British Airways: Analysis of CRM and External Influences Report

This report provides a comprehensive analysis of British Airways, a leading global airline, examining its operations within the context of contemporary business and management. The report begins with an executive summary that highlights the importance of understanding both internal and external factors influencing business development, with a specific emphasis on the PESTEL framework (Political, Economic, Social, Technological, Environmental, and Legal factors) to assess external influences. The report then delves into a detailed analysis of the primary external factors affecting British Airways, illustrating their significance to the airline. Following this, the report focuses on Customer Relationship Management (CRM) as a key theme, analyzing its influence on British Airways' decision-making processes. It evaluates the effectiveness of the company's response to these factors and identifies areas for potential development and improvement using CRM strategies. The report concludes by summarizing key findings and providing insights into the airline's approach to navigating the complexities of the business environment.

Contemporary Developments
in Business and Management

EXECUTIVE SUMMARY
Contemporary developments in business and management means developing or
improving businesses through analysing those internal and external factors that can affect or
contribute toward shaping the organization and organizations don't have control on external
factors. These include changing political, economic social technological social, cultural,
environmental or climate circumstances. Also, changing needs and desires of consumers affects
heavily on any organization.
The report has covered brief overview of external factors to which British airways is
subjected and how those factors (political, economic, social technological, environmental, legal,
weather and cultural) proved to be important for British airways. Then, after selecting one
appropriate theme of Customer Relationship Management (CRM), the report analysed how CRM
influenced decision-making policies of British airways, also effectively evaluated their
organizational response, and identified and evaluated area/room for development/improvement
using CRM.
1

TABLE OF CONTENTS
INTRODUCTION...........................................................................................................................3
TASK 1............................................................................................................................................3
Primary External Influences........................................................................................................3
TASK 2............................................................................................................................................6
Customer Relationship Management (CRM)..............................................................................6
The Effectiveness of the Company's Response...........................................................................8
Areas of Improvement...............................................................................................................10
CONCLUSION..............................................................................................................................11
REFERENCES..............................................................................................................................13
2

INTRODUCTION
Contemporary developments in business and management is the process of developing
and improving businesses by analysing micro and macro factors affecting businesses. The report
is prepared in context of British Airways. British Airways is leading global airline company
which is also recognized as second largest airline company across UK. This report will provide
in brief about the major external circumstances that will affect the chosen organization, that is
British Airways of airline transportation sector. And also illustrates, how those external factors
can be important for British Airways. Then after selecting one theme of customer relationship
management, the report will cover how it is important and relevant and influences British
airway's decision-making policies. The selected theme is important for British airways because,
through customer relationship management (CRM) strategies, the organization maintains and
analyse interactions with their customers. CRM helps organizations to plan, develop and manage
policies to enhance customer relationships, to provide better customer satisfaction, which
ultimately results in increasing sales and gaining profits. The report will also cover effectiveness
of organization's response which is based on CRM. And then lastly, it will provide information
about areas of development or room for improvement for British airways on the basis of CRM.
TASK 1
Primary External Influences
In order to analyse and provide brief overview of external factors or circumstances that
affect or impact any organization, PESTEL analysis is carried out. PESTEL stands for political,
economic, social, technological, environmental and legal factors that affect or influence any
organization. Here, PESTEL analysis of British Airways is mentioned below:
Political Factors: These factors plays a major role in affecting businesses of British
airways. Worldwide political stability is needed for British airways to operate efficiently,
because British Airways is global international airline transportation company. British airways is
having conflict with UK government, regarding demand of runway. Rising corruption, and
government's changing policies of trades and other post Brexit also impacted on British airways
(Connor and et. al., 2018). Also, this post Brexit impact will lead to various political
uncertainties. The governments also propose regulations for British airways to counter violence
and illegal immigration.
3

