies.

Kuwait Airways
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Executive summary
The paper evaluates that Kuwait Airways follows the Bowman's Clock Strategy to maintain its
competitiveness as well as profitability in their business. Moreover, the PESTEL analysis
determines that Kuwait Airways faces problem in concerning social and political factors, but
both these issues do not provide any problem in their business growth. Besides this, Porter's
analysis and also Porter's five forces help the Kuwait Airways to determine its competitive
position as well as profitability context in concerning to their business. Apart from this, the
vision statement, objectives and value chain analysis help the firm to determine the strategy that
will be useful for them to increase their business profit in the coming days. Also, the new digital
practice and target market customer of this Kuwait Airways are also further discussed briefly in
this paper.
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Table of Contents
Introduction.................................................................................................................................................3
Competitiveness strategy of Kuwait Airways by following bowman´s clock strategy................................3
PESTEL analysis of Kuwait Airways..........................................................................................................5
Political factors........................................................................................................................................5
Economic factors.....................................................................................................................................6
Social factors...........................................................................................................................................6
Technological factors..............................................................................................................................7
Environmental factors..............................................................................................................................7
Legal factors............................................................................................................................................7
Porter analysis.............................................................................................................................................8
Functions of Porter’s analysis by Kuwait Airways......................................................................................9
Threats of new entrants............................................................................................................................9
Bargaining powers of suppliers...............................................................................................................9
Bargaining powers of buyers.................................................................................................................10
Threats of a substitute product...............................................................................................................10
Industry rivalry or rivalry amongst existing industry in the market.......................................................10
Vision statement and objectives of Kuwait Airways 153..........................................................................11
Target customer of Kuwait Airways..........................................................................................................12
Value chain analysis..................................................................................................................................12
Digital new practice and Kuwait Airways change cycle............................................................................14
Conclusion.................................................................................................................................................15
References.................................................................................................................................................16
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Introduction
The paper will provide information regarding the competitiveness strategy that is mainly
followed by Kuwait Airways in concern to the Bowman’s Clock Strategy. Also, the PESTEL
analysis of this firm demonstrates that apart from various difficulties of the political and social
issues, the firm will increase their business growth in the market. Besides this, Porter's analysis
and its application of five forces over this firm will also be discussed in this context. The vision,
objectives, target market, value chain analysis procedure will help in evaluating the different
aspects of the concerned business procedures. Moreover, the new digital practice use by Kuwait
Airways will also briefly describe in this paper.
Competitiveness strategy of Kuwait Airways by following bowman´s clock strategy
Bowman's Clock strategy is considered as the model that mainly explores the strategic
positioning of a firm which thereby helps the business to enhance their competitiveness in the
market. Kuwait Airways also follows this Bowman's Clock strategy to increase their competitive
advantage in the market. The competitiveness strategy of Kuwait Airways by following this
Bowman’s clock strategy mainly based on two categories such as perceived value and price
respectively. By following this Bowman's clock strategy, Kuwait Airways provides unique
services in comparison to the other airline services of the country (Kuwaitairways, 2018).
Kuwait Airways provide modern, ambitious as well as innovative services to their customers so
that they can easily maintain high competitiveness in the market in comparison to the other
similar airline services of the country. Thus for enhancing their business growth, the
competitiveness strategy that is used by this airline services is the "transformation plan.”
Kuwait Airways implemented this new bold strategy by following the Bowman's Clock strategy,
and according to this transformational plan, both the infrastructure and the technologies of the
airlines are changed that will provide better comfort to their consumers (Al-Hawary, and
Aldaihani, 2016). This transformational change is followed by the Bowman's Clock strategy, and
the whole plan will be completed by 2021. Hence this plan will thus help Kuwait Airways to
improve their competitive advantage, and this Bowman's Clock Strategy will help the company
to analyze their competitive position in the market in comparison to the offerings of the
competitors. In other words, this Bowman's Clock Strategy usually helps the firm to consider
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their competitive advantage about their differentiation advantage by using this transformational
plan (Low, and Lee, 2014). It is noted that Bowman’s Clock strategy is mainly based on eight
strategic options and keeping this in mind the management team of Kuwait Airways has decided
to implement the change.
Kuwait Airways provides low price as well as low value-added services to their customer and
offers them all sorts of comport, and this helps them to maintain a competitive position in the
market. The low price of their services makes low-profit margin but with the high volume of an
output enable them to generate high profits in their business (Tzvetkova, 2018). About their
competition, Kuwait Airways innovated their technology and business procedure so that they
could provide a differentiation aspect in concerning to the other airlines firm in Kuwait. They
followed a focused differentiation strategy where the airline has adopted a complete suite of
alternative solutions that include e-commerce, inventory, loyalty programmes, departure control,
reservation, revenue management, and payments, mobile as well as travel intelligence (Karsalari
et al., 2017).
