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Business organizations, especially those dealing with particular industry must encounter situation where the success of their operations depend on both internal and external factors. The situation suggests that it is useful to carry out an analysis that takes into account not only the company’s internal factors but also external factors such as activities of the company’s competitors and current industry situation as well.
In many cases, the elaboration of internal and external environment of particular industry must be elaborated by using business analysis tools that specifically discuss internal and external factors the businesses. Some common business analysis tools include Porter’s Five Forces, SWOT analysis, BCG Matrix, PESTLE analysis, Value Chain analysis, and many others. Some of them deal with both internal and external factors while others only address one of them.
Concerning the analysis of internal and external factors in an organization, this paper will develop strategic development of Airbus by using analysis of Strategic Factors, which is based on IFAS and EFAS factors. The others are strategic alternatives and recommended strategy, implementation, and evaluation and control of the recommendation.
1.Analysis of Strategic Factors
The strategic analysis on the Airbus includes all that encloses a business’s marketing purpose. Business environment in this term can be described as the whole thing that enfolds in the Airbus system. With the intention of being successful, and as the players in the environment cannot be managed by the Airbus, the Airbus be obliged to observe the environment for transforms and incessantly become accustomed to them. The Airbus’s environment can be separated into the micro environment and the macro environment (“Introduction to Hot Topics in Marketing”, 1999).
In airline industry, the analysis of strategic factors involves two major issues; they are capacity and quality. In terms of capacity, Airbus Company recognizes their strength and their competitive advantage the customer value the most.
Meanwhile, regarding the quality factors, the airline continues practicing ethical standards and keeps honoring their commitments. The company is found to improve quality of services in order to delight customer, employee, and community satisfaction. Delighted customers are important elements of the company’s success.
To e specific, below is the specific elaboration of internal and external factors analysis that Airbus Company experiences.
1.1.Internal Factors Analysis Summary
The internal analysis illustrates factors/issues that impinge on The Airbus straightforwardly (“Assessing the Micro-Environment”, 2006), which can be elaborate through following factors:
Airbus is managed by an Executive Committee led by President and Chief Executive Officer Christian Streiff and appointed by the Shareholders Committee, which consists of five members from EADS and two from BAE Systems.
Each member of the Executive Committee has responsibility to manage core functions and strategy in his field. There are four General Managers; each has geographical responsibilities representing four countries where Airbus exists; the countries are France, Germany, Spain and the UK, while the subsidiaries in China and Japan are each headed by a President and in North America by a Chairman.
Currently, Airbus Company employs a hierarchical, ridged, and semi autocratic management style. Airbus Company must change their organization culture and structure in order to maintain and build on its worldwide dominate position as a major producer of commercial jet aircraft.
Airbus Company regards skills, strengths, and perspectives of their diverse team as the most import things to sustain the company’s growth. Therefore, the airline continues encouraging an atmosphere that encourages employees to involve in decision making.
In every way, Airbus Company is executing the strategy. Airbus Company is running healthy core businesses. They are experiencing strong growth in adjacent businesses such as aerospace services. Moreover, Airbus Company has exhibited that the company is well-prepared to make tough decisions to make sure real leadership in the aerospace industry extensively to come.
Poor vertical and horizontal communications within the Airbus Company make employees feel separated from the staff management of the company. Grass battles restrain cross-functional and cross-divisional communication. Airbus Company has labor problems.
Airbus Company realizes that their most important resource is their staffs. The staff is the people who work and manage the company’s products and service to the customers. That is why Airbus Company gives them the right combination of skills, training, communications, environment, and leadership. Beside Airbus Company provides a safe workplace and protects the environment, they also promote the health and well-being of the staffs and their families.
1.2. External Factors Analysis Summary
The external factors describe issues that a company like Airbus has a little influence but affect the company severely. It includes universal tendencies and powers that possibly will not directly influence the links that Airbus has with their consumers, suppliers and mediators. Furthermore, Airbus separates the macro-environment into many sections, as the following:
1.2.1. Economical factors
One major external factor is an aircraft manufacturer like Airbus is prone to the political and economical situation. According to a research and observation, it is found that airline companies’ growth has a very close connection to economic growth and trade, which in turn prevent airlines from buying new airplanes from Airbus and other aircraft manufacturers. For example the gulf war in 1990s has damped the airline industry as the war resulted worldwide economic recession. In the era, IATA’s member airlines suffered $20.4 billion losses within 1990 to 1994 (“The Airline Industry”).
The 9/11 tragedy has give the economy a significant down phase, especially the airline industry which has a direct involvement in the tragedy. Almost all airlines suffer losses during the following periods of the incident. Safety and security concerns have been major discussion topics on government bodies, business firms and common society in general.