British Airways: Organizational Strategy and Competitive Analysis

This report provides a comprehensive analysis of British Airways, examining key challenges in its external environment, including employee turnover, ticket pricing, and operational limitations. It delves into the internal business situation, highlighting the impact of Covid-19 and increasing fuel costs, alongside a SWOT analysis that identifies strengths like its market image and weaknesses such as its UK market dependence. The report explores the competitive environment, discussing the effects of international travel restrictions and the influence of Covid-19. It then applies Porter's Five Forces model to assess competitive intensity, focusing on the threats of new entrants and substitutes. The analysis also includes comparisons with competitors like Uber and Travelodge, and discusses the importance of building brand image, gaining customer trust and loyalty. Finally, the report suggests strategies for the airline to overcome challenges and leverage its strengths, emphasizing the need to address customer security concerns and maintain its competitive advantage through enhanced services and loyalty programs.

ORGANIZATIONAL
STRATEGY

KEY CHALLENGES FOR EXTERNAL
ENVIRONMENT
 The turnover of employees in British Airways is high because they are not
paying their employees as much as they should be.
 The pricing of the tickets for the customers is also high which makes the
ratio of people travelling with these airlines limited which is not a good
factor for a long run (Al Dakheel and et.al., 2020).

NOTES
 The company is not permitted to travel to destinations without
having permission being taken in advance which gets limitations for
the organization which is not good for a long run (Bonnisseau,
2020).
 There is a sense of de-motivation in the organization which is not a
good factor for a long run and the company will not be able to have
high profit margins.

INTERNAL BUSINESS SITUATION AND
RESOURCES
 Covid-19 has created a great lose for the organization and it is not good for
the business and due to this the company has lost a lot of employees.
 There is a growth in the airline companies in the market as well which is
not good for the operations and the pricing of services as well (Sadchenko
and et.al., 2020).
 Resources are present in the company and the pricing of fuel is increasing
which is affecting the pricing of the fair for the customers as well which is
making the company have limited customers.

SWOT OF BRITISH AIRWAYS
Strengths
 One of the main strengths of this company is improved image in the market.
 It is the market leader in the UK.
 Other strength of this company is high level of digitalization and integration
of IT (Lukkarila, 2021).
Weaknesses
 The main weakness of this company is it is highly dependent on the UK
market.
 Appointed new CEO Alex Cruz has a little experience in leading premium
segment airline.

NOTES
 The services which the airlines if providing is for all the different
age groups and different age groups can have different kind of
services but the travelers have reduce in 2020 (Uktamov, 2020).

COMPETITIVE ENVIRONMENTS OF
THE COMPANY
 International markets are not allowing travelers from outside the country
which is why the international fights are also not taking place.
 The company has been able to make a place for themselves in the market
but Covid-19 has affected the company very much because of which the
company is in loss (Dincer and Yüksel, 2020).
 According to the lifestyle and the services they opt for British Airways also
provide those services to them so that they can have a better trip with the
airlines.

CONT…
With the help of Porter’s five forces model, intensity of competition
can be known in detailed manner such as:
 New entrants’ threats: There is low threat of this power because of
requirement of high investment. There are numbers of well-known
companies so, it become difficult to enter in this industry and
making a competitive edge (Shaw and et.al., 2021).
 Substitute’s threats: It has medium threat. In regard to substitutes it
can be said that there are numbers of transportation modes are
available such as train, bus, car, ship. These modes can pose a threat
because as compared to air, other substitutes are affordable. But
higher income of people prefers air and British airways.

NOTES
 The other airlines have been able to make a place for themselves in
the market again because they have taken the right measures to be
able to get back the trust of the customers (Ghomi-Avili and et.al.,
2020).
 British Airlines will have to take the right measures and strategies
for the future so that they will be able to get back the customer base
which they had established for themselves.

OPTIONS AND DIRECTIONS
 The company will have to take the right measures for Covid-19 so that
there is going to be a good understanding and safety of the customers so
that they can get the trust of the customers back (Voynov and Babenko,
2020).
 The company will have to do their best so that they can take back the same
net income which they had in the past and this Covid-19 situation can be
balanced in the world.

COMPARE
BASE BRITISH
AIRWAYS
UBER TRAVELODG
E
CHALLENG
ES
Building the
brand image
reputation and
brand value
increase.
Making a place
in the market.
Gain consumer
trust and
loyalty.
COMPETITI
ON
Medium Low High
FOCUSED
STRATEGY
Pricing strategy Promotional
strategies
Offers and
packages.