Strategic Management for Tourism and Aviation Industry

STRATEGIC MANAGEMENT
FOR TOURISM &AVIATION
INDUSTRY

TABLE OF CONTENTS
INTRODUCTION...........................................................................................................................1
MAIN BODY...................................................................................................................................1
SWOT analysis of British Airways..............................................................................................1
PESTLE analysis of British Airways...........................................................................................4
Recommendation ........................................................................................................................6
CONCLUSION................................................................................................................................9
REFERENCES..............................................................................................................................10

INTRODUCTION
Strategic management refers to the process of formulating, implementing and evaluating
organisation strategy for achieving the organisation objectives. British Airways which is an
aviation organisation will be included in this study. It is based in London and provide its services
in 183 companies. Furthermore, this assignment will include SWOT analysis of British airways
which is required for the strategic success of an organisation. Swot analysis of British Airways
will be done in order to identify the strength , weakness, opportunity and threats. Moreover, This
study will provide recommendation for British Airways to improve the performance and
profitability of firm by adopting various changes. This study will also include the pestle analysis
of British Airways in order to identify external factors affecting various operation of
organisation.
MAIN BODY
SWOT analysis of British Airways
The following shows the strength , weakness, opportunity and threat:
Strength
 British Airways have strong brand
image because of its global
presence(Burghouwt, 2016).
 It has excellent marketing and
advertising of airlines in all over the
regions.
 It provides various services such as
business/ first class, in flight
entertainment and loyalty programs etc.
 It has high skilled workforce through
successful training and learning
programs.
 British airways have strong distribution
channels which assist in attracting more
customers towards the brand.
 British airways provide its customers
Opportunities
 British airways have the opportunity for
expanding its business over different
countries to increase its market share
and profitability(British Airways SWOT
Analysis, Competitors & USP, 2018).
 Alliance and code sharing with other
Global airlines can provide high
support to the business of British
airways.
 It is an opportunity for British airways
to form strategic cooperation with other
business in airline to increase its
profitability.
 British airways can attract more
customers by increasing its online
presence. British airways can use online
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with high satisfaction by providing
them high quality services and give
high preference to its customers.
 It performs its various activities in
different countries and thus it has
international operation which is a
strength for the organization.
booking etc. to attract new customers
for the business.
 Diversification can also be a great
platform for British airways to enhance
its business growth.
 Lower inflation rate also provide
opportunity for British airways to
increase their customers base by
providing them travel packages at a
lower price.
Weakness
 British Airways is highly dependent on
UK market.
 British airways is facing problems
outside its core business which affect is
profitability level.
 British airways posses weak airline
computer system.
 Investment in research and
development is low as compared to
other companies.
 British airways need more investment
for adopting new technologies for
improving its various operations.
 British airways lack in forecasting
demand of its products and services .
 Low return on the capital invested is
the weakness which British airways is
facing.
Threat
 High competition from the other
companies operating in the Aviation
industry.
 Rising fuel cost can reduce probability
for British Airways.
 There is a threat of new entrants in the
aviation industry due to which market
share of the British airways will be
reduced.
 There is a threat existing for British
airways as it is operating its activities in
different countries there are chances of
currency fluctuation which will have a
great impact on the business of British
airways(Redpath, O'Connell and
Warnock-Smith,2017).
 Growing strength of Local distributors
also present a threat for British airways
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as it will reduce its customers.
 There are various laws and regulation
of different counties which act as threat
for British airways.
 Rising labor cost act as a threat for
British airways as it will hamper the
profitability of the organization.
Strength : The strength of British Airways is related to the internal factors which have its
impact on the business positively .Strength of business helps in growing the market share of the
organization and also assist in improving the business profitability(Dale and et.al., 2016). British
airways have various strength which helps the organization in growing its business. Strength of
British airways consist of Strong brand image, high skilled employees, Use of terminal 5 etc.
Engage in improving the services offered by using high technologies(Flouris and Oswald, 2016).
Strength of British airways provide support to the firm in their hard times by improving their
skills and knowledge through effective training to improve their brand image in hard times.
