Strategic Analysis and Business Environment of British Airways Report

This report provides a comprehensive analysis of British Airways, focusing on its strategic environment within the aviation industry. It begins with an introduction to strategic thinking and its application to the airline sector, highlighting British Airways' market position and service quality. The report then delves into a detailed analysis of the business environment, utilizing the PESTEL framework to assess political, economic, social, technological, environmental, and legal factors impacting the airline. A comparative analysis of British Airways and its main competitor, Singapore Airlines, is conducted, exploring market share, customer expectations, and current trends in the industry, including passenger growth and technological advancements. The report also examines the internal environment of British Airways, including its resources, capabilities, and strategic investments in digital technologies and customer service enhancements. It concludes by outlining future trends in the airline industry, such as technological advancements, personalization, and the use of smart materials, and emphasizes the importance of effective strategies for sustained success. The document is a valuable resource for students seeking to understand business strategy and the airline industry.

STRATEGIC THINKING

INTRODUCTION
Strategy is a art of designing an effective plan for encouraging entire association towards
attainment of company goal in a define time period. However, aviation industry believes in
making an appropriate schemes by considering internal and external factors which affects the
success or development of an enterprise. British airways is one of the famous organization due to
its best qualitative products as well as on time services (Kapferer, 2012). Therefore, this report is
going to throw lights on business environment of an association in order to understand the actual
market positioning of an enterprise at marketplace. Moreover, conduct internal and external
analysis of selected firm for enhancing their company performance by overcoming issues which
influence the success of an organization. Current strategies and its effectiveness is also outlining
in this project as well as highlight relevancy of strategy in overall industry development.
TASK
1.) Analysis of business environment.
British airways is an Airline industry with which they are serving million of people and
satisfying their needs and demands in right context. The firm is making various strategies which
is helping them to have an effective working. Although British Airways are such which is being
a first choice of people to travel and to grow in various cities as which will help in achieving top
position in London (Zahra and Nambisan, 2012).
Strategies in current scenario.
Therefore, they bring innovation and creativity in their services so that customers needs and
improvement in revenue can be seen. Business also looking in to have a global presence in cargo
economy somewhere it also plays an supporting role for entity. According to current scenario of
strategies the BA is having is related to strategies of customer friendly.
Hence, with this kind of step a benefit will be there for airline business is like BA
implemented a facility to their customer as keeping them update about flights through text or
mail and somewhere this facility is only for business class passengers, with this convenience
would be seen for customer as they will reach on time (Goetsch and Davis, 2014). The cons of
this strategy is that it is not applicable for economy passenger. Although British Airways going
to modify their planes and more comfortable. Moreover with such implementation the customer
are getting attracted and using their services.
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PESTEL analysis of British Airways.
It is required to have an PESTEL analysis of company which will help in knowing the
environment of business in which they are working. PESTLE stands for (political, economical,
social, technological, environmental and legal) which help company to know that which factors
are there which is affecting British Airline to work in proper manner. These are as follows:
Political: This environment is required to be analysed as because this help in getting
familiar with laws and regulations. There are various political issues like terrorism and
smuggling, which has to be controlled by security and make everything happening safer.
Therefore, for such thing BA always make measures to prevent everything from terrorism
activity (Goldman and Casey, 2010).
Economic: Economic condition of UK is not so good from past few years as because of
Brexit and Pound prices went down. Fluctuation were there in inflation which brought affect on
trading and such thing affected the oil prices for BA and there was suddenly a rise in exchanging
rates. In such situation the Dollar got more stronger and affected the BA in great way. Hence, it
lead to price continuously went to decline and with such scenario competition increased.
Social: Although it is needed to analyse population and capability to spend money in
luxurious. Because, many people not being able to spend good amount on luxurious things.
Therefore, when the unemployment increased with the decline in economy it directly affect the
leisure business and thus airline industry is kind of leisure industry. Bargaining power of people
has increase which is a social activity of customer (Brocas and et. al., 2014).
