The Nz Aviation Sector Tourism Essay

The Nz Aviation Sector Tourism EssayThe NZ airwave sector has grown from strength-to-strength in the recent years. smart Zealand has a real high up involvement with the aviation exertion than many other countries. The aviation industry over here is world-class and the kiwis ar air minded too. This make the aviation vocation a large one. exclusive, from the past few years, the innovation and technology has allowed the aviation industry to grow signifi pottly.anz.png publicise NewZealand has a really superfluous brand image among the New Zealanders and it is the sole largest air termination in the country.The report is presented by Narendra Inti, a PG Dip Business student at UNITEC, Auckland. The first bump (Part A) of the report speaks ab forth the history of Air NewZealand and provides an overview about the Managing Team, the organizations mission-vision-values and the prime elements of the organizations existence. By identifying the key values, the report also focuses on the key strategic-elements of the organizational dodge that helped to yield the firm.Environmental scan, both at the micro and macro levels is embarrassd in the report. Environmental epitome would expose the issues that need to be addressed for a business to become successful. The report also emphasizes on those areas in business where commend equal to(p) performance is undeniable to forecast success.2. INTRODUCTIONThe Air NewZealand originated as TEAL (Tasman imperium Airways Limited) in 1940. TEAL was a flying-boat organization operating mingled with Australia and NZ. Later, in 1965 TEAL was completely owned by NZ government and took the bare-assed name as Air NewZealand. Though it was privatized largely in 1989, the majority pole was took over by the NZ government in 2001 after the tie up with Ansett (an Australian mail carrier company) failed miserably collectable to the financial issues that prompted to fold the operations of Ansett. The recent figures show that a bout 12.8 million passengers are carried annually by Air NewZealand. Currently, it ope order on a mighty fleet that comprise of the Boeing-747, Boeing-767, Boeing-777 and an Airbus-A320 on the international routes.Air NewZealand also operates interior(prenominal)ally with its regional subsidiariesAir NelsonEagle AirwaysMount Cook-AirlineAir NewZealand achieved the Airline of the social class awards for the years of 2010 and 2012.Air nz.jpg2.1 COMPANY OVERVIEWCompany name Air New Zealand LimitedCompany Type PublicCompany Size 10,001+employeesIndustry Air lines/ AviationWebsite http//www.air vernalzealand.co.nz/Registered OfficeAir New Zealand House185Fanshawe Street, Auckland1010NEW ZEALANDStock-Exchange ListingNZX trading code AIRASX trading code AIZ2.2 Key PeopleCHIEF-EXECUTIVE OFFICER pluck FyfeCEO DESIGNATE Christopher LuxonDEPUTY CEO Norm ThompsonCHIEF FINANCIAL OFFICER Rob McDonaldGROUP GENERAL MANAGERS convocation General Manager Short-haul Airlines Bruce PartonGroup Ge neral Manager People Technical Operations Vanessa StoddartGeneral Manager Airline Operations and Safety David MorganGeneral Manager Marketing and communication theory Mike TodGeneral Manager Strategy Stephen Jones2.3 OBJECTIVESThe global economy has been facing a challenging environs due to the ongoing recession and this combine with a heavy free-enterprise(a) grocery has slowed down the economic activity. This has resulted in a outstanding change in the peoples attitude towards the mode of travelling. The highly competitive market has compelled the organizations to deal more than strategically. Present global economic crisis has limited the peoples ability to spend and so they look for something that is cost effective and at the aforementioned(prenominal) time very useful.The report mainly focuses on the strategic-foundations of Air NewZealand. Narendra Inti has conducted the PESTEL analysis as a part of the environmental scan while dealing with the macro-level analysi s of the Air NewZealand followed by the Porters quintuplet frame-work to analyze at the micro level. The reinings from the environmental scan are used to address the key level strategic issues and in that locationby help the organization to grow and be successful consistently.3. STRATEGIC FOUNDATIONS491591_orig.jpgCSL_mission2.pngAn organization comprises of the following strategic-foundationsMissionVisionStrategyValues3.1 THE MISSIONAir_New_Zealand.pngThe tag line Worlds warmest welcome clearly suggests that Air NewZealand is committed to provide the best return to the people and that is what they micturate been doing since their inception. About 13 million people all round fly on Air NewZealand , annually. It could happen only because of the warmest service they give been providing and this is what is differentiating Air NewZealand from the other airlines. The commitment towards their mission Worlds warmest welcome has fetched them international acclaim. It is not scarce t he kiwis who love to enjoy the service of this airlines, also people from many other countries do.Apart from the best airlines award for the years of 2010 and 2012, it has been continually winning Best Passenger-Service introduce presented by ATWMA (Air-Transport Worldmagazine-award).3.2 THE VISIONVision of Air NewZealandAir NewZealand will strive to be number one in every market we overhaul by creating a workplace where teams are committed to our customers in a distinctively New Zealand way, resulting in superior industry returns.Values3.2.1 PROVIDING THE BEST gainAir NewZealands approach towards the customers begins by knowing the customers need. They enquire its customer where they are traveling and how many people, why when, and what is that they value during the journey. This helps them to decide the network and their schedule and the service and process is tailored to match needs of the customer during the journey. Every employee of Air NewZealand commits