Barriers to implementation of opportunities and marketing choice

Airlines all around the world are continuing to develop choices and strategies that can be used to increase on product offer, provision of better services, reduction in overall costs and enabling airline businesses to cope easily with challenges and competition within the same industry. Air Berlin has not been left out in its search to better its services, improve on product offer and further decrease its costs and this is evident in their talks with TUIfly. In as much as Air Berlin is paying more attention to quality of its products and services, there are certain social, economic, physical, political and technological barriers that may hinder success of its operations.

Competitive markets would be a fundamental barrier for Air Berlin’s expansion and is the major force behind obstacles to quality. Because there are many companies that have achieved success in the past and in the present in the aviation industry, Hoffman(2000) discusses that firms should strive to always make an effort to develop outstanding characteristics for the end users for them to distinguish themselves from the rest of industrial competitors. Teaming up with Etihad airways would be a perfect idea for Air Berlin but at the mention of Etihad airways, consumers are always drawn to previous successes of the business and would want to be fully associated with Etihad. Because Etihad airways has had a strong foundation ever since its inception, teaming up would far much beneficial to Etihad airways than it would be to Air Berlin.

To be able to achieve unlimited success in the aviation industry particularly in Air Berlin talks, it requires the management to have a competitive strategy. A competitive strategy according to Rostro & Grudzweski (2008) is necessary because every firm must be willing to take both offensive and defensive actions to be able to create a defendable situation. An important question that can be raised from this case study is ‘how can Air Berlin defend its competitive position when Etihad Airways later decide to pull out? From the case study above, it is evident that Air Berlin somehow relies on Etihad airline strategies to achieve success in the new airline plan. Cutting large fleets and reducing the number of employees to cut costs is not a competitive strategy for Air Berlin because having an extensive network and destination operations will require a combined effort for employees. A sustainable competitive advantage cannot be reached with this form of strategy. Looking at the case scenario for Air Berlin, it is evident that there is lack of customer focus. Most of its strategic plans revolve around making profit for the business and are not customer driven.O’Connelly & Williams (2005) discuss how competitive advantage be achieved when an organisation concentrated fully on customer related objectives and little of profit orientation for the organisation and therefore this opportunity might not be fully implemented.

National and international policies

Because of industrialisation and globalisation, airports and airplane operation business have been developed very close to calm residential areas. As part of the longstanding cooperation between Etihad and Air Berlin, it is equally obvious that the new operations are aimed at reducing secondary airports developed in non-business areas and move operational hubs to capital areas. Such a move provide Air Berlin with an opportunity to concentrate fully on primary points avoiding secondary hub distractions that might make it hard for them to fulfill their economic goals (Organisation for Economic Co-Operation and Development, 2009).

A fundamental objective of having airlines merge is for the purpose of encouraging local and international stakeholders to streamline and strengthen the manner in which they are able to work together (Aerospace Defense Security, 2010). Open Skies international policies liberalize regulations and rules of international aviation in order to develop a free airline industry.  Within the open skies regulation, aviation companies are required to have Bilateral Air transport agreement and a multilateral Air transport agreement. Air Berlin  in a bilateral agreement is required to have military personnel and two other states sign the Bilateral agreement while in Multilateral agreement, more than two contracting states are needed. Without these specifications, Air Berlin might fail to transport like it needs to.

PESTL ANALYSIS

Political

For successive growth, Air Berlin as discussed in the case study established close connections with the government which is of a higher concern in the success of its operations.

Economic

It is relevant to understand how economic opportunities with international and local policies are limited and this will be a key challenge in crippling the economy of Air Berlin especially with Open skies regulation. Since majority of airlines as well as Air Berlin has poor connections to the contracts needed, engaging legal processes will remain costly and hard for Air Berlin operations.

Socio-cultural

The establishment of Open skies regulation remains crucial in expansion operations of Air Berlin because Open skies regulation to some extent increase interdependency between firms making it hard to proper individually.

Technology

Depending on technology in the recent years had been a trend and will continue to be a trend in Air transport. Air Berlin is equally coming up with systems that will make flying comfortable and easier with advanced systems of communication that increase efficiency of its services.

Legal

Regulations and policies across the globe continue to rise making it hard for air transport to break through. For instance, Open skies regulation required Air Berlin to conform to the ever changing nature of regulations which might cripple different areas of operation.