STRATEGIC MANAGEMENT EUROPEAN AIRLINE CASE STUDY - Essay Example

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The European airline is facing very high competition from other airlines from Africa, Middle East and other Asian countries. Due to the dynamism in the industry, both European airlines and their competitors are all striving to gain the market segments. The external environment and the trends in the industry itself have also had significant impact on the trend and growth of the industry…
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Download file to see previous pages The above issues have really affected the industry making airlines hard to survive and eventually leading to strategic alliances amongst the players in the industry. The macro environment analysis refers to the analysis of the political, economic, technological, environmental and social environment factors in the business environment.
The Government has come in very strongly to deregulate the European airline industry by opening up the skies .This follows an agreement that was signed up between the United States Government and the European Union. As a result, the airlines are able to make more frequent flights, they have become more flexible in their pricing and it has helped to enhance and heighten competition in the region. Although opening up the skies has had a positive impact on the growth of the industry, the airlines have not been spared the threat of terrorism in the world. The United Kingdom has also come up with the smoke free policy, whereby people are required to abstain from smoking while in the airplanes and this has created a clean and safe environment for both the passengers and employees in the industry (Kassim and Menon 1996).
The social environment has had both a po...
The citizens have benefited from the multicultural environment thus they are able to gain new ideas and hence they have become more innovative. The rate of population growth is also increasing and thus new business trends are emerging and therefore the business is able to benefit from new management styles (Kassim and Menon 1996).
Economic factors.
The economic recession the industry has affected its rate of operation and has thus led to its slow rate of growth. The rise in the Gross Domestic Product has led to trade amongst the airlines very expensive. The rate of inflation has been high due to the high oil prices thus affecting the profit margins in the industry. The exchange rates have also affected the margins that are being made in the industry due to the large fluctuations (Kassim and Menon 1996).



Technological factors.
The emergence of the internet has led to the rapid growth of the industry. Online bookings have become possible thus eliminating the need for travel agents and eventually it has led to saving of time and money for the passengers. Genetic engineering and quality controls have improved and made the industry more innovative thus making the industry more effective and efficient (Kassim and Menon 1996).

Environmental factors.
The industry has made a negative impact on the environment. The industry has come under criticism due to emission of carbon into the environment, erosion of the zone layers and it has brought about the effects of global warming. However, even with these negative effects the industry has become more innovative as they try to come up with new mechanisms to manage and control the negative ...Download file to see next pagesRead More
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