China Eastern Airlines Corporation Limited SWOT Analysis / Matrix

Business Essays, Term Papers & Research Papers

SWOT analysis is a strategic planning tool that can be used by China Eastern Airlines Corporation Limited managers to do a situational analysis of the organization . It is a handy technique to map out the present Strengths (S), Weakness (W), Opportunities (O) & Threats (T) China Eastern Airlines Corporation Limited is facing in its current business environment.

The China Eastern Airlines Corporation Limited is one of the leading organizatations in its industry. China Eastern Airlines Corporation Limited maintains its prominent position in market by carefully analyzing and reviewing the SWOT analysis.  SWOT analysis a highly interactive process and requires effective coordination among various departments within the firm such as – marketing, finance, operations, management information systems and strategic planning.


Order Now - China Eastern Airlines Corporation Limited SWOT Analysis
Check out- China Eastern Airlines Corporation Limited PESTEL / PEST & Environment Analysis
Article continues after advertisement


The SWOT Analysis framework facilitates an organization to identify the internal strategic factors such as -strengths and weaknesses, & external strategic factors such as - opportunities and threats. It leads to a 2X2 matrix – also known as SWOT Matrix.

The Strengths-Weaknesses-Opportunities-Threats (SWOT) Analysis / Matrix enables the managers of the China Eastern Airlines Corporation Limited to develop four types of strategies:

• SO (strengths-opportunities) Strategies
• WO (weaknesses-opportunities) Strategies
• ST (strengths-threats) Strategies
•  WT (weaknesses-threats) Strategies

SWOT Matrix Strategies Objective

The core purpose of SWOT matrix is to identify the strategies that a firm can use to exploit external opportunities, counter threats, and build on & protect China Eastern Airlines Corporation Limited strengths, and eradicate its weaknesses.

Step by Step Guide to China Eastern Airlines Corporation Limited SWOT Analysis

Strengths of China Eastern Airlines Corporation Limited – Internal Strategic Factors

As one of the leading companies in its industry, China Eastern Airlines Corporation Limited has numerous strengths that enable it to thrive in the market place. These strengths not only help it to protect the market share in existing markets but also help in penetrating new markets. Based on Fern Fort University extensive research – some of the strengths of China Eastern Airlines Corporation Limited are –

Read - China Eastern Airlines Corporation Limited Porter 5 Forces Analysis & Industry Analysis
Article continues after advertisement

• Reliable suppliers – It has a strong base of reliable supplier of raw material thus enabling the company to overcome any supply chain bottlenecks.
• Strong Brand Portfolio – Over the years China Eastern Airlines Corporation Limited has invested in building a strong brand portfolio. The SWOT analysis of China Eastern Airlines Corporation Limited just underlines this fact. This brand portfolio can be extremely useful if the organization wants to expand into new product categories.
• Highly successful at Go To Market strategies for its products.
• Strong dealer community – It has built a culture among distributor & dealers where the dealers not only promote company’s products but also invest in training the sales team to explain to the customer how he/she can extract the maximum benefits out of the products.
• Strong Free Cash Flow – China Eastern Airlines Corporation Limited has strong free cash flows that provide resources in the hand of the company to expand into new projects.
• High level of customer satisfaction – the company with its dedicated customer relationship management department has able to achieve a high level of customer satisfaction among present customers and good brand equity among the potential customers.
• Superb Performance in New Markets – China Eastern Airlines Corporation Limited has built expertise at entering new markets and making success of them. The expansion has helped the organization to build new revenue stream and diversify the economic cycle risk in the markets it operates in.
• Highly skilled workforce through successful training and learning programs. China Eastern Airlines Corporation Limited is investing huge resources in training and development of its employees resulting in a workforce that is not only highly skilled but also motivated to achieve more.

---

Weakness of China Eastern Airlines Corporation Limited – Internal Strategic Factors

Weakness are the areas where China Eastern Airlines Corporation Limited can improve upon. Strategy is about making choices and weakness are the areas where a company can improve using SWOT analysis and build on its competitive advantage and strategic positioning.

Article continues after advertisement

• There are gaps in the product range sold by the company. This lack of choice can give a new competitor a foothold in the market.
• The profitability ratio and Net Contribution % of China Eastern Airlines Corporation Limited are below the industry average.
• Organization structure is only compatible with present business model thus limiting expansion in adjacent product segments.
• Investment in Research and Development is below the fastest growing players in the industry. Even though China Eastern Airlines Corporation Limited is spending above the industry average on Research and Development, it has not been able to compete with the leading players in the industry in terms of innovation. It has come across as a mature firm looking forward to bring out products based on tested features in the market.
• Days inventory is high compare to the competitors – making the company raise more capital to invest in the channel. This can impact the long term growth of China Eastern Airlines Corporation Limited
• Financial planning is not done properly and efficiently. The current asset ratio and liquid asset ratios suggest that the company can use the cash more efficiently than what it is doing at present.
• High attrition rate in work force – compare to other organizations in the industry China Eastern Airlines Corporation Limited has a higher attrition rate and have to spend a lot more compare to its competitors on training and development of its employees.

