Jetstar Asia Airways
This report will be analyzing Jetstar Asia Airways Pte Ltd. The report consists of the PESTEL model and Porter's 5 Forces model for an in-depth analysis of Jetstar Asia Airways Pte Ltd. In the report, there will recommendations on diversifications strategies for the company and a conclusion summarizing up the report.
Jetstar Asia Airways Pte Ltd is based in Singapore. It is owned by Westbrook Investments and Qantas Group Holdings (Jetstar, 2014). Jetstar Asia Airways first flight was to Hong Kong on 13 December 2004 (Jetstar, 2014) and main objective of the company is to be the top in providing flights with low prices to consumers within ...view middle of the document...
, & Balkin, D., 2012). The growth(GDP) of a country, which affects employment and the ability to generate profits for long-term plans. It is usually present in day-to-day of running a business (Gimbert, 2011).
As Jetstar heavily relies on the economics of the country, economic crisis or recession from other countries will have a major impact on the company. If there are financial crisis or recession, customers or people of the region will not be keen to travel and will impact the revenue. For example, in 2008, due to the global financial crisis, there was a decline in tourists’ arrivals of 4.3% and the visitor days declined 4.1% (Department of Statistics Singapore, 2014). This can be an opportunity for Jetstar Asia Airways. When there is crisis or recession, people tend to spend lesser. This will lead to the need to find a cheaper option to travel. Hence, people will look for low cost airlines to get to places. Companies who are sending their employees overseas may also see this as an cheaper alternative. This will definitely benefit the company.
2.1.3 Social Factor
Social factors are areas that impact the company by the countries' norms, culture and style of living (Gomez-Mejia, L., & Balkin, D., 2012). Social factor relates values, attitudes, demographic characteristics of the citizens (Byars, Rue & Zahra, 1996).
Singapore has its own set of values compared to other countries. However, due to the influence of the internet, the set of values and culture is changing. Singaporeans have the mindset of saving and be thrifty. With that mindset, they would prefer the low cost flights and having more money to spend overseas. Customers going overseas with their family would also prefer low cost flights. Furthermore, the trends in Singapore are more and more teenagers are travelling overseas with their friends. Usually, teenagers would prefer budget airlines. This is an opportunity for Jetstar.
2.1.4 Technological Factor
Technological Factors are where technology affects the way a company function and how the company adapts to new environment (Gomez-Mejia, L., & Balkin, D., 2012). It is how the company uses the knowledge and makes new products, which would attract customers. It not only revolutionize the lives of people, but also improve the methods, materials and design we use (Griffin, 2011).
In Singapore, it is definitely technology-driven. Nowadays, majority of Singaporeans own a smartphone. This leads to getting of information online easily, effectively and efficiently. By using this knowledge, Jetstar Asia is able to use internet as a source of sales or even customer service. This would save not only the customer’s time, but also will save cost in labour. From Jetstar's official website, the company goes an extra step to work in close liaison with hotels and car services in various countries it flies to. It provides a “full package" feel to the customers. In addition,...