The political factors are important because, the management is dependent on government
to combat with terrorists attacks. They need to ensure safety of passengers and to provide better
customer services. Because such attacks or circumstances affects airline's reputation also in
negative way which result in losing of loyal customers and falling in sales. Also, they had to deal
with regular strikes from workers post Brexit, which affect their services.
Economic Factors: The factors such as GDP of UK or any other country, current
economic system, tax or interest rates post Brexit affected tremendously on British airways. Due
to poor growth of UK post Brexit, many investors withdrawn their investment in British Airways
(Lavery, Quaglia and Dannreuther, 2019). Also, the rate of growth of market affect airlines to
manage demand supply ratio. Also, British airways is engaged in talks with government for
planning another runway, could also have positive impact for airlines, as better customer service
can be provided. Airlines are dependent on oil and gases for carrying out their operations, so
rising prices of oils and gases post Brexit and also due to current situation in Iraq, affected their
businesses in every country. But due to Brexit, government and whole UK is going through
financial crisis, and this proved to be major limiting factor for British Airways.
Economic factors are important for growth of British airways because rising fuel prices
affected British Airway's business. Also, rise in fuel prices resulted in increasing ticket prices or
prices of services for customers. This contributed in losing of customers and reduction in
profitability.
Social Factors: These factor should also be considered for making business polices.
These factors are responsible for improving or deteriorating reputation for any company. Due to
social unrest in France or any other country, strikes are carried out. Also, post Brexit changing
labour laws incited violence in the country (MUMO, 2018). Due to these British airways had to
cancel many of their flight operations.
These factors are also important for British airways, as they have to change or adopt new
policies to counter such situations. Due to frequent strikes, British airways along with other
airlines companies started petitions, demanding action from EU to deal with such strikes in order
to provide better customer satisfaction. Also, British airways after analysing about their potential
market, trend and desires of customers, they had to promote products or services according to
class of populations. For example, they introduced premium services to their ultra rich
customers, also offered affordable products or discounted products to middle class people.
4

Considering all the above, British airways made policies that proves to be value of money for
customers and to provide high quality services. And also customers compare prices of airlines,
this forced British airways to keep prices in similar segment which are offered by rivals.
Technological Factors: These factors refer to use of technology to carry out services
effectively and efficiently. Adopting and using the latest technologies will ease the processes of
airline's functions (López-Lago and et.al., 2019). Use of the latest technologies will completely
change the entire policies of companies, enabling them to provide better customer satisfaction
than competitors.
Technological factors are also important factor for British airways in changing or shaping
their business policies. They analysed about technologies that are gaining popularities, and
studied their impact on businesses. Use of innovative and latest technologies also resulted in
lowering the cost of operations of British airways. Maintaining mobile applications, websites or
introducing more technical services to customers like departure systems, boarding systems, or
more efficient ways to book tickets online, etc. will ultimately ease processes for customers. This
also includes, their investment in the latest servers, because if in case server crashes, it will lead
to tremendous loss to airlines companies in terms of both monetary loss and customers data loss.
Changing and adopting to the latest technologies also improved customer experience for British
airways.
Environmental Factors: Governments of different countries has set up different
environmental norms and procedures according to their environmental conditions. They also set
mandates which limits or restricts airlines' carbon pollution producing activities (McLachlan,
James, and Hampson, 2018). These factors could not be ignored by British airways, if they want
their operations to be carried out in peace. This factor is also important for the British airways, as
it forced them to make changes in policies. They had to adopt such policies from national or
international governments that limits their carbon emissions and radiations. They had to take care
of noise, pollution from their flights, and global climate change. They made necessary changes in
their engine technologies, to combat rising prices and adopted sustainable and renewable energy
sources, which costed them few bucks extra.
Legal Factors: These factors also affected operations of British airways, and are
considered important too. By following the orders of various governments of different countries,
British airways had set up laws like data protection, discrimination, health laws etc. (Patel and
5

D’Cruz, 2018). By adopting these laws, British airways are committed to work according to data
protection law, in which they cannot use customer's data inappropriately. Discrimination and
health laws forces British airways to ensure that no discrimination among employees and among
customers is happening and also have to ensure safety of travelling passengers. In case if they
fail to follow these legal measures, they may face many legal challenges or hurdles, that will
affect their operational tendencies.
Apart from these PESTEL factors, there is also another major factor which could not be
ignored by British airways or any other airline company, that is impact of climate/weather on
operations of airlines. This is also another important factor to which the British airways is
subjected. As weather conditions are not in control of anybody, they are bound to affect
operations of British airways. British airways change routes in South England due to risks of
thunder storms. Through these diverse weather conditions, the company also faced monetary loss
as well as loss in brand image, as they sometimes failed to offer services on time due to extreme
weather conditions. Then comes culture factor which is important and can also prove to be
either beneficial or disadvantageous for British airways. This factor is important for British
airways because, after analysing desires and preferences or choices of different consumers across
globe, it helped them to provide necessary services in context to their preferences and cultures.
This helps British airways in attracting customer as well as in losing some customers, due to
failure in providing services to people without knowing about their cultures.
TASK 2
Customer Relationship Management (CRM)
Customer relationship management is a specific approach for the businesses to manage
their relationship with customers in the market. It is too important in build large customer base in
the market. Customer relationship management is too relevance to the British Airways. The top-
level management of the company is specially focuses on this particular topic. The marketing
team of the company runs various activities in the market to build effective relationship with
customers (Skoumpopoulou and Franklin, 2019). The company perfectly understand the business
term called; 'customer is the king of market'. Currently the company has great customers base in
their home country, United Kingdom and also in the other countries too. The British Airways
succeed in built loyal customer base in the multinational market, because its customer
relationship management is very effective at their work.
6