In other words, it is seen that Kuwait Airlines is supported by Amadeus that help the firm with a
new business process so that they ensure a cost-effective and timely upgrade system and this will
help Kuwait airlines to hold a better positioning status in the market (Alkaabi, 2014). For the
business class category, the firm offers high price services because they provide extra benefits in
this class of people. By following this strategy of risky high margins, they quickly increased their
profits which helped them to maintain a good position in the airlines market. Besides this,
making the partnership with Amadeus the firm Kuwait Airways not just changes their
technological approach but also they are working to find a trusted provider those who have
expertise and long-standing experience in the airline business (Lin et al., 2018). Hence this will
help them to increase their profits as well as competitive advantage in comparison to the other
airlines firm in the country. Therefore, it is clear that by following the Bowman's Clock strategy,
Kuwait Airways easily maintained their competitiveness strategies in the market.
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Figure 1: The Bowman's Clock Strategy followed by of Kuwait Airways to enhance their
competitiveness strategy in the country
(Source: Lin, et al., 2018)
PESTEL analysis of Kuwait Airways
Political factors
Kuwait possesses a closed economy, and the political parties wanted a liberalized economy so
that they get benefits from the different actives that present in the country. Due to the high-cost
oil production of Saudi Arabia faces problem in Kuwait political conditions. Hence it is clear that
Kuwait Airways also faces a problem in developing their business in the overseas market due to
an unstable political condition of the country (Messner, 2017). It is noted that political issue
occurs in between the Israel and Muslim community which affected the business of Kuwait
Airlines because the government order the company management for not selling the ticket to the
Israel citizen. Thus it diminishes the business growth as well as profit of this Kuwait Airways
firm.
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Economic factors
The economy of Kuwait mainly based on the exports of minerals and pearls and thus the total
GDP rate of the industrial sector was 74.8%, and mining industry contributes 57.4% GDP in
2015 (Chang et al., 2015). The GDP of the country has increased by 1.8% per year until 2015,
and the rate increases mainly due to the government income and export business (Laeequddin,
and Abdul Waheed, 2016). Thus it will also help Kuwait Airlines to grow their sales rate from
both the native and global country. In other words, the government supported the firm to increase
their infrastructure investments so that they make an excellent revenue source for their business.
Figure 2: The current GDP rate of Kuwait
(Source: Tubigi, and Alshawi, 2015)
Social factors
Kuwait is considered to be a hub of expatriates that has only one natural resource that plays an
important role in growing their GDP rate. Kuwait can attract a large number of labors from other
countries, but the major social issue faced by the people is that they do not get the illegal work
permit and it causes the huge problem for the citizen to maintain their living style (Moutinho,
and Phillips, 2018). Hence Kuwait Airways also, kept a high revenue so that they can easily
support their employees with all sorts of help. Therefore, it can be said that Kuwait Airways
makes new strategies to increase their business growth so that they can help their workers
efficiently to maintain the social structure.
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Technological factors
The technology of Kuwait is still improving, and for developing this, the Central Bank of Kuwait
provide sufficient fund to the various industries in this country. In other words, the National
Investment Authority help the oil mining and exploration projects to improve their technology so
that they can offer high prices to their products (Schmidt et al., 2015). Kuwait Airways are
supported by both Central Bank of Kuwait and National investment authority which help the
firm to improve their technology so that they can easily offer more comforts to their consumers.
Environmental factors
Kuwait is famous for oil exploration as well as drilling procedure, and this has affected the
environment through both air and water pollution respectively. In other words, the presence of
oil wells causes an average of 3-5 million barrels burnt per day, and this gives rise to nuclear or
acid rain which also effects the environment too (Kim, 2016). Thus getting the huge impact from
air pollution, Kuwait Airways sometimes faces problem while landing the plane. The situation
sometimes causes great hazard such as delay of flight timings, cancelling of flights and all these
causes negative effect on their business growth.
Legal factors
The legal factor of Kuwait is quite good as the people do not have to pay taxes on wages and
salary respectively (Min, and Joo, 2016). Whereas, other laws are strictly followed by all the
citizens as well as the company holders too. Due to the law system, Kuwait is considered one of
the secure and safe places in the world. In other words, the crime rate of this country is low due
to this strict legal system (Alamdari, and Fagan, 2017). Hence, this strict legal system has also
followed by the Kuwait Airways and the law help the firm to get every support from the Kuwait
government easily.
