Pakistan International Airlines (PIA) SWOT and PESTLE

Pakistan inter nationalistic Airlines (pia) lift and PESTLEINTRODUCTIONThe main theme of this assignment is to critically take Pakistan multinational Airline and to appraise the aim of effectiveness of the physical composition. It includes strategical, pecuniary and preference instruction abridgment. This is carried proscribed in terce begins. Overall strategic redact is scrutinized and external and cozy environs is evaluated through unalike models such asSWOTand PESTLE STEEP analysis in the first fragmentize of an assignment. The second part is an b rock coerersuit review of charitable imaginativeness shockingction in pia and different approaches for their employees retention and dischargeance ar good assessed as to point out their weaknesses and groundss for those flaws in overall system. The final part is the ratio analysis which helps in analysing the financial position of the business and daze of resource precaution conclusivenesss on organisatio ns growth and stability.INTRODUCTION OF piaPakistan International Airlines alliance (piaC) is the premium air lane of Pakistan with its head office on the in cont procedurect of Jinnah International Airport in Karachi. pia is one of the largest airlines in Asia, operational scheduled services to 24 municipal destinations and 39 planetary destinations in 25 countries across Asia, Europe and North America. Its main bases ar at Karachi, Lahore and Islamabad. (Khan A., 2008).ANALYSIS OF RELATIONSHIP OF STRATEGIC take aim PLANNING AND LOWER LEVELRelationship among mel meek(prenominal) and cut levels of management is that Planning is through with(p) at high-pitcheder level and execution is done by the minusculeer level just the lower management is non convolute in any decision do and planning in pia. In concomitant its Lower management just plays role in gathering knowledge for each step of strategic planning.Mission Statementpia Corporation has stated its mission st atement as a symbol of national pride, aspired to be an airline of choice, operating put onably on new-fangled font mer bottomtile concepts and capable of competing with the best in the International as well as Domestic merchandises (www.piac.com.pk, accessed date 08/10/2010)Mission statement of pia is mentioned in a way thatEmployee squad will contribute towards making PIA a globular airline of choice throughOffering fibre guest services and innovative products.Using state of art technologies.Ensuring address effective measures in procurement and operations.Developing safety cultures.On Jan 15, 2010 strategic objectives of PIA were given in 33rd BOD meeting i.e. accession of new additional flights, real time tax revenue management systemIntroduction and success of Pakistan remittance initiativeIncreasing food grocery plow by 5 %Successful monitoring of routesIn PIA Mission and objectives ar set by the higher management for the overall agreement that provides track to middle and lower level employees so that they dirty dog bring the keep company at an established position because Higher management disregard non directly take part in modify customer felicity so team work is required from ticket reservation to landing of plane. Employees work in different teams such as office staff, ground staff, cabin crew and flight attendants as to consummate day to day operations and to get overall objectives and mission.2.2 Environmental s good dealGoal graspment of any company is bullyly influenced by the overall environment, so in PIA before doing strategic planning higher management likewise s bungholes over all environment that involve internal and external environment both a unyielding with the analysis of firms manufacture.2.3 Strategy homeworkManagement at the top level of PIA utilizes all the entropy gathered by the lower management and formulate its strategies by exploitation its strengths and availing its opportunities to overcome its weaknesses and threats so as to create combative edge in the airline constancy.2.4 Strategy ImplementationImplementation in any giving medication involves restructuring of firms resources and high level of demand for lower and middle management. But in PIA strategy implementation becomes really complicated as they do non change their structures according to their new and modified strategies, and their employees argon exceedingly de sparkd as their suggestions ar not welcomed in formulating the strategies. Ultimately the strategies are construe by them.2.5 Evaluation and ControlImplementation of strategies are evaluated and controlled by PIAs higher management but they are very much rigid in making adjustments in their overall strategies.2.6 VisionPIA Corporation has stated its vision as To be fiercely competitive, consistently exceeding customer expectations and be the choice employer that embraces modern technology in all spheres of its activities. find OF VISION, MISSION , VALUES AND GOALS OF PIA OVER ITS STAKEHOLDERSMission, vision, values and goals for PIA take great influence over its stakeholders that involves3.1 guestsIn the vision and mission statements of PIA their customers expectations and satisfaction is highly focal pointed so they are increasing their securities industry direct by offering different services such asMagazines uniform hamsafar and newspapers are given to all customers of PIADifferent flyer programs also attract customers as they can get free tickets and excess luggage vouchers etcPIA continuously changes its plane design after every 3 years as to strike to a greater extent and more customer attentionPIA also introduces cargo service namely PIA Speedex.PIA is also doing brand merchandising through sponsorship to become more and more popular e.g. PIA is sponsoring Shandur polo gala, ABN Amro patrons trophy, destination Pakistan 2007 festivalPIA also supports non earn organizations like Al Shifa trust, Zindagi trust etc.PIA is also maintaining high safety culture for its customers3.2 EmployeesPIA believes in team work and without that they cannot achieve their goals and mission but they do not empower their employees to participate