International Business in Strategic Alliance: A Case Study of British Airways

This report highlights about carrying out international business which is performed by international strategic alliance. It explains about relevance and understanding of strategic alliance which is performed in airline industry. Also some of benefits as well as challenges of international strategic alliance which is faced by British airways are explained by carrying literature.

International Business

EXECUTIVE SUMMARY
International business generally relates to any condition where production as well as
distribution of products as well as services are carried across global boundaries. It basically
encompasses full range of cross-border exchanges of goods, services or resources among two or
more than two nations. This report highlights about carrying out international business which is
performed by international strategic alliance. It explains about relevance and understanding of
strategic alliance which is performed in airline industry. Also some of benefits as well as
challenges of international strategic alliance which is faced by British airways are explained by
carrying literature. Along with that on that literature and discussion analysis and interpretation of
findings is being explained in order to provide a clear idea and guidelines about performing
business practices at international level.

Table of Contents
INTRODUCTION...........................................................................................................................1
MAIN BODY...................................................................................................................................1
Literature review.........................................................................................................................1
Analysis and discussion..............................................................................................................4
CONCLUSION................................................................................................................................7
REFERENCES................................................................................................................................8
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INTRODUCTION
International business is referred to trading of goods, technology, capital as well as
knowledge across national limits as well as at a global transnational scale. It generally consists of
cross border transactions of products as well as services among two or more than two countries.
It is also considered to be globalisation (Tan and Meyer, 2021). As globalisation helps business
to allow how business has brought globalisation with an increasing connectedness of business,
markets, individuals as well as information across various countries. By performing international
business it could help companies to increase their revenues, decreased competition as well as
having longer timespan in markets. It highlights about strategic alliance which is being carried in
aviation and airline industry in order to carry international business practices effectively. This
report is based on international business in strategic alliance in British airways which is a flag
carrier airline based in United Kingdom. It is said to be second largest UK based carrier which is
based on fleet size as well as passengers are being carried. This report consists of literature
review that is based on performing strategic alliance and on basis of that analysis and discussion
is being carried followed by its conclusion.
MAIN BODY
Literature review
International strategic alliance is generally defined as a collaborative arrangement among
companies that are headquartered in various countries. As partnering companies remain legally
independent after formation of alliance as well as alliance relationship which is relatively
enduring. International strategic alliances could be categorized along multiple dimensions
(Kolcava, Rudolph and Bernauer, 2021). It is generally based on kinds of activities of
collaborations, international strategic alliance could be termed under licensing, franchising,
supply, manufacturing as well as others practices. Along with international strategic alliance is
based on numbers of partners which are involved that could bilateral or multilateral.
As per viewpoint of Kenichi Ohmae, 2021, By engaging in various global alliances,
company could speed up their access to various foreign markets. By using strategic alliance
practices in business expansion could refer that company requires assumption of lower risk in
method through added benefit of increasing knowledge as well as contacts that are particular to
foreign markets. By having determined alliances as a particular form of inter-company
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cooperation, it is further- more possible to understand more correctly objective of strategic
alliances. Hence, in order to delineate this kind of alliance from others, various authors allude to
different criteria to determine strategic alliances. In accordance with business expansion to
British airways with strategic alliance it has determined that airline company carries a substantial
impact on development as well as shape of global economy. As by offering its product of air
transport, British airlines facilitates world wide travel along international trade as well as they
have redound to wealth of country where they are registered. There are some of components that
cannot be influenced by aviations and airlines sectors. Cost element is a component that cannot
be influenced by British airlines as it consists in price of oil as well as fuel, respectively. Airlines
are generally sensitive to changes as well as are exceedingly relied on oil cost, as fuel accounts
for highest portion of cost beside labour expenses are carried up.
