Delta Airlines -Navigating An Uncertain Environment
Need And Importance Of Environmental Analysis By Organizations Using Relevant Academic Literature
Delta airlines are world’s second largest airline company facilitating passengers through traveling services from one place to another place, cargo and post services. Delta airlines serve almost 180 million passengers per year. Delta airlines are providing services at domestic and worldwide level except for Antarctica. Delta airline was also a partner of establishing Sky Team airline alliance.
Environmental analysis is a tactical strategy used by an organization to identify internal and external factors. These factors have an effect on the on the performance of the organization. Data airlines also include environmental analysis in their organizational structure.
Internal environmental factors are influences the organization directly and organization can control these internal environmental factors. Here are few internal environmental factors, which are controlled and changed by the organization. (Sec.gov, 2003)
- Value Systems: Value system consists of customs and norms of any organization. This is important to maintain the internal system of any organization. In case of delta airlines, value system can be changed any time on the orders of management.
- Goals And Objectives: Different specific requirements, policies, and strategies of organization can affect the goals and objectives.
- Internal Relations: For well-established and functioned organization shareholders, employees and all the management play an important role.
Internal environmental factors play an important role in the victory and approach of operations. The organization has complete control over internal environmental factors. It is a necessity to identify the possible opportunities and pressure out of the organization’s operations. Role of leaders is a major factor includes internal environmental factors of any organization. A formal method must be followed by the whole organization. The strength of employees is also important for the internal environmental factors. If employees are talented and ambitious related to their duties, the organization will be successful. The relationship between employees of the different department must also be good to achieve the better results. (Berkeley.edu, 2013)
Internal factors include the internal strength and weakness of organization. How an organization can meet its goals and requirements it is all very dependent on the internal environmental factors. External environmental factors also affect the organization. In case of data airline, the whole industry contributed to world’s economy and provides a chance to connect buyer and seller. As other organizations, the airline industry is affected by changes in external environmental factors. In all organizations, external environmental factors are not controlled by the organization directly.
In external environmental factors, changes are made on the requirement of clients. External environmental factors are important for the future of any organization. PEST analysis is being imposed in any organization as an external environmental factor. A few external environmental factors are economy, finance, laws, and trend. An organization is supposed to maintain and adjust these external factors. In an organization, there are many external environmental factors, which control the progress and performance of the organization. External factors of an organization are elements, which affect the organization in positive and negative ways respectively. There are two main categories to explain external environmental factors that are volatile and non-volatile. (Q4cdn.com, 2017)
Volatile factors are the clients, suppliers, and opponents. These volatile factors affect the decisions, goals, and strategies of the organization. Hence, it is clearly defined that both internal and external environmental factors both are equally important for the progress of any organization. This factor influences the organization directly and indirectly. Internal environmental and external environmental factors are part of the environmental analysis. Any organization cannot exist without adding and following up these environmental factors in its strategy. (Q4cdn.com, 2017)
An Evaluation Of The Trends In The Macro Environment That Would Influence The Global Airline Industry Using PEST Model.
Delta airline was the first airline company providing the commercial and agriculture flying service to its clients. Delta airlines introduced the term postal service, which is used to carry mail and cargo services. In 2012, Delta airline facilitated 572 destinations in almost 65 countries. These countries were North America, South America, Europe, Asia, Africa, and Australia. Delta airlines operated almost 714 aircraft based on 5,766 regular flights. There are almost 80,000 employees working for the Delta airlines throughout the whole world.
Delta airline was a company providing services to domestic and international level. The company also invested a big amount of the airport facilities and global services as well. When we talk about airline companies, the first thought in mind is always about the services and comfort level provided by the airline company. Here is the detailed PEST analysis of airline industry which explains that how different factors in the macro environment of delta airlines affect its business and effectiveness. (Wilfred S. Manuela Jr, 2016)
Political forces have a significant impact on the airline industry. Delta airline providing services to the worldwide and the government of different countries have a straight and effective impact on Delta airlines. In 1978, delta airlines faced many difficulties related to various policies. With the passage of time, airline industry becomes strong and emerges as world’s second-ranked the largest industry. However, the progress of any industry differs from nation to nation because every country has its own rules and regulations. Many industries still exist with strict conservative and strict rules and regulations. In these types of industries, people face different problems. The government also plays an important part in the airline industry. A large number of government participated in the airline industry to establish standards. The government provides a comfortable environment to airline industry, which is effective to enhance the industry’s repute. The government also offers airline industries with economic benefits. Moreover, there are many governments, which still facilitate the airline industry.
