Strategic Management: A Comparison of British Airways and EasyJet

This report compares the strategic management of British Airways and EasyJet, including SWOT, PESTLE, and Porter's Five Forces analyses. It examines the effect of internal and external environmental changes on managerial strategy and evaluates the procedure used by the companies to assess their strategy.

Strategic management

Table of Contents
INTRODUCTION...........................................................................................................................3
MAIN BODY...................................................................................................................................3
Definition and introduction of strategic management.....................................................................3
Critical evaluation of the procedure utilised by the companies to assess their strategy..................4
Critical examination of the effect of internal and external environment changes on managerial
strategy.............................................................................................................................................4
Comparison of Swot analysis of British Airways and EasyJet..............................................5
Comparison of Porter's five forces model of British Airways and EasyJet...........................6
Comparison of Pestle analysis of British Airways and EasyJet.............................................7
Review of strategic plan of companies offering an action plan on the basis of a variation in either
the external or internal surroundings...............................................................................................9
CONCLUSION................................................................................................................................9
REFERENCES..............................................................................................................................10
Appendix........................................................................................................................................11
Strategic plan of British Airways.........................................................................................11
Strategic plan of EasyJet......................................................................................................12

INTRODUCTION
Strategic planning is utilised by enterprises to fix priorities, emphasis the resources
towards the determined objectives and examine and alter the business directions according to the
dynamic environment. Effective strategic planning not only assist in determining where the
organisation is going and the plans for growth, but also to determine if it will be successful. The
chosen companies for this report are British Airways Plc and Easy Jet (Ansoff and Ansoff,
2018). The report shows the comparison between the two companies assisted by the analysis of
swot, pestle and porter five forces models. The report is mainly divided into four parts that are
the definition and introduction of strategic management, critical examination of the procedure
utilised by companies to assess their strategy, critical examination of effect of internal and
external environmental changes on strategy of organisations and a appraisal of the strategic plan
which provides an action plan for the companies on the variation basis in either the internal or
external surroundings.
MAIN BODY
Definition and introduction of strategic management
In simple words, strategic management deals with the management of an enterprise
resources to achieve its objectives and goals. It comprises the processes of setting targets,
competitive environment and internal environment analysis, evaluation and implementation of
strategies in the enterprise. The strategic management is significant to enable enterprises to
analyse areas for functional improvement. They can follow an analytical procedure that
determine potential threats and opportunities in many cases, or can merely follow generic road
map. According to the organizational structure, organisations can prefer to adopt either a rigid or
expressive approach to strategic management (Carayannis, 2018). Approaches for improvement
and implementation are defined under the prescriptive model. Whereas, the descriptive strategy
explains how companies develop the strategies. For instance, imagine a big organisation looking
to attain more aspiring online sales rates. To achieve these goals, the company formulates a
strategy, communicates it, applies it to different units and departments within the enterprise,
integrates it with the goals of personnel and implements it accordingly (Heino and Tuunainen,

2018). Ideally, when an effective strategy is practised, it assists the organization attain its goals
through a individual, coordinated procedure (Hiriyappa, 2018).
Critical evaluation of the procedure utilised by the companies to assess their
strategy
British Airways is one of the world's largest airlines and number one in the United
Kingdom. It is established as dominated national and world-wide flights in the United Kingdom.
Over 300 destinations worldwide are covered internationally by British Airways and it carry
about 33 million passengers. Over the years, the company has run effective business units and is
recognized as one of the trailblazers in the airline industry in its pursuit of green technology and
green strategic decisions. The company has achieved success and also faced challenges,
consequence of which is a fall in the popularity of airline and repute in the target market. The
strategy plans followed and the development and innovation pursued by British Airways assist to
keep itself in market position and stay in market (Hitt, Ireland and Hoskisson, 2019).
EasyJet Airline Company was established in 1995 by a British entrepreneur. It is a low
cost company, hence, it differs from conventional airlines in that it offers very low fares. It tries
to maintain costs down by getting rid of redundant costs. The requirement to cut down costs is a
crucial strategy to attract as many clients as possible. Today, with the European borders opening
and the leisure society we live in today, travel has become more popular and the demand is
greatly increased. EasyJet took advantage of these factors to open up the market. In 2011, the
EasyJet increased total revenue by 11.5% year-over-year. This development is very positive for
the organisation and is the outcome of significant work on its strategy. However, EasyJet is not
the only one in the inexpensive airline market and has many rivals. It needs to do better than its
competitors by lowering fares as much as possible to maintain its position and become the
market leader (Karpenko and Kukhta, 2019).
Critical examination of the effect of internal and external environment
changes on managerial strategy

