Strategic planning and its influences: low-cost airlines

Nowadays more and more organisations are entering the business, in order to be successful and to gain competitive advantage among the rivals, companies are engaging into strategic planning. The effort of managing the business is to craft, implement and execute strategies which are the core of strategic management process that pursues a market position, carries out its operations, satisfies customers, successfully competes and achieves organisational objectives (Thompson and Strickland, 2001).
The airline industry is complex and characterised by rapid change, innovation and new technology (Doganis, 2006). It exists in an intensely competitive market. In recent years, there has been an industry-wide shakedown that still affects the industry’s trends towards expanding national and international services. As Lawton (2002, p.2) has stated, there is “one fundamental difference between the airline market of today…alongside the large traditional airlines and their strategic partners are well-established, low price alternatives”.
Dess, Lumpkin and Eisner (2008, p.8) stated, that strategic management “consists of the analyses, decisions, and actions an organisation undertakes in order to create and sustain competitive advantages”. Analysis in strategic management should be considered as analysis of strategic goals along with the analysis of organisation’s internal and external environment. Decisions should be made by asking: what business are we in? What industries should we compete in? How should we compete? Finally, organisations must take actions to perform their strategies.
5. Evaluating performance, reviewing new developments and initiating corrective adjustments
The starting point of strategic management should be strategy analysis - evaluation of external, internal and competitive environment. It is very important for a firm to analyse external environmental influence on business. This can be made using the PESTEL framework, that “categorises environmental influences into six main types: political, economic, social, technological, environmental and legal” (Johnson et al., 2008). Using PESTEL analysis for the airline industry, main influences can be...

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