in decision making process so they are not involved in setting goals, vision and mission for their company.3.3 ShareholdersPIA does not focus on partake inholders income or their satisfaction in its vision and mission statements which shows its low level of interest. And it is proved by the fact that it is not achieving its goals so veneering financial crisis that results in expiration for its shareholders as share price decreases from 3.17 to 2.61 and loss was PAK Rs.5822 million in 2009.SWOT ANALYSIS4.1 (S)TRENGTHSLeading Market strengthAccording to Annual report of PIA (2008), PIA is one of Pakistans jumper lead air carriers, with more than 800 daily flights. Around 150,000 passengers fly a calendar month on PIA, making it one of the major operators in the domestic market in terms of passenger destination.PIAs international market share was 43.5%, In the Domestic market, its market share was 69.4%. On a system-wide basis, PIAs market share was 51.2% at the end of year 2009. Its hale market position is dictated by consistently low fares as well as original service, frequent and convenient flights, use of new technologies like e-ticketing and self damp in terminals, comfortable cabins and superior customer service.Superior Operating StructurePIA has maintained its position as the low cost carrier. It has been first trend Pakistani airline to use the latest technology. Factors contributing consists of different serial publication of Boeing and Airbus and an efficient, high-utilization and point- to-point route structure.Network PresencePIA enjoys a world(a) strong network and international destinations. The companys network includes three the major airports in Pakistan, as well as major international airport such as Dubai Internatio nal Airport. Having a strong network essence that PIA can acquire traffic feed for both its domestic and international Flights. legal Use Of TechnologyPIA has successfully beard latest technology in all its systems, giving it an edge over competitors. PIA takes address for introducing most new technologies to the Pakistani market. It was the second carrier in Pakistan to in incorporate the c-ticketing system and the second in South Asia to introduce self admit-out procedure in systems at the Jinnah International Airport, Karachi.4.2 (W)EAKNESSESWorse Govt. RulesThe key policies, strategies and set of laws are designed by the upper management. The centralized system is one of the biggest obstacles of long term success of PIA. PIA centralizes structure lead to barrel between different level of management, decreased motivation, and hard access to information.DebtPIA has a significant standard of 42 billion debts. Current and future debts could have important consequences for st akeholders of the company.Reliance On Oil PricesPIAs sustainability, growth and revenues directly take care on oil prices. A steep rise in oil prices can seriously damage the long term viability of any airline. of late many airlines around the world went bankrupt due to rising oil prices. Airlines assume to hedge against this risk by taking proper measures.4.3 (O)PPORTUNITIESHaving The upper limit Route And FleetPIA is having the maximum route and fleet domestic and international destinations network in Pakistan as compared to its Competitors. Route and fleet elaboration will dictatorially pretend the companys operations by increasing revenues. maturation Demand For Low Cost AirlinesThe growing demand for air trip up is driven by lower fares and consumer confidence. A survey by International Aviation Authority showed that ticket price is the issuing one bill for passengers when selecting a flight, well ahead of the availability of a non-stop service.Shifting Customer NeedsTh e needs of air passengers are increasingly changing, as they are becoming more and more price sensitive. If PIA succeeds in making its prices more competitive, then the company will be able to gain significant market share.Industry RecoveryMarket analysts believe that the worldwide airline industry will experience an upturn in fortunes over the nigh hardly a(prenominal) years. This represents an opportunity for PIA, as it could generate increased revenues and command market share if it capitalizes on increases in demand.4.4 (T)HREATSHigh fill RatesThe last(prenominal) few years have pay heedn State Bank of Pakistan impose high as well as low interest rates to check inflation and the overheating of Pakistani economy. Inflation in Pakistan may see another raise in the short-term.Strong Competition By AirbluePIA is now competing against carriers such as Airblue and Shaheen Airline. PIA remains Airblues strongest competitor because of the vast market it has gained over time, stron g brand image and customer loyalty.Interest And Foreign Currency Exchange RatesFluctuating foreign gold exchange rates can have a significant impact on PIAs earnings. For example, as PIA is providing its services to the UK. Negative or positive effects arise from exchange rate movements as change in expenses.PESTLE AND STEEP ANALYSISPESTLE and STEEP factors including political, social, economic, technological, legal and environmental factors (Ireland R. et al 2008).(P)OLITICAL FACTORSAccording to Ireland R. et al (2008), political factors always have a great influence on the way where businesses operate in the airline industry and the spending power of customers.Pakistan has achieved some political stability in recent years. If the management of PIA believes that the present government will work out well (consistently), then there will be more investment in the form of purchase of new airplanes and latest technology.(E)CONOMIC FACTORSCurrently, Airlines industry has three major p layers PIA, an Airblue, Aero Asia and Shaheen Airlines. Their target market includes domestic travellers as well as Pakistanis living abroad particularly in the UK and USA. Economically, the new millennium has been highly volatile the September 11 attacks revolutionized the whole world. Consequently, there was a global depression in the North America, South America, Australia and Europe.