...PEST Analysis for a Company in the Tourism Industry The Tourism industry is one of the fastest growing industries in the world. The World Travel and Tourism Council estimates that in 2004 Travel and tourism is expected to generate * US$ 5,490.4 billion of economic activity * 10.4% of total GDP * 214,697,000 jobs or 8.1% of total employment * 12.2% of total exports [1] My task is to conduct a PEST analysis for a company within the Tourism industry. Within the tourism industry, I have to select one area of interest like transportation, accommodation and transportation etc. and then one company doing business with these sectors related with the tourism. According to Leiper “Transportation is the only link between the tourist-generating region and destination region”[2]So, transportation was a more interesting sector to discuss in the report but I tried to find a company which is related with all these main sub-sectors discussed above in the report. I have decided to look in the U.K market for such company because “Tourism is one of the largest industries in U.K, worth approximately 75.9 £ Billion to the U.K economy in 2002 and supporting around 2.1 million jobs.” [3] During my research on internet I found many companies offering services in the tourism of U.K but I have decided to choose “Simply Travel” because of its variety of services offering related with the accommodation, transportation and attractions...
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...Airline Ticket Pricing The basis of airlines competition for passengers and a larger share of the market are based on: i. Frequency of service and departure schedule on each route served ii. Price charged, relative to other airlines, to the extent that regulation allows for price competition iii. Quality of service and products offered ‐‐airport and in‐flight service amenities and/or restrictions on discount fare products Passengers on the other hand choose combination of prices, flight schedules and product quality that will maximize the utility of taking a flight. Therefore, it is in the interest of each passenger to have the best service for the lowest price possible on a flight that departs at the most convenient time (Peoples, 2012). Price elasticity is a measure of how responsive consumers are to price changes or consumers' price sensitivity to changes in price. From the law of Demand, we know for certain that an increase in the price of a product will always result in a decrease in the amount demanded and vice versa. That is, we know the direction of the change. Price Elasticity answers the question: When price goes up, how much does the quantity fall. Knowledge of price elasticity helps a firm to accurately forecast the impact of price changes on unit sales. Price elasticity also helps the firm determine an optimal pricing strategy to max profits. The understanding of the price elasticity of demand for a given company's services can guide the firm in...
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...is a low-cost, low-fare airline headquartered in Dublin, Ireland, operating over 200 routes in 20 countries. The company has directly challenged the largest airlines in Europe and has built a 20-year-plus track record of incredibly strong passenger growth while progressively reducing fares. It is not unusual for one-way tickets (exclusive of taxes) to sell on Ryanair’s Web site for less than €1.00. See Exhibit 1 for an excerpt of Ryanair’s Web site, where fares between London and Stockholm, for example, are available for 19 pence (approximately US$0.33). CEO Michael O’Leary, formerly an accountant at KPMG, described the airline as follows: “Ryanair is doing in the airline industry in Europe what Ikea has done. We pile it high and sell it cheap. . . . For years flying has been the preserve of rich [people]. Now everyone can afford to fly.”1,2 Having created profitable operations in the difficult airline industry, Ryanair, as did industry analysts, likened itself to U.S. carrier Southwest Airlines, and its common stock has attracted the attention of investors in Europe and abroad. Low-Fare Airlines Historically the airline industry has been a notoriously difficult business in which to make consistent profits. Over the past several decades, low-fare airlines have been launched in an attempt to operate with lower costs, but with few exceptions, most have gone bankrupt or been swallowed up by larger carriers (see Exhibit 2 for a list of failed airlines). Given the excess capacity...
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...REV: SEPTEMBER 18, 2007 ERICH ALEXANDER VOIGT JORDAN MITCHELL Airbus vs. Boeing (A) Should Airbus go ahead and develop its own version of a super jumbo (the A3XX)? Should Boeing develop a larger version of the 747? What would Boeing and Airbus gain by teaming up? What could they lose? The answers to these questions would determine the future of both companies for many years to come. The Commercial Airline Industry Do The global aviation industry was sized at approximately $100 billion as of 1992. The single largest segment was the manufacture and sale of large commercial aircraft, which totaled $38.5 billion in 1991.1 The sale of large commercial aircraft was expected to grow to $40 billion by the end of 1992. The worldwide commercial aircraft fleet was made up of nearly 8,000 passenger and 1,200 cargo planes spread out over 450 airlines and operators. Large commercial aircraft were defined as airplanes with 100 or more seats. Large aircraft made up 90% of the fleet, while smaller airplanes accounted for the remaining 10%.2 The VLCT was defined as a plane over 400 seats or with the ____________________________________________________________ ____________________________________________________ Professor Ramon Casadesus-Masanell, Erich Alexander Voigt (Tiggeman Associates), and Research Associate Jordan Mitchell prepared this case. This case was developed from published sources. HBS cases are developed solely as the basis for class discussion. Cases are...
