Airline Industry Future Strategies

This assignment analyzes the future strategies of a prominent airline organization, British Airways. It delves into various aspects, including identifying impactful trends shaping the industry and proposing actionable strategies for British Airways to achieve a leading position. The document examines the company's current state and outlines potential approaches to enhance its competitiveness and growth within the dynamic aviation sector.

BUSINESS ESSENTIALS
Table of Contents

INTRODUCTION..............................................................................................................1
MAIN BODY.....................................................................................................................1
A) Brief Introduction of chosen organization and its competitors..................................1
B) Concept of Competitive advantage..........................................................................2
C) Various positioning strategies..................................................................................3
D) Various aspects related to competitive advantage..................................................4
E) Future strategies of British Airways..........................................................................6
F) Opinion regarding operation of business activity......................................................7
CONCLUSION................................................................................................................. 7
REFERENCES.................................................................................................................8

INTRODUCTION
In this modern era, business organizations conduct their business activities in an
effective manner so as to gain proficiency and productivity in prevailing market. Also,
management of companies are always desirous of forming different ways and strategies
so as to get their goals and objectives accomplished. In this report, concept of
competitive advantage is also discussed. Also, in this light it can be said that it is
necessary for the companies to analyse and assess its competitive position in
respective market place (Arasti, Zandi and Talebi, 2012). In this assignment, various
ways in regard to maintain competitive advantage by company namely British Airways,
which is one of the largest airline companies in UK, based on fleet size, are exhibited.
Furthermore, various concepts related to supply chain management, pricing, value of
brand, marketing and Human resource management are also demonstrated. In this
light, various reforms relating to above-mentioned particulars in related to cited
organization will also be given effect.
MAIN BODY
A) Brief Introduction of chosen organization and its competitors
In order to have a close analysis and brief knowledge on competitive advantage,
the company namely British Airways has been chosen. The cited organization is based
on waterside which is situated by its main hub at London Heathrow Airport. It serves
over 160 destinations which includes some domestic locations also (Brown, 2010). It is
also situated at London Stock Exchange along with FTSE 100 Index. It can be noted
that the company has various competitors such as Easy jet, Eastern Airways, Atlantic
airlines, Virgin Atlantis, Emirates Air France, Thomson Airways etc. It can be noted that
parent company of British Airways is International airlines group. On one hand, its total
revenue is £11,443 million, while on other hand, its closest rival Easy Jet has revenue of
£4.669 billion.
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Figure 1 Top 12 Airlines
B) Concept of Competitive advantage
Competitive advantage is a concept which permits a company to leave behind its
rivals or competitors. It includes various phases such as high grade ores and also a low
cost power source, geographic location, supply chain, Human resource management,
pricing, marketing, entry and exit barriers and also access to new technology etc. In this
light, it can be noted that these factors are helpful to analyse and assess position of the
company and its competitors in accordance to different standards raised and
established (Hair, 2015). Furthermore, competitive privilege can be obtained through
submission of better and effective value to clients of a particular organization.
In accordance with the terms of Michael Porter, there are two certain ways
through which competitive advantage can be gained. These can be characterised as
cost advantage and differentiation advantage (Woiceshyn, 2011). Managers and
leaders of business organization should aim to conduct proper analysis of their working
as well as its competitors.
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In other words, Competitive advantage is a concept which is related to
development and acquisition of series of attributes which permits an organization to
perform better than its rivalry companies. It aims at development of economy at better
level. So, in this regard there is a theory namely The Market Based View. In accordance
with this theory, factors of this theory and orientation of external market can be
considered as basic or primary factors of performance of a company. It also includes
various concepts laid down by positioning strategies of theories.
Figure 2Competitors of British Airways
Through the above diagram, it can be seen that there are 60 airlines which are
holders lower than 2.5% share. Among these, there is some percentage of Easy jet.
C) Various positioning strategies
Positioning is a concept which is evolved in a process of marketing of products
and services. It refers to a situation or place, which is occupied by a brand in mind of
the consumer (Wilson, 2014). Considering this, an organization, in order to locate or
position of goods, products, focuses upon distinctive characteristics of its respective
brand. They also attempt to build up appropriate and suitable image through operative
use of marketing mix (Our strategy and objectives, 2017). In this light, it can be said that
once a brand or a product has achieved a strong position in prevailing market area, then
it becomes very difficult to relocate it. Furthermore, it can be said that there positioning
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is one of the most important element of competitive advantage (Hsu, 2011). Also, it is
considered as a regular activity or strategy of market. Also, on other hand, positioning is
a technique in which concepts are recognised for each and every segment, which is
followed by selection and choosing the best alternative among best one. It should be
further communicated. Positioning strategies helps to structure its respective customers
which proves to be a major and important source in guiding towards a particular brand.
