Report on International Business Strategies of British Airways

This report examines the international business strategies of British Airways, a major player in the airline industry. It delves into the use of international strategic alliances for foreign market expansion, exploring the motivations behind these alliances, their benefits, and the challenges faced by the partners involved. The report also analyzes alternative market entry strategies that British Airways could employ. The literature review covers key themes such as the role of alliances in expanding operations, the reasons behind forming these partnerships, the advantages and disadvantages for the participating companies, and other market entry options like licensing, franchising, and joint ventures. The analysis and discussion section applies these concepts to British Airways' operations, offering insights into the company's approach to international business. The report concludes with a summary of findings and recommendations.

INTERNATIONAL
BUSINESS

Table of Contents
INTRODUCTION...........................................................................................................................4
Theme 1: Use of international strategic alliance in foreign market expansion...........................4
Theme 2: Motivation behind the formation of selected international strategic alliance.............5
Theme 3: Benefits and challenges of international strategic alliance selected to partners
involved.......................................................................................................................................7
Theme 4: Suitable alternative market entry strategy...................................................................8
ANALYSIS AND DISCUSSION...................................................................................................9
CONCLUSION..............................................................................................................................13
REFERENCES..............................................................................................................................14

Executive summary
International business can be defined as business that have scale of operation across
worldwide that helps it in earning high profitability. Furthermore, there are various use and
benefits of internationalization that are enjoyed by the firm. Along with it the company also faces
challenges while formulating internationalization strategies so alternative method has to be plan
by firm to cope up with the same for benefits of organization. So, at last it has consists of
different market entry strategies that could be used by firm to enter into international market.

INTRODUCTION
International business refers to exchange of products and services across national borders
or at global scale so that requirements can be fulfilled in the best possible manner. Airline
industry is company that offer regular services for transporting passengers or goods via air.
Furthermore, it can be stated that this report has covered crucial information related to British
Airway. The company is flag carrier airline that have started its operation on 31 March 1974
having its operation across 183 destinations. British Airway is third world largest airline in terms
of annual revenue that it generate through delivering qualitative services to range of customers. It
has included critical review of literature through using international strategic alliance in foreign
market expansion. Assessment of benefits and challenges that company might face in
international strategic alliance. Moreover, alternative market entry strategy that could be used by
company in order to grow and expand its business operation in international market. So, it has
covered detailed pertaining to literature review, analysis and discussion and conclusion. Or
international strategic alliance that has use by British Airline in order to grow and expand its
business operation in international market.
LITERATURE REVIEW
Theme 1: Use of international strategic alliance in foreign market expansion
From the point of view Hill and et.al., (2017), it can be stated that international strategic
alliance in foreign market expansion is collaborative arrangement between the firm that are
working in different countries. Thus, the partnering firm remain legally independent even after
formulation of alliance. Moreover, international business alliance lead in sharing of resources,
capabilities, information and risk between the two firms so that the desired objectives can be

achieved in fruitful manner. Therefore, as per author perspective company can easily expand its
operation in international market through making alliance with other reputable organization.
As illustrated by Reuber and et.al., (2018), there are various characteristics that needs to
be present in the international alliance firm such as it must be independent of partners, shared
benefits and ongoing contribution. Likewise, the two or more firm has set agreement between
each other related to achieve the goals but have independent scale of operations. Both the firm
contribute to each other in terms of technology , products and services which can be used in
order to grow and expand business operations in international market for maximum benefits.
Furthermore, another author Pehrsson, (2019), has supported that there are different types
of strategic alliance such as functional and others. Likewise, company may form alliance in
terms of function that is production, marketing, research and development and financial.
Whereas, other alliance are formed in manner of joint ventures, outsourcing and others. Out of
which most of the companies make use of joint venture alliance while expanding its business in
international market with an motivated to gain maximum benefits. Thus, all these different types
of international strategic alliance can be used by firms for achievement of their respective
objectives.
Theme 2: Motivation behind the formation of selected international strategic alliance
As per the view of Murray and Mahon, (2019), there are various reasons and motivations
for the organizations in order to enter into the strategic alliances when they are facing certain
issues while entering into the new and innovative market scenario. Previous companies are more
prone to adopt joint venture strategies in order to enter into the new external market. But
nowadays they are more going towards the strategic alliances because of their various
advantages and benefits for both the organizations who are participating within this activity and