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...THE EXTERNAL ENVIRONMENT AFFECTING KFC 1.0 External Analysis For success within the airline industry, an awareness of the external environment is essential. This section aims to highlight the position of the industry, in particular looking at competitors and assessing KFC’s capability to meet current and future challenges. 1.1 PESTEL Analysis An analysis of the macro-environment has been carried out using PESTEL POLITICAL: The operations of KFC are affected by the government policies on the regulations of fast food operation. Currently government are controlling the marketing of fast food restaurant because of health concern such as cardiovascular and cholesterol issue and obesity among the young and children in the country. Governments also control the license given for open the fast food restaurant and other business regulation need to follow such as for a franchise business. Good relationship with government in giving mutual benefits such as employment and tax is a must for the company to succeed in any foreign market. ECONOMIC: Though for last 1 year there was economic slowdown all across the globe but the sales of KFC and other fast food chains did not slow down to that extent that of other sectors in. The GDP (Purchasing Power Parity) is estimated at 2.965 trillion U.S. dollars in the year 2010. The GDP- per Capita (PPP) was 2700 U.S. dollars as estimated in 2008. The GDP- real growth rate in 2007 was 8.7%. Foreign direct investment rose in the fiscal...
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...STRATEGY Ryanair’s objective is to firmly establish itself as Europe’s leading low-fares scheduled passenger airline through continued improvements and expanded offerings of its low-fares service. Ryanair aims to offer low fares that generate increased passenger traffic while maintaining a continuous focus on cost-containment and operating efficiencies. The key elements of Ryanair’s strategy are: Low Fares. Ryanair’s low fares are designed to stimulate demand, particularly from fare-conscious leisure and business travelers who might otherwise have used alternative forms of transportation or would not have traveled at all. Ryanair sells seats on a one-way basis, thus eliminating minimum stay requirements from all travel on Ryanair scheduled services, regardless of fare. Ryanair sets fares on the basis of the demand for particular flights and by reference to the period remaining to the date of departure of the flight, with higher fares charged on flights with higher levels of demand for bookings made nearer to the date of departure. Ryanair’s Dublin to London (Stansted) route is its largest route in terms of passenger volume, with fares ranging from 0.99 to 199.99 (excluding government taxes and passenger service charges). Ryanair’s competitors generally do not operate a one-way pricing policy, so direct comparison is not possible, but current round-trip fares on Aer Lingus, Ryanair’s largest competitor on the LondonDublin route, for travel in September 2004 were 82.27 for economy...
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...Title: Low Cost airlines Industry in India An overview of the Indian aircraft industry The Indian economy has grown at an average rate of around 8% in the last decade. The rise in business and leisure travel (both domestic & international) due to this growth, India emerging as a major origin and destination for international travel have all had a significant impact on commercial aviation in India. According to the airports authority of India (AAI), the passenger traffic is expected to grow at over 20% in the next five years. On the supply side, since 2003, when low fare travel in India was ushered in, a number of low cost carriers (LCC) have entered this fast growing market. However, all of the LCC carriers and - with rare exceptions – even the full service carriers (FSC) charging higher fares have been making losses. By and large, operating a commercial airline in India so far has not been a profitable business. In 2007, the industry witnessed a wave of consolidations primarily to stem the tide of red ink. Boom and bust in Indian aviation industry Air India and Indian Airlines retained a monopoly over civil aviation in India till 1992. The deregulation of the Indian economy that started in the mid-1980s, and proceeded more aggressively after the New Economic Policy in 1991, led to calls for opening up of the airline sector. Over the following years, several new airlines including Damania, EastWest, Jet, Sahara, Modiluft and NEPC started operations. However, high...