Weakness : Weakness refers to the internal factors which affect the working
environment negatively and can leads to reduction in profitability and performance of
organization. British airways Have various weaknesses which can leads to reduction in its
performance and profitability. Weakness of British Airways can increase its competitors brand
image and profitability due to which firm will lose its customers. Weakness of British Airways
affect the organization negatively as it these weaknesses with act as a strength for the
competitors of British Airways(Garefalakis and et.al., 2016). It has various weakness which
include high dependency on UK market, history of poor employee relation, poor bag handling
issues etc.
Opportunity : Opportunities are the external factors which are beneficial for the
organization to improve their performance and growth by grabbing thee opportunities firm is
able to increase its profitability. Opportunities provide assistance to firm in developing their
brand image and attracting more customers to increase their profitability (Holloway, 2017).
Opportunities for British Airways include Increasing presence in new market to attract more
customers from all over the regions , can adopt Quality system based on Sky Trax to increase its
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profitability for growth of business and increasing online booking for tickets will boost the
profitability for British Airways.
Threats : Threat are the external factors which affect the business in negative way due to
which organization is not able to perform its function effectively and efficiently. Threat for
British Airways include increasing competition in the industry which have their impact on the
working of British ways. Moreover, It has reduced its market share due to emergence of various
new entrants in the market(Frynas and Mellahi, 2015). Threats are harmful for organization
because they affect the growth and development of business. Threats for British Airways
include increasing environmental awareness , global economic crisis, open skies agreement etc.
SWOT analysis of British Airways is done in order to identify its various strength ,
weakness , opportunity and threats which have their influence on the working of the business.
Strength and weaknesses are the internal factors whereas opportunities and threat are the external
factors (Chen And et.al.,2017). These factors are identified by organization to improve their
performance by adopting their strength and opportunities to improve performance and
profitability and weakness and threats are identified to reduce the impact of these factors by
working on their weakness and threat to change them in strength and weakness for
company(Cook and Billig, 2017 ). British airways formulate various strategies to reduce negative
impact of internal and external factor which will assist in gaining competitive advantage for
firm and also increase the market share and profitability of firm.
PESTLE analysis of British Airways
Pestle analysis includes external factors which have their impact on the business
operation negatively and positively . Negative impact of external factors can act as weakness and
positive impact of external factors act as strength for business. Pestle analysis include political ,
economical, social, technological, legal and environmental factors. Political factors : These are those factors which have their impact on the business due to
various political factors which includes government rules and regulation, political
stability etc(Koopmans and et.al., 2016). British airways is performing its operation in
various countries due to which it has to follow various rules and regulation of the
government of different countries to provide safe journey to its customers. These are
various political factors which have their influence on British airways that includes level
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of bureaucracy, extent of corruption and activities of trade union, terrorist attack etc. Due
to terrorist attack British airways stopped its flights to various countries. Political factors
also include changes in tax rate which will reduce the profitability for British Airways. Economic factors : There are various economic factors which have its impact on the
working of British airways that includes inflation rate, currency exchange rate and
economic climate, coast of fuel etc(Westphal, 2017). These factors can affect the British
airways positively and negatively as positive impact of these factors will include
reduction in prices of fuel. Negative impact of economic factors will include high
fluctuation in the exchange rate due to which British airways will have to face various
challenges operating its functions. Social factors : It includes cultural aspects, age distribution, health consciousness,
demands of customers etc. British airways is affected by these factors as many people
reduced traveling from British airways due to the incident of September 11 because many
flights were canceled from America which has lead to financial difficulties for British
airways(British Airways PESTEL Analysis, 2016). It also includes changes in customers
preference due to high prices of flights with poor quality services can reduce the
customers for British airways. Technological factors : These factors include digital disruption and use of technology
for its various operation in order to increase more customers towards the brand and
improve its functioning through use of the latest technology. British airways in order to
attract more customers and reduce negative impact of technological factor must use the
latest technology for providing its various services to customers(Javaid, 2014).