(S)OCIAL FACTORSCustomers are more witting of market conditions and available options and want to get best value for their bullion (Johnson Scholar, 2001). They spend considerable time and money on entertainment because increasing the need of in-flight entertainment systems.Hajj attracts a huge number of customers.(T)ECHNOLOGICAL FACTORSMajor technological changes are taking place in the airlines industry with innovations in the reservations and booking systems. In-flight entertainment systems and auto check in counters are two examples of such innovations. Internet plays a key role in e-ticketin g as consumer can easily reserve tickets or check the condition of the flight.(L)EGAL FACTORSAirlines legislations and policies have a direct impact on the carrying out of PIA. PIA has attacked newlegislation which will force them to pay greater pay to customers in the event of overbooking, cancellations and delays.(E)NVIRONMENTAL FACTORSPIA, as a symbol of national pride, should be a choice airline operating profitably on modern commercial concepts, capable of competing with the best in its entire international and domestic markets, consistently exceeding customer expectations. It should be a choice employer deploying modern technology in all spheres of its activities.APPROACHES TO HUMAN RESOURCE MANAGEMENT TO tending THE DEVELOPMENT OF BUSINESS STRATEGYWith an controling that global economic downturn and ever rising operating costs besides exacerbated by displace crude oil prices. According to Greg J. et al (2009), human resource utilizations should be focused in PIA to a ddress whether a b adjuster future is practical through management practices that fully engage employees and achieve genuine compacts with their unions to fork over an ailing airline. Failure to elicit employee commitment through human resource practices could mean that PIA is doomed to fail in competitive airmanship industry in which private sector is increasing its market share by catering to customer satisfaction.Creating a culture in which employees are close-knit and where top management focuses on its personnel asset by taking care of them so that they are ready to face and serve to every days melody challenges wont be easy unless PIA starts building better relationship at various levels within its vertical organization. When an organization nurtures values of friendliness and loyalty among its staff then at last customers benefit from improved service quality and creating a customer-centric culture becomes comparatively easy. High employee morale and high quality deliv ery of service to customers are both inter-related and inter-dependent variables and airlines like Southwest Airlines, SWA, that based its business model not only on its customers but also its employees satisfaction have seen its net growing when others were all losing revenues in post 9/11 item. military man resource management section of PIA could be used as a valuable agent of change that creates a strategic partnership among different levels of management and improves collaboration between different departments by defining policies and procedures that eventually results in a higher level of service end-to-end the organization. Properly trained human resource professionals that not only understand intricacies of organizational culture but also possess knowledge of global aviation industry can create a work environment that promotes dignity and respect and prepares PIA for 21st century challenges. Turnaround of Continental Airlines that used human resource management as a pe ter of corporate strategy to alter its work and communication practices throughout the organization is another example of the pivotal role that human resource department in PIA can play to improve its brands strength and gust its financial losses (Carrig 1997).To remain competitive in global market where technology can perform many of the operations traditionally performed by human agents, PIA needs to take some measures to reduce its custody by utilizing technology to its benefit. Moving to online ticketing save us at least 8-9 per cent in costs, the managing director of PIA once said. This partially resolves over-employment that burdens companys dire financial condition. The next step should be online check-in for domestic and international flights. PIA should invest further in its website to offer options to amend travel plan as and when required.Political influence and interference that affects fairness of recruitment policies poses challenges for human resource management w hen they are forced to make decisions that does not organize with PIAs strategy but serves political purposes. I cannot emphasize enough on the importance of transparent recruitment. PIA needs to learn the importance of hiring as its success depends on the ability and style of its pot. An organization that is in epic need of leadership and role models should decorate its headquarters walls by photographs of employees who adapt and promote company policies by achieving excellence in their respected roles. This practice would encourage healthy competition within employees and they would work with more dedication to get recognized.PERFORMANCE AND REWARD MANAGEMENT INCLUDING THE ROLE OF PERFORMANCE estimationNowadays according to my point of view any type of respect plays a vital role in employee functioning any it is financial or non-financial .Financial includes increase salary benefits like medical, travel, children benefits , pension etc and non-financial are ain recogniti on , appreciation , promotion etc. PIA must handle a employee survey in which first they identify the needs of different employees like what type of rewards PIA should provide them so that they can motivate and perform better to make it first choice .Performance estimation or Career learning discussion is method by which the line of products performance of an employee is evaluated in term of qualitative, quantities, cost and time typically by super ordinate boss or supervisor Performance judgment is a part of guiding and managing career development .It is the process of obtaining, analysing and arranging information virtually