himself to make-a -difference to their customers and their business.3.2.2 COMMUNITY SUPPORTAir NewZealand is the top sponsor of most of the major events conducted in New Zealand. It holds a record for sponsoring a lot of groups and supporting many charities by donating huge amounts and providing travel assistance.3.2.3 EnvironmentAL CAREAir NewZealand is highly dedicated to minimize the aviations have-to doe with on the environment. ANZET (Air NewZealand Environment-Trust) has been making donations to support the development for conservation the research projects in NZ.3.2.4 Customers AIRLINEThey value their customers and that has made them the customers choice. They constantly study about peoples changing tastes and give top priority to the customers needs. That is the reason their quality in service has been always above the customers expectations.3.3 KEY ELEMENTS OF PLANNED STRATEGIC DIRECTIONSAir NewZealand indispensableness to build a competitive return in their businesses with the help of its employees innovation and creativity.Air NewZealand is highly committed to champion and also promote NZ and kiwis, business and the socialisation both at home and abroad.They believe in teamwork and its great committed team aiming for the growth of its organization and vitality of New Zealand.Air NewZealand wants to always be the customers choice of airline, when people travel to/from or within NZ.4. ENVIRONMENTAL SCANThe Environmental scanning helps to find out current or forthcoming changes because it soundly focuses on those areas the organization might have neglected previously. So there are 6 elements/segments of the generic environment that has its effect on an organization. The impact caused due to these segments differs from organization to organization. The organization need to mainly concentrate on researching, monitoring, reporting and analyzing the data. The resultant findings of this analysis can be used as the tools that convert misgiving into strategy (Aaker, Da vid, Michael and Mills, 2005).4.1 MACRO ANALYSISBusiness environment surrounding an organization comprises of external regularizes which affects an organizations decisions and its performance. So the PESTEL analysis provides a methodological approach to find out and analyze those macro environmental segments that could affect the strategies involved in business, and also helps to forecast how these instruments might influence the performance of the business in the current and futurity scenarios.The environmental study starts with the study of six factors of the PESTEL analysis. The six factors are interrelated to each other and each factor cannot be viewed as a alone(predicate) one. During the analysis one need to pullulate in to consideration a lot of macro-environmental-factors so that the strategic process of policy formulation can be more useful to the current and future scenarios.The factors discussed below gives an insight for the strategy makers as to what to incorporate in the organization strategy to make it efficient and those environmental factors that are very essence of a business strategy. According to their organization needs, the strategy makers need to assess other factors too that could have the potential to influence the organizations output, which is not mentioned below. Therefore the mantra is to concentrate on the key factors that need to be addressed in order to be successful.(Grant, 2010)pestlee.png4.1.1 POLITICAL factorsPolitical factors can have either a positive or a negative impact on a business and that pure depends on the current scenario in a country .So, understanding and monitoring the political environment is very important for every business because this factor can significantly affect any business. some(prenominal) key questions that are a part of the political environment which the strategy makers need to find the answers before proceeding further are whether the government is shelter?, what type of a government is it?, what type of economic policy do they have?, What type of trade policies the government has?, what are the Diplomatic proceedings in the neighboring countries?. Once the strategy makers get the answers for the above questions, they need to incorporate the findings in the strategy making process and this helps them to forecast the future.Almost 74% of the stake of Air NewZealand being owned by the NZ government, there seems to be no trouble for Air NewZealand from the political front as for as New Zealand is considered. Moreover policies were framed to benefit the organization since the NZ government strongly believed that it is something related to the integrity of the nation. But the organization needs to constantly monitor and adapt to the policies of the overseas governments as the policies, taxes and regulations change very frequently.ECONOMIC factorsThe economic factors which can affect a business and the factors that need to be considered are demand for service or goods, r egulation, stake and the inflation rates, access to the credit and un-employment proportion. The above mentioned factors can directly affect the market competition, demand and the supply.Though the global economy is gloomy, the local economic conditions in New Zealand are far better than many other developed countries. The major areas like Australia, Singapore and Gulf countries where Air NewZealand flees to and from are also in good shape economically. So there are no concerns as of now for Air NewZealand in this segment.4.1.3 SOCIAL factorsSocial factors are very crucial and they can typify a key role in influencing a business. Social factors include several components like lifestyle, trends, wealth distribution among the people and ethnicity. homosexual beings are social animals and so the social factors that influence are interrelated to peoples culture, opinions and changing tastes.The Air NewZealand is very good at marketing themselves in a way