* By clicking on "Buy Now" you agree to accept our ". Being part of the Star Alliance also poses the threat that Lufthansa might lose its identity. Political Environment; Economic Factors; Social Factors; Technological Changes; Legal Issues; Environmental Aspects; Political Environment. A special focus is on the business class on long-haul routes as this segment is the most profitable one. Middle East and North Africa region which accounts for major global oil production is going through a period of conflict and civilian unrest. The synergies range from shared use of ground facilities like check-in-counters, a city office in Paris and also airport terminals. So far, the internal customers don’t act as normal customers yet since the demand conditions, which they would never demand with other external business partners (Bruch & Ghoshal 2000). The outcome of this meeting was “Program 93”, 131 key actions aimed at drastically cutting about 8,000 jobs, lowering non-personnel costs, reducing the aircraft fleet as well as increasing revenues by DM 700 million to reduce the losses of DM 1.3 billion. In comparison with other industry alliances, the Star Alliance is the recognized market leader (see Appendix 2). Factors that are connected with the bargaining power of suppliers include the threat of forward integration as well as the concentration of suppliers in the industry. Nevertheless, all in all it can be said that the bargaining power of buyers is relatively low. a. 1. PEST analysis is an acronym for Political, Economic, Social and Technological. Highly competitive industries are generally less profitable as the cost of competition is high or customers are receiving the benefits of lower prices. Are you looking for a report which is not covered on our website? Below is a basic illustration of the framework. Press Release Airlines Market SWOT Analysis by Key Players: British Airways, Delta Air Lines, Deutsche Lufthansa Published: Dec. 3, 2020 at 11:47 p.m. By implementing a wide range of measures, Lufthansa and its Group companies continuously work on increasing their ecological efficiency in flight operations over the long-term. PESTLE. This report will take a closer look at the turnaround of Lufthansa airlines which went from near bankruptcy in 1991 to a now profitable airline. The SWOT analysis gives insights into the internal and external factors, namely, strength, weakness, opportunity, and threats of Airbus. Figure 4: Michael Porter's … Lufthansa has not reached the required relationships for a market-based internal coordination. Registered office: Venture House, Cross Street, Arnold, Nottingham, Nottinghamshire, NG5 7PJ. This also looks at the external business environment of the organisation helps in finding case study Analysis to real-life business issues as in HBR cases. *You can also browse our support articles here >. Pestle analysis is a technique used to assist corporations in understanding the external environment in which they operate in the present and future. Lufthansa revenue 2004- 2018 - https://www.statista.com/statistics/264269/revenue-of-lufthansa-ag-since-2004/. Lufthansa 2012 PESTEL Analysis Model was proposed by Michael E. Porter in 1979. According to the case study, the United States Airline Industry is one of the most renowned airlines that have gone through several ups and downs. According to Hitt, a corporate level strategy involves specific actions by a company to gain a competitive advantage by having a group of different businesses competing in several industries (2003, p. 183). Den Trend des Wachstums belegt auch die IATA mit ihren Zahlen und attestiert den steigenden Anstieg im Absatz der RPK in ihrer Marktanalyse. per Page. Lufthansa also admits not to be perfect in the areas of punctuality, luggage safety, waiting periods, technical reliability and telephone availability, but is in the process of improving this situation (Bruch & Ghoshal 2000). Strong image associated with German Engineering 4. The reason for that are the massive additional premiums that are being charged for insuring against war and similar events. Disclaimer: This is an example of a student written essay.Click here for sample essays written by our professional writers. Lufthansa is a German airline which operates from two main hubs: Frankfurt airport and Munich airport. Also, there has been steady rise in awarding service packages and production-delivery to various new suppliers that has significantly reduce the threat of new entrants into flight catering segments. In Lufthansa SWOT Analysis, the strengths and weaknesses are the internal factors whereas opportunities and threats are the external factors. Forward integration, which is the expansion of a business’ products or services to related areas in order