Opportunities for China Eastern Airlines Corporation Limited – External Strategic Factors

Article continues after advertisement

• Government green drive also opens an opportunity for procurement of China Eastern Airlines Corporation Limited products by the state as well as federal government contractors.
• New environmental policies – The new opportunities will create a level playing field for all the players in the industry. It represent a great opportunity for China Eastern Airlines Corporation Limited to drive home its advantage in new technology and gain market share in the new product category.
• Opening up of new markets because of government agreement – the adoption of new technology standard and government free trade agreement has provided China Eastern Airlines Corporation Limited an opportunity to enter a new emerging market.
• New trends in the consumer behavior can open up new market for the China Eastern Airlines Corporation Limited . It provides a great opportunity for the organization to build new revenue streams and diversify into new product categories too.
• Lower inflation rate – The low inflation rate bring more stability in the market, enable credit at lower interest rate to the customers of China Eastern Airlines Corporation Limited.
• Stable free cash flow provides opportunities to invest in adjacent product segments. With more cash in bank the company can invest in new technologies as well as in new products segments. This should open a window of opportunity for China Eastern Airlines Corporation Limited in other product categories.
• Economic uptick and increase in customer spending, after years of recession and slow growth rate in the industry, is an opportunity for China Eastern Airlines Corporation Limited to capture new customers and increase its market share.
• Decreasing cost of transportation because of lower shipping prices can also bring down the cost of China Eastern Airlines Corporation Limited’s products thus providing an opportunity to the company - either to boost its profitability or pass on the benefits to the customers to gain market share.

Threats China Eastern Airlines Corporation Limited Facing - External Strategic Factors

• The demand of the highly profitable products is seasonal in nature and any unlikely event during the peak season may impact the profitability of the company in short to medium term.
• Intense competition – Stable profitability has increased the number of players in the industry over last two years which has put downward pressure on not only profitability but also on overall sales.
• The company can face lawsuits in various markets given - different laws and continuous fluctuations regarding product standards in those markets.
• New technologies developed by the competitor or market disruptor could be a serious threat to the industry in medium to long term future.
• As the company is operating in numerous countries it is exposed to currency fluctuations especially given the volatile political climate in number of markets across the world.
• Liability laws in different countries are different and China Eastern Airlines Corporation Limited may be exposed to various liability claims given change in policies in those markets.
• Growing strengths of local distributors also presents a threat in some markets as the competition is paying higher margins to the local distributors.
• Shortage of skilled workforce in certain global market represents a threat to steady growth of profits for China Eastern Airlines Corporation Limited   in those markets.

Limitations of SWOT Analysis for China Eastern Airlines Corporation Limited

Although the SWOT analysis is widely used as a strategic planning tool, the analysis does have its share of limitations.

• Certain capabilities or factors of an organization can be both a strength and weakness at the same time. This is one of the major limitations of SWOT analysis . For example changing environmental regulations can be both a threat to company it can also be an opportunity in a sense that it will enable the company to be on a level playing field or at advantage to competitors if it able to develop the products faster than the competitors.
• SWOT does not show how to achieve a competitive advantage, so it must not be an end in itself.
• The matrix is only a starting point for a discussion on how proposed strategies could be implemented. It provided an evaluation window but not an implementation plan based on strategic competitiveness of China Eastern Airlines Corporation Limited
• SWOT is a static assessment - analysis of status quo with few prospective changes. As circumstances, capabilities, threats, and strategies change, the dynamics of a competitive environment may not be revealed in a single matrix.
• SWOT analysis may lead the firm to overemphasize a single internal or external factor in formulating strategies. There are interrelationships among the key internal and external factors that SWOT does not reveal that may be important in devising strategies.

Article continues after advertisement

Weighted SWOT Analysis of China Eastern Airlines Corporation Limited

In light of the above mentioned limitations of the SWOT analysis / matrix, corporate managers decided to provide weightage to each internal strength and weakness of the firm. Organizations also assess the likelihood of events taking place in the coming future and how strong their impact could be on company's performance.

This method is called Weighted SWOT analysis. It is better than doing simplistic SWOT analysis because with Weighted SWOT Analysis China Eastern Airlines Corporation Limited managers can focus on the most critical factors and discount the non-important one. It also solves the long list problem where organizations ends up making a long list but none of the factors deemed too critical.

Limitation of Weighted SWOT analysis of China Eastern Airlines Corporation Limited

This approach also suffers from one major drawback - it focus on individual importance of factor rather than how they are collectively important and impact the business holistically.

Buy Custom Essay and Term Paper on SWOT Analysis / Matrix , Weighted SWOT Analysis of China Eastern Airlines Corporation Limited

Example of Weighted SWOT Analysis

You can email us to get an example document of Weighted SWOT analysis.

SWOT Worksheet & Template

If you like to do your own SWOT analysis or want to make your own Weighted SWOT SWOT matrix then feel free to download Fern Fort University SWOT Analysis Template.

References / Citations & Bibliography

• M. E. Porter, Competitive Strategy(New York: Free Press, 1980)
• A. D. Chandler, Strategy and Structure (Cambridge, Mass.: MIT Press, 1962)
• O. E. Williamson, Markets and Hierarchies(New York: Free Press, 1975);
• L. Wrigley, Divisional Autonomy and Diversification (PhD, Harvard Business School, 1970)
• R. E. White, Generic Business Strategies, Organizational Context and Performance: An Empirical Investigation, Strategic Management Journal7 (1986)