CASE STUDY

Case Study

Case Study

Introduction

Since the early 90's a dramatic shift has been observed within the industry mainly from the production and manufacturing of goods towards the provision of services. Therefore, in order for companies to differentiate themselves from the competing companies, and also to get the maximum share within the market, what the companies had to do was to create extra and much more value for that service which they were providing. This tactic was known as the service dominant logic in which the main resource or element of competitive advantage is skill and knowledge. However, few years later, most of the organizations were left with no other option but to change this perspective since it was linked with the Global Financial Crisis which eventually became the cause for countless bankruptcies and financial collapses all over the globe in almost each and every industry. Moreover, a decline in the wealth of the consumer was also estimated which rounded up to almost trillions of dollars.

The result of all this was that low prices became the new and main competitive advantage within most of the organizations. The Eastern Airways in the similar way was also severely affected by these changes in the economic conditions as a result of which, the organization had to take some drastic steps which consisted of changing the overall structure of the company and also firing a major percentage of the employees so as to survive. In addition to that, a lot of measures were taken in order to minimize the negative effects and the consequences of the changes.

Environmental scanning

To conduct an environmental scanning is very important to completely understand the true depth and the extent which actually pushed the executives of the Eastern airways to take these drastic actions and steps as firing thousands of employees. According to the senior executives of the organization, the main reasons which caused these changes could be categorized into internal and external factors and further they could be categorized into legal and technological, Socio cultural, economic and political factors (Paton & McCalman, 2008). All the possible internal as well as the external factors should be taken into consideration. Some of the most crucial factors have been further discussed in detail.

External Factors

External factors are those factors that take place outside the boundaries of any organization and they usually have a direct impact on the internal actions of any organization, therefore eventually leading towards the internal factors. One of the most important external factors which had effected the decision of the Eastern Airways regarding the downsizing was “Global Financial Crisis” which falls under the category of economic factors. This event occurred in the year 2007, and it caused a major change in the behavior and the requirements of an average consumer (Paton & McCalman, 2008).

As a result of this downturn, a number of firms went bankrupt. All this resulted in an increase in the level of unemployment and a decrease in the level of the consumer's disposable ...