Business Strategy Report: British Airways Case Study and Analysis

This report presents a comprehensive analysis of British Airways' business strategy, examining its internal and external environments. It begins with an introduction to business strategy and its application to British Airways, a prominent airline in the UK. The report then delves into an internal and external environment analysis using frameworks such as PESTLE and stakeholder matrices. It assesses British Airways' strengths and weaknesses, utilizing the VRIO framework and value chain analysis. Furthermore, it applies Porter's Five Forces model to evaluate the competitive forces within the airline industry. The report concludes with strategic planning recommendations, incorporating various theories and models to devise a strategic plan for the organization. The analysis covers various aspects of the airline's operations and provides insights into its strategic direction, objectives, and tactics, along with suggestions based on both external and internal analyses and various strategic priorities available to the organization.

BUSINESS STARTEGY
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Table of Contents
INTRODUCTION...........................................................................................................................2
TASK 1............................................................................................................................................2
Internal and external environment analysis by using appropriate frameworks......................2
Information interpretation gathers from macro environment analysis and it’s used for strategic
decisions.................................................................................................................................9
Assessing strengths & weaknesses of British airways in context of management directions and
judgements..............................................................................................................................9
VRIO framework and value chain analysis to identify internal abilities and environment of
British Airway........................................................................................................................9
TASK 2.........................................................................................................................................12
Application of porter five force model to evaluates competitive force of given market.....12
TASK 3..........................................................................................................................................16
Range of theories, concepts and model to interpret and device strategic planning for
organisation..........................................................................................................................16
CONCLUSION..............................................................................................................................19
REFERENCES..............................................................................................................................21
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INTRODUCTION
Business strategy can be defined as long term plan of act that can be designed and
developed by management to achieve a specific aim and objective of ventures. It develops a
direction and clear vision for overall companies. It can prevent firms from losing sight of their
ventures goals. The current assignment will be based on British Airways, which falls under list
of well known airlines in the United Kingdom. This study will explain influence and impact of
macro environment on chosen brand and their venture tactics. It will define internal environment
and abilities of company by using appropriate models and concepts. Furthermore, this report will
assess strength and weakness of firm for strategic administration directions and decisions.
It will define application of Porter’s five forces concept in context of evaluating
competitive atmosphere and forces. This assignment will clarify right tactics in regard to British
Airways and will also justify interpretation of data collect from competitive analysis. Moreover,
this study will describe strategic management plan for selected airline with correct strategies,
objectives and tactics. It will provide further suggestions base on overall analysis either external
or internal as well as define varied forms of strategic priorities that are accessible for
organization.
TASK 1
Internal and external environment analysis by using appropriate frameworks
Visions-
British airways is one of the best flag carriers airlines in the world, it fly across the
universe for more than 90 years successfully (Efthymiou and et.al., 2019). It consider as full
service international airline who offers low fares services to passengers with wide global path
flying to and from central established airports. Firm act according to its vision and mission
statement, they want to become number one responsible brand in aviation industry.
Missions-
British Airways want to assure its passengers that he or she fly with high confident that
individual can receive better services and safe journey without facing any issues during their
journey.
Objectives-
 The main objective of British Airways as no one airline is to provide satisfactory services
to national as well as international passengers (Law and Breznik, 2018).
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 Second objective of chosen airline is to boost their brand image and grow venture
presence in key global regions or cities.
 Third one is to meet needs and preference of customers through new approaches.
 Fourth objective of company is to become a global leader by sustaining on its leadership
position in the whole world.
In order to achieve above set objectives, vision and mission, British airways can develop
effective strategies and use varied strategic planning approaches that can help to overcome
negative impact of external and internal factors. Firm can determine all elements via conduct
macro and micro environmental analysis and for that thing they can utilize varied types of
strategic frameworks, following are;
PESTLE analysis-
Macro environment is a situation that exists in economy as entire, more than in specific
industry or country. It includes different factors like inflation rate, spending, GDP etc, which can
influence current tactics and decision making, act of companies. Ranges of approaches are
accessible in the world of business that can be utilized for macro environment analysis purpose.
PESTEL is one of the best models among list of many in context of this action as it help to
chosen airline to determine and examine which factor bring benefits for its business or which one
is not. It mostly use for situational analysis process as it aid to determine key external elements
that influence overall practices of firm, either in negative or in positive manner (Shtal and et.al.,
2018).
Political factor-
Political stability & instability, changes in policies and regulations related to aviation
industry and operating restrictions from government side are included in list of political factors
that can have an effect on current plans and tactics of airlines like British Airways. Political
stability is one of the main elements that can put positive impact on success and progress of
chosen firm in term of developing business friendly atmosphere and creating rules on entire
aviation sector in a region (Łęt, 2020). This factor allows company to operate in and enter into
profitable market like US, where they can increase profits margin even better.
Economic factor-
Economic growth, education level, unemployment rate, changes in fuel prices and
exchange rate are examples of economic factors. Unemployment in one of the components that
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put positive effect on hiring and selection strategies of British Airways as well as give firm the
best chance to hire those people who have knowledge and skills require for cabin crew staffs and
in other departments (Dinçer, Hacıoğlu and Yüksel, 2017). Firm due to this factor can develop a
further plan through which they can recruit skilled applicants who can serve passengers services
according to their needs that increase customer’s satisfaction.