Economic forces are another great influence of Delta airline industry to promote it globally. Economic slumps can affect the airline industry badly. After 1930, airline industry faced a recent downturn, which influenced the airline industry. Passengers and airlines companies are requested to decrease the cost of tickets. Downturn affected the revenue of airline companies business and the rank of service in global economy. These two factors influenced the passenger’s capability of buying costly tickets for travel.
Moreover, presentation of different airline industries also matters a lot. Profit and revenue of any airline industry will totally depend on the economic representation of any industry. But now, the downturn of the airline industry is finished and the good days are started. A rising middle class was a fine achievement for delta airlines. A big number of people are travel from one place to another place for visit and business meetings as well. So these changes were good and acceptable by delta airlines. Due to these economic changes demand of airlines increased.
There is the strong growing relationship between society and airline industry. Social factors are also a big reason behind the increasing demand for air travel. There are demographic changes, which influence the air travel industry. Air travel is a source of traveling from one country to another country. The millennial generation is the biggest reason behind increasing demand for air travel. Another important reason is that airline industries are becoming popular day by day due to its services. There are almost 80,000 employees working for delta airlines. The airline industry is affecting our personal and work life together. Many other factors also available influence the airline industry directly and indirectly respectively.
Technology is a more important factor for increasing the demand of airline than ever. Technology is a most important factor than cost and connivance. Fuel efficient aircraft are higher in demand these days. With the help of latest technology, aircraft are designed that consume less fuel. Technology is involved from booking to the reservation and resolving the technical issue in aircraft. A professional staff is assigned to resolve the technical issue any time.
Mobile phones are the best source to market and promote the airline industry throughout the whole world. People across worldwide can track the flight and reserve tickets through cell phones. All the airlines including delta airline adopted the latest technology.
Analysis Of Competitiveness Of Airline Industry Using Porter’s Five Forces Model
Airline industries commit to providing unique services to passengers. These industries facilitating passengers with transport facilities with a high level of comfort. Airline companies felt proud due to how these companies accommodate the flight’s passengers. They are providing passengers with high-quality food, beverages, and welcome crew. The geographic scale of the airline industry is at global standards. There are many competitors in the airline industry in the world. Porter’s five-factor models are used to understand the strategy of management. We found the reason that why some companies is more popular than other companies is. Porter’s five-factor model is used to identify those factors that figure out the industry competition. (DePersio, 2018)
Bargaining Power Of Customers
The airline industry is established on two groups of customers. In the first type, passengers buy tickets for many reasons that can be personal or business related. In the second type of group, people buy through different airlines or through online procedure. This buyer group is the intermediary between Airline Company and the passenger. Prices must be affordable for the passengers.
Airline companies must consider the value of passengers and should focus on the ease of passengers. Aware the passengers properly about the flight details and timing of departure. However, bargaining power of customers in the airline industry is at low threat.
Bargaining Power Of Suppliers
Bargaining power of suppliers in the airline industry is the next step. In this scenario, main suppliers are airplane manufacturers in the airline industry. All the airplanes are mostly similar in looks but differentiate based on services and internal designs. Many manufacturers are focusing on developing eco-friend airplanes.
To change the suppliers is one of the most difficult tasks for the airline industry as they have commitments with their suppliers. It is not easy to enter in the airline manufacturing industry. It is an estimate that 200 million dollars are required to manufacture a plane. This is the main reason behind few suppliers in the airline industry. (Cederholem, 2014)
The Threat Of New Entries
Another factor of Porter’s model is the threat of new entries. There are only two reasons for this threat. One, there is little switching outlay and second, there are no services implicated. Due to these threats, the airline industry has fewer chances of threats. All the present firms have cost benefit. Although, there are low chances of changing airline company because the passenger has to pay a big amount for tickets to travel. Therefore, they can’t rely on any local or new airline company. There are fewer chances of new entrants in airline field.