There are various motivation factors which are behind formation of strategic alliance that
leads in carrying out business expansion of airline companies. In relation to British airways there
are some of motivation aspects which are behind formation of strategic alliance in aviation
industry. Some of motivation factors consists of entering into new international markets by
establishing their air transport services in various countries (Ang, 2021). There could be
extension in their service line like providing extra facilities in their airline booking as well as
discounts on tickets could be carried. British airways could have a large motivation factor of
entering into new emerging sectors. There is reason for entering into airline industry. As an
airline alliance is an aviation industry arrangement among two or more airlines agreeing to
cooperate on a substantial level. Alliances may provides marketing branding which could
facilitate travellers making inter-airline code share connections within countries. These practices
could help British airways in carrying expansion practices which is beneficial for them in order
to operate from various countries. Strategic alliance generally helps both parties in airlines and
aviations to gain their complementary strengths. As company British airways could form
alliances for joint marketing, joint distribution, joint production, design collaboration, technology
licensing as well as research and development (Christofi, Vrontis and Cadogan, 2021). It has
identified that growing international marketing is becoming norm in present time as well as
partnerships are leveraging various growth through alliances with international partners, where
both British airways could merge as well as gain competitive advantage. Company could also
carry it by performing licensing agreements, deals, cooperative arrangement, cross shareholder
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as well as joint ventures. Rather than taking risks or wasting their time along with investing a
huge amount on of money for increasing this competitive benefit in business, in which they are
entering in international markets by searching a proper alliance that is operating in same market
in another country for their purpose. As increasing strategic alliances is said to be one of fastest
trends in business presently as well as it is becoming an important factor to grow for aviation
industry. As one of major objective to formulate a relationship through other companies is
strategic alliance where they combines their skills as well as expertise of company as well as
create cooperative venture.
In accordance with viewpoint of John F. Buckles, 2019, there are certain challenges as
well as benefits of international strategic alliance which could fosters as well as create barriers in
carrying international business practices. In relation with British airways there are some of
challenges as well as benefits that are faced by aviation industry in terms of performing
international business practices (Bratianu, Stanescu and Mocanu, 2021). One of major advantage
of international strategic alliance which is faced by British airways is decrease in ticket cost
when there is linking cities to each other. As large number of passengers on their flights could
allow for having an increase in aircraft load aspect, lowering thereby trip prices as well as
serving interests of both passengers as well as carriers. International strategic alliance makes
easier for British airways to get instant market access or at least speed of their entry into a new
market. It could also help company in increasing their sales by gaining number of passengers for
their airlines. Also with that international strategic alliance helps British airways in getting
access to their supplementary services in terms of provided services. With these benefits there
are also some of challenges that are faced by British airways by implementing international
strategic alliance. It states that international strategic alliance could make it difficult for British
airways in selecting right partners in order to carry their expansion practices. It could create
challenge in terms of building beneficial alliance in ensuring that partnership is going to benefit
their airline business or not. There is also a challenge of upholding trust and honesty in providing
safety and security in company which could hamper their brand picture in aviation sector. As one
of major challenge airline alliance has to face is of operational costs which goes down as well
as tickets costs could also declines which could create an impact on brand picture of company in
markets. It has also been identified that international strategic alliance in airline sector could face
competition in airline sector (Grosser, 2021). As British airways is facing intense competition
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in international markets as there are various airlines which are providing effective services to
their passengers. So in order to meet that challenge in international markets it is necessary for
company to provide effective services to their passengers.
As by analysing role of international strategic alliance it has been determined that it
provides various expansion practices to airline business which could be British airways so that
they could be able to carry their practices well by carrying out profitability in business. Along
with there are also some alternatives to market entries which could create an easiness of
performing out practices well. In relation with British airways some of alternatives to British
airways which could be used by them in order to make entry in international markets. Some of
entry strategies which are used by British airways is licensing as well as franchising which could
provide legal rights to in-market parties yo implement airline's name with its intellectual
property. Another alternative market entry strategies which could be taken into consideration by
British airways could buying their aviation airlines. As by market analysis it has played an
essential role in due diligence for purchasing through mergers and acquisition of company.
Along with mode of joint venture could be used as an market entry modes which could be
implemented by British airways so that they could enter their business practices in various
countries by carrying up their business with partnering mode.
Analysis and discussion
From taking out above discussion it has been analysed that international strategic alliance
in airline industry ensures that there should be competitive parity in terms of routing as well as
force to other aspects like on-time departures as well as customers services for becoming their
base for competition differentiation in terms of airlines. Along with airline sectors are allowing
their route sharing as well as benefit from their alliance. It has been analysed that there are
various cases in which different airlines are operating better by firming their strategic alliance.
