Strategic Planning

1 Introduction

The name ‘Lufthansa’ for millions of people is all about aviation and flying. This does not reveal the entire truth. The Lufthansa Group has a vast paradigm of businesses under the same roof. The core business of the Group is passenger transportation and the segment comprises Lufthansa Passenger Airlines, fully consolidated Swiss and SunExpress (founded in the month of April 2007, it is a joint venture between Lufthansa Group and Turkish airlines). Lufthansa also has shareholdings in BMI. Lufthansa is a founder member of Star Alliance (the leading airline grouping of the world) and has partnership with various other carrier services. As of 31 December 2007 the aviation segment of Lufthansa Group has 494 aircrafts.

The founding stone of the Lufthansa Group was laid in Berlin on 6 January 1926. This was merger between "Junkers Luftverkehr" and "Deutsche Aero Lloyd" (DAL). It was in 1933 that the company got its present name. Lufthansa Group is not a single ownership.

Lufthansa Technik, a segment of the Lufthansa Group, is a world leading MRO (maintenance, repair and overhaul) service provider. It provides services for the civil aircrafts. Hamburg is the MRO base and the main centers of maintenance are at Frankfurt and Munich. Lufthansa Technik has both direct and indirect stakes in 54 companies. The company has six different product divisions, which are Maintenance, Engines, Overhaul, Landing Gear, Components and VIP Completion. The Lufthansa Group also has an IT wing known as the Lufthansa Systems. This segment of the Group is a leading IT service provider for the aviation industry. It also provides infrastructure services to other sectors like Logistics companies, Banks and Financial organizations, Printing houses etc.

Lufthansa Cargo, another subsidiary of the Lufthansa Group, is a world leader in Logistics services and has its base in Kelsterbach. Owning 19 MD-11F aircrafts, Lufthansa Cargo provides airfreight services in 360 destinations across the globe. The services of Lufthansa Cargo has three product segments, temperature-sensitive products, valuable items and live animals.

When it comes to Airline Catering and Inflight Solutions, LSG Sky Chefs group (a sister body of the Lufthansa Group) can rightly be termed as a world leader with a staggering 30% global market share. LSG Sky Chefs group makes its presence felt in about 119 companies with 200 facilities across 47 countries. The group provides with foods, drinks, inflight services and other related services. The group is looking for expansion in Asia, Middle East and Eastern Europe.

Apart from these services, Lufthansa Group provides aviation insurance by the name of Delvag Luftfahrtversicherung AG. Flight training services for airlines is another subsidiary business of the Lufthansa Group. Lufthansa AirPlus is popular for providing business travel management solutions. This segment provides services and customized product to different companies and thereby simplifying the business travel management systems of these companies.

The standing pillars of the Lufthansa Group are Quality, Innovation, Reliability and Safety. Based on these the company aspires to continue to be one of the leading airlines in the world.

External Factors affecting an organization:

External factors are very important for organization as in many cases it have been revealed that the success of organization depends on its external factors. All external factors affecting a company which are mentioned here customers, shareholders, government, culture, weather and so on. We can see some macro or external factors in this global business which is uncontrollable for any multinational or other business organizations. The business researchers gave it a common name called PESTEL.

PESTEL ANALYSIS: According to Grant (1998), in order to identify the key success factors and the company’s opportunities and threats. In global business we can see some macro or external factors which are uncontrollable for any multinational or other business organizations. It is important to study environmental factors that affect the firm’s strategy on the industrial level. To do this, PESTEL analytical tool is applied.

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P-Political

E-Economical

S-Social

T-Technological

E-Environmental

L-Legal

PESTEL ANALYSIS

The PEST analysis provides the viable picture of the industry or market in which the organization functions. Following are the factors affecting the functioning of Qantas Airlines:

Political

The German aviation industry de-regulated in the year 1990 which gave birth to the competition among the airline companies. The liberal policy by the Australian Government has also welcomed the new entrants in the industry. The Australian Government also helped Lufthansa to merge with British Airways which in turn has reduced the wastage of resources, utilization and expansion of the network and earning revenues in European, Asia-Pacific and Transatlantic market (Narasimhan and Talluri, 2009).