British Airways Competitive Advantage: A Business Report

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EXTENDED BUSINESS PROJECT
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Table of Contents
Individual assignment.......................................................................................................2
1. Introduction.................................................................................................................. 2
2. Company overview.......................................................................................................2
3. Competitive advantage................................................................................................ 4
4. Analysis of competitiveness position of organisation...................................................8
5. Recommendation for next 2-5 years..........................................................................11
6. Conclusion................................................................................................................. 11
Reference list................................................................................................................. 13
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Individual assignment
1. Introduction
Identifying different competitors is important in every sector for enhancing the
competitive position of business operation. International businesses need to evaluate
the internal and external business environment for developing organisational policies for
sustaining their position in the business market. In this business project, competitive
position, and functional areas of a well-known organisation, that is British Airways will
be discussed for understanding the competitive position in business. The study will
develop a proper understanding of the marketing and human resource strategies of
British Airways and will develop recommendations for next 2-5 years.
2. Company overview
British Airways is a popular airline company that provides discipline airline services to
the passengers and the cargoes in UK and other global countries. The company is
established in year 1972 having headquartered in UK, Harmon worth. The company is
found to operate its business in about 183 destinations and are having more than 280
airplanes consisting of 787 and A380. In year 2018, the company has generated £13
million revenue (Britishairways.com, 2019). This indicates that company has been able
to gain a strong position in the airline sector. Total number of employees working
currently in British Airways is 42,384. Based on the information, it has been found that
staffs of the company ensure that customers travelling through the flights are satisfied
with the services. The company aims at providing top-quality services, favourable
choice of airlines, enhancing the product, services, and offering extensive customer
services to every group of passengers.
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Figure 1: Market share of British Airways in the operating countries
(Source: Britishairways.com, 2019)
3. Competitive advantage
External environmental analysis
External analysis of business is done for evaluating the macro factors that affect in the
business functioning of an organisation. In this table, external analysis of the aviation
industry of UK has been done in order to understand its affect in the operations of
British Airways.
Pestle factors Analysis
Political  Event of Brexit has occurred in UK that
has high trade costs and FDI inflow has
decreased by 22% (Market-
inspector.co.uk, 2019). Thus, this is the
prime reason for the difficulties of
business in airline industry, as Brexit
would reduce the profit margin of airline
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business.
 The terrorist attack that took place at
Brussels airport in 2016 has resulted in
the declination of share price of British
Airways by 1.5% (Fletcher, 2016).
 Other factors affecting BA are corruption
level, bureaucracy level, and trade union
activities largely.
Economic  Economic factors like inflation rate and
currency exchange rates directly affect
on the performance of BA. Cost of fuel is
a vital economic element that may affect
due to economic factors.
 In 2015, expenses of BA on fuel have
lowered by 13.8% compared to previous
year due to the decrease in the inflation
rate (Wilkinson, 2015).
Figure 2: Falling oil price in aviation, UK
(Source: Wilkinson, 2015)
 Significant fall of the oil prices in UK in
last two years has caused in the drop of
price of air tickets and decreased the
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revenue growth of BA by 2.8%.
Social  The population rate of UK is increasing
at huge rate and the statistics shows that
there is a hike in population to 67 million
from 65 million among year 2015 and
2018. Therefore, BA is having
opportunities to increase revenue growth
in business.
Figure 3: Population growth of UK
(Source: Evans et al., 2017)
Technology  British Airways has connected their
business with mobile phones and
internet that helps the passengers for
effective check-in.
 Environmental mitigation technologies
and other capacity enhancing
technologies are used in airline industry
that helps in managing the departure
time and arrival time of the passengers
effectively. Hence, it is influencing the
business of BA largely.
Legal  UK government has encouraged the
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airline businesses to implement Aviation
law 2019 that are regulated by civil
aviation authority of UK (Meneghetti and
Perrotta, 2019). This helps BA to
maintain the common issues in airline
business such as aircraft trading,
leasing, dispute resolution and financing.
Environmental  In UK regions, there is over-increasing
level of air, water, and noise pollution.
Hence, BA needs to manage
environmental concerns such as climatic
changes.
 UK government has developed new
rules and regulations that can help BA to
limit the radiation and emission growth.
Table 1: Pestle analysis
(Source: Research-methodology.net, 2016)
Internal environmental analysis
Analysing the internal environmental factors can help in understanding the internal
condition such ads staffing, competitors, strategies, opportunities, and threats in
business operation. Micro factors of BA will be analysed to gain an overview of their
current business position.