Aviation industry in airlines could differentiate in various ways for having a competitive market
threat. As aviation and airline sector is considered to be fastest growing source of greenhouse gas
emissions. Airlines sectors generally engages with in alliances as well as inter firm
collaborations for getting an access towards new knowledge as well as resources for
accomplishing economies of scale by providing better and effective services to their customers
in terms of travelling. Though it has analysed that in alliance cooperation British airways could
improve their profitability as well as market share for having benefits from scheduling
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convenience, connectivity as well as flow enhancement (Huang, Xie and Wu, 2021). It has
evaluated that major goals of aviation alliances is to contribute towards long terms airline
profitability as well as development which is far beyond for accomplishing their goals
individually or bilaterally. It has identified that most of common point in order to form alliance
is to serve international routes as well as expand global route coverage on international levels.
Along with this types of alliance practices generally provides help to British airways in reducing
their costs per passenger by taking up advantage of economies of scale, scope as well as density
across geographical limits because of increased traffic, joint mode of advertising as well as
equipment sharing sharing along with accessing resources which could not be achievable.
Along with airline alliances has grown exponentially with past decade as well as it has
become more usual in aviation sector in present years. It generally involves enduring of inter
firm collaborations which could consists of governance structures. With increased prevalence of
global alliance as well as code sharing partnership among various airlines has lead to
embeddedness into their networks of multilateral coopetitivity which is concurrence of
cooperation as well as competition operations among their allied partner with British airways. It
is carried because of search of capable revenue increase as well as cost savings with deeper
partnerships through their allied partners that are searching for resource sharing as well as joint
marketing and branding. Though British airways have maintained as well as developed bilateral
relationships with non allied carriers from their rival airlines. It has evaluated that international
strategic alliance in relation to airline industry has provided their essential role in airlines
environmental performance. It could be stated as resource allocation as well as knowledge
transfer could also plays their key duties in development of competitive advantages along with
strategic assets of airline sectors (Guillén, 2021). As the more open companies are, the more they
are exposed to better operations of other airlines companies, it could deal being capable to learn
from them as well as their procedures, and ultimately which are having access to their resources
and abilities.
Although it has interpreted that there are certain motivations which are carried behind in
order to undertake strategic alliance which could evolve as well as change through years. Along
with British airways implements alliance when they face with particular circumstances in
external surroundings. These reasons consists of mode of entering into new international
markets, circumvent foreign market barriers, extending service line in airlines along with
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reaching towards future competition that is arise in air transport. These practices generates
reasons towards airline sector to form strategic alliance (Forsgren and Holm, 2021). Airlines
sectors generally engages in strategic alliances in order to create competitive advantage as well
as reduce competitive advantage difference which separates them from being a more successful
competitor. These aspects which pushes British airways to engage in strategic alliances for
gaining competitive advantage usually fall in two major categories: strategic or operational. It
has analyses that an alliance which serves long-term strategic motive which could assists in
British airways for entering into a new market as well as product category whereas an
operational alliance strives to enhance an operational roles of a company. In international
markets strategic alliances it allows British airways to overcome disadvantages which are
associated with its status as a foreign company as well as compete on equal terms through local
companies. Strategic alliances generally tends to improve competitive benefits of British airways
as they are providing a company with time to observe, experiment as well as tried a variety of
problem-solving arrangements with other airlines companies while it is in process of building
abilities.
Also with that it has also determined there are also some of advantages as well as
challenges of forming into strategic alliance which is used by airline aviation sectors. With that
it has evaluated that British airways has faced major challenge of cost operations in terms of
identifying right partnership goals along with problem in assessing proper securing partners
(AGARWAL and GUPTA, 2021). Also with certain challenges there are also some of benefits of
international strategic alliance which were faced by airlines industries. From carrying out
discussion it has evaluated that British airways gets benefits of building their larger reach of
customers by providing them proper services with their expansion practices by mode of
franchising. Along with strategic alliance has provided use of franchising to British airways in
order to carry up their international expansion practices effectively. From this discussion it could
be concluded that strategic alliance is based proper as well as clear strategies which could
strengthen alliance as well as for benefit of all employees of airlines company.
