Turkish Airlines Strategic Analysis

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Executive Summary

Turkish Airline is the major carrier that operates in Europe, Africa, Asia, and North American markets. It has experienced impressive performance in the market because of its market strategies. Easy Jet is currently one of the leading low-cost carries based in London but operates internationally. The airline companies operate in a highly competitive global market that has numerous other plays.

To achieve competitive advantage over their local and international rivals, these two firms have come up with several strategies. In this project, the researcher focused on the strategic analysis of Turkish Airline, comparing its operations to that of Easy Jet. First, both have differentiated its services from that of its competitors based on the safety and customer friendliness. Easy Jet goes a step further in ensuring that its clients are safe and comfortable when using the products. Easy Jet also charges a relatively low price for its services. The PESTEL analysis also identifies several environmental forces that have a direct impact on the operations of the two firms. The paper also looks at how the firms have used Blue Ocean Strategies to develop new paths in the market and come up with their niche in the market.

Key Areas of Research and Sources

In this study, the researchers had to identify key areas of research before commencing the study. The first area of interest was the internal environment of Turkish Airline (Aaker 2014). Using SWOT analysis, the researchers investigated to determine the firms strengths and weaknesses. The researchers looked at the strategies that the management of the company is using to manage the external threats and take advantage of the external opportunities.

The researchers also looked at the external environment of the firm both in their local and international market using PESTEL analysis. Political, economic, social, technological, ecological, and legal environmental forces both at national and international levels have been critically analysed in this study (Hawkins, Mothersbaugh, & Best 2012). The researchers used reliable sources of information to conduct this study. Books, journals, and other online sources were used to conduct this study.

Strategic Models

When conducting this study, it was important to come up with strategic models to help in the comparative analysis of the two airline companies. The global airline industry is highly competitive, and firms are trying to use different ways to gain market share against their rivals. The airline industry is also very unique compared with other industries because it is easily affected by numerous other environmental forces within the market. According to Aghazadeh (2015), each airline often tries to find ways of being unique to differentiate their products from that of their rivals, using various models of analysis made it possible to evaluate the two firms and make some fundamental comparisons critically.

SWOT Analysis

This was the first model that was used in this study. According to Alagöz and Ekici (2014), this model is often very critical when analysing a firms core competencies and resources that make it unique in the market. This model made it is possible to determine the core competencies of the airline. In our analysis, we realised that the airline had various strengths in its operations. The analysis revealed that while Turkish focused on comfort and safety of the passengers as its core competencies, unlike Easy Jet that focused on price competitiveness with the view of expanding its global operations.

It was also noticed that while the main weakness of Easy Jet was to its inability to capitalise in the rapidly expanding African market, the main issue at Turkish Airline is the limited capacity of the airline to have a successful penetration of the Asia-Pacific markets which are dominated by firms such as Emirates Airways.

Using this model, it was noted that the two firms face almost similar opportunities in the global market. For instance, the emerging technologies gave both firms impressive opportunity to improve their service to their customers in the market (Loon, Evans, & Kerridge 2015).

For instance, these firms can now make their air tickets available to their clients through their websites. The clients only need to visit the website, identify their route, book for the ticket, pay online, and they will be ready to make their travel on their chosen dates. It was also confirmed from the analysis that these two firms face almost similar threats in their national and global operations (Acar & Karabulak 2015). It was noted that stiff market competition is an issue that affects both Turkish Airline and Easy Jet because of the high number of airlines operating in the global market. The geopolitical issues such as the political instability in the Middle East were posing more threats to the operations of the Turkish Airline than they did to the Easy Jet.

Blue Ocean Strategy

Blue Ocean Strategy was another model that was reviewed in our study to find out how this firm was managing competition. According to Barbot, Alfonso, Malighetti and Redondi (2013, p. 11), Blue Ocean Strategy is a new way of thinking, a new strategic mind-set that charts a bold new path to winning the future. It goes beyond the competitive strategy tenets and demands for a shift from focusing on competition to the creation of new markets (Barney & Barney 2013).

