British Airways (UK): Executive Summary and Strategic Analysis Report

This report provides an executive summary and in-depth analysis of British Airways (UK), examining its business strategies, performance, and key factors contributing to its success. It explores the company's history, evolution, and its position as a leading global airline. The report delves into the challenges faced by the airline industry, the strategies adopted by British Airways, including its service distinctness and customer-centric approach, and its financial performance, including the impact of the ANSOFF matrix. Furthermore, it highlights the company's balanced scorecard, which includes financial and non-monetary performance metrics. The report concludes with recommendations for maintaining profitability and customer satisfaction, emphasizing the importance of financial stability, customer feedback, operational efficiency, and employee engagement. The analysis is supported by relevant references, offering a comprehensive overview of British Airways' strategic management and business practices.

BRITISH AIRWAYS (UK)

EXECUTIVE SUMMARY
The reason behind presenting this report is to get an in-depth knowledge of British Airways
(UK) business, strategies followed by the company, having a view of the performance of the
company and related fields that are essential for overall planning and control of the company.
This report provides an insight to the recently appointed non-executive directors with the
facts related to the business, the implications of the findings and at last the recommendations
that needs to be followed for the success and profitability of the company. Further, the report
highlights from where the company started and how it became one of the largest airlines in
the world and how it has surpassed all the issues and is still sustaining profitability despite of
all obstacles. Lastly, we have provided an overview of the balanced scorecard of the
company.
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Table of Contents
INTRODUCTION……………………………………………………………………………………………………………………………….4
FINDINGS………………………………………………………………………………………………..............................................4
IMPLICATIONS OF FINDINGS………………..................................................................................................5
BALANCED SCORECARD……………………………………………………………………………………………………………………6
RECOMMENDATION………………………………………………………………………………………………………………………...7
REFERENCES……………………………………………………………………………………………………………………………………..8
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INTRODUCTION
British Airways is considered as one of the prevalent top airlines globally. It is the biggest
airline in United Kingdom employing around 40,000 people and convoy of over 280 aircrafts
with its head office in Harmondsworth. On 25th August, 1999, the company completed 90
years in the business. Truly regarded as favourite airlines globally, it serves around 35 million
cups of tea to around 40 million customers yearly and began its journey in the airline industry
with only one commuter (Direct Traveller, 2015). The airline has its central hub at London
Heathrow and covers around 170 places in over 70 countries around the world (Media Centre
British Airways, 2016). The company has its main operations in US and Europe.
FINDINGS
In today’s scenario, airline industry is facing numerous changes and challenges which
requires constant modernization and development. However, British Airways have been
running successfully but is lately facing solid competition from competitors such as
Lufthansa. Government guideline refusal, intermittent oil prices, natural catastrophe,
information technology breakdown, safety issues are some of the problems faced by the
company. The business strategy followed by the said organization is of service distinctness
which is attained with superior passenger services. The airlines long term vision is of
becoming prime quality airline worldwide. To be quality consumer’s first choice in extensive
route destination, fulfilment of consumer needs, and expansion of profits through innovative
income ways are the goals of the company. The airlines advantage that helped it in becoming
the leading market stakeholder lies in its excellent services and geographical expansion
through availability of flights in several countries worldwide. The company made huge
profits of around $15.9 billion in the year 2010 (Dhall, 2017). British Airways has done
tremendous efforts in sustaining itself in the market despite of the challenges. However, the
company faces some tactical development issues regarding internal possessions, individuals
who should be part of decision making and with the external surroundings. The company
follows ANSOFF MATRIX which deals in market diffusion and expansion and product
growth and diversification and is currently following red ocean strategy (Sinjini, 2017). It
also follows five product strategies of core product, basic product, expected product,
argument product which provides extra value to its customers.
The said airways has made a potential groundwork with a huge gain of 1,473 million pounds
in the year 2016 (British Airways Plc, 2016).In the same year, increase in yearly reported
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profit of around 65% was achieved owing to reduced fuel costs and increased demand by the
International Airlines Group. The said group which resulted as a merger of British Airways
and Iberia in the year 2011 reported an increase in operating profit from 1.39 billion euro in
the year 2014 to 2.3 billion euro in the year 2015 (Powley, 2016). The objective of the
company is earning at least 15% return on capital and 12-15% effective yield margin. For the
achievement of the same, it has projected that by the year 2020; almost 99% of the extensive
plane will have to substituted or reconstructed. Overall advancement in customer service with
instalment of Wi-Fi services is projected. Further, investment of funds for further
advancement of technology is also anticipated (Dudovskiy, 2016). Despite of continuous
strikes, the company is still earning profits.
IMPLICATONS AND DISCUSSION OF FINDINGS
On the basis of the above strategies and performance of the company, it is clear that all the
business and marketing strategies adopted by the company are effective and efficient which is
