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Strategic Analysis of Organisational Data - Royal Brunei Airline

University: University of Northampton

  • Unit No: N/A
  • Level: Undergraduate/College
  • Pages: 9 / Words 2250
  • Paper Type: Assignment
  • Course Code: MB0052
  • Downloads: 25
Organization Selected : Royal Brunei Airline

INTRODUCTION

Strategic management is referred as the set of managerial decision and actions that determine long run performance of the corporation. It mainly includes the environment analysis which includes both external as well as internal analysis, strategy formulation, strategy implementation, evaluation and control. Strategic management is the way of defining the uniqueness of company from its competitors by identifying its strength in order to provide better values to consumers in terms of both products and services. Strategic management is used for identifying the needs and desires of customers for creating a plan to reach out to them to accomplish satisfaction among customers(Barney, 2012)Strategic management is study that allows to emphasizes the monitoring and evaluating the external opportunities and threats in order to work on both organisation's strengths and weaknesses. Strategic marketing is generally is used to identify the desires of customers for developing appropriate plan in order to accomplish customer's loyalty. This company that is considered in this report is Royal Brunei Airlines one of the national flag carrier airlines of Brunei Darussalam that is headquartered in Bandar Seri Begawan. This report mainly covers about the strategic analysis of organisational data and information, business level strategy, corporate strategy, environmental analysis, resources and competence analysis. This report also covers about the strategic plan and strategic control through which developed strategy plan is implemented.

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1. Strategic analysis of organisational information that supports decision making

Every organisation wants to achieve competitive advantage in order to develop brand image in the market. In order to achieve organisational goals it is very essential to implement proper strategic analysis by using all the organisational data and information. Through strategic analysis Royal Brunei Airlines are able to make and take appropriate decision making in order to achieve competitive advantage. Strategic analysis mainly emphasis on the business level strategy, corporate strategy, environment analysis along with resources and competence analysis.

Business Level strategy and Cooperate strategy in Royal Brunei Airlines

In context with the business level strategy, Royal Brunei Airlines uses Porter's Five Force to identify rivalry among existing competitors, bargaining power of suppliers, bargaining power of buyers, threats of new entrants and threat of substitute product or services. Porter's Five Force analysis is considered as framework for analysing the overall level of competition within business strategy development and industry.

Threat of new entrants: Royal Brunei Airlines requires high investment in order to enter in airline industry. Royal Brunei Airlines is facing many barrier in order to be competitive in comparison to other airlines. Some issues that is faced by Royal Brunei Airlines are implementation of government policies, cost disadvantage of independent of size, sunk costs, economics of scale. Threat of entry is very low due to high saturation, high cost and government controls.

Threat of Substitutes: There are many substitutes that are already available to customers when compared with Royal Brunei Airlines. There are many substitute available in context with Royal Brunei Airlines which includes trains, cabs, buses, ships. Threat of substitute is consider medium for Royal Brunei Airlines.

Bargaining Power of Buyers: Customers nowadays are very price sensitive and they know very well about their rights and have many choices when they need to choose airlines. There are several alternative airlines available in marketing due to this bargaining power of the buyers increases automatically. Bargaining Power of Buyers is low(Hill, 2017).

Bargaining Power of Suppliers: There are very suppliers of air plane as it becomes very difficult tasks to do that as high amount of investment is required. The supplier of Royal Brunei Airlines mainly includes all those suppliers that supplies fuel, air planes. This leads to increase in bargaining power of suppliers. Bargaining power for the suppliers is low suppliers are very less for airways.

Industry Rivalry: Royal Brunei Airlines is having high competition in market at different level. It is facing high competition which mainly involves with international airlines. The competition is very intense at national as well as international level which involves different terms convenience, price and services. Industry Rivalry for Royal Brunei Airlines is high due to fare comparison and different services(Greco, Cricelli and Grimaldi, 2013).

Environmental analysis of Royal Brunei Airlines

Pest analysis is used for the identification and analysis of environmental factors that are directly or indirectly responsible for the growth and development of an organisations. This factors creates different impact on different sectors of a economy. For environmental analysis Royal Brunei Airlines uses PEST that is discussed below:

Political: Political factors mainly involves with the intervention of government which generally involves with taxation policy, environmental laws, labour laws. Royal Brunei Airlines faces different political issues which mainly includes bilateral agreements, deregulations and open sky issues. Moreover, terrorism fear and political instability affects the performance of the Royal Brunei Airlines.

Economical: Economical factor creates an significant influence on the organisations profitability. The factors that mainly involves in this are economy growth, exchange rate, inflation, rate of interest. Demand for air travel highly depends upon the world economy growth or fluctuation(Hill, 2017).

Social: Social analysis includes change in the demographics, lifestyle and cultural needs. This social factors affects Royal Brunei Airlines as its creates direct impact on them in order to interpret customers needs.

Technology: It involves with the change in technology trends and innovation that affects the performance of Royal Brunei Airlines. Some advance technology used by the Royal Brunei Airlines are video conferencing, satellite based navigation system, online ticket booking etc. This helps in enhancing customer engagement.

