An analysis of a selected aviation company's competitive environment in South Africa
Abstract
Competitiveness and gaining a sustainable competitive advantage are very important factors when analysing the success of companies involved in the aviation industry in South Africa. The success of these companies will depend on their ability to maintain technological capabilities in the areas of human resources and product development. Global aviation currently is concentrated in a few countries, with the USA being the largest contributor to an industry which is regarded as one of the fastest globalizing industries in terms of market structure and production systems. In South Africa, companies have managed to develop skills in aviation manufacturing. The opportunities that will be created, owing to changes in global production chains, will enable South African companies to establish themselves further as global suppliers. The aviation industry contains high risks, especially because it is considered to be the industry which acts as a driver for innovation. Complexity of production, the capital-intensive nature and high risks involved in developing new products and services have linked the industry to inevitable political influence and support. The industry can broadly be divided into two main sectors: military and commercial. Analysts predict that opportunities in the global aviation markets in future will increase considerably. This is attributed to more Asian, African and Latin-American regions capitalizing on opportunities that exist mainly within the commercial sector. They will form strategic alliances which will enable them to perform on low-cost platforms and offer exceptional services to major players in the aviation sector. To capitalize on these opportunities, companies need to analyse their external and internal environment. The main objective of this study is to analyse and to evaluate the competitive environment of a selected aviation company, to ensure that the best strategy is chosen and adopted and to confirm that the company can create and sustain a competitive advantage over competitors. The planning tools utilized in this study are the PEST and SWOT analyses. Both have been used in the strategic planning process of many other firms. These analyses have proved to be the key element needed to formulate an action plan to be and to stay competitive in the aviation industry. This study evaluates both of these planning tools and applies them to the company chosen for this case study.