Comparison of Swot analysis of British Airways and EasyJet
It is carried out to analyse the internal environment with regards to strengths and weaknesses and
the opportunities and threats which are in external surroundings of the companies.
Strengths
British Airways: British Airways' strengths comprises its reputation and service ability to
provide quality customer service and a global premium trademark. It have the robust and gainful
strategic alliances, like joining the IAG Group and the one world alliance, to provide broader
network access and advanced technology.
EasyJet: It have a solid repute for offering the low-cost flights in the United Kingdom and
Europe. It offer consistent and punctual travel facilities with value-adding characteristics such as
bookings through net, travelling without tickets and services relating to travel. It has added latest
up-to-date aircraft to its fleet to assure protection, consistency and condensed emissions
(Karpenko and Starodub, 2019).
Weaknesses
British Airways: British Airways' main weakness is its high price because of its large fleet
operations. It have greater operating costs as compared to many competitors, comprising lower
cost competitors. This is additionally strengthened by a distinction approach on the basis of
quality, value creation service and excellent client service. Airlines also have the past of labour
problems because of repeated strikes by aviators and flight attendants over wage conflicts. It
leads to business disruption and lost profits.
EasyJet: The lower-cost airline sector is a highly rivalry industry with numerous brands
competing for the identical base of clients. This have caused value wars and other tactics,
making it challenging for EasyJet to worry about the costs associated with trying to further
reduce prices or offer additional features. There is now more competition from older airlines that
have changed their business model and started offering lower fares on the same routes as EasyJet
(Khalifa, 2021).
Opportunities
British Airways: Given its current history of tenuous relationships with its employees, British
Airways has an opportunity to do improvements in this area that will reduce service interruptions

and improve reliability. In addition, there are opportunities to grow to improve market share in
the short-haul market by forming suitable strategic partnerships at low cost airlines specializing
in such routes.
EasyJet: The airline will be able to further enlarge its course structure into latest regional markets
across Europe to serve particular sections of clients. EasyJet can provide tourism packages which
entice specific passengers looking for specific types of travel experiences (Krutova, 2020).
Threats
British Airways: Market share shrinks, Ryanair and EasyJet remains a critical threat to British
Airways. The other critical threat is pandemic of Covid-19 have significantly condensed
travelling internationally and movement of people. A deep recession after the pandemic is
probable to influence the businesses and consumers disposable income.
EasyJet: Airport fee increases pose a threat to EasyJet as they reduce the margins on which
airlines can compete. This is because these costs cannot be controlled or changed by the
company unless it negotiates with these airports and enters into reach agreements to reduce
airport charges. Failure to do so may result in the need to close some paths, additionally
jeopardizing the sustainability of the company. Rivals offer extra frills, flights, and path options
while preserving lower costs. This could also impend EasyJet's place in the market (Kumar and
Gupta, 2022).
Comparison of Porter's five forces model of British Airways and EasyJet
Threat to new entrants: New entrants are the powerful source of the increased competition.
They can reduce the profitability of the industry as it increases the supply in the market. Entering
into airlines industry in UK is a difficult task for a new player as it involves high cost to be
established and strict rules and regulations to survive. As British airways and EasyJet are UK
based airlines companies, then threat to new entrants is low for both the companies as regulations
and rules are strict (MacKay and McKiernan, 2018).
Buyers' bargaining power: Customers play a very crucial role in the industry as they possess
adequate knowledge of the products through social media, internet etc. British airways and
EasyJet are not the low cost companies. Consumers can switch to other companies which are
suitable for them. Thus buyer's bargaining power is high for British airlines and EasyJet both.

