Discuss about the Business Environment Analysis of Air Chathams.
Air Chathams Limited is a domestic airline company of New Zealand that primarily serves the routes between mainland of New Zealand and Chatham Island. The company was founded in the year 1984 that is privately owned by Marion and Craig Emeny ("www.airchathams.co.nz", 2016). The company has grown to be a safe and reliable airline organisation that supports the transportation needs of people and freight from and to mainland New Zealand. In the international market, the company is known for its charter flights that serve the transportation needs of local businesses in Chatham ("www.airchathams.co.nz", 2016). Air Chathams charter flight routes serve different destinations of Australia and South Pacific.
There are several other airlines companies in the market that are quite advanced in terms of technology and services. Air Chathams is found to be the second leading airline company of New Zealand after Air New Zealand holding the first position in the Airline industry of New Zealand ("www.airchathams.co.nz", 2016). There are several other international companies like Virgin Airlines and Qantas that provides the company with huge competition because of their low air fares and international existence.
Business Environment Analysis
Business Environment Analysis is a management tool for analysing the factors that influence the business of an organisation and observe the level of impacts of these factors on the operations of the firm (Little, 2010). The general environment involves the identification of the internal and external factors that impacts the performance of the organisation. The general environment primarily impacts the success level of the organisation (Guy, 2009). Hence, it is important for the management of an organisation to observe the market trends and events that has an implication on the operations of the business.
On the other hand, PESTEL analysis is an essential management tool under the general environment that helps to evaluate and analyse the Political Factors, Economical Factors, Socio-cultural Factors, Technological Factors, Environmental Factors and International factors that impacts the business of Air Chathams Limited (Collett, 2007). The report has been developed to conduct an environmental analysis of Air Chathams business to observe the dimensions that effects the organisation in directly or indirectly.
It is important to note that the political environment presents the political and legal issues such as war, rules and regulations of tourism and several other factors in the country that impacts the business of the airline company (Fahy, 2012). The government of New Zealand do not allow the airlines to travel to such destinations that are going through political distress for the safety of the citizens. On the other hand, the Economic Environment presents the overall financial health of the country in terms of consumer spending, recession and inflation in the economy.
Business Environment Framework
The business environment framework in the form of dimensions of the organisation’s task, internal and general environment has been presented herein below (Emerson, 2013)
Analysis of the Task Environment
The task environment of any business is identified to be one of the most significant things to increase the level of organisational performance and business functions as described below:
- Customers: For any growing business industry such as airlines industry, customers have been identified as one of the major business targets. Precisely, in the contemporary business scenario, customers of airline industry verify the offering rates, accommodation, performance and feedbacks of other passengers before choosing aviation services (Staff, Hunziker, & Jones, 2010). Invariably, the services and affordability of rates have made Air Chathams Limited more preferable to the target customers.
- Suppliers: During the flight system, the reliability of the suppliers attached to the business is mandatory for successful services offered to the clients (Emerson, 2013). Herein, suppliers of airline business determine transportation of luggage of the passengers; ensure quality food services and medical services if required. Air Chathams Limited’s major suppliers are retentively up to the mark to achieve highest business operations (Cary, 2007).
- Competitors: In recent times, the development of the airline industry all around the globe has presented a number of customers’ to the New Zealand based Air Chathams Limited ("www.airchathams.co.nz", 2016). Primarily, Air Nelson, Air2there, Air New Zealand, Jetstar, and Virgin Australia Holding Limited have been identified as major domestic and international competitors for Air Chathams Limited (Somerville, 2007).
- Labour Market: Currently, sustainability of the labour industry in the aviation business in New Zealand has provided productive growth for businesses (Paulsen, 2013). Meanwhile, the high scale payments and job offerings to the new talents have increased the overall functionality of NZ’s aviation firms.
In this particular section, the three top environments attached to the business of Air Chathams Limited have been briefed as follows:
The task environment analysis presents the micro level environment of the firm that impacts its business. The Task environment analysis has been presented herein below:
- Customers: Air Chathams serves both international and domestic customers. It is the primary choice for the people living in Chathams or visiting the place (Worthington & Britton, 2016). Air Chathams operates international charter flights to meet the needs of high profile customers and businesses that operate in Chatham Island.
