FOR PROF washington watson

Running Head: ALASKA AIRLINES ENVIRONMETAL SCANNING 0

Alaska Airlines Environmental Scanning

University of Phoenix

05/08/2017

Alaska Airlines Environmental Scanning

Environmental scanning refers collection of data regarding the organization’s activities’ trend, pattern, occasions and relationship with its external and internal environment through systematic survey. It assists in determining the external threats and opportunities of the organization and also assists the organization managers in making decisions regarding the organization’s future path.

Alaska Airlines is an airline company located in Washington, United States. Just like other airline companies, external influences can adversely affect the organization or lead to organization’s improvement. Economic conditions may also adversely affect the performance of the airport. For example, the strength of Sterling Pound (British Currency) against Euro or American Dollar directly affects the travelling decision by the passenger.

Analysis

Here, there is need to develop the external and internal environment for clear understanding. Alaska Airlines Company has its unique external and internal environment where it is located. The internal environment is related with the way in which individuals undertake work agreement to attain the organization’s vision, mission, goals and objectives. Normally, it is possible to control the internal environment through the application of effective management strategies and planning processes (Alaska Airlines, 2015, p. 230). Management strategies, cash flow and profits, physical assets, human resource and organizational culture are among the organization’s internal environment that affects the organization directly. Undertaking the SWOT analysis will offer an extensive analysis of the organization’s internal affairs. It is done through displaying the strengths, weaknesses, opportunities and threats of Alaska Airlines Company.

On contrary, the external environment is surpasses the management’s ability to deal with. Furthermore, the organization’s management lacks the ability to control the activities of their competitors, the rule and regulations of the government as well as the legislations regarding land use.

Strategic formulation

This part is going to entail a highly developed Alaska Airline’s strategic plan. This Alaska Airline’s SWOT analysis demonstrates the strategic SWOT analysis of the operations and businesses of the company.

Strengths

High revenues and profitability- the company has positive financial background which is majorly influenced by the finances earned from the Alaska Airline’s customers (passengers). Other activities that the company carries out on its environment also generate income therefore contributes a lot of profits. The company provides high standard services that has helped it in attracting more customers and retaining the old ones hence earn high revenues from airline services.

Reduced Labor Cost

The company has embraced the use of modern technology in its operations which helps in reducing the energy cost. Most of the services including booking are done using technology and this has helped in reducing the cost of labor which adds to the profits and revenues.

Creation of employment opportunities

Alaska Airlines has been on the forefront in dealing with issues of unemployment through creation of employment opportunities to significant number of Americans. For example, the positions of air crew, pilots, and air hostesses are created every year with the qualified applicants securing the job in the company. Furthermore, the geographical location of Alaska makes the air transport the only suitable mode of travel (Seybold, 2012, p. 183).

Lastly, the Alaska airlines has the capacity to carry more passengers between the Contiguous United States and the state of Alaska than any other company therefore making the company to have a strong presence in the American markets.

Weaknesses

High investment in R&D: Alaska Airlines invested petite in research and development and taking less considerations to other operational activities. The less attention given to other operations may weaken the company’s operations hence potential to be overtaken by competitors. There is need to have uniform development of all departments

There is high spoilage rate of aircraft and acquiring the aircraft involves a lot of costs. Making one aircraft can take several months hence the company cannot increase the number of flights at a faster rate.

Opportunities

Global Markets: According to the current flights demand globally, Alaska Airlines Company has identified opportunity to expand the business. Today, Alaska Airlines has expanded its operations to several states within America, Africa, Asia and Europe. The extended operations is meant to enhance the reputation of the business in the global market.

Moreover, Alaska Airlines Company has no membership with any of the global airline alliances. This could probably affect the company should the other companies turn against it. There is also absence of lucrative markets in Asia hence the company is not able to expand its services to Asia due to low revenues and profits expected.

Being a member with other airline alliances will assist the company to enhance reach through code share agreement. The company may also leverage on association with other companies such as Starbucks to offer onboard coffee through engaging in awareness creation in all outlets of Starbucks Company.

Threats

There is fluctuating demand on air transport by the economy class. This means that there is potential reduction on revenues and profitability of the company in the short run. Furthermore, the increasing aviation fuel cost would make the company spend significant amount on fuel that will lead to losses. Increasing the travel cost to cater for the fuel cost may drive away customers. Also, Alaska Airlines is affected by the global economic downturn which adversely impacts on travel business, optional travel and leisure. Terrorists have been a great threat to America hence affects the air travel business.

Just like any other business, Alaska Airlines is equally affected by the external environment. Thus PESEL analysis will be utilized to identify the external environment of the company.

Political and legal factors

The government has a significant impact on the operations of Airline Company. Alaska airlines has been operating in the context of politics that is restricted and regulated. The terrorists threats and passengers’ safety has attracted the government interest in airline operations. The other one is taxation and other regulations.

Economic factors

A healthy economy enhances industrial growth. Various indicators of the economy can measure the economic growth. For instance, the economic indicators involves the use of instruments such as gross domestic product (GDP)

Sociological factors

There has been high increase for the need to use air travel in the recent past. Air travelling has provided choices of travel in the latest generation. There is need to understand the demographic factors to forecast on the anticipated changes in air traveling demands in the future. As a matter of fact, the Alaska’s airline’s future is majorly grounded on the latest generation’s growth. The changes in population will directly affect the operations of Alaska Airlines

Technological factors

The advancements in technology in businesses has also impacted on the operations of the business. The company has no control on technology and it has to adopt the most suitable technology to compete favorably with other companies. Such technologies include but not limited to online bookings and communication.

Alaska focuses on competitors

The key competitors of Alaska Airlines in the United States include; JetBlue Airways, Southwest Airlines, American Airlines, United Continental Airlines and Delta Airlines which has significantly contributed to the airline travel growth. The companies named above have brought a lot of competition to Alaska Airlines because of the customized services and expansion capacity provided by the companies. For Alaska to outdo these companies, there is need to employ the aforementioned PESTEL and SWOT frameworks to analyze its environment.

Strategy execution

In this case, the organization’s plans are translated to actual action. The ongoing refinement and performance evaluation, data reporting and communication as well as other issues on strategic management takes place.

Conclusion

Environmental scanning is helpful to a company since in enables the company to determine the external opportunities and threats. The managers can use the evaluation results to make decision on the future operations of the company. Through this, Alaska Airlines will be able to outdo its key airline competitors in the market. It is the responsibility of the Management of Alaska Company to put their plans into use to meet the required standards to create service value and enhance the company’s competitive advantage.

References

Alaska Airlines. (2015). Alaska beyond.

Human Resources Scanning. (2013). Environmental Scanning and Sustainable Development, 101-127. doi:10.1002/9781118601891.ch5

Seybold, P. (2012). Alaska Airlines' Evolves Its Mobile Strategy. doi:10.1571/cs08-02-12cc

Stoffels, J. D. (1994). Strategic issues management: A comprehensive guide to environmental scanning. s.l.: Pergamon.