Lufthansa’s Financial Strategy|Macro-environment (PESTLE)

External environment is a critical factor in attainment of Lufthansa’s financial strategy. Political and economic factors for instance affect the monetary policy that the government adopts which could either stabilize the exchange rates between two regions or lead to wide fluctuations. Legal factors such as labor laws and union related legal obligations also influence the cost of labor hence factor into the overall operational costs of the entity. Social aspects may also impact on the revenue earning capacity of the entity with activities such as sporting tournaments providing opportunities for the company to generate more revenues from increased demand for transportation services. Social aspects also could influence customers’ choice of the flight provider where alternatives that do not vary widely in other aspects such as fares, and comfort are available. Further technological advancements provide the opportunity for the entity to not only pursue cost-reduction alternatives but also brings along threats such as safety concerns and information privacy breaches. Go to part 6 here.

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