Threat Of Substitute
The threat of substitute is a main and considerable factor in Porter’s Model. Passengers can select any other type of transport for traveling such as car, bus, and trains. This medium of travel can be costly than airplane tickets due to the distance and airlines are the fastest form of travel. Airline industries provide better services than another source of transports. Cost and services are the main reason behind switching the source of travel.
The Rivalry Between Existing Companies
Rivalry among existing companies is the last factor of Porter’s Model. Rivalry in the airline industry is demanding due to many reasons. There is a list of airlines companies providing services to passengers all around the world. There are a large number of competitors in every field. Cost is very high in the airline industry. Different airline industries are part of existing market. The rivalry between existing industries is high and suppliers are the main and strong factor because manufacture a plane is an expensive process.
However, buyers are the weak factors due to less switching costs. Another reason of weak buyers is, substitutes are sometimes cost-effective and time-consuming as well. Profit margin is high in the airline industry because flying to other paces is a valid reason for passengers. Profit margin is totally depending on the repute and services of any airline company. Delta Airline Company is also popular in the whole world due to its services and a large number of available planes. (Revenuesandprofits.com, 2017)
Delta Airlines Inc. SWOT Analysis
Delta airlines are one of the biggest American airlines. Delta airline has almost more than 5400 regular flights and 64 international destinations. It is an oldest and world’s second number airline of America. Here is a detailed SWOT analysis of Delta Airlines. (Haseeb, 2016)
The strengths of Delta Airlines are listed here.
- The fleet size of Delta airline is more than 700.
- Innovation was also strength in the form of Track check bags.
- Delta airline was the biggest and strongest airline of Atlanta.
- Delta airlines consist of 80,000 employees.
- Delta airline has 5000 flights per day to facilitate passengers.
- The strong and trustworthy relationship between passengers and management.
- The strong management team was strength of Delta Airlines.
- Delta airlines provide passengers with excellent services’
- The main strength of Delta airline is that company facilitates passengers with affordable prices.
There are few weaknesses in the strengths of Delta airlines as well. If a company is unable to overcome the weaknesses, it can affect Airline Company badly. The company must solve and improve these weaknesses.
- The main weakness of Delta airline was, it depends on the North American market especially on Atlanta.
- Financial issues facing delta Airline Company.
- In same planes of delta airlines, seats were uncomfortable for the passengers.
- Less involvement of technology was also a weakness, which delta airlines faced.
- A number of canceled flights were a bit high as compared to other airline companies.
These are the few weaknesses of delta airlines and company must focus on these weaknesses by resolving as soon as possible.
There are few opportunities that Delta airlines contain and these opportunities are listed here such as
- The Delta Airline Company can offer its passengers more opportunities to access online reservation of tickets and tracking of flights.
- The Delta Airline Company can use the customers to expand the business all around the world and market as well.
- Delta airlines have no expiry date for the extra miles offered by the company to the passengers.
By utilizing these opportunities, Delta airlines can expand its business and services all around the nation and world.
There is a list of threats which delta airline faced in its time.
- Having the biggest competition is the main threat faced by Delta Airlines. The number of new airline companies is increasing with passing years. The major competitors of Delta Airlines in the industry are American Airlines, Southwest Airlines, and United Continental Holdings.
- Many competitor airlines are offering low and affordable prices for domestic tickets to the passengers.
- Another threat is increasing fuel prices day by day.
- In 2010, Delta Airline has announced the airline with worst services.
It was a detailed SWOT analysis of Delta Airlines, which contain strength to weaknesses of the airline over the market and industrial perspective. Threats and weaknesses of Airline Company can be overcome with the help of strengths and weaknesses. Competition is increasing day by day and company need to improve its strategies. (Phdessay.com)
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