I.

Company Background

As one of China's top three major state-owned air transportation companies,

China Eastern Airlines Corporation Limited (China Eastern) had built an international
brand image with a global influence. With the airline's unique Shanghai-based
globalization, China Eastern's strategy remained focused on expanding its global
footprint. In the face of growing competition from domestic and international rivals, China
Eastern strove to carry out cross-border business, strengthen its co-operation with
partners in the aviation industry, and accelerate its globalization process. Over the past
three years, China Eastern had introduced its "Pacific Plan" and made concerted efforts
in expanding its route network and optimizing transit opportunities in the North American
market

II. Statement of the Problem

With the implementation of the Belt and Road Initiative (a global development
strategy adopted by the Chinese government), what strategy should China Eastern use
to continue to expand its Shanghai-based globalization?

Marketing Objectives

III. Areas of Consideration

A. Porter’s Five Forces Theory

Threats of New ● Huge capital investment needed to start an

Entrants (Low) airline company
● High exit barriers

Threat of Substitution ● Presence of other modes of transportation

(Medium) within and outside China. People can travel
by land via Buses/Cars, and by sea via ships.
● However, airplanes prove to be the most
efficient and convenient way when travelling
long distance over a short period of time.

Bargaining Power of ● The airline industry relies on few suppliers of

Suppliers (High) aircraft (Boeing and Airbus), fuel (high-grade
oil), and human resources (pilots and flight
attendants)

Bargaining Power of ● There are plenty of customers in China and

Buyers (High) in the US and they have the ability to choose
whichever airline they want to fly with.
Because of this, airline companies must keep
their price competitive, offer discounts and
 promos in order to attract customers.
● Low switching costs due to the
advancements in technology which made
booking a ticket easier.

Existing Competition ● Presence of other major airlines such as Air

(High) China Limited and China Southern Airlines
Company Limited.
● There are also other minor airline companies
within China.

B. PESTEL Analysis

Political Factors 1. Strict regulations for the aviation industry. A

number of policies have been developed to
better safeguard passengers.

2. The Chinese government is facing increased

international pressure to comply with World
Trade Organization standards governing the
airline industry.

3. The airline sector is usually harmed by

insecurity or war circumstances that affect
specific countries. This is a significant barrier
because airlines will begin to lose consumers
in locations where security threats are high.

Economic Factors 1. Unpredictable currency rate.

2. The ongoing economic recession during this

pandemic has caused the travel market to
see its lowest period. Travelling in economy
and business classes has decreased.

3. Airlines were under pressure to keep up the

rising fuel prices.

Socio-Cultural Factors 1. Both traditional and social media are quickly

expanding. This trend can be used to
expand, sell and position its services.

Technological Factors 1. The aviation company also runs social

media advertising campaigns. Failure to be
 technologically knowledgeable can result in
client loss.

2. Customer expectations in the transportation

sector have changed as a result of the
advancement and widespread use of
mobile technologies.

3. Technological advancement, resulting in

increased speed and fuel efficiency.

Environmental Factors 1. Fuel is a significant industry expense, and

airlines must invest more in ecologically
friendly and fuel-efficient aircraft.

2. Climate change has an impact on the

aviation sector, as airlines are now compelled
to follow "green flying" procedures in order to
safeguard the environment.

3. The Chinese government has enacted

severe waste management regulations in
metropolitan areas.

Legal Factors 1. There are numerous rules governing air

traffic and passenger safety and security.
There are slew of rules requiring airlines to
provide safe travel as well as high-quality
services.

C. SWOT Analysis

STRENGTHS WEAKNESSES

● Online Sale Channels ● Brand awareness

advertisement and
promotional projects

OPPORTUNITIES THREATS

● Intense competition in the

Global Airline Industry
 D. SWOT Matrix

STRENGTH-OPPORTUNITIES STRENGTHS-THREATS

WEAKNESSES-OPPORTUNITIES WEAKNESSES-THREATS

IV. Alternative Courses of Action

Alternative Courses of Action Pros Cons

V. Conclusion
VI. Recommendation