GLOBAL STRATEGY

Global Strategy

Global strategy

Question 1

Internal and External Analysis

One cannot conceive the organization as an entity isolated from the environment in which it acts. The company must continuously monitor its environment because, firstly, it fits into this environment and, secondly, it acts on that environment. The company can be influenced by its environment in a positive way (environmental opportunities) or negative (environmental constraints).

In order to be competitive, company first have to analyze it own strength and weakness in order to fight against threat and opportunity.

The enterprise should monitor the constantly changing markets, changing competition and technologies. It is also to identify the risks of breaks technology (occurrence of major innovations) or structural (new lobbies, new regulations, increasing influence of consumer organizations.

So here we describe the components of that environment and then insist on its interactions with the company (Fame, 2009: 30-38).

Permanent Monitoring Of the Environment

As was said in the introduction, the company cannot be conceived as an isolated entity. The role of the environment is therefore crucial in the company's business and this insofar as it determines the strategy development and therefore sometimes even survival.

Overall Approach to Environmental Components

In general, the environment is the source or a number or constraints for the company. These constraints can be external or result from economic and sociological phenomena.

- External constraints are easily identifiable without being exhaustive; include such taxes, the cost of supplies, the emergence of new competitors, the policy of the state's credit, the contemporary environment of union action, the conventional or statutory minimum wages, etc

These constraints we imposed by decision centers that are in dose relationship with business - it is both company shareholders and consumers or suppliers, bankers, of the state.

- The influence of economic, sociological and natural is also very important. This can be for example the level of unemployment, labor market, attitudes of price stability, or specific events can sometimes upset the strategic options of business and even lead to their disappearance (attacks, wars, and natural disasters) (Fishman, 2006: 47-70).

1. Environment

The airline industry has a number of rather unique characteristics. First, demand is highly seasonal, with the air traffic peak month equivalent to about twice that for the month of the most hollow. Then, the activity of the industry evolves procyclical and varies with greater amplitude than the economy as a whole. The industry is also characterized by overhead and capital expenditure levels, which means that small increases or small decreases in traffic can greatly increase profits or losses.

2. Costs

The airline industry also stands against cost. Costs vary in effect under the influence of different factors. On the one hand, costs vary depending on the size of the aircraft: in general, smaller aircraft seats per record costs higher than the greatest. On the other hand, costs are a function of distance: the average cost per mile decreases as the number of kilometers traveled. Moreover, there is a relationship between costs and the number of seats ...