Also from discussion it has evaluated that there should be alternative market strategies
which are used by airlines sectors which could help in performing their international business
practices well in different countries. Along it is essential to use market entry strategies which
could help companies in carrying out international business practices well. As it has identified
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that market entry strategies could help British airways in making their entry in foreign markets. It
has been examined that low-fare carriers generally expands all over world, regulators are
increasingly concerned through effects of low-fare entry on competitiveness of airline industry as
well as potential for predatory operations by incumbents (McIvor and Bals, 2021) . As there is a
common misconception of competition in airline markets as well as they are more specifically of
low-fare entry into airline markets which is lower average fares on incumbent carrier (relative to
the new entrant carrier) that are indicative of an aggressive costing response. It has evaluated
that these practices could make foreign market entries easier. Along with British airways could
be able to deal with international market situations more better as well as airlines industries
could be able to make higher amounts of profits (Pauluzzo, 2021). Overall this above discussion
evaluates about importance of international strategic alliance which is required by airlines
industries to follow to carry their foreign business practices well.
CONCLUSION
It has been concluded from above report that international business are said to be
practices which are carried across national borders. This report highlights about literature which
explains about implementation of strategic alliance which is required for having foreign market
expansion. As explains about motivation factors which are behind formulation of British
airways with its international strategic alliance. As by carrying international business with a part
of strategic alliances it identifies about benefits as well as challenges which are faced by
company with its partners that are involved in business markets. These challenges as well as
issues could create barriers in performing business practices across global boundaries. This
report examines about relevance and understanding of international strategic alliance which
could be beneficial in markets for generating profits by carrying out expansion practices at
various borders. It also explains about alternative market entry strategy which could be used as
an alternative strategy for carrying out market business well with some of recommendations. At
last this report carries an analysis as well as discussion on based literature that explains about
interpretation of discussion which is related to international markets.
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REFERENCES
Books and Journals
AGARWAL, D. and GUPTA, A.K., 2021. Utilizing Corporate Social Responsibility as Financial
Investment Opportunity in Conserving Local Environment Toward Sustainable
Business. Financial Intelligence in Human Resources Management: New Directions
and Applications for Industry 4.0, p.10.
Ang, S.H., 2021. Research Projects for Business & Management Students. SAGE.
Bratianu, C., Stanescu, D.F. and Mocanu, R., 2021. Exploring the Knowledge Management
Impact on Business Education. Sustainability .13 (4). p.2313.
Christofi, M., Vrontis, D. and Cadogan, J.W., 2021. Micro-foundational ambidexterity and
multinational enterprises: a systematic review and a conceptual
framework. International Business Review .30 (1). p.101625.
Forsgren, M. and Holm, U., 2021. Controlling without owning–owning without controlling: A
critical note on two extensions of internalization theory. Journal of International
Business Studies, pp.1-13.
Grosser, K., 2021. Gender, business and human rights: Academic activism as critical
engagement in neoliberal times. Gender, Work & Organization .28 (4). pp.1624-1637.
Guillén, M.F., 2021. Network Effects and Multi-level Dynamics in the Internationalization of
Digital Platforms: A Reflection. In The Multiple Dimensions of Institutional Complexity
in International Business Research. Emerald Publishing Limited.
Huang, Y., Xie, E. and Wu, Z., 2021. Portfolio characteristics of outward foreign direct
investment and dynamic performance of emerging economy firms: An option portfolio
perspective. International Business Review .30 (4). p.101750.
Kolcava, D., Rudolph, L. and Bernauer, T., 2021. Voluntary business initiatives can reduce
public pressure for regulating firm behaviour abroad. Journal of European Public
Policy .28 (4). pp.591-614.
McIvor, R. and Bals, L., 2021. A multi-theory framework for understanding the reshoring
decision. International Business Review, p.101827.
Pauluzzo, R., 2021. The imitation game: building cultural intelligence as a social learning
capability to boost SMEs' international performance. Journal of Small Business and
Enterprise Development.
Tan, D. and Meyer, K.E., 2021. Context-bridging and context-embedded experience: Growth
drivers of emerging economy business groups. Asia Pacific Journal of Management .38
(2). pp.401-434.
Online
Ohmae, 2021, The global logic of strategic alliances [Online] Available
Through:<https://hbr.org/1989/03/the-global-logic-of-strategic-alliances>
Buckles, 2019, Understanding benefits and challenges of strategic alliances [Online] Available
Through:<https://www.franchise.org/franchise-information/understanding-the-benefits-
and-challenges-of-strategic-alliances>
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