Threat of substitution: Substitutes products are the alternate product in terms of prices,
availability etc. Trains can be the main substitute for the plane but they are suitable for short
travelling within the limited area. Generally it is observed that planes have no substitute for long
journeys across the world. Hence it can be said that for EasyJet and British airways the threat of
substitute is quite low.
Rivalry in the industry: Rivalry refers the competitors in the in the industry, competition can
occur because of pricing policies and product differentiation. British airways charges higher
prices than the EasyJet for the same quality of services. So British airways faces the strong
rivalry threat from its competitors for the pricing policy in the industry whereas EasyJet has not
extremely high competition as compared to British airways (Mazzei, 2018).
Suppliers' bargaining power: Suppliers power represents as how the suppliers influence the
market in terms of the prices. For the airline industry not only the aeroplane suppliers play a
crucial role but also the fuel supplier possesses his own significance in the industry. Suppliers'
power for the British airways and EasyJet is high because there exists low number of suppliers
for the aeroplane (i.e. Boing and Airbus) and for fuel suppliers there is still big threat for both.
Comparison of Pestle analysis of British Airways and EasyJet
One of the crucial strategies to do the macro environment analysis of the companies is pestle
analysis. It highlights the external environment factors affecting the company's strategies and the
threats and opportunities faced by the companies.
Political factors: These factors are very important to the airline industry, because the airline’s
operations and the flights management to various destinations depend upon the political climate
of that area. If a country experiences political turmoil, the activities of this sector and its
stakeholders can be adversely affected. British Airways and EasyJet are subject to the political
environment in the UK and other locations covered by their flights. It has also been observed that
terrorism-related threats adversely affect an organization's operational reach, reducing travel
numbers and reducing an organization's profitability (Mwakisaghu, 2019).
Economic factors: A country's economic conditions can affect the growth or decline of an
enterprise. For the airline sector, British Airways was the dominant organisation, but the
financial crisis had a major impact on profitability. The company suffered a loss of £401m due to
a decline in passenger numbers for airline travel. The financial situation in worldwide markets

has created business environment which is unfavourable for the companies. Rising fuel prices
was another notable variable that had a significant impact on British Airways financial
performance during the financial crisis. However, the recent fall in cost of fuel has created a
favourable economic environment for the company and helped it achieve higher profitability
level.
Social factors: Demographic changes impact the airline industry. An increase in the proportion
of older people in the population implies an increase in air passenger traffic. At the same time,
the company's operations must adapt to the needs of the population, as the growing number of
elderly passengers must include the assistance these passengers require. Other social factors that
can affect these companies' earnings are people's social tastes and preferences, reflected in the
growing demand for low-cost air travel. Additionally, safety issues must be controlled effectively
to maintain consumer confidence and maintain a good brand reputation in its sector. This may
increase demand for their services. As the holiday season approaches, demand for air travel is
likely to increase, reflecting the role seasonal influences have on air travel and passenger
numbers for both inbound and outbound destinations (Nilsson, Petri and Westelius, 2020).
Technological factors: The airline industry relies on technology that enables airlines to
effectively manage their operations while providing travellers with safe and worry-free air travel.
Companies’ success relies heavily on the integration of its current IT systems with the latest
aircraft of Boeing and Airbus. Other than that, the companies has used technology to engage
with its customers more effectively. For example, the development of the British Airways app
has made it simple for travellers to get up-to-date information about the terminal of a particular
flight.
Legal factors: An organization's involvement with trading enterprises like the European Union
can influence how air carriage contracts are administered. The Open Skies Agreement has
developed a comparatively open market for players of airline industry, enabling them to enlarge
their business reach and benefit from exposure to a deregulated sector. Organizations must
follow state passenger safety laws and safety protocols to keep the organization's processes
flowing. The influence of trade unions on the management of personnel relations is another
important factor in British Airways' and EasyJet legal environment. Additionally, several legal
issues faced by these companies illustrate how the law affects the operations of companies
(Okumus and Köseoglu, 2019).