Resources and competence analysis

VRIO analysis is adopted by Royal Brunei Airlines in order evaluated the resources of the organisation. VRIO analysis for Royal Brunei Airlines is mentioned below:

Resources

Valuable

Rare

Inimitable

Organized to Exploit

Impact on organisations

1. In- Flight Entertainment

Yes

Yes

Yes

Yes

Long term competitive advantage

2. Seating comforts

Yes

Yes

No

Yes

Unused competitive advantage

3. The customer Bill of Rights

Yes

Yes

No

 

Temporary competitive advantage

As In flight entertainment for Royal Brunei Airlines is valuable, rare, difficult to imitate and is well organised. This allows to achieve long term competitive advantage. As seating arrangement for the Royal Brunei Airlines is valuable, rare but easy to imitate. This allows Royal Brunei Airlines to gain unused competitive advantage.

Royal Brunei Airlines should use five force porter model in order to develop and implement appropriate business strategy to achieve competitive advantage. PEST analysis allows Royal Brunei to analysis overall macro environment analysis to improve performance. VIRO analysis helps to focus on those resources that gives long term competitive advantage.

2. Strategic Plan for Royal Brunei Airlines

Strategic Planning acts as an organisation's continuous process in order to develop appropriate strategy so that specific goals and objectives of the organisation can be attained. Strategic planning can be used on large scale for making planning for further growth and development of the organisations. It can be also used on small scale in order to determine marketing planning and developing strategy for attaining goals and objectives of one department within organisations.

The main benefit of strategic planning is that it allows to provide clear communication to clients, customers, team members and stakeholder. It also provides clarification to deal with internal and environmental changes. Royal Brunei Airlines prepare its strategic planning based on their environmental analysis through PEST, business level analysis and resources analysis. Strategic plan for Royal Brunei Airlines are mentioned and discussed below:

Introducing statement: This strategic plan was mainly developed in order to enhance customer engagement of the Royal Brunei Airlines as the bargaining power of buyers is low due to availability of cabs, trains, railways etc. within 3 years.

Background statement: Royal Brunei Airlines is the carrier airline of Brunei Darussalam and it is owned by government of Brunei. Organisation structure of Royal Brunei Airlines includes various departments such as cabin crew, managers, fight operations and maintenance, pilots, engineer. Royal Brunei Airlines manages everything under the guidance of chief executive officer and board of directors. Royal Brunei Airlines follows code share agreements with various airlines which mainly involves China Eastern Airlines, Hong Kong Airlines, Malaysia Airlines, Myanmar Airways international etc.

Vision: Royal Brunei Airlines mainly aims to become most competent among several airlines and become first choice for each passenger along with renowned for service excellence.

Mission:  Royal Brunei Airlines mission is to generate high profits by providing excellent and comfortable air services to customers along with high customer engagement.

Strategic direction: In order to enhance and achieve high customer engagement it is very essential to follow and emphasis on all the environmental analysis factors which includes political, social, economical and technological factors. All this factors allows to identify the requirement and desires of the customer. Porter's Five Force model allows to analysis the threats new arrivals in order to maintain the businesses. It is important to analysis about the bargaining power of buyers and supplier in order to modify strategic planning according the requirement. Resources analysis allows Royal Brunei Airlines to focus on those resources that are giving long term competitive advantage and to work on those resources that are considered as unused competitive advantage(Hill, 2017).

Key performance Indicators: The main key performance indicators for Royal Brunei Airlines mainly includes with safety, flights ops, environmental and financial. It is duty of Royal Brunei Airlines to maintain proper fatality, record and report dangerous occurrences in order to maintain proper safety. It is crucial to maintain fight ops information that includes available flying time, number of Pax, number of flights. In order to achieve high profitability by serving excellent and comfortable services to customer, it is essential to focus on operating margin along with revenue per available seat.

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3. Strategic control

Strategic controls mainly focuses more on achievement of future goals rather than the evaluations of past performance. It is concerned with the tracking of a strategy as it is being implemented for detecting problems or changes in its underlying premises and make necessary adjustments for future strategic planning along with decision making.

The main characteristics of strategic control is continuous process and it is implementation at each level of organisational hierarchy. Royal Brunei Airlines uses following strategic control methods in order to achieve organisational goals and objectives along with competitive advantage

Premise Control: Premise control allows to serve the purpose of continually testing the factors and assumption in order to find out whether the strategies adopted is valid or not. It helps the Royal Brunei Airline strategists to take corrective actions at right time to make appropriate modification in the strategies.

Implantation Control: This strategic control method aims at evaluating that whether the plans, projects and programs are implemented and guiding the department in right way for determining predetermined objectives and goals. Royal Brunei Airline uses implantation control method in order to follow right direction of strategic planning to perform well and achieve competitive advantage (Hitt, and Duane, 2017).

Strategic surveillance: It mainly aims to design to monitor a wide range of events both internal as well as external in order to identify the threats of the organisational and make modification according to the requirements.

Special alert control: This strategic control method is s totally based on the trigger mechanism for achieving rapid response and get immediate reassessment of strategy in light of unexpected events. Royal Brunei Airline uses this strategic control method when unexpected changes in the environment occurs and affect the profitability of the organisations.

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CONCLUSION

From the above assignment report, It has been concluded that in order to provide excellent and comfortable services to customer Royal Brunei Airline has to implement various business strategy analysis, environment analysis and resource analysis to determine needs of customers. From pestle analysis, an firm gets the idea about the various factors where improvements are required. Also from pestle, organisations can point out their strengths and can improve weakness factors so that the company will get positive response from the customers of targeted economy. It is conducted that both strategic plan and control method is important to modify strategies according to future requirement and needs.

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