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...potential of Singapore Airlines (1100 words) The velocity of competition in recent times has put an extreme demand on corporations to articulate their strategic management in terms of positioning, choices and execution. Strategic positioning is the foundation that establishes organisations strategic potential, what it can do and strategic ambitions, what it actually seeks to do (Johnson et. al 2011). This requires good understanding of the externalinternal environment, organisational purpose and culture. The tools commonly used to develop understanding and perform a strategic analysis are presented in Appendix 1.0.This essay aims to lay the foundation for a comprehensive analysis of current strategic potential of Singapore Airlines (SIA). Firstly, the focus is on how to identify the sources of information about macro environment, unique features of airlines industry and in depth view of internal dynamics of SIA. Secondly, the focus is on comparison of four core tools in terms of relevance, advantages, disadvantages and creative adaptability for SIA. A preliminary application of these tools is made to illustrate the arguments for or against using a particular tool. The essay briefly touches on another crucial aspect of right expertise and competence for an effective analysis. The essay concludes with key observations and recommendations for a further comprehensive analysis of SIA.A simple structure is adopted in this essay as indicated in Fig 1.0 The airlines industry in general, with...
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...and vegetables are the main crops. The dairy industry makes milk, eggs, and cheese in large quantities. Cattle and big numbers of sheep, as well as poultry and pigs, are raised all across the country. They also have a large fishing industry, with all kinds of fish, like cod, haddock, mackerel, whiting, trout, salmon, and shellfish, making up the vast majority of it. Making of Great...
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...maintain its planes, instead of needlessly maintaining excess costs. Q 2.How does Citrix Systems’ improve operational efficiency and decision -making? Ans 2. The benefits of Citrix Presentation Server that interested Jet Airways were enhanced and fasterdelivery of business-critical application to local and international users, timelier decision making andincreased operational efficiencies, superior service levels and significantly lower IT administration costs.2. PresentationServer with its inherent centralization capabilities facilities application delivery andinformation available in a timely manner.3. Instant access to business critical application helps management to take faster decision on criticalbusiness aspect of running the airline.4. By providing relevant authenticated user IDs, users are able to access application as and whenrequired. Q3.Give examples of three decision supported by the Citrix system. What information does thesystem provide to support each of these decisions?Ans 1. Implementing Citrix Presentation Server for centralized application management .About 300 concurrent users across all domestic and international location access all domestic andinternational locations access,BW application, a revenue management system, a cargo booking systemand the entire suite of SAP R/3 modules.The sales...
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...Table of Content RYANAIR THE COMPANY 3 Section A 4 Slow Growth 4 The impact of slow growth on the industry 4 Taxation 4 ECONOMIC FACTORS 5 Unemployment 5 GNP trends 5 Inflation 5 Exchange rates 5 Interest rates 6 Security Factors 6 The Threat of close substitutes and rivals 7 HIGH FIXED COSTS; 7 AIRPORTS 7 PORTER’S FIVE FORCES 9 Threat of new entrants 9 Suppliers: 9 Buyers: 9 Substitutes: 9 Competitive rivalry: 9 Section B 10 Firm Infrastructure 10 Human Resource Management 10 Technology Development 11 Procurement 12 Inbound logistics 12 Operations 12 Outbound logistics 13 Marketing and Sales 13 Service 13 Margin 14 Joint Venture 14 SECTION C 15 Ryanair Business Strategy 15 Low Fares: 15 Customer service: 15 Frequent Point-to-Point Flights on Short-Haul Routes: 15 Low Operating Costs: 15 Taking Advantage of the Internet: 16 Commitment to Safety and Quality Maintenance: 16 Enhancement of Operating Results through Ancillary Services: 16 Analysis of the airline business models 16 Ryanair’s strategy in future: 17 Focused Criteria for Growth: 17 New Aircraft-markers: 18 New design ‘standing seats’ 18 SWOT Analysis 19 Strengths 19 Weakness 19 Opportunities 19 Threats 19 BIBLIOGRAPHY 20 RYANAIR THE COMPANY The company was incorporated in 1995 and became Ryanair limited, and in 1996 it changed to a holding company for Ryanair limited. Registered...
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...economics of the firm and the industry in which the firm competes. There are a number of benefits to developing this knowledge before performing any financial statement analysis. 1. Strategy understanding provides a context for evaluating a firm’s choice of accounting policies and hence the information reflected in its financial statements. For example, accounting policies (such as revenue recognition and cost capitalization) can differ across firms either because of differences in business economics or because of differences in management’s financial reporting incentives. Only by understanding differences in firms’ business strategies is it possible to assess how much to rely on a firm’s accounting information. 2. Strategy analysis highlights the firm’s profit drivers and major areas of risk. An analyst can then use this information to evaluate current firm performance and to assess the firm’s likelihood of maintaining or changing this performance based on its business strategy. 3. Strategy analysis also makes it possible to understand a firm’s financial policies and whether they make sense. As discussed later in the book, the firm’s business economics is an important driver of its capital structure and dividend policy decisions. In summary, understanding a firm’s business, the factors that are critical to the success of that business, and its key risks is critical to effective financial statement analysis. 2. What are the critical drivers of industry profitability? Rivalry Among...