Environment factors: In this regard, the impact of regulations related to green business
operations and reducing the carbon footprint of airlines controlled by various industry players is
significant. An increasing focus on integrating measures to reduce toxic gas emissions has led to
the adoption of CSR initiatives by various airlines. British Airways and EasyJet, like other
airlines, are required to adopt carbon emission reduction technologies and implement green
business processes to demonstrate its support for environmental conservation (Siegfried, 2021).
.
Review of strategic plan of companies offering an action plan on the basis of a
variation in either the external or internal surroundings.
Strategic Business plan of British Airways and EasyJet are included in Appendix.
CONCLUSION
From the above report, the conclusion is made that strategic management process assists the
organization and its management to plan for its upcoming existence. It provides path to an
organization and its people. Unlike one-off planning strategically, effective strategic
management involves constantly planning, monitoring, and testing an organization's activities to
progress efficiency of operations and productivity. The report above has a brief analysis and
comparisons of various strategies and strategic plans of two airline companies British Airways
and EasyJet.

REFERENCES
Books and Journals
Ansoff, H.I. and Ansoff, R., 2018. Implanting strategic management. Springer.
Carayannis, E., 2018. Strategic management of technological learning. CRC Press.
Heino, H. and Tuunainen, J., 2018. Heading for decline? The significance of disturbances in
strategic management. International Journal of Strategic Change
Management. 7(2) pp.139-159.
Hiriyappa, B., 2018. Strategic Management and Business Policy: For Managers and Consultant.
PublishDrive.
Hitt, M.A., Ireland, R.D. and Hoskisson, R.E., 2019. Strategic management: Concepts and
cases: Competitiveness and globalization. Cengage Learning.
Karpenko, L and Kukhta, P., 2019. Strategic management of entrepreneurship based on smart
technologies. Journal of Entrepreneurship Education. 22(5) pp.1-6.
Karpenko, L. and Starodub, D., 2019. Blockchain as an innovative technology in the strategic
management of companies. Academy of Strategic Management Journal. 18, pp.1-6.
Khalifa, A.S., 2021. Strategy and what it means to be strategic: redefining strategic, operational,
and tactical decisions. Journal of Strategy and Management.
Krutova, A., 2020. Strategic management accounting as an information basis of effective
management of enterprise activities. Academy of Accounting and Financial Studies
Journal. 24(2), pp.1-8.
Kumar, V. and Gupta, G. eds., 2022. Strategic Management During a Pandemic. Routledge.
MacKay, R.B. and McKiernan, P., 2018. Scenario thinking: A historical evolution of strategic
foresight. Cambridge University Press.
Mazzei, M.J., 2018. Strategic entrepreneurship: Content, process, context, and
outcomes. International Entrepreneurship and Management Journal. 14(3), pp.657-
670.
Mwakisaghu, J.K., 2019. Strategic management change. International Journal of Advanced
Research in Management and Social Sciences. 8(5) pp.8-22.
Nilsson, F., Petri, C.J. and Westelius, A., 2020. Strategic management control in theory and
practice. In Strategic Management Control (pp. 1-7). Springer, Cham.
Okumus, F. and Köseoglu, M.A., 2019. Introduction to strategic management. In Strategic
management for hospitality and tourism (pp. 3-21). Routledge.
Reavis, M., Singh, K. and Tucci, J., 2021. Millennials' Strategic Decision Making Through the
Lens of Corporate Social Responsibility and Financial Management. Journal of
Business Strategies. 38(2), pp.125-146.
Siegfried, P., 2021. Strategic Management Business Cases and Management Concepts. BoD–
Books on Demand.
Sydorchuk, O. and Klimova, A., 2019. Strategic management of a travel company in the
conditions of introduction of modern information technologies. Academy of Strategic
Management Journal. 18, pp.1-6.