Technological: Company through research come to know that people recently started
booking tickets online which is helping them to compare the prices of industry and making them
to choose the cheapest source of flight. BA is ensuring that more to more people can come to
know about this technology.
Environmental: BA is aware of not making any environmental destruction and thus they
keep and control many things like noise pollution and making a energy consumption. Even the
land area used by airline industry is in control and not thinking to expand because somewhere it
will affect environment as well.
Legal: Relation of employees with the company should be healthy to avoid any kind of
strike as because in case of British Airways the Cabin crew strike in the most serious trade union
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issues. This has the great legal issues which is applied by government on having merger in
between British Airline and American Airline.
2.) Consider the main competitors.
British Airways is having many competitor in market but company is providing the best
services from others. The main competitor of British Airways is Singapore Airline and both are
providing their best services to customers to attract them towards their packages (Pang and
Pisapia, 2012).
The position of airline industry are as follows:
British Airline:
British Airways is that industry which is a premium international UK based on making
customer happy globally in effective way.
Singapore Airline:
This airline industry make customer to travel in comfortable way by air globally.
Moreover, firm is having a pioneer stage in excellence in service.
British Airways and their market details are as follows:
In terms of market share and value the British Airways is leading business then the
Singapore airline. Market research should be done by companies so that they can come to know
about customer expectation from airline company. In market the changes are always there with
time which has to cope up by company so that they can attract new customer prospect with their
existing customer (Kunc, 2012). Value and share is that which help company to differentiate in
between those can be done in easier way.
Current trends in airline industry.
The airline is growing in rapid manner because of increase in travel and tourism and this
thing help airline industry to earn higher profit. Current trend is such which help company to
improve their working criteria in right contrast and some of those are as follows:
 It's a new passenger out there although it is required to bring more social place for to
create the brand equity in proper manner. Therefore, increase in passenger also made
company to earn higher income.
 Hence, customers are directly working through online and offline. This is something
which is required to enhance by company and British Airways doing the same. This
somewhere helping customer to choose the cheapest source to travel by plane.
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 Analytics- As keeping record of their passenger is the gold mine and somewhere contains
the crucial information and data of people. This help in making a effective decision and
strategy which make firm to earn higher profit.
 Great competition in market is the base of creating a revenue generation in higher
manner. Although airline business is changing their structure of working so that they can
more income and in today's scenario.
 Airline industry is making more focus on regulatory and standardization format which is
making them to perform in that criteria only. If airline industry is not following the
specified regularities then they have to pay amount or they are being penalized in great
way.
Future trend in airline industry.
In airline industry there is going to have a great competition which will result into higher
profits as well and thus in future different air company has to make an effective decision and
strategy which will help them to compete in right context (Blattberg and Deighton, 2010). Some
of the future trend in airline industry will be as follows:
 In future there will be less of airport as various new technologies will be used further to
enhance experience level of customer. Even though through technology the passenger is
going to spend their less of the time there.
 Personalization as whole information would be coming on mobile phones. All
information about flight and ticket booking everything can be seen over phone through
messages and mail.
 In future the airline industry is going to be self serviced as people who is going to travel
through the airline will complete all formalities by their own. In other words people is
going to serve themselves through out their journey.
 Aviation industry is going to use smart materials which will help company to cut down
fuel prices, help in boosting aerodynamics and somewhere planes will travel more faster
then earlier because of their light weight and light body.
 In future the aviation industry is going to improve their security criteria as this help them
to reduce terrorism. Although industry has to work in right context so that they can bring
effectiveness in such industry for longer period only.
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The company has various objective for which they are working hard to achieve such in
proper manner and thus British Airways is having a objective to become the first of million of
people to travel around different countries (Segal, 2014). Although strategy has to be very
effective which will help firm to perform in better way then earlier and this will make airline
company to earn higher profits.
3.) Analysis of internal environment.