to directly satisfy the customer needs, is fairly low. PESTEL Analysis of Lufthansa 2012. The article is all about the factors affecting Germany. Step 7 – Organize and Prioritize the Analysis conducted into the Case Study Solution . End 2017: 35.579 million. "Lufthansa Pestle Analysis" Essays and Research Papers . Strategic leadership, which is ‘the ability to anticipate, envision, maintain flexibility and empower others to create strategic change as necessary’ (Hitt 2003, p. 386) was extremely important in Lufthansa’s turnaround. Moreover, short international trips to major European capitals are often done by bus and also by ferry if it is a trip to the United Kingdom. They recently started a fleet renewal program in 2003 and by 2005 they will replace older aircrafts with ten new Airbus A340-600 jets, as well as ten new Airbus A330-300s. In addition the first Star Alliance Lounge went into service 2001 at Zürich airport. It helps an organization to assess the macroeconomic conditions surrounding it in order to make a business decision. PESTLE analysis for the macroenvorit, Porter’s five forces for the industry structure Resources and capabilities. Lufthansa Group Business segments Key data analysis Group strategy Financial strategy & value-based management Improve profitability Focus capital allocation Maintain financial stabilty Fleet Corporate Governance & Compliance Corporate Governance Declaration, Section 289f HGB 1. Companies with an interest in entering the market also require access to distribution channels. The evolutionary patterns of strategy and structure are identified in this report as well as how strategic leadership and German culture contributed to the turnaround. In 2003, it contributed 7.6% to Lufthansa’s total operating expenses. Online bookings have more than doubled in 2003. As good examples serve the events of September 11, the Iraq conflict and the outbreak of SARS in Asia along with a stagnating global economy which seriously influenced the business activity of the entire airline industry in a negative way (Heerkens 2003). Idealerweise erfolgt diese Umfeldanalyse regelmäßig, um Veränderungen bei den Einflussfaktoren rechtzeitig zu erfassen. 2. There are also a number of infrastructure risks that Lufthansa will have to deal with. Case Study Solution & Analysis of Lufthansa PESTEL / PEST / STEP Analysis of Lufthansa Case Study. Fuel providers have an excellent bargaining position as they can increase fuel prices without regarding the airlines as an important customer group. Many European countries have an excellent railway system with high-speed trains like the ICE in Germany and the TGV in France. It is suggested that there is a price advantage of an average 6% in comparison with conventional tariffs. The PEST Analysis (Political, Economic, Social, Technology) is one of the most important strategic management methods for analysing the microeconomics (external) infuses of company. Info: 5506 words (22 pages) Essay $39.99. With high ASD, your ad post will be displayed across all our 2500+ pages.Grow your business with effective advertisement! The term PEST stands for “Political, Economic, Social and Technological analysis and, not only is it well known within the academic circles, it can also provide a general overview of Cold Chain Logistics and its adaptation in India. In case you need the complete report please purchase using the buy options displayed. Gap Outsourcing in China: PESTLE Analysis. per Page. Every four seconds an aircraft of the Star Alliance starts or lands somewhere in the world and it possible to fly once round the world in 36 hours with Star Alliance airlines. 3 Analysis of Lufthansa’s Business Environment. Keep it up! This leads to a process of consolidation and the creation of strategic alliances. 20). Table of Contents. Pest analysis is very important and informative. Opportunities and threats of the SWOT analysis developed by Albert Humphrey for the analysis of Ryanair’s external factors 2.1 PESTLE Analysis. Employee disputes and strikes over wages impacts operations, 1. Switching costs are quite low as consumers have a range of choices when selecting an airline. Analysis. Copyright © 2003 - 2021 - UKEssays is a trading name of All Answers Ltd, a company registered in England and Wales. PESTEL Analysis Lufthansa group operates on the global scale and it is the largest airline in the world in terms of the destinations, fleet sizes, scheduled passengers, revenues for the cargo and the passenger business of the company. Competitive rivalry is affected by industry growth, brand identity, fixed costs, as well as barriers to exit (Wheelen & Hunger 2000, p. 63). Quite a number of these factors can be discussed but has been written in this paper in an order of priority. Nicht