In the context of British Airways, the management in order to gain competitive
advantage, over its competitors, the management of the cited organization should focus
on to adopt various effective positioning skills and strategies so that it can achieve its
set goals and objectives. So, regarding this, various strategies have been prepared,
which are as follows:
 Quality of Price Approach: It is one of the strategies which is framed with a
viewpoint to deliver services by the management of company in a quality
manner. It can also be said that if quality will be maintained, then it’s customers
will be attracted towards it. In this regard, British Airways is desirous of rendering
quality services to its guests. Also, price should be reasonable, so that they can
be able to attain more customer satisfaction.
 Product users: It can be said that product user is one of the major technique
which is framed by British Airways to gain competitive advantage among its
competitors in prevailing market area (Kimbell, 2011). So, considering this,
British Airways frame their tactics by taking consideration into users of products
and services.
 Customer benefits: British Airways has framed strategies in respect to render
profits and good services to its customers. In this regard it can also be said that it
has formed policies and schemes which are advantageous for customers.
However, policies of Easy jet and Thomson airways are comparatively more
effective in an organization.
 Differentiation: It is considered as another strategy which has been used by
British Airways, which is used by companies in the aspect of setting themselves
apart from its competitors.
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D) Various aspects related to competitive advantage
There are several aspects and components which are related to competitive
advantage of a company. In regard to attain competitive advantage among all its rivalry
business entities, the company should consider the following aspects:
 Supply chain - A supply chain is a network between organisation and their
suppliers to provide and distribute specific products and services to customers.
Supply chain management is crucial process which can also result in lower costs
and in faster production also. The services which are provided in airline is both
from on-board and lounges also. In this, over 50 managers are supplying
approximately 900 on-board products e.g. passenger amenity, convenience
facilities and many more. They are organising and managing plans logistic so
that they can deliver goods to customers (Singh and Khanduja, 2012). They are
measuring customer value by ensuring British airways portfolio around the world.
With the help of supply chain management, the cited company can provide
effective services to customers at reasonable time period (Laudon and Laudon,
2011). Through this, the company can attract large number of customers more.
 Pricing – Pricing is an idea which depicts the meaning in which a business
organization sets out a cost of which it will make sale of its products and
services. It is also considered as a part of marketing plan formed by a business
institution. Also, pricing is a concept which can be treated as a basic feature of
financial modelling and also is a part of 4 Ps. In this direction, the manager of
British Airways has also formed a pricing strategy which lead them to gain
competitive advantage. The manager of cited business entity, are maintaining
their pricing policy to provide equal services to all customers. The customer can
also buy tickets from its base price without giving any extra value added profit to
other services providers. Economic pricing strategy is used by cited organisation
f9or providing low priced tickets to customers. Further, medium-pricing strategy is
used for those people who want some fringe benefits. Moreover, premium pricing
strategy is used for those people who love to like travel with high-class benefits
which are provided by airline company. These strategies will help to organisation
in maintaining their high standards and generating profits in competitive times. To
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maintain reasonable price for tickets, it can also be proved as successful story
also for cited business entity. The main objectives of pricing include
consideration of financial goals of an organization.
 Human resource – In British airways, human resource department is
responsible for recruiting and selecting high talented employees for organisation.
They have to see that whatever resources are using by business entity should be
used in appropriate manner. So, these resources can also be used in future (Li,
Lai and Wang, 2010). Along with this, they are also responsible for conducting
training session for existing and new employees so that they can understand
value of organisation. These training should be conducted in time period
whenever it is required, because it will help employees to provide high quality of
services to customers.
 Marketing – Cited business entity, is having strong market value where they can
attract large number of customers. The marketing objective of this frim is to grow
all its operation and make prominent part for their business. They are investing
huge amount in purchasing new aircrafts and reducing manpower which will help
them to reduce cost of services also. Along with this, they are also producing
new products on international flights and delivering best services to customers
(Mendling, Recker and Reijers, 2010). They are targeting those customers who
want to use these kind of services and through this, they can beat their
competitors in competitive market. However, marketing strategies such as
promotion, segmentation will help to organisation to target new customers.