The British airline industry is that which uses various strategy which help to improve
strategic position. There are various strategies which is being opted by company to make their
customer satisfied incorrect format. Some of those strategies are as follows:
 Company will make a further investment in great way to have digital technologies so that
personalized and seamless service can be provided to them in perfect manner.
 There will be improvement in services as it will be related to entertainment in seat-power
and providing a WI-FI on board.
Airline industry has various resources and capabilities which help in making a effective
strategies so that company can work in proper manner too. Although internal environment is that
which is being affected by various thing like customer, supplier of resources and employees.
Internal environment of company should be strong enough to face any competition and make
their internal environment resources (Newton, Colley and Sharpe, 2010). Therefore, internal
environment does also affect the competence of employees in working criteria. Competence of
organisation are their resources and ability to work in crisis and in difficult situation.
Competence and resource of company bring strength in them to work in correct format which
make firm to earn higher profits as well. Therefore, internal environment has to be analysed so
that effective strategy and decision can be brought in firm.
Moreover, analysis of internal environment also help entity to earn higher profits and
achieve their goal and objective. Bringing improvement in service for customer can make them
to work in smoother manner and will get stable in market for longer period. Hence, various
things are there which help company to achieve success, trends in airline industry making a great
future of aviation in firm. British Airways is having a bright future in the way they are using
market research in proper manner and hence using available information in right context.
Resources and capabilities used by aviation industry in great way as this help firm to achieve
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higher income. Although capability is also known as ability of firm which ha to be used by
company in right format so that they can higher profit.
Internal environment has to be analysed in correct context which will help firm to
perform in right manner and thus it will make company to earn higher profits in proper manner.
Employees and different aspect of internal process of environment are such which has to be three
in right format and the employees has to work in correct direction and this help in increase in
productivity of firm and make organisation to provide better services in right context as well. All
those things are there which help company to perform better then competitors and make them to
perform better then other entity in market (Ringland, 2010).
4.Identification of current strategy and evidences from external or internal analysis as well as
requirement of changes in recent schemes
British Airways is the important lifeline of UK transport since 25 Aug 1919 with its first
flight from London to Paris and is about to complete 100 year of services in 2019. In the 100
long years it has faced numerous challenges and competition globally. The airways operate in
both domestic and international flight and doing it more effectively and productively (Staiano,
and Calvert, 2011).
For running the airways successfully they have strategies made for both internal and external
environment
Internal factors
 Good human resource management as all the employees have defined goals .
 Recruitment process is very tedious it ensures that they recruit best skilled employer in
the organisation.
 It have a huge amount of staff having prescribed roles due to large in numbers it is very
difficult to monitor the working.
 In recent times they are reducing the pension of employees which have leads to strikes in
the organisation.
 With poor growth from the Brexit process they have observed a huge loss of revenue
which they are compensating through salary cut or termination of employee.
External environment
 they are having high prices for travelling and having stiff competition through different
low cost carriers like Raynair .
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 Have a good promotional policies by using the digital platforms like cashback and
discounts which is a huge boost to increase the revenue .
 Company is affected by changing environment of the political factors as it is very
difficult to cope up with the guidelines of the government.
 It has been found that the company is using the traditional concepts in many areas so
they sometimes find it difficult to compete to the challenges thrown by compositors .
 The British airways is facing many legal cases against it in Asian company for delaying
or cheating of services so it has a huge impact he image of the company.
As from the above discussed factor it has been concluded that it is not necessary to
change the whole strategy in both internal and external environment.
 they should change the hiring process by easing out the criteria they adopt. They must
recruit the raw talent and invest in their development so that they can serve for longer
time with dedication and ethical value.
 They must provide the salary and pension in time which will increase the morale and
dedication of the employee .
 Use digital platform to analyse the performances of the employee and give appraisals
based on merit.
 Must analyse and forecast changes in airways industry quickly adopt new policies to face
the challenges.
 Meant capitalise on the rate of investment by effective investment policies
 Modified future planning should be ready before the Brexit to fetch more income and
increase its root in the industry.
 They must increase the security and safety measures to counter the terrorism and natural
calamities.
