SWOT Analysis Aeromexico

Opportunity:

When analysing which opportunities could be exploited by Aeromexico, we came to

the conclusion that most of these opportunities arose from the recent technological
changes in the world. The heavy use of technology in the airline industry is why the
technological factors are so important to understand. Improvements in technology
over the past few years means that aeroplanes are lighter which saves fuel and
increases speed. Increased technology has allowed airlines to be more lucrative as
they can offer safety and enhanced services. The development of social media has
allowed airlines to expand their marketing strategies and attract new customers.

The opportunity we will analyse in this SWOT analysis will be the social media
development.

Strength that exploits the opportunity:

Aeromexico is the biggest airline in Mexico with over 150 aeroplanes with national
and international flights. This strength can be used to exploit the opportunity because
of several reasons, the first, as they are the biggest airline they can invest more into
conducting a marketing strategy that will have a bigger impact than other airlines, the
second, as they are the airline that transports the most passengers in all of Mexico
they can use social media to collect data from customers and improve their service,
finally, they can use social media to maintain customer satisfaction and protect their
image.

Weakness that prevent the exploitation:

Aeromexico currently has a financial debt of 2,273 million pesos. This weakness can
prevent exploiting social media because Aeromexico has a financial obligation to pay
back the debts before investing the money elsewhere, like a social media marketing
strategy.

Plan of action to exploit opportunity:

In today's world, the importance of social media in business is growing at a rapid

pace because of the amount of people that use the sites and how frequently they
use them. Social media has become a necessity for firms and not using it can cause
the firm to loose a lot in potential revenue, because of this it is vital that Aeromexico
engages in a social media marketing strategy and although they have enormous
debts, they have to restructure their financial infrastructure to allow them to invest in
a social media marketing strategy and delay the payment of their debts.
Threat:

One of the biggest threats that Aeromexico has to face is the fact that with the arrival
of more airlines, thus more competition, they have had to lower their prices. The
airline industry is not considered to be a very profitable industry because they have
to pay for things such as the fuel, a hangar and pay for people’s accommodation in
case anything goes wrong.

The threat we will be analysing is the increase in competition.

Weakness that exposes the firm:

Aeromexico's financial debt amounts to 2,273 million pesos. The airline market is a
very competitive one, that the only way an airline can differentiate from another is
through price and quality. In recent years the number of price sensitive customers
has increased exponentially which means price is the most important factor for a
customer choosing a flight. This means that Aeromexico has to reduce its prices to
be able to enter into competition with the other airlines and therefore their revenue
decreases. This puts Aeromexico in a huge disadvantage because they have a huge
debt they have to pay back and the revenue they earn from flights keeps getting
lower and lower, as new competition arises.

Strength that protects:

The strength that protects Aeromexico from the increase in competition is their
customer loyalty and quality service. The first strength, loyalty, will help Aeromexico
protect themselves from new competition because customers value when an airline
constantly delivers on the quality of service, which will make the loyal customers
choose Aeromexico over another airline. The second strength, quality service,
means that the competition solely focuses on price and not service, on the other
hand, although Aeromexico might not be the cheapest, they are known to have one
of the best services in all of the airline industry, this might not be a priority for price
sensitive customers but for a customer segment that does care about service, they
will choose Aeromexico over the competition.

Plan of action to neutralise threat:

The plan of action for Aeromexico to beat the competition can consist of two different
paths, the first path is beating them at their own game and restructuring their entire
business in order to be able to lower their costs and compete with firms like Volaris
and VivaAerobus. On the other hand, they can do what they do best and focus on
having an airline with the highest quality service on the market and at the same time
focus more on the international flight market because the low cost airlines will likely
not compete in that market. We believe the second path would be more beneficial for
Aeromexico.