the other one as well who adopts certain actions. Cooperation from local organizations in target
market in which they are already exists will make the strategy adopting firm to get familiar with
political and economic environment of the country within very short span of time.
However, in view of Lowndes and Skelcher, (2018), it has been described that there are
certain entry barriers that affects the firm who wants to enter into the new foreign market and
wants to successfully expand their business activities in most fruitful manner. The strategic
alliances are highly appropriate in most of the countries in context of every industry type. This is
a very common practice that has been utilised in international market by almost all of the
companies to enter into the market in which various competitors has already shared their large
market share. With the expansion of activities into global market, firms are able to extend their
offered product line range and fill the gaps through their product extent. This also helps them to
approach huge amount of consumers within the local as well as global market place along with
the expansion of its brand value in front of their competitive establishments as well.
According to Parkhe, (2020) it has been identified that involvement of strategic alliances
can alter overall structure of the firm with the help of involvement of new and advanced
technologies within the working and thus change the overall ways the companies can operate in
that industry. Newly introduced firms may not have to alter their products but introduction of
advanced technologies is highly appreciated and required by customers. Many firms form
strategic alliances in order to eliminate potential competitors who are becoming their future
direct competitors. This is vary common strategy for the firms who want to extent
internationally. From many studies it has been analysed that most of the firms did alliances with
the establishments who are already famous into that particular market space. Majority of
companies utilises their manufacturing distribution channel and human resource of their partners

after the completion of strategic alliance activity in order to get success in very quick manner.
This activity also helps their employees in the situation where they are lacking behind
into certain skills and with the help of this strategy, the company is able to gain training
advantages from their alliance partners. Although, it has been evaluated that almost all
organizations in each industry are well known the benefits of the alliances as they acts as a
helping hand for the firms who wants to enter into the new and innovative market for an
intention to expand their business activities in order to gain profits for their firm.
Theme 3: Benefits and challenges of international strategic alliance selected to partners involved
As per the view of Denysenko and et.al., (2019), it can be explained that company
through international strategic alliance can get benefits of gaining new client base and adding
competitive skills. Company can easily attract new and new customers to become part of
organization so that it can enjoy high market share and profitability. Moreover, it can easily gain
competitive skills or able to higher more talented, qualified and experience employees within the
firm. Another benefit of international strategic alliance is that it helps in reducing the amount of
risk as it is shared between the two companies. Thus, it companies can easily enter into new
market with minimum restrictions for its growth and development in future circumstances.
According to Karafyllia and Zucchella, (2017), companies through making use of
international strategic alliance strategy can create its strong brand image or awareness in mind
and hearts of customers. Thus, it finally results in enhancing overall sales volume and market
positioning of firm in international market. Moreover, the company is able to get knowledge of
market condition and financial assistance related to the way finance can be optimum utilized.
The author further clarified that it also helps in expanding the network opportunities as
companies is able to formulate relationship with range of other firms.

However, Pitsis and Gudergan, (2019) reflect in their study some of the challenges as
well that are incurred within the strategic alliance strategy such as the party party which manages
all of its business activities must rely on the another firm in context of their business activities. It
sometimes creates clashes among the cultural backgrounds or lack of independence which is the
foremost challenge within the alliance strategy. Moreover, the organisations may withdraw
themselves from future administration opportunities with the contender of their strategic partner.
The challenges are bigger in the case where both the parties who are engaged in this activity are
not economically equal. It may creates losses of operational power and secrecy of proprietary
substance and technology. Thus it is highly important for the establishments to cautiously
examined all the agreements that there is no surety that the alliance will benefit the firms in
fruitful manner.
Theme 4: Suitable alternative market entry strategy
Zollo, Minoja and Coda, (2018) explained in their study that there are many strategies
apart from strategic alliance in order to get entry into the new and innovative marketplace. In
order to fulfil their core requirements there are other alternatives to get enter into the global
market such as contractual agreement as this process is completely responsible for transferring
technologies, human skills, procedures and trade marks. Licensing and franchising are the two
individual contractual agreements that are mostly utilised by the establishments to get entry into
the international market place. In the process of Licensing company can able to use its own trade
marks and technologies while franchising refers to the procedure which provides a standard
package of goods and services to a representative. Another alternative method is the joint venture
which is used to undertake an economic activity by a group of companies. It is beneficial for

both the participating firms in context to that they may avoid barriers related to the culture and
other hurdles in achieving specific goals and objectives of the group of company.
As per the view of Baylis, Wirtz and Gray, (2018), it has been identified that there is an
other alternative solution as well namely Turnkey project. This option refers to the project which
is developed in foreign countries. Such kind of projects are always based on the principles
including Build, operate and transfer. With the help of this turnkey projects, the firms are able to
establish themselves in easy terms within the global marketplace. These projects are helpful in
earning money or revenue on the basis of information and knowledge. Another advantage of
such kind of strategy is that it has fewer risks involved than doing direct investments in the
foreign market.
ANALYSIS AND DISCUSSION
From the above analysis it can be stated that company through formulating international
alliance strategies can easily attract and retained range of customers within organization or
sustain its business operations in international market. Likewise, British Airway is one of
leading company in Airline industry of United Kingdom that is delivering qualitative
transportation services to customers for fulfilment of their respective desire. British Airway
through emphasizing on international strategies' alliance is able to easily grow and expand its
operations in foreign market. Thus it is agreement between the two firm that have mutually
agreed to share the benefits as well as loss of project while retaining their independence.
Moreover, the agreement is not much complex, and in it the business pool their resources to
create a separate business entity and enjoy huge profitability (Swoboda, Morbe and Hirschmann,
2018). At the same time, organisation mainly enter into strategic alliance in order to expand its
business into new market or improve its product line so that the end objectives of company can