Hence it has been analysed that British airways plays a major role in satisfying needs or
demands of millions of customers while travelling from one place to another (Pels and et. al.,
2014). In fact it has been analysed that number of effective strategies is adopted by selected firm
in order to overcome their organizational problems as well as to get succeeded in gaining trust or
loyalty of distinct consumers. But still it has been observed that an association need to modified
their policy as per changes in customer taste, preferences and requirement so that they get
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satisfied them by delivering high tech products. Along with this, useful in cope up with close
substitutes and innovative ideas which was introduced by other competitors.
5. Future relevancy of strategy in developing industry
It is needed to focus the implementation on strategies and technological advancement for
growth of given company. It helps in improve stake holder's sale as well as value of brand which
can increase profits (Niess, 2011). Changing in strategies are complimentary to compete in
market and development of firm to boost up strengths and profit margins.
Recruitment of right person at a right time: The process of recruitment ans selection
will be done according to great degree of knowledge as well as strong network who eager to
close deals and discussions with clients. But sometimes it has negative aspect for firm's well
being as marketing teams emphasize on lass cost only and they forget about quality aspects
which affects the reputation of the company and it's life cycle. There are several stages in firm's
life cycle which is as follows- Scouting: It can be defined as preliminary stage of company as it deals with
identification of market entry points which are provided to internal concerned team with
feed back of market analysis. There is a need of collaborative work with product and
engineering teams. Testing: This stage refers to close of few business deals in respect of testing assumptions
built by market and input various findings. Setting of goals, objectives, strengths and
missions so as to do measurement of framework which depends on these is required
(Pagani and Otto, 2013).
 Scaling: Having all data from each and every deals, the way of goal fulfilment will be
started so now business development is all set and an entire support system will be
developed for future aspects.
Looking for right opportunity: It is very essential to cross checked dealings avoid frauds
because deal should be done with right person only as well identify potential clients with whom
business will run successfully in future. Market analysis plays an important role while
contracting with someone for fruitful associations is vital one. Focus on those customers who
really matters to the business besides of putting efforts to unwanted ones.
Qualitative and Quantitative approach: The minimal probability of market to spend
more for premium service as they get improves client experience as well as better services. So
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that quantitative aspect of any business have increased chances of success by creating low price
competitively which attracts more customers which in turn maximize the revenue generation.
Innovation at its best: New creations are must to have top position in competition and
firms are able to offer something unique and attractive to clients which ensures high probability
of doing business with them. People want to be up to date according to current trends of market
and like to adopt new products or service (Kagel and Roth, 2016). Innovation can include new
methods, ideas, workflows, process flows which should be beneficial for an organisation.
The importance of strategies regarding development is crucial in starting of new business
and identification of winning concepts for business is needed. It is also brainstorming ideas in
respect to building successful in development of particular business. Promotional activities must
have new innovative aspects to gain better output regarding products and services offering by
firm. Try to render cheaper version of same product by doing mix and match of ideas to achieve
goals and missions have confidence to face the world.
Be important: It can be defined as the important people deals with other important
people or it may referred to deal between same level of people to build better business
associations. It will fulfil business needs where they can interact with prospective customers and
offer volunteers to industry experts for gaining visibility as well as capturing high value targets
(Jisi, 2011). The successive orders are bound to flow in company to keep in mind the creamy
layer or winners in their respective areas of expertise.
CONCLUSION
From the above report it has been summarised that effective strategy is indispensable for
success or growth of entire association as it aids in developing overall aviation industry as well
as economy of a nation. Therefore, this assignment is mainly shows the various schemes adopted
by respected organization while improving their company performance such as; micro and macro
analysis. Moreover, it has been analysed that an appropriate schemes is very much significant for
upliftment of an association as it aids in understanding the needs or requirement of distinct
customers. Along with this, by thorough this project learner should get aware about the current
shares or positioning of British airways at marketplace by considering relevant facts or figures
which was explained in a above report.
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REFERENCES
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