British Airways Club World: Market Share Loss and Strategy Analysis

This case study analysis focuses on British Airways' (BA) Club World initiative, examining the reasons behind its market share loss and the potential consequences of not investing in the new Club World. It evaluates the new product strategy, considering consumer behavior in the business class segment, and assesses the pricing strategy, given the £100 million investment. The analysis delves into the success factors of the Club World concept, considering how BA addressed customer feedback and implemented changes to enhance the travel experience. The study highlights the competitive pressures from niche carriers and analyzes BA's response through strategic product development, including improvements in comfort, space, and privacy. The analysis also explores the crucial aspects of pricing strategies, the importance of understanding market conditions, and the need for continuous innovation to maintain a competitive edge in the airline industry.

Running head: EXECUTIVE MBA
EXECUTIVE MBA
Name of the Student
Name of the University
Author Note

1EXECUTIVE MBA
Q1. Diagnose the reasons for BA’s market share loss and assess the likely development
if BA did not invest in developing the new Club World.
The case study involves the organization of British Airways. It can be stated in this
context that British Airways is considered as the flag carrier aviation organization from the
region of the United Kingdom. It is the 2nd largest airline service provider company in terms
of its number of passengers carried and fleet size, which is 281, and sits just behind EasyJet.
The business house is created in the year of 1974. Since then, the management successfully
has operated their flights from Heathrow Airport and Gatwick Airport, which are the 2 hubs
for this aviation company (Britishairways.com, 2020). It can be stated in this context that
aviation industry is one of the most competitive business sectors among other business
industries that prevails in the modern global business world. In most of the market places
where the organization of British Airways operate possess several aviation companies,
whether regional or international, and provides stiff competition to them. The intensity of this
competition varies from route to route along with the nature and number of the competitors
that are operating in those market places. Apart from this, rising of niche airline service
provider organizations are also posing threat to this organization of British Airways.
Companies like Emirates Airline, Etihad Airways from the Middle East as well as Singapore
Airlines, Cathay Pacific and Malaysia Airlines from Asia are adding their routes at a fast
pace, which is posing competition to British Airways, which is resulting in decrease in the
market share of them. This will led to losing the competitive advantage that once was enjoyed
by the owners and management of British Airways.
The likely development that the management of British Airways may think is starting
short distance small flights, which will have access for limited number of passengers. The
prices of the tickets will be less, and these flights will be categorised into two sections. One
section will comprise the flights which will carry the business and corporate people, and the

2EXECUTIVE MBA
prices of the tickets will be less than the other section and possess a minimum number of
faculties. This will benefit those passengers who need to travel from one place to the other for
business meetings and corporate deals. Another section will include the fleet which will be
exclusively for the tourists, where the rate of the tickets will be more and facilities will also
be more in number. This will help to attract the passengers who travel from one place from
the other for the sake of vacation and leisure. Connecting flights will be arranged according
to the number of bookings in both the occasions. Both these sections will help to attract new
people from the market place towards them, and in this way the lost market share will be
regained. Innovative and unique approaches will also need to be implemented in the overall
approach of the organization towards their passengers, which will also help to earn more
money, which can be invested back in both these projects.
Q2. Evaluate the general product strategy of new Club World proposal and its
implementation details given consumer behaviour of Business class customers.
To cope up with the rising competition that is faced by British Airways in the market
places where they operates, the owners and management of this aviation company are
planning to launch a fresh and innovative product strategy through Club World. Through this
new offer, the owners and the management of this airline service provider company thought
of regaining the lost market place. 5 priorities were identified for improving the existing
services of British Airways by the research team of this organization. It has been identified
and found that comfort, control, space, privacy and storage were required by the passengers
who use the fleet of this particular organization. The feedbacks were welcomed by the
management and new seats which were 25% wider than the existing were offered to the
passengers along with audio-visual system which was also demanded by the passengers.
Apart from all these, 10-inch TV screens, noise-cancelling headphones, larger privacy