Technological advancement helps in improving the quality of services and also assist in
increasing firm's profitability. There are various automation done by British airways such
as Arrival management system and departure manager system are being implemented by
organization. Legal factors : It refers to laws pertaining to an organization which the firm must comply
in order to perform its various activities. Laws relating to health and safety of customers,
discrimination law, consumer law etc(Suzuki and et.al., 2018). These are the laws which
British airways have to follow in order to perform its operations. British airways have to
follow security laws in order to reduce impact of terrorist affect which leads to reduction
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in customers for British airways. Safety laws must be followed in order to protect
customers from various harmful effects.
 Environmental factors : It refers to increasing awareness for environmental protection
which affect the business of British airways. It includes factors such as pollution,
wastage, environmental regulations, climatic changes etc. British airways in order to
reduce the negative impact of environmental factors must formulate policies for creating
environmental awareness(Bose, 2018). British airways have to face various challenges
relating to climatic changes. Government in order to create awareness about environment
protection have made various rules and regulation which all airline companies including
British airways have to follow to reduce growth of radiations and emissions.
Recommendation
 It is recommended for British Airways that they should Improve their quality of services
provided by them to customers in order to improve their customer experience and satisfy
their customers by fulfilling their demands. British Airways in order to improve its
quality of services should use Service quality gap model which will assist in improving
the service quality. Gaps in Service quality includes knowledge gap, design and standard
gap, performance gap and communication gap.
British Airways should implement this model to improve the gap affect service
quality. British Airways for improving knowledge gap should do market research to
identify customers needs and demands. Organization to improve their design and
standard should use the latest technology. For reducing performance gap British airways
should make proper research to identify their employees needs and satisfy them to
improve their performance. Company should improve communication gap by
communicating about service delivery in advance and also providing high services ton
customers.
 British Airways should make strategies and planning to reduce their weaknesses by
improving its internal factors which act as weakness for British Airways. Organization
should provide proper training to its employees to improve their performance and should
also provide motivation to employees to reduce employee turnover. British Airways
should provide its employees with various benefits to increase their performance level.
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 It is recommended to British Airways to operate its business in various countries and
should not get highly dependent on UK market due to which other customers from other
countries are reducing . Organization should maintain balance between various countries
and should not depend on particular market.
 British airways should grab the opportunities which will enhance their growth and
profitability. It is recommended to the organization adopt Sky Trax which is the star
system for quality and will assist in boosting the market for British airways. British
Airways should invest in research and development to identify various methods to
improve their profitability and success.
 British airways should provide complementary services to increase their customers base
and attract people from all over the regions. Introduction of complementary services will
increase their customer base and also increase their profitability level. Complementary
services which should be provided to customers such as car rental or hotels etc.
 It is recommended to British Airways that it should increase its technological
advancement to improve the service quality and this will also provide support to British
airways in operating its various functions effectively and efficiently.
 British Airways should involve its employees in decision making process to engage
employees in Decision making to improve relation with the employees which will help
in the growth of business and also assist in bringing innovative ideas for improvement of
activities.
 It is recommended to British Airways to diversify into substitute services to increase
customers with different substitute such as rail, bus etc. This will help the organization in
increasing the sources of income for British Airways and will also help in attracting more
customers which are not traveling through airlines.
 It is recommended to British Airways to focus on the business class customers as this will
be the most profitable segment of British Airways (Koopmans and et.al., 2016).
 British Airways should improve its functioning and provide services by considering
environmental awareness. British airways should make proper cleaning and maintenance
in order to protect environment from various harmful effects.
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 It is recommended to British airways to follow the laws and regulation of the various
countries in which it is operating its business to operate in different countries smoothly
otherwise it can affect its business.
 British airways should make proper strategies and planning to overcome the weakness
and threat which will reduce the profitability of organization. It should overcome the
weakness by improving its employee performance and improvement in technology used.
For example, British Airways should increase use of internet access for flight booking
which will help in overcoming the weaknesses. British Airways in order to overcome
threats should renovate the brand image or can diversify in other markets which will
assist in reducing the threats.
 It is recommended to organization to get into partnership with other companies to
increase the brand image of organization and will also assist in attracting customers by
maintaining good relationship with the customers of other business in which the
organization is involved as partner.
