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Submitted by:
Muskan Sharma
Roll No: 281031
Assignment 3
Case Analysis
China Eastern Airlines (CEA):
Strategic pathway to going global

Case Description: China Eastern Airlines (CEA) is a state-owned enterprise (SOE) in China's
aviation industry. To be internationally competitive, it sought out international investors such as
SIA in 2007 and Delta in 2015.
The three major things that were to be analyzed include:
 What was the strategic intent of CEA behind accepting the deal with Delta Airlines?
 In what ways would CEA and Delta benefit in the long run?
 If CEA would have accepted the deal with SIA, would it have been beneficial in
increasing internationalization for the company?
CEA wanted to expand globally and exploit the global market.
Delta Airlines:
It can tap into the Chinese market and has CEA which is experienced in that market and build a
synergy. As seen in the AFK deal, delta also got a seat on the board.
Delta airline will give them more exposure to overseas market as seen in the case too that the
Chinese eastern air holding announced investment in Air- France KLM through which Delta and
Chinese eastern air holding also got a seat on the board.

PESTEL Analysis

Political Restrictive policies in respect to foreign ownership prior to

2003 onwards, gradually the liberal policies were introduced
which encouraged private capital injection, internationalization,
non-government ownership and provided space for the new
Economic In 2006, CEA suffered great losses because of the increasing
operating cost. Afterwards, policies were liberalized encouraging
foreign investment which was key strategic decision for growth
and expansion of CEA. Also, the financial crisis in 2008 also
impacted CEA earnings.

Social Growing population and untapped potential for tourism

Technological Prior to the Strategic investments CEA did not have the advanced
technology to support the growth hence its operations were also
limited. However, they focused on improving their processes
with merger with Delta.

Environmental Concerns towards the environment will enhance the business

image. Incorporating environment goals along with the business
objectives will also count for corporate social responsibility.
Lately, CEA has been focusing on implementing successful route
optimization and low carbon travel.

Legal CEA should keep its focus on the various Labor Laws,
Discrimination Laws, etc. in becoming a successful global
The various in the national and international laws is also an area
of concern during merger or acquisition activities