3EXECUTIVE MBA
screens, and a US plug adaptor for laptops were also implemented within the flights along
with the revolutionary flatbed was introduced.
More flexible food option was planned on the new menu which enabled the
passengers to choose from a wide variety of food options. The management cleverly aimed
on the usage of materials as well as the designs in order to maximise the privacy and space
which would provide more comfort to the passengers who would avail this new fleet size,
though they stick to their north-south layout, while Air New Zealand and Virgin Atlantic
adopted east-west herringbone layout of seats. As they were offering face-to-face layout
system, so privacy was one of the most important thing that was required in their fleet. To
enjoy the privacy, a fresh electronically controlled dividing screen was designed and
developed, which involved a microscopic pattern to it, which enabled them to enjoy the
privacy as the screen would not allow passing the vision from one side to the other except
helping enough light to pass only. Overall, it can be said that all these new and innovative
offering possess all the power to satisfy the benefits of the passengers who would avail the
business class (Mills, 1998).
Q3. Should BA charge more for business class tickets as it has invested £100 million?
Why or why not?
The management of British Airways need to set the ticket prices according to the
routes which a particular flight will follow. According to the facilities that they are offering,
it seems that the prices of the tickets need to be increased. As they also have invested a lot of
money on this, which amounts to £100 million, so it need to be brought back in terms of
earning more revenue and this can be achieved if the process of the tickets are increased. But,
the business class tickets need to be increased according to the tome of booking of the seats
that are available along with the specific journey for which it is getting booked. For example,

4EXECUTIVE MBA
if the tickets are booked for a flight which is travelling from London to Paris, then the
charges will be less as passengers will be able to enjoy the facilities for shorter span of time.
On the other hand, if the flight is going from London to New York, then the fare should be
increased at higher rates as passengers of business class will be able to enjoy the wide range
of facilities for more amount of time. Apart from this, more before the tickets will be
purchased less will be the prices of the tickets of the fleet that will avail the above mentioned
services in their fresh and innovative Club world proposal. Strategies need to be implemented
separately according to the routes and availability of seats. But one thing need to be
considered by the owners and management of the organization, and that is they should not
change an amount which will lose their competitiveness and the rival institutions will start to
gain the competitive advantage over British Airways. They also need to be re-structured
according to the different market conditions as well as the spending capacity of the people
from the regions where they operate their business (Jones, 1998).
Q4. Do you think BA’s new Club World concept be successful as BA has fulfilled what
the customers asked for? Please explain your answer using appropriate examples.
It can be stated in this context that advancement in the area of technology has
increased the competition in all the business industries as well as changed the overall needs
and requirements towards a particular product or service. The same is in the aviation industry,
where the tastes and preferences have started to impact on selecting the services of particular
organizations. After performing a survey among the business class passengers, the owners
and management of British Airways has identified certain areas where they need to improve
and have planned to design their fleet size according to the needs of the business class
passengers. This new and innovative concept of Club World should be successful, as the
facilities that has been planned to offer has been identified by the business class passengers
only, and it should satisfy their needs and requirements of them. In one word, it can be said

5EXECUTIVE MBA
that almost the whole stuff has been redesigned and re-structured by British Airways, with
one major point of focus keeping in mind. And that is to regain back the lost market share
along with maintaining it and increasing it in all the market places where they are currently
offering their services along with planning to expand their services as well (Balmer, Stuart &
Greyser, 2009). More revenue can be earned by them by selling all these services, which will
help to invest more amount of money to offer these kind of innovative services to the people
who are availing their worldwide services.

6EXECUTIVE MBA
Reference
Balmer, J. M., Stuart, H., & Greyser, S. A. (2009). Aligning identity and strategy: Corporate
branding at British Airways in the late 20th century. California Management
Review, 51(3), 6-23.
Britishairways.com. (2020). British Airways | Book Flights, Holidays, City Breaks & Check
In Online. [online] Available at:
https://www.britishairways.com/travel/home/public/en_in/ [Accessed 16 Jan. 2020].
Jones, S. (1998). A New British Airways for the New Millennium. Design Management
Journal (Former Series), 9(1), 47-52.
Mills, A. J. (1998). Cockpits, hangars, boys and galleys: Corporate masculinities and the
development of British Airways. Gender, Work & Organization, 5(3), 172-188.