immer ist es leicht, auf Anhieb mögliche Einflussfaktoren auf das Projekt zu ermitteln. Lufthansa’s potential losses from the above could result in not being able to fly to some destinations or taking longer flight paths in order to avoid skies where there is potential of terrorist attacks. Having counters in the same area at airports also creates a single contact point and improves changes and baggage loading. Generally it can be said that Lufthansa’s change management during its crisis was outstanding. Reddit. Lufthansa centrally coordinates their strategy development process. LinkedIn. At rare times, a slight delay not exceeding 4 hours might be caused. The main responsibility for effective strategic leadership generally rests at the top, especially with the CEO, but also with other recognized strategic leaders like members of the board of directors and the top management team. Furthermore there is the threat of higher costs of insuring Lufthansa’s fleet. Doha and Dubai the base hubs of Qatar airways and Emirates have emerged as global hubs and have taken traffic away from traditional European hubs such as Frankfurt, thereby impacting Lufthansa. I have completed a PEST analysis for Germany here. Weber showed his total support for the OPS team and personally supported them in many ways. 100% Plagiarism Free; On Time Delivery | 27x7; PayPal Secure; 300 Words / Page; Get A+ Now; 12 Hr Delivery. Revenue Lufthansa. SWOT & PESTLE.com (2021). Lufthansa annual report 2017 - https://investor-relations.lufthansagroup.com/fileadmin/downloads/en/financial-reports/annual-reports/LH-AR-2017-e.pdf, 4. VAT Registration No: 842417633. Lufthansa’s Miles & More customer loyalty program is also a great tool to encourage customers to fly Lufthansa again. In regards to Lufthansa, the organisation uses a related diversification corporate-level strategy which means that Lufthansa generates more than 30% of its sales revenue outside a dominated business and its businesses are related to each other since Lufthansa centrally coordinates their strategy development process. According to Costa et al. Jürgen Weber also created the OPS team (Operations Team) as a forceful engine in the process of implementing the 131 actions. We're here to answer any questions you have about our services. Buyer power is determined by relative volume of purchase, switching cost, standardization of the product, brand identity, elasticity of demand as well as quality of service (Del Vecchio 2000). WhatsApp Lufthansa is one of the premier airlines of the world and one of the largest in Europe, in terms of the number of passengers carried by it. It is vital for them to preserve the Lufthansa brand (Bruch & Ghoshal 2002). PESTLEanalysis.com is an educational website collecting all the information and resources related not only to PESTLE but also SWOT, STEEPLE and other analysis that will come useful to business owners, entrepreneur, and students alike. The PESTLE Analysis for Lufthansa is presented below: Copyright © 2021. Revenue Lufthansa. The political system functions under a system called Grundgesetz which was published in the 1949 constitutional document. It helps an organization to assess the macroeconomic conditions surrounding it in order to make a business decision. SlideShare Explore Search You. This is due to the fact that passenger safety is paramount and the political establishment have been made weary of the airlines and resorted towards strict regulations for their operations, due to their earlier inclinations towards monopolistic behavior. In terms of traffic performance, Lufthansa is in third position in worldwide passenger transport. The internal environment of an … SWOT Analysis is a proven management framework which enables a brand like Lufthansa to benchmark its business & performance as compared to the competitors and industry. PESTLE analysis explains so much about the internal and external factors. This article is about a detailed SWOT analysis of Lufthansa. Pestle analysis is a technique used to assist corporations in understanding the external environment in which they operate in the present and future. The goals of this program included an improvement of the competitive position through a reduction in cost, internationalisation of cost-structure and making staff conscious of reducing costs in their daily work. Therefore, founding the Star Alliance was a logical consequence and Lufthansa was one of the key-founding members of the first airline network in the world (Global Network – Five years of Star Alliance). Lufthansa is also confronted with some capital market risks as its international business activities expose it to exchange rate and interest rate fluctuations in the international money, capital and also the foreign