Flight Centre - Internal and External Environment and Management Style - Case Study Example

Management Theory and Practice: Flight Centre Name Course Name and Code Instructor’s Name Date Introduction Flight Centre is a publically listed company on the Australian Stock Exchange as a travel company. The company has more than 2500 stores with more than 13,500 employees that operate through numerous countries (Flight Centre, 2013). The Flight Centred was established in 1981 and has being operating profitable since. The aim of this report is to analyse the internal and external factors affecting Flight Centre with the aim of formulating appropriate strategies that leads the organisation to become more successful. Internal and External Environment In understanding the environmental factors on Flight Centre, two frameworks are utilised. These frameworks are SWOT analysis for the internal environment while for external environment; the most appropriate is PESTEL Analysis. The following are the analysis of both internal and external environments of Flight Centre using SWOT analysis and PESTEL analysis. SWOT Analysis SWOT analysis analyses the strengths and opportunities within an organisation with the aim of maximising on these factors while reducing the threats and weaknesses factors. The following is analyses of Flight Centre based on SWOT Analysis: Strengths Presence in numerous countries Subsequent profits and revenues making it easier for the company to enter into new markets Strong social responsibility framework Appropriate business model e.g. discount flight specialist Weaknesses Dependent on agency based operations that is risky in a dynamic business Opportunities Expansion into other markets such as in Latin America and Africa because of developments within this region Enter strategic and beneficial alliance and collaboration with other agencies and airlines Threats Competition – numerous airlines are forming their own bureaus and agencies Environmental awareness and sustainability legal requirements e.g. carbon trading Disease outbreak wars and terrorism PESTEL Analysis PESTEAL analysis allows preparation of results associated with environmental scanning. PESTEL stands for political, economic, social, technological, environmental and legal factors. The following are PESTEL analysis of Flight Centre: Political The company is located in Australia, and Australia is a stable and developed country (André, 2007). The government is run based on a developed constitution and the government has clear and specially maintained foreign policy that champion for high quality relationship. The country has developed positive relationship with many countries, creating an avenue for Flights Centre to operate effectively. This is illustrated through the numerous branches of Flight Centre in United States, United Kingdom, China, India, New Zealand, Hong Kong and South Africa (Flight Centre, 2013). Therefore, Flight Centre is politically placed to succeed in its operations. Economic Flight Centre financial and economic records illustrates yearly growth in revenues and profits but in 2005 was the only year wherein annual profit declined (Roth, 2012). The revenues for 2005 were $6.9 billion while the profit was &67.9 million. In 2006, the Flight Centre proposed for privatisation but the plans tumbled in February 2007 because of misunderstanding with Lazard Investment Bank even though most of the shareholders were comfortable with privatisation plans (Johnson, 2011). In 2007, Flight Centre reported a profit of $174 million, in 2008, a profit of $201 was reported, and in 2009, a profit of $40.4 million was reported. In addition, in 2011, a profit of 198.5 million was reported while in 2011 a profit of $213 million was reported. These data illustrates the profits that the organisation has been making (Flight Centre, 2013). Moreover, the economic position of the world after the subprime housing problem in 2008 in United States has stabilised and business is booming. In addition, there are frequent events held across Australia such as wines and festivals have increased the number of people moving around within the country (Miller, Vandome and McBrewster, 2011). Social Flight Centre understands the importance of the society in driving the success of the business. Flight Centre is located in different countries but most strategies, procedures and structures are formulated at its headquarters in Australia (Flight Centre, 2013). The policies champions for corporate social responsibility platform and the organisation has participated in numerous social related projects. For example, The Flight Centre Foundation is the social pillar and have assisted Queensland’s floods victims, urban centre earthquakes in New Zealand and already accumulated funds to support social related projects. In addition, the purpose of Flight Centre is to open the globe through incorporating tour operators and suppliers and championing visitation requirements. Moreover, Flight Centre promotes and champion engagement that is accountable with the aim of providing vocational choices towards sustaining generations that would come (Miller, Vandome and McBrewster, 2011). Through the process, the Flight Centre formulates and implements measures around environmental and social causes, as well as volunteering choices. Technology Technological advancement has provided numerous platforms for Flight Centre to advance their operations. The Flight Centre has developed a high-density video platform that has significantly improved video conferencing to substitute on frequent business travel (Kidman and Feher, 2012). The company’s website, flightcentre.com, operates based on agency approach resulting in huge annual benefits. For example, the web site sales in New Zealand was $639, in Australia was $4.4 