Responding to a changing external business environment
An United Airlines case study

Page 0: Introduction

Many business organisations operate in complex business environments that can be hard for them to fully understand and impossible for them to fully control. Whereas internal factors within businesses can generally be managed and dealt with effectively, external factors cannot be controlled in the same way. The full impact of these external factors, which can be devastating for a business, may also...
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Page 1: United Airlines

United Airlines was formed in 1927 from four airlines: Boeing Aeroplane Company, National Air Transport, Varney and Pacific Air Transport. From being predominantly a USA domestic carrier, United Airlines expanded into international routes to become the world's second largest air carrier. With hubs in Chicago, Denver, Los Angeles, San Francisco, Washington D.C. and key international gateways in...
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Page 2: Assessing the external environment

One useful way of assessing an organisation's external environment involves grouping forces into five areas using a SLEPT analysis. A recent analysis of factors affecting United Airlines produced the following:Social influencesMany UK travellers fly frequently to various destinations. Because they have plenty of choice and also know something about key world issues and events, their travel...
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Page 3: Meeting the external challenges

The SLEPT analysis illustrates the complexity and uncertainty of the airline environment. To handle this, United Airlines must itself continually change and evolve to ensure that it remains the carrier of choice, based upon its leading position as a major innovator. Only then will sufficient customers continue to prefer United Airlines and remain loyal to it. Whilst ticket prices certainly...
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Page 4: The importance of marketing

Market orientation lies at the heart of United's recovery operation. Its Chief Executive believes that although hard times may make reductions in the labour force inevitable, and may also lead to adjustments to its aircraft fleet and to the balance between aircraft purchase and aircraft leasing, marketing activities should not be reduced. According to the UK's Chartered Institute of Marketing...
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Page 5: Conclusion

This Case Study illustrates that if decision takers know and understand many of the influences and changes in their own business environment, they can use this data to make key decisions that help counter many of the challenges and threats that they face. It shows how United Airlines has used marketing as a strategic tool to move the organisation forward and to provide it with a series of...
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