Influences of Customer Relationship Management
CRM is very helpful to the company, because with the help it the British Airways able to
gain loyal customer base in the market. This is highly influencing the policies and decision-
making aspects of the British Airways. Suppose the British Airways want to expand their
business operations in new markets. In this case, the management of the company creating
specific policies related to the relationship with customer in the new market. The marketing
department of the company runs their task for build effective relationship with the people in the
new market (Gummesson, 2017). The company taken decisions to hire some highly qualified
policy-makers in their business environment which will make effective policies for build
effective customer relationship. In this time the company regulating many policies based on
CRM in their business operations. The major policy of the British Airways is “offer best of the
best services to the customers”. It also created different policies in the favour of different income
groups of people. It always tries to fulfil such needs which customers expect from the company
or airline industry. For example; safe zone in the flights and airports. So, the company
completely considering this topic in their operations. It is also made some policies for such
customers which always choose the British Airways for travelling. These customers are basically
loyal customers of the company. So, in these policies it mentioned, the company give special
discounts and offers to those customers which always give priority to the flights of British
Airways. These steps of the company are very important to build effective relationship with the
customers.
On the other hand, it is also influencing the decision-making aspect of British Airways.
The top-level management of the company is mainly taking all necessary and important
decisions for the business development. In which the customer relationship management also
completely controlled by the company's manager (Partanen, Jajaee and Cavén, 2017). The CRM
giving great contribution in the all over growth of the British Airways. The management is taken
some productive decisions towards good customer relationship. Currently the management
totally given CRM authority to their marketing department. The marketing department of the
company supervises all activities which are conducted for the purpose of making good
relationship with customers. The management many times take decisions for invite customers at
their meet-up events or programmes.
7

The top-level management also taken many decisions for provide quality services to the
customers in their passenger flights (Lopes, 2018). The company taken decisions for develop
exclusive services for the customers. It is also good step towards build good relationship with the
customers. Specially in the European countries where people are literate and giving high priority
to those airline companies which provide quality services. In which they are ready to pay any
cost to buy quality services during air travelling. So, here is the decision-making of the British
Airways highly influencing with these factors. Now the company taken many decisions for use
such business strategies in operations. These all are some major influences of the customer
relationship management on the British Airways.
The Effectiveness of the Company's Response
The British Airways is effectively responding on the customer relationship management.
It is runs many activities under their business environment which are necessary in build good
customer relationship (Wali and Wright, 2016). Currently, the company is leading the airline
industry in their home country, United Kingdom. The main reason behind this statement is, the
company's effective relationship with their all stakeholders including customers. It is showing
logical and meaningful advertisements to their customers which positively influence them.
When the customers take economy cabin for international travelling, then it offers them
their exclusive and free snacks, lunch, dinner, and complimentary drinks. It also provides a
lighter snack to the customer few minutes before landing. So, the customers are highly
appreciating company's these services on the social media. The company also providing many
additional complimentary services to the customers in different countries (Ranjbar and Rezaei,
2017). The top-level management is also focuses on avoid issue related to the flight delays. This
issue is badly impacting to the customers' relationship with the British Airways. In some cases
when their fights get delay for any reason, in this case the company provide them special
facilities at the airport, like; free food and drinks etc. It is almost covering all activities which are
necessary in build good relationship with customers. There are large competition in the
international airline industry. So, to deal with this challenge, CRM playing great role for the
company. There are included major responses of the British Airways towards CRM in their
business environment.
Providing Training to the Staff: The communication skills are playing great role in the
airline industry. The company completely understand the role of good communication skills. So,
8