billion, Canada was $415 million, South Africa was $365 and in United Kingdom was $909 million (Flight Centre, 2013). These data illustrates how technology has played an important role in advancing business sales and operations within the Flight Centre. In addition, numerous payments methods such as PayPal, Payoneer and other Internet based payment methods have contributed to positive developments in business and sales at Flight Centre (Miller, Vandome and McBrewster, 2011). Environment Environmental conservation and sustainability is core within Flight Centre strategies. The organisation has initiated an Environmentally Sustainable Design framework in developing its retail shops across the countries that they are located. Some important information in this framework include fit-out materials, waste management, fittings and water fixtures, equipment, lighting and signage. Additionally, Flight Centre has encouraged sustainability of the environment through reduction of its waste. The can be achieved through printing information only when required, ensuring recycling bins are accessible and available, reducing on packaging, encouraging double side copying (Miller, Vandome and McBrewster, 2011). Moreover, Flight Centre encourages utilisation of unbleached paper and encouraging the use of recycled products. Flight Centre has reduced subscriptions to trade journals, periodicals and magazines while also encouraging online publication to reduce on waste. The company also donates old computers and phones to charities and other organisations for reusing. Legal Flight Centre has positioned itself to acquisition of numerous entities such as the employment agency in 2008. The aim of such approach is to encourage the employees to work within moral behaviour and trust as well as compliance with applicable rules and laws (Flight Centre, 2013). Every employee is required to work within the corporate policies and directives to prevent litigations and other challenges associated to inappropriate operation of business. Organisation’s Environment on Management Style The internal and external factors are important in operations at Flight Centre and it is appropriate for the management to incorporate these factors into operations at Flight Centre. The factors are analysed from three perspectives, which are ethics and corporate social responsibility, planning and controlling. These factors are analysed Ethics and Corporate Social Responsibility The Flight Centre has concentrated their sustainability and corporate social responsibilities to regions around Australia. It is important for Flight Centre to expound on the CSR reaching societies that are not only within their centres of operations. The Flight Centre Foundation should formulate a model that creates a positive image of the organisation. This can be achieved through diversification of their social offerings towards fulfilling environmental, economic and social requirements. Planning The Flight Centre management should formulate and implement strategies to counter the threats and weakness and also maximising on the strengths and opportunities that are available (Hempstead, 2012). The Flight Centre should expand and diversify their products and services offering with the aim of increasing their consumer base while also ensuring the profits continues to increase. Additionally, Flight Centre should enter into business deals and collaboration towards increasing the customer base and improve on its profit generation. Controlling Controlling within Flight Centre is important because it is easier to pinpoint errors and to correct these errors with the aim of making the business become more profitable (Flight Centre, 2013). The aim of controlling is to prevent the corporate policies and objectives are followed to the later fulfilling any standards that have been set. Flight Centre should follow its policies especially on ethical and corporate social responsibility to create a positive image to the society (Parker, 2012). In addition, the company should ensure the employees follow policies and rules with the aim of preventing the organisation from negative publicity. These approaches ensure the profitability and revenue creation within the organisation is sustained. Conclusion Flight Centre is a business that has its headquarters in Australia and has numerous branches across the world. The internal and external environment is positive to the company and the platform in which the organisation generates revenues. From the data, it is evident Flight Centre has never made a loss illustrating the positive operational strategies. Nevertheless, the Flight Centre should monitor planning and controlling with the aim of increasing the business benefits while positive outlook for the business. References André, S. (2007). 'Retail’, in Dick, H. & Merrett, D. (eds.), The Internationalisation Strategies of Small-Country Firms: The Australian Experience of Globalisation, Edward Elgar: Cheltenham, UK, pp.175–194. Flight Centre. (2013). Home. Available at http://www.flightcentre.com.au/about-us [Accessed on 26th August 2013] Hempstead, A. (2012). Moon Atlantic Canada: Nova Scotia, New Brunswick, Prince Edward Island, Newfoundland & Labrador. Toronto: Avalon Travel Johnson, M. (2011). Family Village Tribe: Revised and Updated 2013. Sydney: Random House Australia Kidman, M., and Feher, A. (2012). Master CEOs: Secrets of Australia's Leading CEOs. Victoria: John Wiley & Sons Miller, F., Vandome, A., and McBrewster, J. (2011). Flight Centre. Melbourne: International Book Marketing Service Limited Parker, D. (2012). Service Operations Management: The Total Experience. London: Edward Elgar Publishing Roth, M. (2012). Top Stocks 2013: A Sharebuyer's Guide to Leading Australian Companies, 19th Ed. London: John Wiley & Sons Read More