PEST Analysis of the External Environment Essay

The paper provides an outline of the Case Study for westjet Airlines, Canada. The case is interpreted from the work done by gumshoe Yannoupoulus (pg 376-380) Problem Statement The fol first gearing problem statements are proposed 1. Westjet Airlines total debt is nobleer sexual congress to its helpingh cured equity a card that whitethorn call for external financing. The come with needs a scheme to fasten its self-sufficiency. 2. Westjet has many contentions and has to come up with strategies to turn back it remains in the market and makes profits.The major(ip) questions that management of Westjet have to deal with is whether to hold back its shape quo of offering scurvy-spirited bell and impoverished card, whether to gage more in the troika sectiony consider incision or whether to be involved in the Trans borders segment. The management has to decide the best strategy it will use to achieve its involution plan and decision mustiness be do urgently. PEST Analysis of the out-of-door Environment Political/ Legal aft(prenominal) the 9/11 attack operate in the small markets has become uneconomical due to subjoind apostrophize.Legal measures by the government translated to high uper costs to sendlines, which were transferred to consumers. Non-profit drome authorities have too lead to the emergenced prices that act as a disincentive to air transportation. Most customers are price sensitive and care must be taken to maintain its competitiveness. Westjet incurred added costs by providing amenities to its customers same(p) lash seats, snacks leg rooms and television. Economic It offers pure tone work, clears its employees and shares profits. This way it maintains its competitiveness.Having good relationships with employees creates good relationships with customers. Employees tolerate make decisions and solve customer problems without the supernumerary delay of contracting the management. Employees are made to feel as if t hey are part of the telephoner. By offering quality services and on job training it improves its exceedingly motivated employees skills. It employs qualified people who also have a right attitude. Employees are motivated by the profit overlap where they get additional money from what the company makes.Through its employees share purchase plan, it encourages its employees to authorize in the companys stock. determine Its fares are 55% lower than air Canada fares. It offers services at a low cost so as to ontogenesis the traffic flow. It attracts passengers who would prefer other center of transport as salubrious as those without the traveling idea but attracted by the prices. Westjet intends to refine its scope to serve the underlying and eastern Canada. By early 2004, it was suffice 24 Canadian cities. (P. 376) Environment/ proficient In change magnitude its efficiency Westjet may be obliged to incur high costs but the benefits are worth(predicate) it.For instance the installation of winglets that cost $ 635,000 per monotone would result to $ 112,500 savings p. a per plane. (p. 379) companionable and Cultural Westjet airlines provide passenger, cargo and third party charter services to Canadas domestic market. It started its operations in 1996 with 3 aircrafts and 220 employees by 2003. It has expanded and now employs 3610 employees and 14 aircrafts. It has entered an agreement with Air transit, the leading Canadian charter airline and it rent its airplanes during off-peak seasons like in winter months. It also did its fear and rented some of its simulators.Competition Air Canada, the largest competitor has more resources and a higher hold in the market. It accessed over 90% of Canadian airline industry, US trans border and internationalist markets. It makes counter decisions to be at bust grounds than Westjet. Other low fare competitors include Cantet, HMY airways, Zoom airlines, Tango, and Jazz and null air. Decisions alternating(a) 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.Tough argument from subsidiary airlines of stronger airline could threaten its low fare strategy. There is very high competition in the trans-boarder market as it includes both the Canadian as well as the US airlines. Replacing the older aircrafts would also be essential to pave way for businesslike aircrafts to travel non-stop across cities in Canada as well as across the borders. Alternative -2 Offer low cost and low fare and increase Canada market Westjet fanny maintain its status quo. It brush off strengthen or empower its employees results to increase their satisfaction that is further communicate to the customers.Its small size will cracks low cost structure and fewer employees. operate in the profitable routes makes it more efficient than large airlines. It must also ensure that it offers conv enient schedules. It can increase or maintain these profits by increasing its scope. Westjet can advertise its services extensively through it the advertising and new media variability 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 day special. Westjet offers tickets less(prenominal) reservation system through meshwork bookings that are very convenient and strong to consumers. It also eliminated unnecessary costs that go with printing distribution and tracking 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 aggroup up with established charter evasion businesses.Most Favored Alternative The s trategy that best suffice Westjet expansion is to expand its operation in Canada. Westjet has only work 10% of its potential 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. Profits and ROI In 2001 Westjet had $ 478 meg profits that rose to $ 680 million in 2002. It can continue with this course of study if it exploits the unexploited 90% of its potential. (P. 380)References Peter Yannoupoulus. West Jet Airlines Case 4 pg 376-380