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...and put on the desk of everyone involved in the business. The brand profile would usually be accompanied by the Brand Name, and, if some implementation detail is appropriate, a summary of the main elements of the Brand Identity (e.g. logo, basic graphic standards). Local brands or national brands: Logo |Brand name |Company type |Origin of the brand |Founded year |Brand type |Area served |Parent company |Products | |[pic] |Aftab automobiles |Private |Bangladesh |1982 |Automotive |Bangladesh |Navana group |Car assembling, automotive parts | |[pic] |GMG Airlines |Private |Bangladesh |1997 |Airlines |Bangladesh and few international hub |GMG group and Beximco |Airline services | |[pic] |Dhaka bank |Private |Bangladesh |5th July 1995 |Banking |Bangladesh |Dhaka bank limited |Banking services | |[pic] |Square pharmaceuticals |Public |Bangladesh |1958 |Pharmaceutical |Bangladesh and global locations |Square group of industries |Pharmaceutical supply | |[pic] |RAK ceramics |Public |Bangladesh |1989 |Ceramics |Worldwide |RAK ceramics |Ceramic appliances | |[pic] |Eastern housing |Public |Bangladesh | |Real estate |Bangladesh |Islam group |Housing services | |[pic] |Rahimafrooz |Public |Bangladesh |April 15, 1954 |automotive aftermarket, power and energy, and retail chain |World...
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...Recreating the Airways How it’s Possible to Fly Low-Cost Luxury A Creative Marketing Strategy for an Upstart Airline Joseph Deluca Table of Contents Overview……………………….. 1 Target Audience………………. . 2 SWOT Analysis…………… …… 2-4 MC Objectives………………….. 5 Strategic Plan…………………… 5 -6 The Budget……………………… 6 -7 Evaluation and Conclusion…….. 7 Citations…………………………. 8 Virgin America: Recreating the Airways How it’s Possible to Fly Low-Cost Luxury A Creative Marketing Strategy for an Upstart Airline By Joseph Deluca Overview Fledgling airline, Virgin America, is rethinking what it means to fly economy. Low cost shouldn’t infer low quality. Virgin America offers consumers style, relaxation and entertainment without emptying their pockets. A thorough and accurate creative work plan will allow Virgin America to produce an effective MC campaign that will yield a high ROI. The Virgin Brand The Virgin brand is synonymous with value style, a little bit of fun, irreverence and caring deeply for customers and employees (Reed, 1). Corporate Values Virgin America’s main principle is commitment. Virgin America is committed to environmental sustainability, governance and accountability, its employees and its stakeholders (VirginAmerica.com). Corporate Vision Within the next 5 years Virgin America aims to be the leading low- cost, high- luxury airline in the United States by expanding flights, its air force and by creating new destinations. Mission Statement ...
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...Economic Analysis on Budget Airline—Taking Ryanair as an example . 1. Introduction Ryanair Ltd. is a pioneered Irish low-cost airline, located in Dublin, Ireland. In 2013, Ryanair was both the largest European airline by scheduled passengers carried, and the busiest international airline by passenger numbers, according to its annual report in 2013. From its official website, data shows that Ryanair operates more than 1,600 daily flights from 72 bases, connecting 184 destinations in 30 countries and operating a fleet of more than 300 new Boeing 737-800 aircraft. The latest news about Ryanair could be found on its corporate website (http://corporate.ryanair.com), saying that “Ryanair has recently announced firm orders for a further 280 new Boeing 737 aircraft, as well as options for 100 more Boeing 737 MAX 200s, which will enable Ryanair to lower fares and grow traffic from 90m this year to over 150m p.a. in 2024. Ryanair currently has a team of more than 9,500 highly skilled aviation professionals, and has an industry leading 30-year safety record”. It is a very typical case for economic analysis. The tragic news about the wreckage of Airasia QZ8501 hit the world on 28th Dec 2014, which put the budget airline in the front of the storm again since it is not the first news about airline crash in 2014. Budget airline is elastic in terms of the speed to repose to the demand change and it makes efforts to sell out its all seat using differentiated...
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