 Brand value: It is a term which involves the concept related to value of
customers in financial terms, who will pay more for a particular brand. Also, in
other term it is related to value of a specific brand for an organization that makes
it. In regard to British Airways, the cited company through effective services
providing can crate brand value for its customers.
 Cost leadership: It is one of the competitive advantages of business, which
occurs in case when business is able to render similar kind of product to kits
competitors, but at a lower price. It can also be considered as an effective part of
competitive advantage as it enables an organization to manufacture goods and
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services at a lower cost with the help of perfection in process of manufacturing of
products.
E) Future strategies of British Airways
In order to meet its long term, aim and objectives, it is necessary to frame future
strategies and schemes by management of a company, which will enable it to achieve
success. It can be further noted that this task has been assigned to manager of
company. In concern to British Airways, takes into account several future strategies
which are as follows:
The management of cited organization aim to make its customers more comfortable
during their traveling (Linnenluecke and Griffiths, 2010).
 Also, the cited business entity will make its customers to travel through the globe.
In addition to this, new products and services will be offered to them so as to
attract themselves.
 Introduction of terminal 5 in is one of the attribute which is formed as a medium
to achieve operational efficiency.
 Furthermore, the management of cited organization mainly emphasise on
following g up of corporate social responsibility.
F) Opinion regarding operation of business activity
As per view, British Airways can use some of approaches like defensive
strategies, differentiation, alliances and other strategies which can enable the cited
organization to accomplish set goals and objectives. Also, I think, the cited Airlines
should increase their capacity of passengers and number of destinations. Along with
this, it can be said that it should increases their area of services, which will ultimately
lead British Airlines to success. Also, in accordance with my view, managers and
leaders of cited organization should set long term goals or objectives, which should be
accompanied by effective implementation and formulation of strategies to attain them.
CONCLUSION
From the above report, it can be concluded that business should form effective
strategies to accomplish set objectives. Also, in order to gain competitive advantage, it
can be considered that a business enterprise should form follow effective strategies,
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approaches etc. so as to have a close competition with its competitors. In this report,
analysis and assessment of British Airways is done with its closest rivalry companies
like easy jet, Atlantis Airlines. Emirates etc. Furthermore, various aspects in regard to
competitive analysis has also been elaborated. In this abovementioned assignment,
various future strategies in aspect of cited organization was also given effect. The
company should adopt various effective approaches so as to make it a leading one in
Airlines industry.
REFERENCES
Book and Journals
Arasti, Z., Zandi, F. and Talebi, K., 2012. Exploring the effect of individual factors on
business failure in Iranian new established small businesses. International
Business Research. 5(4). p.2.
Brown, R. E., 2010. Business essentials for utility engineers. CRC press.
Hair, J. F., 2015. Essentials of business research methods. ME Sharpe.
Hsu, W., 2011. The vocabulary thresholds of business textbooks and business research
articles for EFL learners. English for Specific Purposes. 30(4). pp.247-257.
Kimbell, L., 2011. Rethinking design thinking: Part I. Design and Culture. 3(3). pp.285-
306.
Laudon, K. C. and Laudon, J.P., 2011. Essentials of management information systems.
Upper Saddle River: Pearson.
Li, D., Lai, F. and Wang, J., 2010. E-business assimilation in China's international trade
firms: The technology-organization-environment framework. Journal of Global
Information Management (JGIM). 18(1). pp.39-65.
Linnenluecke, M. and Griffiths, A., 2010. Beyond adaptation: resilience for business in
light of climate change and weather extremes. Business & Society. 49(3).
pp.477-511.
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Mendling, J., Recker, J. and Reijers, H.A., 2010. On the usage of labels and icons in
business process modeling. International Journal of Information System
Modeling and Design (IJISMD). 1(2). pp.40-58.
Singh, B. J. and Khanduja, D., 2012. Essentials of D-phase to secure the competitive
advantage through Six Sigma. International Journal of Business Excellence.
5(1-2). pp.35-51.
Wilson, J., 2014. Essentials of business research: A guide to doing your research
project. Sage.
Woiceshyn, J., 2011. A model for ethical decision making in business: Reasoning,
intuition, and rational moral principles. Journal of business Ethics. 104(3).
pp.311-323.
Online
Our strategy and objectives, 2017. [Online] . Available through:
<https://www.britishairways.com/cms/global/microsites/ba_reports0910/pdfs/
Strategy.pdf>. [Accessed on 27th June, 2017]
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