Business and Management
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Introduction
When it comes to the company‘s future, senior management’s primary responsibility is to set the strategic direction by aligning the organization’s vision, mission, and values with evolving market trends and opportunities. In the case scenario, senior managers must assess the potential impact of increasing regional travel demand on NORTHEASTERN’s business model and develop corresponding strategic plans. According to Coleman et al. (2023), the project team should comprise individuals with diverse expertise, including executives from different departments, market analysts, and operational specialists. Despite the positive outlook on the regional travel demand, NORTHEASTERN faces several challenges. Firstly, the company faces uncertainties in the McKinsey report, such as changing passenger dynamics after COVID-19, which can jeopardize future operations. The witnessed competition from the established airlines entering the regional markets is another challenge, disrupting the company’s market share. Finally, the company faces internal resistance among management members, an issue that can impede proper decision-making and cause long-term jeopardy to the company’s sustainability.
The Framework the Company Needs to Use to Develop Its Strategic Plan for The Next Five Years.
SWOT analysis is appropriate for the company to design its future strategic plan. Phadermrod et al. (2019) explain that the tool works by analyzing a company’s strengths, weaknesses, threats, and opportunities that a particular company has in relation to the market. The company’s strengths are the strong brand name and customer loyalty in analyzing the NORTHEASTERN using the SWOT analysis tool. The company should, therefore, maximize this strength and establish a regional presence. The common weaknesses are limited network routes, and the company can invest in technology to mitigate this issue. The company also needs to seize the opportunity to increase the number of customers by inventing routes in areas that initially needed to have. Understanding the mechanism and principles of the tool allows the company to strategically implement the plan with a proper knowledge of the strengths and weaknesses and the possible opportunities.
The Useful Tools to Analyze the Current Company Situation and The Insights Gained from The Tools
PESTLE analysis, Porter’s Five Forces market research, and financial analysis are the most useful tools in the company’s case. PESTLE analysis provides an understanding of the external factors that create an opportunity or a threat to the company by identifying regulatory changes, economic trends, or societal shifts in the context of the company’s operations. Porter’s Five Forces analysis framework fosters the assessment of the competitive landscape between airlines by examining the purchase rates, the nature of the imposed threats by the new entrants, the threat of substitutes, and the level of rivalry among competitors (Bruijl, 2018). Through methods like surveys and focus groups, market research offers vital information relating to the customer’s preferences, trends, and competitor strategies to allow the company to tailor specific decisions based on the customers’ demands and needs. Financial analysis tools like financial statement trends provide insights into the company’s financial health to implement the needed strategies. Appropriate utilization of the tools allows the organization to identify the present status for effective implementation of cutting-edge strategies for plans.
Consideration Of Systems View Address Some of The Challenges
According to Estrada (2023), the top-of-form system view considers the organization a complex system of interconnected parts, where changes in one part can affect the entire system. Applying this perspective allows NORTHEASTERN to understand interdependencies and relationships within the company and its external environment. A proto example of this situation is during the assessment of the effect of increasing regional travel demand on the company’s customer base. In this case, the company must analyze its operational capacity and external factors like airport infrastructure, air traffic control systems, and regulatory frameworks, which are vital in determining customer demand effectively. This consideration allows for rectification of the factors affecting the customer’s needs in cases of any experienced challenges. Further, the systems view highlights the possible feedback loops to identify any negative effects, allowing the company to mitigate possible risks promptly (Estrada, 2023). Adopting the systems view can easily enhance the organization’s strategic planning process, allowing easy navigation in challenging situations.
The Value of The Gained Insights Through Analysis in Developing the Strategic Plan for The Next Five Years
The insights gained in the analysis help inform resource allocation decisions in the company. For example, if the market research findings reveal a rise in regional travel within a particular demographic segment or specific geographical region, the company can direct more resources towards expanding its presence in those areas, either by offering increased flight frequencies or adding new routes. The financial insights gained from the analysis can help the company identify regions with lower financial returns and implement appropriate strategies to curb the issue, propelling lower financial returns. Further identifying the lower-performance regions can redirect resources to enable a more sustainable approach to exploring alternative strategic options for maximum performance (Coleman et al., 2023). Through this resource alignment with the market opportunities and challenges, NORTHEASTERN can utilize its financial resources, labor, and other assets to maximize the returns and achieve its strategic targets in the next five years.
How Senior Management Needs to Go About Deciding What to Do
The approach of senior management in decision-making should be based on a thorough review of the available alternatives through the company’s set objective, as well as the benefits that are expected, the shortcomings, and the viewpoint of key stakeholders of the company. According to Coleman et al. (2023), senior management needs to rank choices that are consistent with the company’s objectives, visions, and opportunities. There also needs to be alignment of the plan on a uniform ground to prevent suboptimal decisions that may crop from personal biases and overconfidence. Senior management has to create an understanding, open environment to allow for any counter opinions and ideas. Openness makes it possible for counter ideas to be heard, which may be very important in reducing the risks of individual biases and overconfidence. The senior management is also responsible for an extensive risk analysis to achieve a unanimous implementation of the chosen plan (Coleman et al., 2023). By promoting an environment that embraces differences of perspectives and opinions, holistic decisions can be made holistic decisions for the overall success of the company.
Conclusion And Outlook
Allocation of the resources that will foster the success of the implemented strategy is the step that follows the development of the plan. The resources can be inclusive of financial support, provision of a determined workforce, and implementation of the needed technology to help the project succeed. Using the NORTHEASTERN company for this analysis, after the development of the plan for expanding the company to increase the customer base, the next step can involve the allocation of the needed resources and an efficient workforce to ensure that the plan comes to a completion. Senior management can ensure the successful implementation of a plan by conducting reviews and performance evaluations to gauge the progress of the plan. Further, the senior management can ensure the plan is implemented by creating a positive environment that allows for open communication and collaboration to reduce internal resistance during the plan’s implementation.
References
Bruijl, G. H. Th. (2018, June 7). The Relevance of Porter’s Five Forces in Today’s Innovative and Changing Business Environment. SSRN. https://papers.ssrn.com/sol3/papers.cfm?abstract_id=3192207
Coleman, F., Daehnick, C., Holecek, M., & Krishnan, V. (2023). Planning for uncertainty in commercial aerospace. 1–5. file:///C:/Users/user/Downloads/McKinsey%202023%20Planning%20for%20Uncertainty%20in%20Commercial%20Arospace%20(1)%20(1).pdf
Estrada, E. (2023). What is a Complex System, After All? Foundations of Science. https://doi.org/10.1007/s10699-023-09917-w
Phadermrod, B., Crowder, R. M., & Wills, G. B. (2019). Importance-Performance analysis based SWOT analysis. International Journal of Information Management, 44(12), 194–203. ScienceDirect. https://doi.org/10.1016/j.ijinfomgt.2016.03.009