Strategic Management and Competitive Advantage Analysis for Air Canada

This report provides a strategic management analysis of Air Canada, focusing on creating a competitive advantage. It begins with an awareness of the external environment, emphasizing the importance for managers to stay informed about potential threats and opportunities. The report then explores the general environment, detailing the impact of political, economic, social, technological, legal, and environmental factors on the airline. It further examines the advantages and disadvantages of SWOT analysis, followed by an application of Porter's Five Forces to assess profitability and competitive dynamics within the airline industry. The analysis includes an evaluation of threats of substitutes, new entrants, bargaining power of consumers and suppliers, and rivalry among competitors. Finally, the report addresses legal and ethical issues, discussing the implications of unethical practices in business. References to academic sources support the analysis.

STRATEGIC MANAGEMENT
CREATING COMPETITIVE
ADVANTAGE

MAIN BODY
1.Awareness of managers for firm’s external environment
Manager of Air Canada must be aware about the firm’s external environment. It can support the
company in shaping their future and can also help them in making aware about the potential
threats that can exist to the organization. The awareness can assist in shaping the future of
individual as well as the firm (Ansoff and et.al., 2018). It can also help the manager of Air
Canada in keeping the business ahead of the competition.
2.Elements of the general environment
The six elements of the general environment that can affect Air Canada are:
Political- It includes the trade policies, laws rules and regulations related to taxes which
can affect the working of the company. Company must frame their policies according to the rules
of different regions where they are working
Economical- These factors include inflation rate, labour rate, fiscal policies. Like for
example if labour rate in any country decreases, it will enhance profit of Air Canada.
Social- It includes attitude, belief, values of the consumers. Company in order to be
successful must adhere to them.
Technological- Consumers like company that is using the advance technology. So Air
Canada must provide the benefit to their consumers on booking tickets online.
Legal- It includes the various laws and regulations like health and safety law in which the
Air Canada needs to provide safe environment to passengers.Environment- Company needs to
perform CSR activities or hold any event that promote awareness for environment ((Moutinho
and Vargas-Sanchez, 2018.).
.
3Advantage and Disadvantage of SWOT
Advantage:
 It helps in analysing the strength and weakness of the organization
 It can also help Air Canada in analysing the opportunities and potential threat for them.
Disadvantage:
 This method is subjective.
 It is also prone to ambiguity.
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4.Porters five forces in analysing the profitability
Porters five forces can help the firm in analysing the profitability as this method can provide the
organization an idea of the substitute and competitors present in the market. This can help the
firm in enhancing their profitability. Also they can set price according to the competitors’
products and services so that competitive advantage can be gain (Rothaermel, 2015).
5.Porters five forces for Air Canada
Threat of substitute- It has to be clarified that although there is a substitution for air travel,
represented by other modes of transportation such as vehicles and sea transports, air travel
remains as the fastest form of travel. So the threat of Substitute for Air Canada is subsequently
low.
Threat of new entrants- The threat of new entrants in the Airline industry is low. This can be a
benefit to Air Canada as there more legal challenges for new entrants to enter the airline industry
(Moutinho and Vargas-Sanchez, 2018.).
Bargaining power of consumers- The bargaining power of consumer is moderate. As there is
no other feasible alternative for consumer to travel long distance in short duration of time.
Bargaining power of suppliers- The bargaining power of suppliers is also moderate. On the
other hand, when there are adequate suppliers for the industry, the company can also switch
which reduces there operating costs.
Rivalry among existing competitors- The threat to Air Canada of existing competitors are high.
There are many competitors which are bringing new and advance technology in the airline
industry. So the company needs to update the technology from time to time (Porters five forces,
2013).
6.Legal and ethical issues involved
A) It is ethically a wrong deed which is been done Hotel A. These practice can hamper the image
of the hotel. Consumer and organization can feel manipulated because of this practice. Hotel A
must be engaged in ethical practices, so that their brand image cannot be hampered. This can also
lead the company into the legal trouble (Wheelen and et.al., 2017). The owner can be send
behind the bar for almost 14 years.
B) This is also the wrong deed which is done by the firm. It is directly the case of cheating. It is
ethically wrong (Wheelen and et.al., 2017). Also the firm can get into the legal trouble. It can
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lead to life time slavery for the people involved in this conspiracy. So the firm must not engage
in these type of practices.
C) This deed done by the firm is also ethically wrong. Misguiding the competitors can make
them go into the legal trouble.
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REFERENCES
Books and Journals
Ansoff, H.I. and et.al., 2018. Implanting strategic management. Springer.
Moutinho, L. and Vargas-Sanchez, A. eds., 2018. Strategic Management in Tourism, CABI
Tourism Texts. Cabi.
Wheelen, T.L. and et.al., 2017. Strategic management and business policy (p. 55). Boston:
pearson.
Rothaermel, F.T., 2015. Strategic management. McGraw-Hill Education.
Online
Porters five forces. 2013. [Online] Available through :
<https://www.mindtools.com/pages/article/newTMC_08.htm>
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