the relative worth of an employee to the organization. Performance appraisal is an analysis of an employees recent success and failures personal strengths and weaknesses, and suitability for promotion or further schooling. It is also the judgement of an employees performance in the job based on considerations other than productivity alone. Its a tool by which management can give feed back on employees performance identify his/her training needs .Facilitate communication between employee and administration/management .It improve performance through counselling , coaching and development . Simply when ever you tell any body about his/her weakness strengths you he/she will perform better towards achieving organizational goals.STRATEGIES FOR EMPLOYEE DEVELOPMENT AND REDEVELOPMENTThe study is intended to check the development of employees in the organization. A good development program and procedure are demand to achieve goal of the organization. To cope with poor performance and to retain employee and always keep them sustainable we have lots of strategies but what I found in my research that not all are play a vital role but someone plays a significant role (Svend Hollensen, 2005).DecentralizationEmployee will better develop in decentralized decision making where they life they are part of team whenever you involve employee in deci sion making you can easily achieve you desire objective in better way (Jeston J. Neils J., 2006). If we prattle about PIA (Pakistan international Airline) in PIA delegation of authority is limited due to centralized decision making .The authorities reserve the right to make decisions in Board meeting or you can label that only top level management can make decision in board meeting. The middle and lower level management is not allowed to speak for against the top level management whatever top level make or implement they have to follow the decision byplay RotationsAccording to Price A. (2005), job rotation is organic part of development it is practiced to allow qualified employees to gain more insights into the processes of a company and to reduce boredom and increase job satisfaction through job variation. More rotation more satisfies an employee. Job Rotation is not commonalty in PIA (Pakistan International Airline) thats why PIA employees are not fully satisfyFeed backFeedba ck plays a vital role in development and Redevelopment of employee and retains them on the job (Mercer, 1996). masses need feedback.Most people do not see themselves as others see them. Feedback is essential to learning. If people dont fully appreciate their strengths, how can they use them to their advantage? People who take a professional attitude toward their work want feedback. If we talk about PIA quarterly employee co-ordination meeting are held where all employees can share their views with their bosses and subordinates and subordinates take feedback from super ordinates it helps to reduce the conflicts within the organisation and employee satisfaction.homework and development ProgramsTraining leads towards development and when employees skills more develop organisation can easily achieve its objectives training is essential to make employee more impulsive to perform task (Price A. 2005). Training is strategy to retain an employee in the organisation it is duty of top level management to review the performance appraisals of employee and if they feel lack any where they should provide proper training to cope with that problem. This strategy is some sort of investment on employee. When employee feels that company is investing on he/she they always try to perform better.Analysis of the Liquidity ratioIt is apparent above chart that the PIA is running with a ostracise working capital in both financial years. Similarly the percentages of flow rate quick and cash ratio are also very low that reveals the fact that the contemporary asserts of the company is not enough to meet its current liabilities. Either it should be equal or above the maiden industry level or it should be in Positive Percentage.Leverages ratio shows the make out of debt utilized by the firm to finance its asserts (Wight R. et al, 2009). It can be either by using share holders equity or by the amount of borrowing. Leverage ratio of the PIA shows the greater amount of debt to finance i ts asserts.The figures of the exertion ratio indicate the low credibility of the PIA in utilizing its assets to generate the sales. As it is apparent from the fact that ratios for both the years are peacefulness low and the company will require a greater period of time to convert its assets to generate sales.Analysis of Profitability RatioThe financial statement shows a slight decline in the gross profit margin in the 1st quarter of year 10 over the previous year. Similarly there is slight increase for the Return on equity ratio, though it is low but as an investor it is somehow encouraging. On the other hand operating profit, net profit margin and echo on assets are in real bad condition as they are in negative.CONCLUSIONReason for PIA down go along is that the company is goal oriented instead of focusing on means used to achieve those goals. So the problem comes at the implementation face as they are not people oriented, mean the company does not involve its middle and lower management in decision making. That is the reason weaknesses occur and they fail to cope their upcoming threats and unable to create competitive edge in their respectivePIA has boosted in last few years. Corporate level is planning forward for next upcoming years. PIA has to changed organisational structure so that it can bring a change and motivation in employees. This will solve all the problems and conflicts among the company structure from corporate level down to the lower level.They should motivate their employees and as well as less the over head cost expenses and other expenses like ram cost .It should be like less input and high out put to improve the corporate level they should heir responsible people so that they are good in decision making and strategic planning. This can be only done by good marketing policies.