Figure 1PESTEL Model
(Source: What Is the PESTEL Model for Business Analysis, 2019)
Social factor-
Life style changes, demographic modifications, preferences change and income level of
individual are all social factors. Changes in dietary and eating habits of passengers influence
flight services and food distribution strategy of British Airlines in negative manner. In recent
time, due to health issues people change the way him or her eaten and purchase food items
(Reynolds and et.al., 2019). This change can impact service providing procedure of air hostess
negative because without understand and determining eating habit and likes of passengers
workers could not be able to serve right food item to individual as it can influence their physical
and mental health.
Technology factor-
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Advancement of technologies influence and impact British Airways marketing strategies
and plans positively, it help to generate brand awareness and gain attention of international
passengers towards existing offers of firm (Ziegler, Troester and Sazali, 2017). Due to this
factor, marketing team experience positive things they feel stronger and powerful in term of
developing effective & attractive tactics that lead to increase sales level even better. With
advanced technology like social media channels and platforms, firm can develop an official
website where workers can update each information about business and offers on time that allow
people to known even better about company and compare their service level with other airlines.
Legal factor-
Equality Act 2010 is one of the legal factors that can impact British Airways
administration practices and decision making process positively. It allow firm to develop a plan
and policy through which they can protect workers especially cabin crew members from
discrimination in aviation sector or at workplace where more than 42,322 applicants perform and
accomplish his or her daily duties with sweet smile on face.
Environmental factor-
According to situation of environment, customers and government are more concern
about environmental safety and they put more pressure on well known airline like British
airways to reduce their carbon footprint. It can influence existing strategies of company in
positive manner in form of building excellent brand image within overall sector and boost
productivity level more than other airlines in the London.
Stakeholder matrix-
It is the best strategic management tool that can be utilized to examine stakeholders who
can impact operations, management decision and business strategies (Balane and et.al., 2020).
This model can help British Airways to identify actions and activities conduct by individual
stakeholder that can influence set aims.
Keep satisfied-
All the stakeholders are essential for British Airways and play important role in different
decision making act of firm. But Government is special one because they able to make current
and further changes within existing practices of airline by making change in current laws as well
as regulations developed especially for aviation industry (Spasojevic, Lohmann and Scott, 2019).
Because of that reason, organizations should keep this stakeholder satisfy and inform about every
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actions taken by its management in context of venture, customers and workers. It can be done by
planning small meeting and conducting continuous discussion on several legal terms &
conditions.
Manage closely-
Along with above stakeholder, suppliers are another one who can have an impact British
airways business services and organizational activities. Airbus and Boeing are the main
stakeholders of firm who can impact its service standard and customer base positively by
working with them without making changes in their work structure and procedures (Tronje and
Gan, 2018). When modification could be done by them it can direct influence pricing structure of
company and selling activities as well as strategy development relate to ticket prices in negative
manner.
Figure 2: Stakeholder Analysis
(Source: Stakeholder Analysis: Identification, Mapping & More, 2020)
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Monitor-
British airways face challenges because of intense competition level within aviation
industry that can be occur because of its rivals who are creating business growth strategies and
plans (Amankwah-Amoah, 2020). Easy Jet, Virgin Group and Jet 2 are the main competitors of
chosen airline and stakeholders as well because they impact business success and progress in
form of external factor. These stakeholders can increase stress level for firm and give negative
experience to its management. Airline to become global leader and boost their productivity
should monitor each activity of rivals which make them able to take right action accordingly.
Keep informed-
Like above stakeholders, British airways business plans and operational efficiencies can
be affected due to their workers or cabin crew members who can switch to other employment
opportunities as they have this power. They could not impact negatively because accessibility of
applicants gives organization chance to hire new staff. Employees as stakeholder are less
interested to work with any firm for longer period of time, so in that case chosen airline should
keep them inform about strategic development and organizational changes that is quite enough.
SWOT analysis-
It is strategic planning and management approach that has been utilized especially to aid
companies such as British Airways determine internal abilities, strengths, weaknesses, threats
and opportunities (Vlados, 2019).
Strengths-
The biggest strength of British Airways is its skilled workforce who has given great
experience of passengers during his or her travel journey either long or short. Because of this
force company can sustain within aviation industry for longer period of time and give tough
competition to its rivals by working even hard.
Another strength of chosen airline is its own engineering branch through which they can
maintain aircrafts fleet appropriately, which in return save money and time as well. It can save
time consuming activity of firm like invite team of engineers to maintain and update current
aircraft systems successfully.
Weaknesses-
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The biggest weak point of British Airways is it’s over dependency upon United Kingdom
market. It has been analysed that more than 50% of organization revenue come from above
market which can be considered as good but quite risky as well. Economic chances within UK
can put negative impact on offering and services of company as it can lead to decrease
profitability and productivity level.
Lack of management is another weakness of British Airways that can influence its
performance level in negative manner. When manager could not handle skilled workforce and
create inclusive culture for them at workplace it can impact work ability of people.