that appeals to the people. T hey focus on diverse cultures and that can been seen in their service, which address and values the culture. To give an example, during the recent rugby world cup few planes were multi-colour in black to support the All Blacks rugby team of NZ. This clearly shows that they give a lot of importance to incorporate the social factors in the strategy making process. Also the way Air NewZealand staff address the people of different cultures is another classic example too.4.1.4 TECHNOLOGICAL factorsBusinesses should continually implement new technologies to give the best service in the market. Companies with good vision look out for the best technologies that are apt for their business and implement those technologies to take an good in the market.Air NewZealand is very good in terms of implementing new technology. As their company vision states, they always strive to provide competitive advantage blended with creativity and innovation. When few airlines are still with old technology in the seating facilitiesetc, Air NewZealand constantly monitors the technology advancements and updates them regularly to their services.4.1.5 DEMOGRAPHIC factorsNew Zealand is a place of great ethnic mix. People from all over the world have come and settled here. Every year there is a great increase in young generation pouring from all the over the world for good study and job opportunities over here. This is a great advantage for the Air NewZealand as the immigrants fly to home countries very frequently. This is also a reason that boosted up the Air New Zealand business.4.1.6 Legal factorsThe legal factors include the regulations of employment, health, safety and service. Air NewZealand has to abide by the New Zealand Civil Aviation Act 1990.4.2 MICRO ANALYSISThe micro-environment involves organizations/individuals that are dealt by the firms regularly. Stakeholders groups in business that is to say suppliers, competitors, distributors, employees and customers come under the micro -environment. All the stakeholder groups can show their impact on a firm directly. Managers need to often interact with the stakeholders since their decisions have direct impact on the business. Therefore the micro-environmental factors play a critical role in organizations behavior and success.Many frameworks and models are recommended to analyze an organizations micro-environment where it operates.Porters Five Forces Of Competition FrameworkIn 1979, Michael.E.Porter, a professor from Harvard Business School proposed a frame-work known as Porter Five Frame-Work. This framework was very useful for business strategy-development and for the ongoing industrial-analysis. These five forces are useful to analyze the competition in a given environment of the market and help to improve the strategy (Michael, Duane, and Robert, 2005).The forces of Porters five framework are groundingd on the S-C-P paradigm ( grammatical construction and conduct performance) in organizational-economics. Thi s can be applied to diverse scenarios and different range of problems and thereby help the businesses to be more profitable (Porter, 1979).DAUT SEM 2SMAssignmentporters_five_forces.pngThe five forces were referred as micro-environment by Michael E.Porter. The micro-environment consists of the forces that are close to the organization which can affect the ability of an organization to serve the customers and its profitability. Firms would be able to apply its core competencies, network or the business model to gain profits over industry average.4.2.1. Bargaining power of suppliersThe term suppliers can be referred to all the sources of input required to provide the goods or the services. A service industry needs infrastructure, labor and the other supplies. This requirement has lead to supplier-buyer relationship between the firm that provides material and the industry that provides goods or services. If the suppliers are powerful, they could exert influence on the industry that prov ides goods or services, by selling the material at very high prices with an intention to capture the industrys profit.Supplier bargaining-power could be high in the following scenariosIf the market is completely dominated by very few titan suppliers.If there are no substitutes for those products.If the buyers are fragmented, the bargaining power would be low.Sometimes switching to a different supplier could cost more.In the cause of airlines, are there several-buyers and few principal-suppliers?Yes, in the case of airline industry there are many buyers like Air NewZealand and only two suppliers viz Boeing and Airbus. So the power is in the hands of those two suppliers.Is the suppliers brand image strong?Yes, Boeing and Airbus have a very strong brand image and they are the only suppliers of aircrafts for many airline service providers like Air NewZealand.Can the suppliers raise prices?Suppliers have all the power to increase their prices, but currently they might not do so as the airline industry is struggling with low profits due to heavy competition.Can the suppliers find new customers?Yes, it is easy to find new customers but not many are jumping into this sector so tardily.4.2.2 Bargaining power of buyersThe buyer bargaining power of Porters five forces refers to the consumers wring in-order to get the better quality service and lower prices. According to the Porters framework of industry analysis, buyer bargaining power is one among the five forces that shape the structure of a completion in an industry. The main idea here is buyer bargaining-power in any given industry affects the competitive-environment for the seller and thus influencing the sellers profitability. If the buyers are strong, they could blackjack the sellers to improve quality of the product, provide more services and to reduce the prices. Buyers play a key role in creating demand in an industry. ar there very few leading-buyers and