The Nz Aviation Sector Tourism Essay Example

a large fleet consisting of the "Boeing-747", "Boeing-767", "Boeing-777", and an "Airbus-A320" on international routes. Air NewZealand also operates domestically with its regional subsidiaries: Air Nelson, Eagle Airways, and Mount Cook-Airline. The airline has been awarded the "Airline of the Year" title in 2010 and 2012.

Key People

• Chief Executive Officer: Rob Fyfe
• CEO Designate: Christopher Luxon
• Deputy CEO: Norm Thompson
• Chief Financial Officer: Rob McDonald

Group General Managers:

• Group General Manager Short-haul Airlines: A Bruce Parton
• Group General Manager People & Technical Operations: Vanessa Stoddart
• General Manager Airline Operations and Safety: David Morgan
• General Manager Marketing and Communications: Mike Tod
• General Manager Strategy: Stephen Jones

The Objective:

The global economy has faced challenges due to the ongoing recession and intense competition in the market, leading to a decline in economic activity. This has significantly impacted people's attitudes towards travel.

The text above describes Air New Zealand's operations, key people within the company, as well as their objective in response to challenges faced by the global economy such as recession and intense competition affecting travel demand.

The organizations are forced to adopt more strategic approaches in the highly competitive market. Due to the current global economic crisis, people have limited financial resources and are looking for cost-effective solutions that are also highly useful. This report specifically focuses on the strategic foundations of Air NewZealand. The analysis conducted by Narendra Inti includes a PESTEL analysis as part of the environmental scan to evaluate the macro-level factors impacting Air NewZealand. Additionally, the report uses Porter's five framework to analyze the micro-level factors. The findings from the environmental scan are used to address key strategic issues and help the organization consistently grow and succeed.

Strategic Foundations

An organization consists

of the following "strategic foundations":

• Mission
• Vision
• Strategy
• Values

The Mission

The tagline "World's warmest welcome" clearly indicates that "Air NewZealand" is dedicated to providing the best service to the people, and that is what they have been doing since their establishment. Approximately 13 million people worldwide fly on "Air NewZealand" every year. This is mainly due to the exceptional service they have been offering, which sets them apart from other airlines. Their commitment to their mission "World's warmest welcome" has earned them international recognition.

Not only do the Chinese gooseberry love to enjoy the service of this airline, but people from many other countries do as well. In addition to receiving the best airlines award for the years 2010 and 2012, it has consistently been the winner of the "Best Passenger-Service Award" presented by ATWMA (Air-Transport WorldA magazine-award).

The vision of "Air NewZealand"

"Air NewZealand will strive to be number one in every market we serve by creating a workplace where teams are dedicated to our customers in a uniquely New Zealand way, resulting in excellent industry returns."

Values


Providing the Best Service

Air NewZealand's approach to customers begins by understanding their needs.

They ask their clients about their destination, the number of people, the purpose and timing of the trip, and what they value during the journey. This information helps them determine the ideal route and schedule for the client, and they personalize their service to meet the client's needs throughout the journey. Every employee at Air NewZealand is dedicated to

making a positive impact on their clients and the company.

Community Support:

Air NewZealand is a major sponsor of various events held in New Zealand.

It holds a record for supporting multiple groups and charities by donating large amounts and providing travel assistance.

Environmental Care

Air New Zealand is highly committed to reducing the aviation industry's impact on the environment. ANZET (Air New Zealand Environment-Trust) has been making contributions to support preservation and research projects in NZ.

Customers Airline

They value their customers and this has made them the preferred choice of customers. They continuously study changing preferences and prioritize customer needs.

That is why their level of service consistently exceeds the expectations of their clients.

Cardinal Elements of Planned Strategic Directions

• "Air NewZealand" desires to gain a competitive advantage in their business by leveraging the innovation and creativity of its employees.
• "Air NewZealand" is highly devoted to championing and promoting both New Zealand and its people, culture, both at home and abroad.
• They place a strong emphasis on teamwork and have a dedicated team working towards the growth and vitality of the organization and New Zealand as a whole.
• "Air NewZealand" aims to consistently be the preferred airline for customers traveling to/from or within New Zealand.

Environmental Scan

The process of environmental scanning is essential in identifying current or upcoming changes, as it focuses on areas that an organization may have previously overlooked. There are six elements/segments within the generic environment that affect an organization, with the impact varying between organizations.

The primary focus of the organization is on researching,

monitoring, describing, and analyzing information. The results of this analysis can be used as tools to transform uncertainty into strategy (Aaker, David, Michael and Mills, 2005).
Macro Analysis
The business environment surrounding an organization consists of external influences that affect an organization's decisions and performance. Therefore, the PESTEL analysis is a methodological approach for identifying and analyzing macro environmental factors that could impact business strategies. It also helps predict how these factors may influence the business's performance in current and future scenarios.

