PEST Analysis of the External Environment Essay

The musical composition provides an analysis of the Case Study for Westjet placelines, Canada. The object lesson is taken from the work done by tool Yannoupoulus (pg 376-380) Problem Statement The avocation problem statements argon proposed 1. Westjet Airlines total debt is high relative to its sh beholder equity a measure that may call for extraneous financing. The company needs a strategy to ensure its self-sufficiency. 2. Westjet has many competitors and has to come up with strategies to ensure it remains in the grocery and makes dineros.The major questions that management of Westjet have to green goddess with is whether to keep an eye on its status quo of offering broken in cost and upset fodder, whether to venture more than in the third party choose segment or whether to be touch in the Trans calls segment. The management has to decide the scoop up strategy it entrust use to happen upon its expanding upon plan and decision must(prenominal) be make urgen tly. PEST abstract of the External surround Political/ reasoned After the 9/11 polish operating in the small trades has establish uneconomical due to change magnitude cost. heavy measures by the government translated to higher(prenominal) be to airlines, which were transferred to consumers. Non-profit airport authorities have too led to the ontogenyd prices that act as a disincentive to air transportation. just about guests are price sensitive and misgiving must be taken to get its competitiveness. Westjet observered added costs by providing amenities to its customers standardized leather seats, snacks leg rooms and television. scotch It offers feature serve, empowers its employees and shares profits. This way it maintains its competitiveness.Having trustworthy relationships with employees creates good relationships with customers. Employees move make decisions and solve customer problems without the unnecessary delay of contracting the management. Employees are made to feel as if they are part of the company. By offering quality function and on job learn it improves its highly motivated employees skills. It employs qualified passel who withal have a remunerate attitude. Employees are motivated by the profit sharing where they get additional bills from what the company makes.Through its employees share grease ones palms plan, it encourages its employees to invest in the companys stock. Pricing Its fares are 55% dismantle than air Canada fares. It offers services at a low cost so as to increase the traffic flow. It attracts passengers who would prefer opposite means of transport as sound as those without the actuateing idea merely attracted by the prices. Westjet intends to puff its scope to make out the central and eastern Canada. By primal 2004, it was serving 24 Canadian cities. (P. 376) Environment/ Technological In increasing its aptitude Westjet may be obliged to incur high costs but the benefits are worth it.For insta nce the installation of winglets that cost $ 635,000 per plane would result to $ 112,500 savings p. a per plane. (p. 379) Social and Cultural Westjet airlines provide passenger, commitment and third party rent services to Canadas domestic commercialize. It started its operations in 1996 with 3 aircrafts and 220 employees by 2003. It has splayed and straight off employs 3610 employees and 14 aircrafts. It has entered an agreement with Air jump, the leadership Canadian charter airline and it withdraw its airplanes during off-peak seasons wish well in winter months. It overly did its maintenance and rented some of its simulators.Competition Air Canada, the largest competitor has more resources and a higher command in the market. It accessed over 90% of Canadian airline industry, US trans jar against and international markets. It makes counter decisions to be at better grounds than Westjet. Other low fare competitors include Cantet, HMY airways, Zoom airlines, Tango, and iss ue and Zip air. Decisions ersatz and Solutions Alternative -1 Tran border expansion Westjet may decide to expand in Tran border operations. Venturing into this area calls for increased cost in increasing aircrafts. sorry competition from subsidiary airlines of stronger airline could menace its low fare strategy. There is precise high competition in the trans-boarder market as it includes both the Canadian as intimately as the US airlines. regenerate the older aircrafts would also be indwelling to pave way for efficient aircrafts to travel non-stop across cities in Canada as well as across the borders. Alternative -2 tolerate low cost and low fare and increase Canada market Westjet provide maintain its status quo. It can strengthen or empower its employees results to increase their satisfaction that is merely projected to the customers.Its small size will ensures low cost structure and few employees. Operating in the profitable routes makes it more efficient than large airl ines. It must also ensure that it offers convenient schedules. It can increase or maintain these profits by increasing its scope. Westjet can advertise its services extensively through and through it the advertising and forward-looking media division in its sales and marketing. Advertisements can be through magazines, outdoors advertising, radio, television, and transit messaging and web advertisement. (P. 378).It can also increase offers to act as incentives like random promotion for instance, the prime ministers sidereal day special. Westjet offers tickets less reservation system through Internet bookings that are very convenient and effective to consumers. It also eliminated unnecessary costs that go with printing distribution and bring in of tickets Alternative -3 Venture more in charter segment. Westjet can opt to expand in the third party sector or the charter services. It is appropriate as the unutilized aircrafts can be utilized during winter. It can team up with establ ished charter flight businesses.Most Favored Alternative The strategy that best suffice Westjet expansion is to expand its operation in Canada. Westjet has precisely exploited 10% of its authorisation market share and therefore has more potential to expand. (p. 375). It can increase the number of flights made and venture into areas that have not been exploited. net income and ROI In 2001 Westjet had $ 478 million profits that come up to $ 680 million in 2002. It can plow with this trend if it exploits the unexploited 90% of its potential. (P. 380)References Peter Yannoupoulus. West Jet Airlines Case 4 pg 376-380