Business Strategy: Analysis of External and Internal Factors for British Airways

Business strat-
egy

INTRODUCTION
Business strategy is describe as strategic management process that contains activities and
process that plays significant role in guiding and providing framework for business in order to
achieve business goals in effective manner. It has prominent impact over to obtain competitive
advantages and strengthen position within industry.
British Airways is a flag carrier airline of UK with it’s headquartering in England. It is
known as second largest airline of UK based on fleet size & passengers carried. The organisation
founded in 1974 with 250 fleet size and 183 destinations. Net income of it comes under $1,952
million by 2018.
This report in made on the basis of business strategies that has prominent impact over
growth and expansion of business. In this report internal and externals analysis of respective
organisation is discussed with their capabilities of running business. Further competitive
analysis, theories and concepts are explained with suitable strategic plan for business.
TASK1
P1: Apply suitable framework to analyse affects of external environment factors over British
Airways.
One of the best method to analyse and identify factors that are uncontrollable for firm and
affects business growth at serious level is pestle analysis. It is the method that helps in analyse
external environment that has positive or negative impacts over business organisations. There are
some factors that affects growth of respective organisation are explained as follows:
PESTLE Analysis
Political: It plays important role in aviation sector which includes factors like political stability
and many others. The airline industry is majorly affected by government policies of UK. Apart
from government policies uncertainty due to Brexit that affects air travel includes border,
customs and immigration laws. British Airways has a effective approach to manage effects of
Brexit and communicating with customers that flights will be running as per their normal
schedule following Brexit. Several steps are taken by British Airways in order to make travel
form lending markets US or other Western countries that has prominent role in huge success of
respective organisation.
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Economical: The economic stability, unemployment and GDP are prominent factors that
impacts business. UK Brexit was result in economic slowdown that impacts airlines in negative
ways. In these circumstances British Airways has some strength in order to maintain sustainable
growth rate including higher investment in strategic areas of business, concentration on customer
experience and ability to change business model as per the requirements of economic situation of
nation. Even in critical conditions of economic uncertainty caused by Brexit, company has
significant growth revenues. It generates profit of by 10.3% reaching $1,952 million from $1,769
million. Thus economic condition of UK may not have intense impact over position and growth
of British Airways due its capability to deal with uncertainties successfully.
Social: This factor may include demographic changes that has significant role in aviation sector,
British Airways targets millennia’s who has different travel as compared to others lies between
precious generation to them who spends more than baby boomer on air travel in growing
Western markets. In context of this British Airways has significant impact of this factor. On the
basis of social component respective business focuses on providing best experience to its
customer and also on efficient operation of business which results in reliable and social image of
business.
Technological: The core element of success in aviation sector is known as technology. for
instance use of safer and more fuel-efficient aircraft model and evolution of better sales &
service technologies that has prominent impact in terms of fastest growth of airline
internationally. In context of respective airline focuses on more investment in technology so as to
enhance efficiency, higher profitability and better services. During past few years respective
company has made technological improvements in various areas such as- company website to
streamline booking process and makes improvement in BA app that helps customers in easy,
quick and affordable booking with considering all required information.
Legal: The major component in entire aviation sector of United Kingdom. Apart from passenger
safety & security or customer convenience, there are some other laws related labour laws and
other different areas of operation all are factors that impacts British Airways. In 2019 respective
company faced a huge challenge from pilot’s strike and lots legal attempt to block planned strike
and later agreed upon settlement to avoid disruptions. Thus there are several legal factors that are
uncontrollable and affects airline adversely.
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