Appendix
Strategic plan of British Airways
Executive summary: British Airways is one of the world's leading airlines today. It offers travel
services to 300 destinations in over 75 countries around the world. It operate primarily from
Heathrow and Gatwick in the United Kingdom. Because of the latest technologies, customer
requirements, and other types of changes, the airline industry is constantly changing. BA was
facing a number of issues like revenue loss of pounds 531 m because of deficiency in research of
international market, staff associations (strike issues) and more. As a result, British Airways will
need to further revisit its existing strategy to overcome these issues. There are several strategies
that British Airways can pursue like technical accessories innovation, enhanced customer and
employee relations, etc.
Mission: The mission statement of British Airways is to make sure that its customers fly save
and confidently. It is acting accountably to take care of the people. It also targets to be the
acknowledged leader in worlds travel for the next era. The company further emphasises on
giving the finest services to its travellers and fetching a superior airline choice.
Vision: British Airways vision is to turn out to be the world’s most accountable airline. They
have created guidelines that explain what they are doing to reach this goal.
Marketing plan:
Product: The services provided by BA excel in satisfying the requirements and wants of
customers. With a fleet size of over 295 ships, it provides the highest quality service to all its
clients. BA strives to satisfy all its customers’ needs.
Place: Location has a crucial and exceptional role in any strategy of marketing. BA has accepted
this truth and has constantly encouraged mergers and networks among many of the international
major destinations.
Price: British Airways skilfully maintains a pricing policy so that all groups of people can take
advantage of its services. It has attempted to keep a policy of price that is consistent with the
value the company offers. The approach of company is that the consumer is the decision maker
and governs the decision for the amount to be spent. Customers can even purchase tickets at a
base price with no added value and choose the various services they want.
Promotions: Substantial innovation has taken place in developing and maintaining marketing
approaches. Numerous strategies have been established to maintain network with all consumers.

An app in mobile has been made for special airline patrons to easily make reservations and
receive ancillary services. To facilitate airline services, tech-savvy customers are looking to the
internet for help as they can save time when booking tickets via the internet.
Competitive environment: The competitors of British Airways includes EasyJet, Virgin Group,
Singapore Airlines. British Airways utilises focus and differentiation strategies combination.
Streamlining the service delivery process has given British Airways a competitive advantage by
adding ancillary services that improve the customer experience.
Strategic plan of EasyJet
Executive summary: EasyJet is a commercial airline that provides arranged flights, on-board
and associated services. The main operations of the organisation and its subsidiaries is the
establishment of air services in Europe. The organisation controls more than 540 paths, owns 196
aircraft and functions in 30 countries. The company is headquartered in Luton, UK and hires
about 7,359 people.
Mission: The mission of EasyJet is to offer the clients with secure and affordable flight facilities.
To offer a regular and reliable products and fares on various European routes that appeal to
leisure and business markets. To attain this it will develop its people and build lasting
relationships with its suppliers.
Vision: The vision of EasyJet is to strengthen its market position by becoming Europe's largest
low-cost airline. The company’s vision is fully aligned with that of easy Group, Ltd. vision to
develop the token 'easy' into a global force. EasyJet is not currently pursuing global target
markets. So this vision statement is good. Current vision develops a suitable frame of reference
for the company's values and goals.
Marketing plan:
Product: EasyJet is one of the United Kingdom’s most famous low cost airlines. It offers
travellers comfortable, safe and affordable air travel. It is associated to a vast linkage of airports
in the world, an added advantage for passengers. Offering superior consumer facility at this price
level assisted the organisation capture the majority of the market share.
Price: The organisation is recognised for its inexpensive and modest fares. The company's
modern fleet of aircraft also reduces aircraft fuel and maintenance costs. These strategic moves
have allowed the company to decrease costs and increase suitability for consumers. This allows

to provide superior services at low prices and remain competitive and relevant in customers’
minds.
Place: EasyJet prides itself on having an excellent design of website that assist consumers check
charges, develop journeys, and complete ticket bookings. By adapting continuously developing
latest know-hows, the organisation has been able to extent a wide-ranging client base across
worldwide.
Promotion: EasyJet partners with numerous travel and tourism websites to expand the extent of
their client base, which serves as a medium to sell their amenities. Company also direct
customized emails with superior offers to its regular consumers, encouraging them to provide the
organisation a chance to offer their facilities at a premium. This leads to enhanced customer
loyalty and word of mouth.
Competitive environment: The main competitors of EasyJet includes British Airways,
Lufthansa and Ryanair. EasyJet’s strategies to create competitive edges, includes an unrivalled
linkage and position in market, a well-organized inexpensive model, a strong balance sheet and
well-known brands. These have enabled EasyJet to achieve sustained, disciplined growth and
earnings for shareholders.