When initiating the environmental survey, it is vital to evaluate all six elements of the PESTEL analysis collectively. These elements are interconnected and should not be assessed separately. It is crucial to examine multiple macro-environmental factors during the analysis in order to create a policy that can be applied to both present and future situations. The subsequent factors guide decision-makers in determining what to include in an organizational strategy for effectiveness, as well as identifying the essential environmental factors that bolster a business strategy.

According to organizational requirements, strategy makers must also assess other factors that may potentially impact the organization's output; these factors are not mentioned below. Thus, the emphasis is on addressing the key success factors.

Political factors

Political factors can have positive or negative effects on a business, depending on the current situation in a country. Therefore, it is crucial for every business to comprehend and monitor the political environment as it can significantly influence their operations. Prior to proceeding further, strategy makers should seek answers to critical questions about the political environment such as: "Is the government stable?", "What type of government holds power?", "What are their economic policies?", "What trade policies does the government

implement?", and "What are the diplomatic relations with neighboring countries?".

Once the scheme shapers receive the responses for the aforementioned inquiries, they must incorporate the findings into the scheme development process, which helps them predict the future. With approximately 74% of "Air NewZealand" being owned by the NZ government, there seems to be no issue politically speaking, as far as New Zealand is concerned. Furthermore, policies were established to benefit the organization, as the NZ government strongly believed it was connected to the nation's integrity. However, the organization must continuously monitor and adjust to the policies of foreign authorities, as these policies, taxes, and regulations change frequently.

Economic factors

The economic factors that can impact a business and should be considered include: demand for goods or services, regulations, interest and inflation rates, access to credit, and unemployment rates.

The factors mentioned above can directly impact market competition, demand, and supply. Despite the global economic downturn, the local economic conditions in New Zealand are better than many other developed countries. Major countries like Australia, Singapore, and Gulf states, where Air NewZealand flies to and from, are also economically stable. Therefore, Air NewZealand currently has no concerns in this area.

Social Factors

Social factors are extremely important and can greatly influence a business.

Social factors encompass various elements such as lifestyle, trends, wealth distribution, and ethnicity. As humans are social creatures, these factors are interconnected with people's culture, opinions, and changing preferences. The Air NewZealand is particularly adept at marketing themselves in a way that resonates with individuals. Their service reflects and respects diverse cultures, which is evident in how they prioritize and

value different civilizations.

During the recent rugby world cup, planes were painted black as a show of support for the "All Blacks" rugby squad from NZ, highlighting their commitment to considering social factors in decision-making. Moreover, Air New Zealand's staff interaction with individuals from diverse cultures serves as another remarkable illustration.

Technological factors

It is crucial for businesses to continually embrace new technologies to offer exceptional service in the market.

Companies that have a strong vision actively seek out and utilize the most advanced technologies for their business. Air New Zealand is particularly notable for its implementation of new technology, which is aligned with their company vision that emphasizes competitive advantage, creativity, and innovation. Unlike other airlines that may persist in using outdated technology for seating arrangements, Air New Zealand consistently keeps track of technological advancements and updates its services on a regular basis.

Demographic Factors:

New Zealand is renowned for its diverse population and vibrant cultural diversity.

The location has attracted immigrants from various parts of the universe who have relocated and settled here. Each year, there is a significant rise in young people moving to this area from different nations, seeking educational and employment prospects. This influx of immigrants benefits "Air NewZealand" as they frequently travel back to their home countries, thus contributing to the success of Air New Zealand's business.

Legal Factors

The legal aspects include regulations concerning employment, health, safety, and service. "Air NewZealand" must comply with the "New Zealand Civil Aviation Act 1990".

Micro Analysis The micro-environment involves the organizations/individuals that are dealt with by the houses on a regular basis. Stakeholder groups in concern, such as providers, rivals, distributors, employees, and clients, come under the micro-environment. All the stakeholder

groups can demonstrate their impact on a house directly. Directors need to frequently interact with the stakeholders since their determinations have a direct impact on the concern. Therefore, the micro-environmental factors play a critical function in an organization's behavior and success.

Many models and theoretical accounts are recommended for analyzing an organization's micro-environment where it operates. Porter's Five Forces Of Competition Framework, proposed by Michael E. Porter in 1979, is a particularly useful model for business strategy development and ongoing industry analysis. These five forces are helpful for analyzing competition in a given market environment and improving strategy (Michael, Duane, and Robert, 2005).

The forces of Porter's five model are based on the "S-C-P paradigm" (construction and behavior ; performance) in organizational-economics. This can be applied to diverse scenarios and different scope of jobs and thereby assist the concerns to be more profitable (Porter, 1979). The five forces were referred as micro-environment by Michael E.Porter. The micro-environment consists of the forces that are close to the organisation which can impact the ability of an organisation to function the clients and its profitability.

Firms can use their core competences, website, or business model to generate profits above the industry average.