be achieved in the best possible manner. In context of British Airway it has form international
alliance with companies such as American Airlines, Iberia and Finnair that has helped in making
the global travel experience more rewarding and easier. Thereby providing more satisfaction to
customer’s so it can be summarized that British Airway has mainly made use of international
strategic alliance in order to grow and expand business operations in international market for
earning higher profitability.
In context of British Airways, it has been identified that the motives behind doing
strategic alliances with the many other airlines in order to get entry into the new market
environment are formation of economies of scale as with the help of shared and advanced skills
the British airways also able to get easily able to perform within the new market. For instance
partnership with American airlines, Finnair and Iberia across the Atlantic it has been evaluated
that it highly benefited in providing great fair facilities, smoother connections along with
integrated customer support (Haq and Sohail, 2018). British airways are able to get advantages
and can easily rely on other well established firms in the market in which they want to enter and
thus resulting in less amount of time spending along with wastage of resources. It also enables
the firm to divide their global business risks by sharing research and development costs and
facilities provides good value for money to all the firms that are involved within this activity
(Khan and et.al., 2021). It also speed up the whole procedure of getting entry into the market
scenario. The motive behind doing this activity is to set new standards with the help of doing
development in technologies that are highly important in order to get entry into the new market.
It highly convinced the alliance of British airlines with other similar industry airlines, which can
fulfil the motive of getting start their functioning or activities into new market as well. It possible
prevents other competitive firms to get enter into that similar market place.

In addition to this it can be stated that there are various benefits that are enjoyed by the
British Airway through making international alliance with other companies. Such as, it has
alliance with American Airlines, Finnair and Iberia across atlantic and Finnair, Iberia and Japan
Airlines in Europe and Japan. All these have provided different benefits to organization such as
customers are able to access great prices across the mix and match of the flight in order to get
best deal. Along with it company is able to provide integrated customer’s support through
different airline thus able to make them happy and satisfied too much extend (Aagaard, Aagaard,
and Harrison, 2019). It also offers extensive network through connecting with 100 cities in Asia,
Africa and Middle east.
Smoother connection for onward flight by making use of coordinated schedule and one
world is able to provide global support or effectively operate its functions. Moreover, the another
benefits that has been enjoyed by the airway is use of British Airway and Qatar airway website
in order to book flights, make online check of in and out or getting the boarding pass for the
flights. Thus, it enhances customer’s satisfaction level and contribute in building strong of firm
in airline industry. On the other hand it has also been find out that there are different challenges
that British Airway faces while operating its functions. Likewise, it faces challenges pertaining
to choosing right partner that can honestly, integrity and dedicatedly work with each other.
Building mutual beneficial Alliance is another challenges that firm face while planning
international strategic alliance for benefits of organization (Pehrsson, 2019). As each business
have different purpose, needs and wants so it is somewhat difficult for firm to build mutually
agreed relationship with each other. So, all these are major challenges that has been faced by the
company in context of international strategic alliance.

Generally, it has been seen that firms typically approach international market with full
caution. So as with the British airlines as well. The firm analyses the market opportunities before
entering into any contract in order to get enter into the new globalised market place along with
the assessment of internal capabilities to determine the correct approach. Apart from strategic
alliances, the exporting is an option to adopt while entering into the international market. It is a
very low risk strategy that most of the firms finds it attractive to get entry. It fulfils various
reasons requirements such as it is less risky and more profitable concept, Airways who face
season demands may get benefits from such kind of strategy through which they can share their
services in most effectual manner. Another example is in the form of trade intermediaries.
British airways can hire an expert to enter into foreign country market and thus can hire trade
intermediaries who fulfils the necessary requirements in terms of creating contacts and
relationships with the new potential customers in the global market space. Subsidiaries is also
an alternative option to get enter into the globalised market. This strategy refers to the creation of
sub branches of the British airways that are located in diversified locations (Baum and Auerbach,
2017). The main branch known as the parent company while others are the sub branches of the
main organization. Its benefits includes easy handling of risk factors, provides good
performances for different operations and can easily able to promote the offering services.
British airway while expanding its business operation in international market can make use of
different strategies such as joint venture, partnership. Such as through making use of joint
venture that is two firm independently that have decided to work together in particular market.
Thus, risk and profitability of company are shared in equal basis between the firm that helps in
rapidly growth and expansion of business. Likewise, the British Airway has formulated joint