Strengths
 Strong brand value
 Second largest aviation in UK
 The company is operating in 6
continents and 150 international
locations
 Effective advertising and marketing
Weaknesses
 Staff issues that is causing service
disruptions
 Disruption because of issues of
infrastructure system
 BA is not able to tackle the new
challenges of new entrant, hence
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strategy
 Strongest hub in England and
Europe region
significant loss of market share
Opportunities
 Use of partnership and joint venture
for enhancing global operations
 Scope of new business initiatives
for improving customer experiences
and business efficiency
Threats
 High threats of competition from
Virgin Atlantic, Easy Jet, Air France,
Thomson Airways and others
 Rising of labour costs
 Rising in the fuel costs that can
decrease the profit margin
Table 2: SWOT analysis
(Source: Phadermrod et al., 2019)
4. Analysis of competitiveness position of organisation
Human resources
Objective of organisation
The main objective of British Airways is to enhance the service level of business so that
customers are satisfied with this airline business (Nalley, 2019). The five main goals of
British Airways are mentioned below:
 To remain top choice among the premium customers for the international flights
along the cargo, shorter and economy flights
 To provide top-quality services to the customers by improving online services
 To meet the needs of the customers by exploring current options and services
for enhancing customer loyalty
 To keep Heathrow Airport, world class hub for gaining support from the
government and airport owner
 To expand the leading position of airline by getting listed in the top cities using
airline partnerships
Functions
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The organisation is functioning in about 200 destinations. British Airways is having
several branding and distribution partners that help them to operate global operations
successfully (Nalley, 2019). Human resource department of BA is found to organise
various training activities for their staffs. The HR manager tries to consider ideas and
thoughts of every team member for developing informed decision in business (Noe et
al., 2017). Appraisal and incentives of the staffs are taken-care by HR managers that
are done based on the performance of each employee.
Human resource strategy
Line manager and HR manager collaborate for implementing effective recruitment in all
the branches of British Airways. The company provides instruction to the HR manager
for selecting the qualified candidates so that responsibilities of business are handled in
proper way. Besides this, HR managers conduct workshops and surveys for providing
valuable suggestions to the staffs of BA.
Marketing
Marketing is the important functional area that helps the organization in gaining new
competitive position in the business. Marketing department of organisation is found to
develop the product, place, promotions, price, and other components in order to
increase the business efficiency and profit margins. British Airways is found to invest
huge time on developing these marketing mix elements for gaining more customers in
airline business.
The marketing strategies of British Airlines are discussed using the elements of 7ps of
marketing mix in below segment:
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Figure 4: 7ps of marketing mix strategies
(Source: Mallik and Farhan, 2018)
Product: This is the main element of marketing strategy that helps in gaining a positive
image in the business (Mallik and Farhan, 2018). BA is offering high quality services to
the customers by introducing BA fleets of Boeing 787s, 747s and 777s. The services
are offered by BA are associated with latest technologies. Moreover, the flight tickets
available for the customers are consisting of various classes. Cabins, entertainment
screens, meal courses, beds, and other services are provided to the customers that
make the travel experiences luxurious and sophisticated.
Price: Pricing strategy is used by organisation to enhance the marketing approach and
balance the business operations for gaining profitability (Abidemi et al., 2017). It has
been found that tickets of flight are available at different price range; hence, it helps in
gaining attention from both economic and business class groups. This shows that BA is
using differentiation-pricing strategy. Beside this, BA offers effective discounts to the
customers during festivals like New Year and Christmas. However, the price of fuel has
risen that has put pressure on BA in develop an effective pricing for the airline services.
Place: BA is found to operate business in about 200 destinations comprising of six
continents. The main head office of the company is in Heathrow Airport, London. This
organisation is distributing the service information through mobile application and
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websites. All information starting from arrival of flights to departure time of flights can be
checked by log-in their websites.
Promotion: Airline industry of UK is found to be highly competitive, thus it is important
for the organisation to use effective promotional strategies. BA is found to advertise
their services using TV, newspaper and billboards advertisements. The promotions that
are provided them are quite classy and sophisticated in nature. Hence, customers are
getting easy alert about the marketing message. Moreover, sponsorships are arranged
by the organisation in the sports, cultural and charitable events across the entire globe.
People: Total number of staffs working in the company is more than 40000 among
which there are 3600 pilots, 5500 engineers, and 15000-cabin crew (Nalley, 2019). The
staffs are recruited by conducting proper selection and induction process. Apart from
this, operations and customer team is found to manage the flight operations, customer
management and communication process.
Process: Mainly online system is followed in BA that helps the management team to
keep track of the booking process of the customers. The process of business starts with
the booking of tickets and continues with different phases like arriving at airport, getting
of the boarding passes, luggage checking, experiencing of services, and getting back of
luggage. The entire process of BA indicates that they are able to provide customers a
remarkable service experience.
Physical evidence: This component of marketing mix helps the customers in
developing strong and positive review towards the business. The company provides
new experiences to the customer that is represented as intangible aspects in business.
The flight services are provided to customers where lounges, cabins, ambiences are
properly designed. These the main symbols of physical evidence of BA.
5. Recommendation for next 2-5 years
As per the analysis of internal and external environment of British Airways, the
mentioned recommendations are given so that they can develop competitive advantage
for next 2-5 years:
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 The company needs to invest more funds for the improvement of IT technologies.
This would help the firm in making the process of online booking more efficient.
The management of the firm should enhance the website quality for introducing
the new changes in operations effectively.
 This airline organisation should invest on launching environmental program in
order to overcome the environmental challenge. This will help the organisation to
decrease the damages that are done to the atmosphere
 The management team of British Airways should strengthen the HR strategies to
manage the staffing issues properly. Incentives and rewards should be given to
the potential employee in stipulated time.
6. Conclusion
The study has discussed about the large number of factors in order to explore the
competitive position of British Airways. After conducting a close analysis of the business
function, it can be said that British Airways is a significant player in the airline sector.
The company is using several numbers of effective strategies for gaining success in
business. However, based on the analysis of challenges faced by business, the
company is recommended with some improvements for increasing the business
efficiency. These recommended strategies would help the company to become stronger
and enter in new territories successfully.
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