The strategy renders competition irrelevant by creating a special niche for a firm that other competitors cannot attack. From the analysis, it was noted that both Turkish Airline and Easy Jet have been trying in their different ways to create new market space for themselves in the flooded aviation market. As Davies (2013) says, creating a niche in a market where products are almost similar is not easy. All the airline companies in the aviation market offer travel services as the primary product to their clients. Creating a niche means trying to find a new way of offering this standard product but in a very different manner. From our analysis, we noticed that Easy Jet has been trying to differentiate its products in several ways (Kim & Mauborgne 2015).

The first approach that this firm has taken is a low market price. Easy Jet charges the lowest price for its domestic air tickets. This is meant to help the firm create a pool of loyal customers. For the international travellers who are often forced to spend a lot of time on the planes, this firm has improved comfort for the travellers to reduce fatigue. It has also introduced entertainment services to ensure that clients do not get bored when they are on their long trips. For Turkish Airline, the main focus has been to enhance the security of its travellers, especially due to the terror concerns common in the region.

PESTEL Analysis

In our research, it was important to conduct an external environmental analysis of Turkish Airline. According to Daft and Albers (2015), PESTEL model is one of the most effective frameworks that help in analysing the external market. The political environment that affects the firm in the local environment was slightly different in the international environment. In the European and Americas markets, Turkish Airline enjoyed a stable political environment that does not directly interfere with the business community. However, in Turkey, it was noted that there were some political interferences (Airlines 2016).

Economically, Turkish Airline enjoyed a stable market where purchasing power in the local and international client was high because of the economic growth that has been witnessed in the recent past. The social environment favoured, especially the increasing popularity of tourism in the Middle East, has been of great benefit for this firm as it seeks to expand its operations.

Turkish Airline has benefited a lot from emerging technologies, as witnessed in our research. It was clear that Turkish Airline was taking advantage of the emerging technologies to lower its cost of operations, reach out to its clients more easily, and improve the entertainment for its customers. Ecologically, our study revealed that clients are becoming very keen on using airlines that are deemed to be environmentally friendly (Halpern & Graham 2015).

As such, it becomes necessary for the airline to embrace environmentally-sensitive strategies in its operations. The legal environment is another force that Turkish Airline has had to deal within the market. It has been necessary to ensure that it abides by the rules and regulations in each of the countries where it operates (Jamali 2015). This is to help avoid cases on litigation. Each country has specific regulatory policies that must be respected by every airline company that uses its space (Çelikdemir & Tukel 2015). Turkish Airline is forced to understand these regulations and abide by them.

Individual Key Conclusions and Findings Related to Strategic Theories and Models and the Practical Implications

This research project critically analysed the operations of Turkish Airways, making some comparisons with how Easy Jet operates. One of the major conclusions made was that the growing relevance of Istanbul as a regional hub offers this firm an impressive growth opportunities that it should learn how to take full advantage of to enhance its growth. This firm indeed has a bright future as a regional carrier, but the management can do more to improve its current performance. The strategic theories and models used have identified several strengths and weaknesses of this firm, as discussed above.

The management of Turkish Airline should find a way of taking advantage of its strengths to overcome its weaknesses, manage environmental threats, and take advantage of the existing opportunities (Airlines 2015). The external environmental scan done using PESTEL has revealed that other than the economic fluctuations and the geopolitical threat posed by the increasing instability in the Middle East, Turkish Airline has a highly supportive external environment. The size of the rich and the middle class in most of the regions where it operates continue to expand, offering it the opportunity to grow.

From the project, it was concluded that Turkish Airline needs to embrace sustainable growth. According to Gemici and Alpkan (2015), sustainable growth goes beyond experiencing rapid expansion in the market. It also involves having well-laid plans that will ensure that the current growth of the firm does not come to a sudden drop shortly. It focuses on how the firms strategies in the current market can protect its existence in the future market.

The firm currently uses low air ticket price as a way of attracting customers to its products. However, this strategy cannot be used as a long term strategy because it harms the profitability of the firm. Instead of this strategy, this firm can focus more on low-cost operations, as indicated in our analysis based on the models used. In this context, this firm will need to identify costs which do not translate to profitability and consider eliminating them as a way of streamlining the firms operations.