It is fully trying to train their employees or staff for improve their communication skills.
Specially of their flight attendants or air hostess, because they are generally dealing with the
customers in flights (Sharma, 2020). It trains their staff to improve their interaction values,
because without good interaction values the company can't build good relationship with their
customers.
Providing Additional Services: The company also providing additional services to their
customer in the flights, like; free food and drinks, medical service, security guards etc. With
these services the company offers more exclusive and effective services when any customer
travel in their business class cabin. These all factors are positively impacting to the relationship
between the British Airways and the customers.
Providing Effective Discounts and Offers: It is also providing many discounts and
offers to the customer for gain their attention towards brand. This response of the British
Airways is also very helpful in make good relationship with the customers. The company
specially care for those customers which always taking flights of British Airways for air travel
(Li, Huang and Song, 2019). These customers are generally loyal customers for the company.
So, it always tries to give them best of the best deals when they buy company's flight ticket.
24*7 Customer Care Services: The British Airways also providing full time customer
care services. In these services, the company taking complaints and feedbacks from the
customers, and then take suitable steps to solve issues related to the complaints and feedbacks. It
is totally productive response of the British Airways towards CRM. In case, if any customer face
any issue while using company's services then, it able to contact customer care service of the
British Airways at any time (Williams, 2017). The customer care department of the company is
also very effectively working at their workplace, because when any customer contact to the
customer care then they respond in very fast manner. So, it is also too good for the company to
make good relations with the customer.
This response of the company is a small part of their all operations. The top-level
management of the British Airways still effectively working on improve these all services for the
customers. Currently, in the airline industry there are almost all companies are putting their full
efforts in build good relationship in the market with the customers. The counters of British
Airways in the different airports are also very customer friendly (Paliouras and Siakas, 2017).
They give special support to those customers which first time taking the air travel option by
9

guide them. So, this is the basic response of the company towards customer relationship
management.
Areas of Improvement
Currently, the top-level management of British Airways systematically operating their all
operations in the international market, but it still needs to improve their some areas of operations
within business environment. Improvement also necessary to gain high competitive advantage in
the airline industry. The company is a big part of the airline industry. In which the company need
to improve their technological aspect. Day by day there are various technological gadgets and
equipment are coming in the market. In this case, the company need to use these modern gadgets
in their business activities to improve its all over performance in the market (Rawal and
Saavedra, 2018). This step of the company will put good impression on the customers. There are
some areas for improvement in the British Airways' response are mentioned below;
Add More Quantity in Free Meals: The company currently providing free meals,
specially to those customers which take long flights, but in these meals the food quantity which
the British Airways offer is very low. Many times the customers also mentioned that the food
quality is good but not much effective. In which the company need to offer them best of the best
food quality according to its brand reputation.
Regularly Maintain Social Media Handles: In this time, the social media platforms are
the best way for the company to interact with the customers. In which the company need to
maintain their all social media handles which are based on Instagram, Twitter, Facebook, etc. It
needs to post their pictures, videos, ideas, new policies, new trends on these platforms on the
daily basis (Bijadeh and Rostami, 2019). Then, people will able to give their reviews and
feedbacks through comments. It is the best way to know what customers actually expect from the
company. Then, it needs to provide their services on the basis of customers' expectation. This
step will also improve the over all business performance of the British Airways.
Improve Service Quality: Services of British Airways are too good, but it still needs to
improve them, because those services which the company offering to the customers these all are
also provided by the other airlines as well. So, now there is no big difference exist in British
Airways services and other airlines' services. For build effective relationship with the customers,
the company needs to focus on providing some exclusive services to them on the same price. It is
too necessary for the company, because currently the market competition highly increasing day
10

by day. In this case, if it continuously offers these same services in the future also, then it will
tough challenge for the company to sustain in market competition.
Maintain Punctuality: Proper time-management strategies are giving great contribution
in any company's growth in the airline industry. In this case, British Airways also need to
improve their punctuality aspect to provide the best satisfaction to the customers (Newbury,
2016). Many times, it becomes hard to the company for give response to customers in few
minutes when many queries come together. So, to deal with this issue, it needs to hire more
query attendants, because when customers contact to the customer care of the company and
when they not receive any response on time, then they get unsatisfied with its services.
Organize Meet-up Events: The company need to organize meet-up events at least twice
in a year, where it needs to invite special and loyal customers for meet-up with the management.
This type of events is promoted the good relationship with the customers. These events are really
given great opportunity to the company to build effective customer base in the all market
segments. The management need to take some decisions towards meet-up events. So, this is also
a big area for improvement in British Airways.
In case, if the company will improve these all areas, then it'll also able to achieve their
decided goals in the airline industry. The main reason behind this statement is, if once the
company can build effective relationship with the customers, then it'll help in gaining high profit
in the market. The technological factor will give high contribution in the improvement. The IT
department of the company specially responsible for implement these all latest gadgets or tools
in the all operations for increase work efficiency of the British Airways.
CONCLUSION
It can be concluded that the external factors are highly influencing to the business
environment of the British Airways. These factors are influencing in both terms; positively and
negatively. In which these all factors are important for the growth of the company. Customers
relationship management is very useful to the company. With this, the company enables to gain
large customer base in the international airline industry. With the support of its effective business
strategies, British Airways currently running their all operations in progressive manner. The
marketing department is specially responsible to build good relationship with customers of the
company. The CRM is impacting or influencing the policies and decision-making within
business environment. The company made many policies and taken lots of needed decisions for
11

making effective relations with their customers. The company need to focus on innovation factor
to improve the all over performance of the company. Proper customer relationship management
is very helpful to the British Airways to gain high competitive advantage in the airline industry.
12