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Figure 3: New business map for Kuwait Airways
(Source: Alamdari, and Fagan, 2017)
Porter analysis
Porter analysis is a tool created by Michael Porter to analyze the company's attractiveness as well
as profitability in concerning the five competitive forces (Castiglioni et al., 2018). The Porter's
analysis helps a firm to determine its strengths and weakness respectively. Porter analysis help a
firm to identify its structure in concerning the corporate strategy, and thereby it explains the
different levels of profitability. To determine the intensity of profitability level and competition,
Porter identified five forces and these forces help the firm to determine its attractiveness in the
market. The five forces are competition in the industry, powers of suppliers, the power of buyers,
a threat of entry and the threat of substitute products (Hannigan et al., 2015).
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Figure 4: Porters Analysis with its five forces
(Source: Hannigan et al., 2015)
Functions of Porter’s analysis by Kuwait Airways
The functions of Porter’s five forces in concerning to Kuwait Airways are as follows:
Threats of new entrants
The new entrants always possess threat from the existing firm that presents in another country.
Kuwait Airways, in that case, possess a moderate level of threats from the existing firm that has
the large cost advantage (Moir, and Lohmann, 2018). To maintain the competition, Kuwait
Airways requires a large amount of capital, and it can only occur with a strong consumer base
which can help them to maintain their business. It is noted that Kuwait Airways have built a high
position in the market which enables them to compete against the threat of new entrants.
Bargaining powers of suppliers
Suppliers mainly affect Kuwait Airways by their ability to enhance the price and reduce the
quality of goods as well as services. In the whole world, only two airline industry supplies the
airline products, and this is Airbus and Boeing, and this is the reason for which the bargaining
powers of the suppliers is high (Moon et al., 2015). Thus the bargaining powers of suppliers of
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Kuwait Airways is also high because of these limited suppliers who can easily control the market
by their airline manufacture products.
Bargaining powers of buyers
Buyers are the one that affects the airline's industry through their ability to reduce prices and
bargain for higher services as well as quality. Kuwait Airways has also affected by this
bargaining powers of the buyers, and it became a higher approach as the switching costs are low
in comparison to their passenger's numbers (Yan et al., 2016). In other words, passengers of
Kuwait Airways have different choices regarding seat selection, services offerings and so on.
Hence keeping this on mind the Kuwait Airways offer cheaper costs and better services to their
customers so they can easily grab a higher competition in comparison to the other airline firms in
Kuwait.
Threats of a substitute product
The threats of substitutes product in case of Kuwait Airways is comparatively low because they
offer international flights with the highly comfortable offer according to the passenger choice. In
other words, in the case of international flight, it became easier for the passenger to travel
through airways rather than through trains (Spil et al., 2016). Kuwait Airways provides all types
of international flight that will help the passengers to travel from one country to another without
wasting time by traveling through a train and hence it is clear that the threats of substitute
products of this airlines company are low in comparison to the other transport system of the
country.
Industry rivalry or rivalry amongst existing industry in the market
The rivalry among the existing industry present in the market is very intense as well as high due
to various reasons. In Kuwait Airways, the rivalry amongst the existing industry is very high
because several airlines industries are also present in Kuwait that provides the best aircraft as
well as services to their consumers (Aldaihani, and Ali, 2018). Therefore other airline industry in
Kuwait also attracts the huge number of passengers towards their company to gain a high
competitive advantage in the market. It is also seen that many airline companies of Kuwait
expand their market share by offering best customer services, prices and also provide creative
advertising campaigns that can easily grab attention of the consumer’s towards their airline's
services.
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Figure 5: Porter’s five forces of Kuwait Airways
(Source: Aldaihani, and Ali, 2018)
Vision statement and objectives of Kuwait Airways 153
The vision statement of Kuwait Airways is as follows:
"Kuwait Airways aimed at setting the standard for customer orientation and became an admired
airline to fly, to invest in and to work for” (Cho et al., 2017).
The main objectives of this Kuwait Airways are as follows:
 To provide consumer-oriented services that easily meets the passenger's preferences
and needs respectively
 To serve the best-in-class services than any other airlines in Kuwait
 To provide reliable economy services to every passenger
 To serve the whole community of the country
 To become one of a link for business as well as Leisure travel in between Western and
Eastern regions
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Industry
rivalry
High
Threats of
New
Entrants
Moderate
Bargaining
powers of
buyers
High
Threats of
substitue
products
Low
Baragaining
powers of
Suppliers
High