exchange markets (Zea 2003). For example, another version of PEST is SLEPT which also takes the legal factors into account. One of the foundations for Lufthansa’s commercial success was its integration into the Star Alliance, the world’s leading airline partnership system. PESTLE analysis explains so much about the internal and external factors. Lufthansa was also one of the founding members of the Star Alliance in 1997, when 16 partners joined into the world’s largest airline alliance (Key data on environmental care and sustainability at Lufthansa 2002/2003). Lufthansa strategy analysis 1. They constantly monitored, created activities, advised and supported the line managers who were ultimately responsible for the implementation process. This is achieved through frequent mutual quality checks. Registered Data Controller No: Z1821391. Political developments leading to economic uncertainty, 1. Comprehending the dynamics of the competitive forces in an industry can give an insight whether an industry is attractive and whether there are any chances for returns on capital. This industry is also very labour and fuel intensive which requires a lot of funds. Lufthansa is also the first airline in the world that offers broadband Internet access on board its planes (Anonymous 2003). Also one can reschedule and cancel flights through the website. Need Help with Lufthansa Cargo AG The WOW Alliance in the UK Case Study Analysis & Solution? In case of more wars and terrorist attacks the premiums are likely to increase even further (Zea 2003). Lufthansa Strategy Analysis. In terms of the Star Alliance this leads to estimated passenger savings of between 50 and 82 million dollars per year. Product diversification, a primary corporate-level strategy deals with the scope of the industries and markets in which the company competes in addition to how managers buy, establish and sell different businesses to equal skills and strengths. Urgent - 6Hr. All in all it can be said that the threat of new entrants is not that high in the airline industry in the current business environment. The detailed complete set of references are available on request in the 'Complete report' on purchase. Line management was responsible for the implementation of the staff cuts. PESTEL analysis provides great detail about operating challenges The Boeing Company will face in prevalent macro environment other than competitive forces. No airline worldwide has the capacity infrastructure to offer a suitable network by itself. PESTLE grid for Lufthansa The key impacting factors of the PESTLE framework of Lufthansa is as follows; Figure 3: Key macro-economic factors effecting Lufthansa (Dombrowski, n.d.) Internal Analysis Value Chain Michael Porter defines value-chain as a process of value adding activity based on cost and strategy (Dilip Kumar, 2016). Die PEST-Analyse hilft dabei, sich von den Kategorien inspirieren zu lassen und nichts zu vergessen. From simple essay plans, through to full dissertations, you can guarantee we have a service perfectly matched to your needs. The individual Lufthansa companies are quite successful. “Competitive Position Analysis of Airlines: Traditional Airlines and Low Cost Carriers ... 5.1 Lufthansa – the traditional airline (including Germanwings, Eurowings)..... 42 5.1.1 Company profile and strategy..... 42 . Another strength, which gives Lufthansa a comparative advantage, is the use of a premium executive jet service on North Atlantic routes like Düsseldorf-Newark and Munich-Newark. Furthermore, Lufthansa’s management is very conscious of the need for innovation and customer service. Michael Porter, a professor at Harvard Business School, created a framework for understanding the structure of an industry. SWOT analysis helps in analysing the external as well as internal factors that have an impact on the operations of a company. For 82 % of all offered flight connections, the Star Alliance is the fastest network. A good example of Lufthansa’s innovative strength is their new terminal at Munich Airport, which was build to optimise operational procedures. PEST analysis is a good tool to analyse the Macro environment as it is focused on a range of external factors that influence the industry where the organisation operates (Johnson, 2013). How has Volkswagen’s business strategy evolved post the emissions scandal? This cost management contributed substantially to Lufthansa making profits again in 1999 (Bruch & Goshal 2000). 100% Plagiarism Free; On Time Delivery | 27x7; PayPal Secure; 300 Words / Page; Get A+ Now; 24 Hr . The program has grown in popularity since it was introduced ten years ago and developed into the leading frequent flyer program in Europe (Miles & More).

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