Bargaining power of suppliers

The term "suppliers" refers to all the sources of input required to provide goods or services. A service industry requires infrastructure, labor, and other supplies. This has created a supplier-buyer relationship between the company that supplies materials and the industry that provides goods or services. If the suppliers have significant power, they can influence the industry by selling materials at high prices in order to capture the industry's profits.

The supplier's bargaining power can be high

in the following situations:

• If only a few giant providers dominate the market.
• If there are no alternatives for those products.
• If the buyers are fragmented, the bargaining power would be low.
• Sometimes, it may be more advantageous to switch to a different provider.

Purchaser bargaining power

The bargaining power of purchasers, according to Porter's five forces, refers to the pressure consumers exert to obtain better quality service and lower prices. In Porter's industry analysis framework, "purchaser bargaining power" is one of the forces that shape competition within an industry. The main idea is that the bargaining power of buyers affects the competitive environment for sellers and therefore impacts their profitability. Strong buyers can compel sellers to improve product quality, offer more services, and reduce prices.

Buyers have a significant role in creating demand in an industry. The threat of new entrants refers to new companies that enter and emerge in a particular industry, presenting strong competition to existing established companies. However, these new entrants cannot compete on an equal footing with established and well-known companies. New entrants face various risk factors that need to be considered. They have limited opportunities to become large-scale players. The three main barriers for new entrants are brand loyalty, economies of scale, and absolute cost advantages (Hill and et Al, 2007).

Traveling by the current scenario, surviving in an airline industry is not easy for new entrants due to the industry's saturation and high entry barriers. Additionally, the airline industry is

unappealing because of the significant initial investment required and minimal profits to be gained. Therefore, Air NewZealand faces no threat from new competitors.

Threat of substitution

The threat of substitution refers to the alternative options available in the market for customers. These alternative options are known as substitutes.

When it comes to air hoses, other modes of transportation such as roadways, railroads, and waterways can pose a threat as they can also be used for leisure travel. However, air hoses continue to hold the position of being the fastest mode of transportation and will maintain their dominance in the global transportation market.

Competition Among Established Competitors: A challenger is a business that offers similar services or goods and exists when there are multiple companies in a market.

These houses all strive to capture the markets of their competitors in order to gain an advantage and surpass the others. Typically, the competition revolves around product offerings, pricing, customer service, and promotional campaigns in order to gain a better position in the market. This competition indicates the strength of the rivalry among the existing players in the market. Intense competition leads to lower prices and margins, which affects the profitability of each individual firm in the industry. While Air NewZealand and Qantas dominate the Trans Tasman market zone in airlines, other competitors such as Virgin Blue and Emirates also play a crucial role in determining market prices.

The competition and level of competition in the air hose industry is expected to be high under the following circumstances:

• Competition Structure
• The competition will be greater when there are

smaller rivals, and vice versa when there is a single dominant market leader.

Strategic goals

Competition increases if rivals adopt aggressive growth plans. However, it would be different if their aim is solely for profits. In the air hose industry, competition is primarily focused on advertising, pricing structure, and customer satisfaction. The main competitors of "Air NewZealand '' are:

• Qantas Airways & its subsidiary Jetstar Airlines
• Virgin Australia Airlines
• Emirates Airlines

Key strategic issues

The aviation industry has undergone significant changes in recent years. Airlines have become highly competitive as they strive to capture competitors' market share.

Equally far as the "Trans Tasman" zone is considered, the environment for air power is in good form.

Understanding The Markets and Customers

To last and efficaciously vie in the air power sector it is indispensable for the air hoses to understand the market and the altering gustatory sensations of the clients. Airlines can retain a client merely if they provide the best in their service. So retaining has become one of the cardinal issues for air hoses. Therefore, Air NewZealand " should invariably look into their SL 's, frequentness and connectivity.

The text emphasizes the importance of continuously studying and updating in order to meet the preferences and expectations of customers. There is also a mention of the increasing use of loyalty marketing, which aims to encourage customers to regularly use a product or service by instilling a sense of loyalty in them. Air New Zealand, for example, offers a frequent-flyer loyalty

program where customers can earn points during their trips and redeem them for free benefits. Additionally, the text mentions the need to realign procurement strategies in light of the lessons learned during the recession, as it demonstrated how trends can quickly change.

The current economic crisis has forced the air power industry to reorganize its procurement strategy. Therefore, it is crucial for "Air NewZealand" to establish an efficient scheme and procurement system in order to succeed in uncertain conditions.

Decision

The aviation industry is highly competitive. "Air NewZealand" must ensure that their staff provides exceptional service that exceeds customer expectations. They need to strategically plan all their actions and always strive to offer the best market rates and service. "Air NewZealand" has consistently won awards in the aviation industry for its operations and has received an excellent service award.

With a dominant 52% market share in the "Trans Tasman" air power zone, "Air NewZealand'' should always strive to be the top provider by offering the best services.