Alibaba Essay example

2533 Words Jun 14th, 2014 11 Pages
1.0 Introduction The competition in Airline industry is now rising which make it harder and harder for those Airline corporation to survive. Scandinavian Airlines System (SAS) is an airline business which was founded in early 1946. SAS has made a huge successful change to overcome its problems through recession period. This successful change has a big contribution of Jan Carlzon who is a CEO of SAS. Nowadays, after a vertical integration revaluation, SAS has expanded their business into International Hotel (SIH) and Service Partner (SSP) such as catering and restaurants. The main aim of this report is to analyze the problems that SAS faced as well as identify the solution approaches that had been used by the company, especially the …show more content…
With many big air-planes, its operating cost is high and the frequency of flight is low. In addition, the lack of employees training and middle stage management are also problems. It results in the situation that employees felt passengers as disturbing elements. The increasing in oil price, international recession and higher interest rates are external threats for the company. Aside from those threats and weakness, the re-organization of company and the vertical integrations are big opportunities of SAS to overcome problems.
2.2 PESTEL Analysis According to Dan (2007), PESTEL or PEST analysis can be considered as macro-environmental factors. It assumes that specific external conditions or factors can affect company capacity. PESTEL stands for political, economic, social, technological, legal and environmental analysis. Paul (2013) stated that PESTEL is a simple tool for analysts to reduce the impact and effects of the potential threats. It also provides a mechanism for organization to identify and exploit new opportunities.
The PESTEL analysis shows six factors that impact SAS (appendix 6.2): Political and Legal: SAS business has to face with numerous safety regulations which are established by government and International Air Transport Association in order to ensure safety of passengers. For example: The European airline industry is increasingly under scrutiny to reduce environmental damage. Economic: A rise in fuel cost or an

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