 It is recommended to British airways that in order to reduce the negative impact of
various external factors such as political, economical, social, environmental,
technological and legal factors. British airways should make proper strategies and
policies to reduce the impact of these factors.
 British Airways should reduce negative impact of political factors by making proper
planning and following the rules and regulation made by government.
 It is recommended to British Airways that in order to increase its customer base and
reduce negative impact it should provide customers with better service quality in order to
improve their experience.
 British Airways in order to reduce negative impact of environmental factors should
formulate policies for maintaining environmental protection. Also, it is recommended to
make policies regarding dumb the wastage at a proper place.
 It is also recommended to British Airways to use advance technology to reduce digital
disruption occurring in the organization.
 For building competitive edge over others business unit needs to lay emphasis on
sustainability aspect while carry out operations. Moreover, in the recent times, customers
give high level of priority to the firms which perform activities in an ecofriendly manner.
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Hence, by undertaking such strategy BA would become able to attain desired level of
outcome or success.
CONCLUSION
From the above study it has been concluded about strategic management which has
provided with various strategies to improve the various operation of organization. This study has
provided with the SWOT analysis of British airways from which it can be concluded about
various strength , weakness , opportunity and threats that has helped British Airways in
identifying different internal and external factors which hampers the working environment of
British Airways. Strength of British Airways has included strong brand image, High skilled
workers and strong distribution channels. Weakness for British Airways are concluded as lack of
research and development , high dependency on UK market etc. Opportunities for British
Airways can be concluded as implementing Sky trax for quality services , partnership with other
organization etc. Threats for British Airways can be concluded as increasing environmental
awareness, fluctuation in currency prices in different counties etc. This assignment has also
provided with Recommendation for British Airways which has included diversification in
different market, increasing training programs etc.
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REFERENCES
Books and Journals
Burghouwt, G., 2016. Airline network development in Europe and its implications for airport
planning. Routledge.
Chen, H.M. And et.al.,2017. How Lufthansa Capitalized on Big Data for Business Model
Renovation. MIS Quarterly Executive. 16(1).
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Routledge.
Holloway, S., 2017. Straight and Level: Practical Airline Economics: Practical Airline
Economics. Routledge.
Dale, C.R.I.S.P.I.N., and et.al., 2016. Business planning and strategy. Operations management
in the travel industry.pp.21.
Flouris, T.G. and Oswald, S.L., 2016. Designing and executing strategy in aviation management.
Routledge.
Frynas, J.G. and Mellahi, K., 2015. Global strategic management. Oxford University Press,
USA.
Garefalakis, A. and et.al., 2016. Determinants of profitability in aviation industry of Europe and
America. International Journal of Supply Chain Management. 5(2). pp.131-137.
Redpath, N., O'Connell, J.F. and Warnock-Smith, D., 2017. The strategic impact of airline group
diversification: The cases of Emirates and Lufthansa. Journal of Air Transport
Management. 64. pp.121-138.
Bose, I., 2018. The Strategic Environment of the Aviation Industry in UAE: A Case Study on
Etihad Airways.
Koopmans, T. and et.al., 2016. Selective targeting of CREB‐binding protein/β‐catenin inhibits
growth of and extracellular matrix remodelling by airway smooth muscle. British
journal of pharmacology. 173(23). pp.3327-3341.
Suzuki, H. and et.al., 2018. Respirable powder formulation of a shortened vasoactive intestinal
peptide analog for treatment of airway inflammatory diseases. Journal of Peptide
Science. 24(3). p.e3069.
Javaid, J., 2014. Marketing Research & Innovative Product Launch in Indian Sanitation
Industry. GRIN Verlag.
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Westphal, N., 2017. Analysis of the UK Package Holiday Industry and its Environment.
Online
British Airways SWOT Analysis, Competitors & USP. 2018. [Online]. Available
through :<https://www.mbaskool.com/brandguide/airlines/532-british-airways.html>
British Airways PESTEL Analysis. 2016. [Online]. Available through :<https://research-
methodology.net/british-airways-pestel-analysis/>
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