Introduction
Strategic planning is the process through which future outlook of the company is molded out where several aspects need to be incorporated for successful formulation of goals such as vision of the organization, value for stakeholders etc. Strategic planning process will be discussed putting it in perspective of Air Arabia which is a UAE based airline company slowly expanding its reach across various regions gaining recognition as a strong emerging brand. Analysis will be made of several areas taking into view various strategic options that are available for the company. Evaluation will be made of progress towards strategic aims and objectives being pursued followed by practical implementation which will cover evaluation, monitoring and review of the strategic plan.
1. Analyzing Strategic Options
1.1 Strategic Planning Approach
Mission statement is “to revolutionize air travel in the region and bring about innovative innovational approach which can offer superior value for money along with safe and reliable information”. It can be seen how emphasis is placed on the cost factor where the company wishes that its customers view Air Arabia as a cheaper alternative to other airlines but this cheap cost will not be delivered at compromise of other factors where it is to be ensured that operations of the company are safe and reliable. Setting itself out as a cost leader within the region and airline industry would allow it to attract more economy flyers. Vision statement is “To be one of the world’s leading budget airlines” which emphasizes its main moto of cost effectiveness as mention before where key strategies have also been highlighted through which this vision is planned to be achieved which includes lowering profit margin so that overall pricing of tickets can be reduced, use of innovational technology through which business operations can be enhanced bringing about greater efficiency, building strong reputation where flyers will know cost value where all these features are being introduced along with ensuring that higher value is delivered.
1.2 Alternate Strategic Options
Air Arabia is taking up price leadership strategy in the airline industry where it will be given greater quality of services as compared to other competitors that are operating in the airline industry. It will be different from previous price penetration strategy, where the company is trying to target economy travelers, and rather target those people who are looking for high quality traveling where their comfort would be given priority. It will move focus of the company from decreasing costs to more customer oriented approach trying to enhance quality of service being offered (Martin, 2014). Upper class would be targeted by this change of strategy but would require change in overall structure of the organization where strong competition will be present from established companies such as emirates who are also aiming to meet higher customer expectations through enhanced quality.
1.3 Stakeholders Expectations Impact
Number of stakeholders are present of the company whose expectations need to be kept in mind while planning ahead for the future. Shareholders are key owners of the company since it is their capital being used for running everyday activity. Shareholders would expect share value to increase with time along with positive profitability for which company needs to pursue its low pricing strategy with ensuring bulk sales along with rapid expansion so that value can keep on increasing. Employee would expect that some focus be directed towards their training and development so that they can gain more skill and increase future opportunities for them. Society would expect that airlines bring about more sustainability in their business working so that long term security can be guaranteed to employees. Safe working environment needs to be provided for safety of both employees and passengers of the company.
2. Progress Towards Organizational Goals
2.1 Competitor Impact
Company wishes to establish itself apart from other airline companies present where reputation would be established as cost leader. However, number of issues seem to be coming in way of strategic plan as being pursued by the company where airline industry seems to be facing declining trend in demand leaving aa with a large fleet of planes and large number of seating available but with less number of fliers. This contradicts with strategic plan of the company where they expect to make greater revenue and increase sales by bulk sales at lower profit margin effecting profitability of the company in the long run.
2.2 Priorities & Feasibility
Company should expand its lines of services where focus will not only be placed on fliers who have lower affordability but offer range of services which can target wider group of customers. This can be made possible by modifying different planes according to their features where economy and high class places will differ based on quality that will be in line with price (Baxendale, Macdonald & Wilson, 2015). Other strategic options which can be applied are pursuing CSR activities in a stronger manner where emphasis will be put on decreasing carbon foot print that is being imparted on the planet by airline industry. Little importance is being given to highlight this issue from the start where future activities can be oriented in such a manner that they decrease impact.
2.3 Risk Assessment
Strategic risk needs to be differentiated from operational risk where strategic risk comes up where company fails to meet market needs in time.
Looking at first option as suggested where company changes its outlook from cost oriented company to one focused on quality of services being offered where additional price being paid is justified through service quality. Taking the suggested option of expanding into greater service quality would not carry as much impact as there are already companies operating who provide service for greater price due to which profitability might not be enhanced as much (Kitchen &Burgmann, 2010). Negative response may be seen from customers where they will feel link with old preposition of the company to offer cheap flights. Second option is to take more environmentalist outlook such as purchasing airplanes with greater fuel efficiency where such change will bring more positive impact on image of the company potentially increasing sales. However, this would require greater financial standing since amount needs to be invested in these activities. Negative response may be present from the side of stakeholders since they may view it as the organization is spending on areas where it is not required.
2.4 Addressing Problems
Plan opted to be pursued is supporting environmentalist approach where new vision will be to set itself as a company which not only pursues delivering affordable service for its customers but also take care of the environment. Financial issues may arise for making such transition and investing in environmentalist direction but justification can be provided to stakeholders for potential downturn in profits. Value of such approach on image of the company would be positive allowing the company to use it as a way to gain greater share of potential market.
2.5 Producing Plan
New sustainable practices will be introduced in the organization where values of current aim will be shared with all organizational members. Financing will be rearranged bring up profit margins so that financial stringing can be enhanced and using extra money derived into CSR activities such as more fuel efficient airplanes. Communication system would be implemented involving various written channels which will ensure that all members are aware of the plans.
3. Implementing and Monitoring Plan
3.1 Organizational & Market Factors Review
Organizational culture should be kept in mind while bringing about this change where structure of aa can be somewhat regarded as closed where main focus is put on decreasing costs (Schein, 2010). Analysis will be made of market checking response of consumer relating to their perspective of aa participating in activities focused on bettering the environment. Positive response gained from customer will indicate that it will carry positive effect on reputation.
3.2 Tools for Monitoring & Reviewing Plans
Project management software will be applied to ensure smooth implementation of the plan where Scoro has been selected as appropriate software for this project. Number of benefits are present in using this software due to which it has been selected such as its easy to use interface and simplistic tools. It will help keep track of work activities and ensure that lacking is not present in any area.
3.3 Impact of Strategic Plan
Strategic plan being implemented will be different form main aim of the company but would play supporting role for it in a number of ways. Caring for the environment will provide it support from various institutions smoothing out its way for future expansion where it meets with original goal of the company to expand its network.
Conclusion
Analysis has been made of aa company devising a strategic plan which will help in achievement of objectives. Various options have been analyzed out of which the most suitable option was found to increase emphasis towards environmental activities as to decrease carbon footprint of the company.
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