Opportunities-
Brand expansion is one of the best chances that firm can grab and take its benefits in term
of increasing their customer’s base, profits margin and sales even better or more than rivals who
has attempt to become a global leader within aviation industry by serving the best services and
offers cheapest products.
The advancement of technologies is other opportunity that also benefits British airways
and boost their performance, it can help to reach at international platforms and allow becoming
the top airline. Both chances are really great for brand as it help management to serve more than
current routes.
Threats-
Intense competition within aviation industry can posses threat for British Airways
because it can put negative impact on current management activities, decision making procedure
and marketing tactics. Because of high rivalry, firm could experience challenging situation that
drive manager to think innovatively and creatively, which is really very important according to
business environment where innovation is require to gain competitive advantages.
Industry where British airways have operated its business is highly regulated; chances
within rules and policies for aviation sector can impact negatively upon decision making
procedure of firm.
Information interpretation gathers from macro environment analysis and it’s used for strategic
decisions
With above strategic approaches and models, it has been analysed that firm is able to take
better decision which can help them to overcome difficult situation and reduce the negative
impact of varied external or internal factors. From gathered data, company can decide which
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option is best and suitable for its venture success. They can take decision about what direction is
appropriate for company growth and better productivity. Macro environment give a lot of data
that firm can use in varied ways.
Assessing strengths & weaknesses of British airways in context of management directions and
judgements
With skilled workforce company can decision to expand its business in new market. It
can be said that strength allows firms to think about gaining further opportunities along with
current one. Weakness of British airways can drive manager towards think positively and take
judgement that can help to overcome.
VRIO framework and value chain analysis to identify internal abilities and environment of
British Airway
Strategic capability can include competences and assets that a company can use to
compete in its sector or industry. Strategic reason, values, aims, vision and tools for
environmental analysis are elements of above term. Following models are use to analyse internal
atmosphere and capabilities of British Airways.
Value chain analysis-
Primary activities-
Inbound logistics-
This activity of chosen airline is quite complex as it includes several things that firm
effectively manage like delivery of fleet of aircrafts, range of other on board items and catering
goods to passengers. Firm is able to build positive relation with its suppliers, which make them
able to deliver quality services on time.
Operations-
It can include cooking food items for passengers and serving them in effective as well as
systematic manner. As United Kingdom biggest global schedule airline, firm serve excellent
food services to its passenger according to their taste and preferences. They prepare meal by
using organic products.
Outbound logistics-
Baggage handling can be recognized as outbound activity of British airways that can help
customer to carry their heavy luggage at airport easily without facing problems. This ability of
firm makes it one of the most popular and well known airlines among which people can trust.
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Marketing and sales-
British Airways is able to invest in marketing activities as they try to develop effective
marketing content that directly influence people and mind. Firm can attempt to directly
communicate target market which is quite beneficial for its business image in market as it
promote and generate brand awareness.
Services-
The best thing about British airways is it complaint handling ability that can be recognize
as strategic capability of company which turn into increasing passenger satisfaction degree and
rating scale of brand even better. Organization gives importance to its post sale services that can
help to achieve competitive edge.
Secondary activities-
Infrastructure of company-
Structure of British Airways is quite simple and sorted, because it has finance, HRM,
marketing and legal section who can contribute in achieving set goals and objectives of
company. It can also help to reach at international level where potential business investors are
seeking to work with well known brand.
Human resource department-
Organization with effective human resource management can hire skilled applicants and
train new as well as existing one who is known as key elements of business success and progress.
They can build a team who can beat competitors by providing training which enhance
performance level and morale of cabin crew staff.
Technology development-
British airways can use the best and latest technologies which could make it able to
compete within industry for longer period of time and strengthen them to become a global leader.
Firm has use advanced technology to give superb experience to each passenger.
Procurement-
By building strong relation with suppliers and other stakeholders, British Airways can
manage its procurement activities in positive manner. As it can permit company to gain
competitive edge and boost brand position.
McKinsey 7s model-
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This concept has been used from longer period in regard to varied firms for determining
organizational effectiveness and internal environment that can help to take further decision.
Here, this model has use for British Airways to assess its internal atmosphere and abilities. It
comprise of two different elements;
Hard elements-
Strategy-
From above internal analysis, it has been identified that British Airways is able to
develop plan and strategies to maintain its position and gain competitive edge over its rivals,
which is actually very essential.
Structure-
All the department within British airways work together that can be its strengths. It can
help to manage performance of firm and allow develop effective tactics which bring different
benefits.
Systems-
Management of chosen airline appropriately monitor daily activities of cabin crew and
other staff members as they conduct investigation on time, which allow them to known that
applicants are getting his or her job done or not.
Soft elements-
Shared values-
Organization by managing corporate culture at workplace can boost morale and
motivational level of all workers which is very nice thing. They share values and respect each
other.
Skills-
Human resource management increase performance standard and productivity of
candidates by developing and improving his or her skills even better. They train people and build
a strong workforce at workplace.
Style-
Leader by using effective leadership style can motivate and encourage people to work
even better which actually management want from all of them.
Staff-
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