clear from the success of the company despite of certain issues faced by the company. The
directors of the company are liable to prepare reasonable fiscal statement in accordance with
the appropriate accounting policies. Duly observance of intense instruction imposed by
government is required. Adequate safety ways are required to have a competitive
environment. Instability in fuel and exchange rates also affect company’s performance. With
the mounting rates of unemployment, the company possess the advantage of negotiating
power. The company has constructed Plan 4 which is fabricated on four principal tactical
grounds namely customer, operations, efficiency and people. Taking care of modernization
and maintaining elevated standards of services and giving customers wide range of varieties
to choose from, running its operation securely, consistently and correctly, to manage its
capital and becoming more cost efficient and correct utilization of its workers are the main
focus areas for British Airways. Customer is the topmost priority and for the satisfaction and
enhancement of the same, consistent funding is projected of putting up of Wi-Fi across all
airlines.
BALANCED SCORECARD
The company has been successful in forming a balanced set of performance meters for their
business which are both monetary as well as non-monetary. This balance scorecard has
helped them to find out their flaws and improve upon the same. As a critical part of the
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planning which would help the company achieve its targets, the board determines the yearly
targets for every KPI. The BSC is one of the main methods which help in the formulation of
strategies and implanting the same. British Airways has been able to succeed in the airline
industry simply because of the BSC followed. Each and every department of the company
used the said technique so as to achieve its goal. They conducted SWOT analysis which
helped them understand their strengths and weaknesses and the opportunities as well which
they should take care of and also learnt the weaknesses of the other competitors which they
took advantage of to succeed in this industry. With regards the monetary part, balanced
scorecard has been helpful for the company as it ensured eradication of wastes which in turn
took care of the financial performance automatically. British Airways scorecard comprises of
its vision and mission, internal approach to business including its partners and shareholders
and performance. Customers and employees satisfaction and financial stability which is
achieved after applying all these forms a part of the balanced scorecard of the company.
Hence, keeping in mind its goals and interests of its customers, shareholders, operations and
its employees it can and has achieved its standing in the industry.
RECOMMENDATIONS
At the end, from the above facts, findings and implications of findings, we conclude that with
the aim of becoming the world’s largest quality airlines, the company is at the right track in
terms of profitability and customer satisfaction. However, to maintain so it is required to
fulfil its key performance indicators which are in terms of fiscal standing of the company,
customer’s satisfaction, vigorous operations and ethical work environment. Since the
company has projected to make huge investments in innovation and technology, it is liable to
perform well in terms of finances. Company’s success is well established from its operating
profits which is clear from the fact that company goal of attaining 10% operating gain
projected in the year 2002 was accomplished in the year 2007/08 (British Airways Plc,2009).
Hence, it should make consistent efforts for maintaining its dominance by financial stability.
Second way of assessing company’s performance is through client commendation. This
recommendation provides an insight to the company how well satisfied their passengers are
and also affects probable profitability as this would show how they are promoting the brand
by recommending them to others. Hence, it is highly recommended to correctly analyze
customer suggestion. Implementation of healthy operations of the business is also
recommended which is measured by the promptness of the flights to leave. This not only
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ensures adherence to timely operations by the company but also saves company a lot of cost
which would be high in case of delays in flight. Employee review, their satisfaction and
consideration of their opinion matters a lot to an organization. Strict adherence to rules and
regulations set by the company and continuously involving them and drawing their opinions
through various means is also highly recommended and the airlines is taking correct steps to
follow them in order to maintain its success and to improve its performance in future. Also,
the company should follow blue ocean strategy to maintain its dominance in the field.
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REFERENCES:
Direct Traveller. (2015). 6 Facts You Didnt Know About British Airways. Retrieved from
https://www.directtraveller.com/blog/6-facts-you-didnt-know-about-british-airways/
Media Centre British Airways. (2016). BRITISH AIRWAYS FACT SHEET. Retrieved from
http://mediacentre.britishairways.com/factsheets/details/86/Factsheets-3/33
Dhall, R. (2017). A review of the marketing strategy of British Airways and its effectiveness. Retrieved
from
http://www.academia.edu/7763431/A_review_of_the_marketing_strategy_of_British_Airways_and
_its_effectiveness
British Airways Plc. (2016). Annual Report and Accounts Year ended31st December2016 Retrieved
from file:///C:/Users/hp/Downloads/British%20Airways%20Report%20and%20Accounts
%20year%20ended%2031%20December%202016.pdf
Powley, T. (2016). Low fuel costs lift profits at British Airways owner IAG. Retrieved from
https://www.ft.com/content/38c54aea-dc68-11e5-98fd-06d75973fe09?mhq5j=e7
British Airways Plc. (2009). Our Key Performance Indicators. Retrieved from
https://www.britishairways.com/cms/global/microsites/ba_reports0809/pdfs/KPIs.pdf
Sinjini, S. (2017). Strategic management of British Airways. Retrieved from
http://www.academia.edu/20111286/strategic_management_of_British_Airways
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