- Competitors: The domestic routes served by the company are also provided by several other airline companies such as Virgin Airlines and Air New Zealand. Hence, it faces a huge competition from the market leaders due to a higher air fares as compared to Air New Zealand and Virgin Airlines (Vitale & Giglierano, 2012).
- Suppliers: The primary suppliers of the company are the aviation fuel company such as Z situated in Auckland. Along with that, the catering agency for food service during flights is also important supplier of the company (Worthington & Britton, 2016). It is important for Air Chathams to maintain a good relationship with the suppliers to reduce the cost of operations and any delay in the operations.
- Labour Markets: The Company sets a target of hiring younger employees to enhance the productivity of the organisation. Along with that, it hire female in the management team to improve the quality of services (Vitale & Giglierano, 2012).
- Management: The management of Air Chathams Limited verifies the environmental issues, employee issues and other social problems that can contribute towards the lack of productivity. Precisely, the administration of the group has hired best managers and executives to complete the entire management work in a fruitful procedure (Bailey & Baron, 2014). Thus, the organisational design has efficiently made out management planning, controlling of the human resources and organising decision-making.
- Organisational Culture: Organisational culture is another vital ingredient to support the activities of the internal environment. The work culture of the group influences the performance of the workforce to provide best customer services. Also, following the guidelines of the aviation industry, the work culture ensures security and safety of the passengers during the flight (Blais, 2012).
- Employees: Air Chathams Limited offers significant remuneration to their dedicated workforce. Moreover, hiring the best business executives, technical people and engineers in the industry, the organisation shows their responsibility towards the target demographics ("www.airchathams.co.nz", 2016). Also, the employees of the group have supported the customers to influence the level of satisfaction of the clients.
- Technological Environment: Air Chathams Limited has ensured technical assessment to the current business operations to make aviation journey more secure and time-saving. Through the identification of modern technologies, the aviation organisation is aimed to create more opportunities to increase the number of target demographics (Staff, Hunziker, & Jones, 2010).
- Natural Environment: In the case of the natural business environment, the long-run business reputation of the aviation group has apparently worked in favour of Air Chathams Limited to increase the business sustainability (Paulsen, 2013). Meanwhile, the operations of the business are directed towards environment-friendly steps so that the corporate social responsibility of the organisation can be highlighted to the rest of the target demographic profile.
- Legal/Political Environment: Air Chathams Limited’s employees and associates truly value the government regulations and policies to be followed in the business operations. Precisely, following the regulations, Air Chathams Limited is very strict about their operations and does not permit any misconduct during the flight to secure passengers’ life.
- Economic Environment: Meanwhile, in the time of global downturn, the fundamental of poor economic condition hurts the business spending. Therefore, the organisation has set some new strategies to work better during the possible recession scenario providing significant customer packages (Orlady, Orlady, & Lauber, 2009).
- Socio-cultural Environment: In order to meet the satisfaction level of the domestic as well as international clients, Air Chathams Limited offers latest aviation facilities and services to increase the tourism probabilities (Worthington & Britton, 2016). Moreover, for international tourists, special packages have been offered to influence the purchasing of the clients.
- International Environment: In aviation business, the global environment has been predicted to be one of the most critical aspects. Decisively, Air Chathams Limited has operated its business mainly in Australia and Asia-Pacific to make maximum profits (Maekwa, 2013). Admittedly, a significant portion of profit has come from the international trade operations of Air Chathams Limited.
The analysis of the industry trend, internal and external business environment of Air Chathams Limited, it can be identified that the management of the group has taken tough decisions to increase the level of business activities. Moreover, the strategic moves of the organisation have clearly elevated the chances of the firm. Currently, the management operations of the business have presented tough competition to the other market operators to take away the maximum market share from the competitors in the domestic as well as international market.
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www.airchathams.co.nz. (2016). Air Chathams. Retrieved November 2016, from https://www.airchathams.co.nz/.