Through the reduction of the cost of operations, this firm will be increasing its profit margin in the market. The practical implications of these findings are that this firm will need to re-strategise its operations in the market and come up with mechanisms that will give it an edge over its rivals. It will need to embrace the emerging technologies, especially those that enable it to reduce its number of employees. For instance, it may emphasise more on online booking instead of having the clients coming physically to the firms premises to make their bookings. It will also be necessary, as identified in our study, for the firm to find celebrity endorsement or engage in sponsoring popular sports such as football to promote its brand in the market.

Key Issues and Conclusions and the Success or Failure of the Group-Team Endeavours

Our team did an excellent job of undertaking this research. It is important to identify several key issues, conclusions, successes and possible failures that the team had when undertaking this study. The main issue that the team faced was assigning tasks to individual members when starting the project. However, this issue was addressed after the initial meeting, where members freely expressed how they felt the project should be undertaken.

The main strength of this group was the interactive ability to listen to each members views and discuss them objectively. Everyone was committed to the group in terms of time and effort. Team members were able to understand one another and work as a unit in addressing various tasks in this project. We met several challenges, but the unity and determination of the members made it easy to overcome them.

It is important to appreciate that the team had some failures which are worth noting, although the weaknesses did not affect the outcome of the study (Paksoy 2015). The team was unable to get to interview one of the current or former employees of this firm. Since the data used were from secondary sources, the team wanted to have a simple interview with one of these current or former employees of Turkish Airline. Unfortunately, we did not succeed in achieving this. It meant that the team had to rely on the secondary sources of data from the literature that were reviewed. The team concluded, based on the analysis using various models, that Turkish Airline has the opportunity to grow. Still, sustainable development could only be achieved if the firm embraced the strategies and recommendations made in the project.

Way In Which Individual Contribution Impacted On Group Discussion

The success of the group project was primarily because of the contributions made by the individual group members. It is important to note that all the members were involved actively in the final discussions of all the components of the entire paper. However, during the data collection stage, tasks were divided among individual members. One member was tasked with the role of reviewing the background of both Turkish Airline and Easy Jet to help in providing the basis of the analysis. This was done by collecting relevant literature and reviewing the reports from the companies available on their websites or through any other relevant source. This participant had to prepare a report of the findings from this activity. Another member was assigned the task of conducting a review of Turkish Airways using SWOT model.

The analysis was to be conducted using available literature in the library and other reliable online sources. This firms core competence was to be determined about the performance of Easy Jet. This group member had to write a detailed report of the findings.

Another group member was assigned the role of conducting an environmental scan of this firm using the PESTEL model. This was an important analysis that required the participant to go beyond analysing the industry to analysing the entire forces that may affect operations of any firm in this industry. Just like the other group members, this student had to use available literature in the library and online sources. The student had to collect data from recent sources because these environmental factors keep changing. The student also wrote a detailed report about the findings from the external environmental scan.

It is from these individual contributions made by the group members that the team was able to have all the information that was needed for the discussion and in concluding the report. In the group, each of the members was allowed to present the findings to the members. After each presentation, members engaged in a debate to discuss these findings and ask relevant questions with the view of developing a comprehensive report. Each member had to support the findings with literature during the discussion to validate the claims. After a convincing discussion and harmonising of the information from all the members, the team proceeded to write the entire report. All the team members had to participate in this sensitive process of writing the final report.

According to Dursun, OConnell, Lei, and Warnock (2014), the success of a given team largely depends on the success of individual members in their respective areas of assignment. If the team members can coordinate closely and work as a unit, then chances of them achieving success are high. However, if the team fails to understand and appreciate the need to work together, then it may not possibly be successful (Evansb 2015). The success of our team is attributed to the ability of the members to work together and approach every task from a united front. The team faced challenges, but through the commitment, we were able to overcome them and develop a report that was based on facts from the available literature. Openness to members ideas was also important because it motivated objective debate.

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Turkish Airlines Strategic Analysis