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TABLE OF CONTENT
LETTER OF TRANSMITTAL ................................................................................ 3 ACKNOWLEDGEMENT .......................................................................................4 INTRODUCTION .................................................................................................. 5
BRIEF HISTORY .................................................................................................................... 6 TOWS MATRIX ...................................................................................................................... 7 EFE MATRIX.......................................................................................................................... 8 IFE MATRIX ........................................................................................................................... 9 OUTCOME TOWS MATRIX ..................................................................................................10
CONCLUSION .................................................................................................... 11
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LETTER OF TRANSMITTAL
Saturday, July 16, 2011 Mr. M. A. Jan Strategic Management BIZTEK, Karachi.
Respected Sir, Here is the assignment you have assigned us in the course of Strategic Management. This assignment is based on to the information about IFE and EFE Matrix.
This report also gives detailed information regarding the IFE and EFE Matrix of Pakistan International Airlines.
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ACKNOWLEDGEMENT
Dear Reader: First of all we would like to thank Allah Almighty for guiding us in making this assignment in the accomplishment of the term assignment we are grateful to our parents, We would like to take this opportunity to thank our instructor Mr. M. A. Jan who made this assignment possible by providing his unconditional guidance and cooperation throughout the semester.
Once again we are thankful and look forward for such support in future.
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INTRODUCTION
External Factor Evaluation (EFE) matrix method is a strategic-management tool often used for assessment of current business conditions. The EFE matrix is a good tool to visualize and prioritize the opportunities and threats that a business is facing. The EFE matrix is very similar to the IFE matrix. The major difference between the EFE matrix and the IFE matrix is the type of factors that are included in the model. While the IFE matrix deals with internal factors, the EFE matrix is concerned solely with external factors. Internal Factor Evaluation (IFE) matrix is a strategic management tool for auditing or evaluating major strengths and weaknesses in functional areas of a business IFE matrix also provides a basis for identifying and evaluating relationships among those areas. The Internal Factor Evaluation matrix or short IFE matrix is used in strategy formulation.
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BREIF HISTORY
Birth of a Nation, Birth of an Airline Pakistan International Airlines is the only Government owned aircraft carrier in Pakistan. PIA has started its operation in 1955 and since then its running their aircrafts in inland as well as to all destinations. There are total 18500 employees working in PIA. Its a semi Govt. organization with 80% government owned and 20% private. For last several decades PIA is giving continuous losses because of decreasing market size and new competitors threats in market. Competitors threats are not the only threats its also getting threats from its internal environment. Recently PIA has already closed its non profitable routes to different destinations and since then its getting business threats from his internal employees to start those non profitable routes. Due to the huge government influences its very difficult to make PIA in profit.
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1. 2. 3. 4. 5. 6. 7. 8.
There are 8 steps to calculate TOWS Matrix: List key external opportunities. List key external threats. List key internal strengths. List key internal weaknesses. Match # 3 with # 1 & record resultant SO strategies. Match # 4 with # 1 & record resultant WO strategies. Match # 3 with # 2 & record resultant ST strategies. Match # 4 with # 2 & record resultant WT strategies.
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Threats
Increase in International Oil Prices General Poverty Position and Inflation in country Excellent services of other competitors Bad Public image due to service New Airlines are offering cheap rates on some destinations Total
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Weaknesses
Behavior of Labor Union and Pilot Association Attitude of booking partners and agencies Liquor is not served Govt. hurdles and strategy making Public image Total
Rating 1 2 2 2 3
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WEAKNESSES W
1. Internal employees behavior 2. Attitude of partners & agents 3. Liquor not served 4. Govt. hurdles and strategy making 5. Public image
OPPORTUNITIES O
1. Very few major players 2. Monopoly in Hajj Season 3. Several routes are still open 4. Existing network strength
SO
- PIA can better their services with new aircrafts(S2,O1) - PIA can discount directly to customers on new routes (S1,O3) - PIA can start international courier with their existing network (S3,O4)
WO
- PIA can give Hajj incentive to its employee. (W1,O2) - PIA can serve Liquor on new international routes (W3,O3) - Hajj routes can open to private airlines to get better public image and get competition (W5,O2)
THREATS T
1. Hike in global oil prices 2. Poverty and inflation in country 3. Competitors good service 4. Competitors competitive fairs
ST
- PIA can book online their seats and cut off un-certainty to fly without passengers and give discounts on online sale (S1,T2) - PIA can extend SpeedEx internationally and get big revenue that will reduce its oil prices budget(S3,T1) - PIA can give discount on advance online booking so customers can get competitive rates. (S1,T4)
WT
- PIA can make strategy to purchase oil in future prices in off seasons to cut off uncertainty in oil prices (W4,T1) - PIA can make joint venture with international competitors to train their agents and reseller. (W2,T3)
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