REFERENCES
Books and Journals
Bijadeh, M. and Rostami, H., 2019. Investigating the Effect of Knowledge Management and
Customer Satisfaction on Sustainability of Customer Relationship Management (CRM).
JOURNAL OF MANAGEMENT AND ACCOUNTING STUDIES. 7(01). pp.51-54.
Connor, P and et.al., 2018. Sources of risk and uncertainty in UK smart grid deployment: An
expert stakeholder analysis. Energy. 161. pp.1-9.
Gummesson, E., 2017. From relationship marketing to total relationship marketing and beyond.
Journal of services marketing.
Lavery, S., Quaglia, L. and Dannreuther, C., 2019. The political economy of Brexit and the
future of British capitalism first symposium. New political economy. 24(2). pp.252-257.
Li, Y., Huang, J. and Song, T., 2019. Examining business value of customer relationship
management systems: IT usage and two-stage model perspectives. Information &
Management. 56(3). pp.392-402.
Lopes, A. L. A., 2018. Customer Relationship Management Strategy: the factors towards a
success implementation.
López-Lago, M and et.al., 2019. Present and Future of Air Navigation: PBN Operations and
Supporting Technologies. International Journal of Aeronautical and Space Sciences.
pp.1-18.
McLachlan, J., James, K. and Hampson, B., 2018. Assessing whether environmental impact is a
criterion of consumers when selecting an airline. International Journal of Advanced
Research. 6(3). pp.740-755.
MUMO, M. G., 2018. CORPORATE SOCIAL RESPONSIBILITY AND PERFORMANCE OF
SELECTED AIRLINES OPERATING IN KENYA.
Paliouras, K. and Siakas, K. V., 2017. Social customer relationship management: a case study.
International Journal of Entrepreneurial Knowledge. 5(1). pp.20-34.
Partanen, J., Jajaee, S. M. and Cavén, O., 2017. Business Intelligence Within the Customer
Relationship Management Sphere. In Real-time Strategy and Business Intelligence.(pp.
123-147). Palgrave Macmillan, Cham.
Patel, H. and D’Cruz, M., 2018. Passenger-centric factors influencing the experience of aircraft
comfort. Transport Reviews. 38(2). pp.252-269.
Ranjbar, M. and Rezaei, F., 2017. The Relationship between CRM and Relationship Marketing
Strategies with Customer Satisfaction. Research Journal of Management Reviews. Vol.
3(1). pp.13-20.
Rawal, M. and Saavedra, J. L., 2018, May. Social Customer Relationship Management and
Company Intervention: A Strategy to Build Trust: An Abstract. In Academy of
Marketing Science Annual Conference.(pp. 259-260). Springer, Cham.
Skoumpopoulou, D. and Franklin, B., 2019. Implementing a Customer Relationship
Management (CRM) System. In Advanced Methodologies and Technologies in Digital
Marketing and Entrepreneurship.(pp. 57-69). IGI Global.
Wali, A. F. and Wright, L. T., 2016. Customer relationship management and service quality:
Influences in higher education. Journal of Customer Behaviour. 15(1). pp.67-79.
Williams, J., 2017. Customer relationship management systems role in supply chain management
strategy.
13

Online
Newbury, E. 2016. The Importance of Customer Relationship Management Within a Business.
[Online]. Available Through:
<https://www.digitaldoughnut.com/articles/2016/april/the-importance-of-customer-
relationship-management>.
Sharma, R. 2020. 14 Reasons Why CRM Is Important For Any Business In 2020. [Online].
Available Through: <https://technians.com/blog/why-crm-is-important/>.
14

Appendix 1
Company Profile
British Airways is one of the leading airline companies in the UK, headquartered at
Harmondsworth, United Kingdom. Heathrow airport, London is the main hub of this airline. It is
the most popular airline company in their home country after the Easy Jet. The company was
established on 31st March 1974. It was generated approx £13,020 million revenue in 2018 and
still running their all operations on the progressive path. “City Flyer” is the subsidiary company
of the British Airways. Currently the company holding high reputation in the European airline
industry. It also has the large customer base in the international market. The top-level
management of the company currently focuses on expand their business operations in the new
market segments.
15