many sellers in airline industry?The entire populat ion of New Zealand and other users from many different countries form the customer base and this is too high when compared to airlines operating.Are the services standardized?Yes. The customers demand a wide range of high quality services at low prices.Are the buyers forced to be tough?No.Is it easy for the buyers to switch their suppliers?Yes. There are many airlines operating currently and so the customer can easily switch if they find that they are not getting what they prefer from the current airlines.4.2.3 Threat of NEW ENTRANTSThe new entrants can be referred to the new firms that pop in and emerge in any given industry and thereby giving a tough competition to the existing already established firm. New entrants cannot in truth compete on equivalent terms on the already established and recognized firms. There are many risk factors involved that need to be considered by the new entrants. There is minimum scope for the new entrants to come up on a large scale.The three main barr iers for a new entrant are brand loyalty, economies-of-scale and absolute-cost-advantages (Hill and et al, 2007). Going by the current scenario, it is not so easy for the new entrants to survive in an airline industry, because this particular industry is very congested and has very high entry barriers. Moreover airline industry is less attractive due to high initial investment required and very less profits to gain. So there is no threat of new entrants to Air NewZealand.4.2.4 Threat of substituteSThe substitute refers to the alternatives that are available in the market to the buyers.The alternatives that are available for the customers are referred to as substitutes. Speaking in context to airlines, alternative transport methods like roadways, railways and waterways can be a threat to domestic airlines as a train or ship can be used for leisurely travel purpose. But still airlines secure the position of winged mode of transport and it would continue its dominance in the internat ional market of transport.4.2.5 RIVALRY BETWEEN ESTABLISHED COMPETITORSThe business that is providing similar services or goods is referred to as rival. It exists if there are more many firms in a market. These firms constantly try to capture the markets of the other firms to better their position and get an edge over the others. Normally the competition is on the product basis, cost, customer service and promotional campaigning to achieve a better place in the market. This force gives a clear idea about the competition intensity between the current players in the market. High competition results in lowering the prices margins and this affects the profitability of every single firm in the industry.Though Trans Tasman market zone in airlines is completely dominated by Air NewZealand and Qantas, other competitors like Virgin Blue and Emirates play a vital role in determining the prices in the market.Competition and intensity of rivalry in airline industry is likely to be high when th e following happensCompetition StructureThe rivalry would be more when it has small sized competitors vice versa when there is single largest market leader.Strategic objectivesThe competition increases if the competitors take up fierce growth plans. It would be a different scenario if they only aim for the profits. In the airline industry, the competition is more focused on advertising, price structure and customer satisfaction.The main competitors of Air NewZealand are listed belowQantas Airways its subsidiary Jetstar AirlinesVirgin Australia AirlinesEmirates Airlines5. KEY STRATEGIC ISSUESThe aviation industry has seen drastic changes from the recent past. Airlines have become very competitive as the airlines are more focused on capturing the market share of the others. As far as the Trans Tasman zone is considered, the environment for aviation is in good shape.Understanding The Markets and CustomersTo survive and effectively compete in the aviation sector it is essential for the airlines to understand the market and the changing tastes of the customers. Airlines can retain a customer only if they provide the best in their service. So retaining has become one of the key issues for airlines. Therefore, Air NewZealand should constantly check their SLs, frequentness and connectivity. They should constantly survey and update accordingly to meet the customer taste and expectations.Increasing use of loyalty marketingA concept that aims to encourage the customers to use a product or service frequently by instilling a loyalty sense in them is called loyalty marketing. There are various loyalty program adapted by the airlines. Air NewZealand provides a frequent-flyer loyalty program that gives a chance for the customers to win points during their trips. Once the customer has sufficient points, he could drive home them in order to avail some free benefits.re-align procurement strategiesRecession has taught many good lessons. It has clearly shown how trends could bec ome volatile. The current global economic crisis has urged the aviation industry to realign the procurement-strategy. Therefore it is very necessary for Air NewZealaand to establish an efficient strategy and procurement system in order to succeed in any uncertain conditions and be successful.6. CONCLUSIONAviation industry is a very hi-fi industry. Air NewZealand has to make sure that their staff is providing the WOW factor in their service that a customer would always expect. They need to strategically plan all their moves and should always strive to provide the best market rates and the best service in the market.Air NewZealand has been constantly receiving aviation industry awards for its operations and it has got excellent honor of services. It enjoys a giant 52 % of total market share in the Trans Tasman aviation zone. Therefore Air NewZealand should always strive to be the best by providing the best.