Analyzing British Airways: SWOT and PESTLE Evaluation

This report presents a thorough SWOT and PESTLE analysis of British Airways (BA) to gain insights into its internal capabilities and external environment. The SWOT analysis identifies BA's strengths such as brand reputation, loyalty programs, and extensive global network; weaknesses including financial challenges from the pandemic and operational inefficiencies; opportunities like expansion in emerging markets and digital transformation; and threats from competitive pressures and regulatory changes. The PESTLE analysis highlights political factors like Brexit implications, economic conditions affecting travel demand, social trends towards sustainable travel, technological advancements in aviation, legal frameworks governing international flights, and environmental concerns about carbon emissions. Together, these analyses provide a strategic framework for BA to navigate its current challenges and leverage opportunities effectively.

EXTENDED PROJECT

TABLE OF CONTENTS
INTRODUCTION...........................................................................................................................1
TASK...............................................................................................................................................1
Background of company and industry.........................................................................................1
Strategic position (competitors)...................................................................................................1
Internal analysis...........................................................................................................................2
Product differentiation.................................................................................................................4
Human resource management (HRM).........................................................................................4
Supply chain management...........................................................................................................5
External environment...................................................................................................................5
Recommendations........................................................................................................................6
CONCLUSION................................................................................................................................7
REFERENCES................................................................................................................................8

INTRODUCTION
Airline industry is performing well and it contributes in the economic development of
nation. Present study is based on British Airways. It will cover Human Resource Management
and Supply Chain Management of this company. It will also analyse internal and external
environment of this firm.
TASK
Background of company and industry
British Airways is the leading airline firm that has the largest international carriers
globally. It is the part of International Airline Group. Company always take care of needs of its
passengers and offer them amazing products and services so that they behave positive towards
brand for longer duration (Koopmans and et.al, 2016).
Aviation industry is considered as the sector that generates huge revenues and contributes
well in improving economic performance of the nation. Biannual Industry Report of 2017 has
declared that airline sector raised its profit as compared to the previous year. Passenger traffic
has been increased by 8.1% in this year. As per the forecasting of International Air Transport
Association (IATA), it has been identified that till the end of 2018, aviation industry will be able
to generate $ 38.4 billion net profit.
In the year 2017, total profit generated by this sector was $34.5 billion. Over the period
of time, net margin of the industry has been raised to 4.7%. Increasing demand and raising
operational efficiency have supported this sector in improving its performance to a great extent
(Bunjun and et.al., 2017).
British Airways (BA) was established in the year 1974 by British Government. Recently,
it is operating in 183 locations and providing amazing aviation services to its passengers. Entity
has generated £11,443 million revenue in the year 2016 and its net income was £1473 million in
the same year. Company has 90+ years experience of working in the same sector. It has a strong
brand image and people have faith on British Airways that has recently made changes in its
ordering system and has developed new online ordering system. Now consumers are able to
book their tickets online as well (Suzuki and et.al., 2018). This facility has improved overall
sales of this enterprise to a great extent and supported in gaining competitive advantages to the
business.
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Strategic position (competitors)
Strategic position can be defined as strategies of the company that help the entity in
determining its actual position in the market. The main aim of British airways is to provide high
quality services to passengers and make them feel satisfied. Company operates in the aviation
industry and it has developed its strong brand reputation. Strategies reflect the entire business
process and define its operation efficiency. Strategy positioning is the tool that describes formal
process of an enterprise that supports in accomplishing its objective effectively (Westphal,
2016).
British Airways (BA) is the leading aviation firm that targets young, old, all types of
consumers. BA always concentrates on multi-segment marketing strategies that help in
designing products and services as per the needs of consumers. Company uses Demographic
Segmentation Strategy. British Airways has developed its position as leading brand in the
industry that has helped them in retaining its consumers in the band for longer duration. As it
always pays attention on expanding business across the world thus, it has a presence in many
countries (Lin and et.al., 2014). Entity provides travel services to all range of passengers’ such as
upper class, middle class etc. BA offers airline tickets to the consumers at lower price; that is
why all range of customers can afford its tickets and can travel in British airways easily.
British Airways is facing huge competition in the market. Malaysian Airline, Jet Airways,
Cathay Pacific, Thai etc. are its main competitors. Malaysia Airline has employed 6601
employees. All they performe well and are contributing well in raising profitability of the entity
(Kew and Stredwick, 2016).
Internal analysis
British Airways is performing well in market and has become leading brand in aviation
industry.
SWOT analysis
Strengths
 Strong brand presence
 Adequate financial resources
 Excellent marketing tactics
 It carries large number of passengers
Weaknesses
 High competition creates difficulty for
the business to run its operations
smoothly.
 Poor investment strategies
Opportunities Threats
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 Technological advancement helps an
enterprise in offering amazing services
to passengers and retaining them in
business for longer duration.
 Globalisation helps BA in expanding its
business across the world.
 Changes in government polices
 Fluctuating fuel prices
 Increase competition
 High debt
 Highly depended upon European
market
British Airways has a strong global presence that helps the brand in attracting
international clients and offering them amazing aviation services. Micro environmental factors
are related with internal environment of organization that helps in analysing internal position of
business and its capability to meet with its objectives (MacIntyre and et.al, 2014).
Competitive rivalry
Competition is very high in the aviation industry, BA has many competitors such as Jet
Airways, Virgin group etc. Entity has to face issue due to high competition in order to run its
business smoothly. Competitors have high power to influence the entire operational efficiency of
the organization.
New entrants
Power of new entrants is very low because it is very difficult to enter in this industry.
Firm must be required to have experience and huge investment before entering into this sector.
Buyer’s power
Passengers are the key stakeholder of an enterprise; they can influence overall
performance of business to great extent. If consumers are not satisfied with the services of BA
then they can move towards other airline entity (British Airways's Competitors, Revenue, and
Number of Employees, Funding and Acquisitions, 2018).
Power of suppliers
Suppliers in aviation industry have high power where limited suppliers are present. Thus,
they have high power to influence overall business performance.
Substitute
It is another major component that can impact on business activities. Due to freezing
weather conditions in the year 2009, demand for airline services has been decreased by 1.2%.
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Product Differentiation
British Airlines is the leading and premium airline firm as it offers variety of products and
services to passengers according to their needs and requirements. Company adopts
differentiation strategy that supports the firm in generating 15% more profit. Enterprise
concentrates on service and product differentiation. BA is expanding its business across the
world aggressively. It is planning to fly in new routes. It has started providing additional services
to its passengers (British Airways SWOT Analysis, USP & Competitors, 2018).
Product differentiation is the strategy of distinguishing services of a company from
competitors and makes it more attractive so that it can gain competitive advantages. Company
offers breakfast facilities to its passengers. Apart from this, it has different classes for different
income group of people.
In recent years, British Airways has started providing meal services to its consumers. It
also offers cargo services, in-flight services to its consumers so that they feel happy and
comfortable. Soft drinks, hard drinks are being served in the flight and staff members give
immediate response to complains of consumers. That is why people give positive reviews about
services of the company. British Airways has 56 Boeing 747s, 38 Airbus A319/320s (British
Airways refines its product, services and fleet, 2016).
Human Resource Management (HRM)
Human Resource Management is the most essential part of any organization. HR
management monitors performance of all workers and give rewards and recognition on the basis
of their performance. This motivates them and makes them feel happy (Westphal, 2016). That is
the reason there are many staff members who are working in an organization since longer
duration. HR manager communicate with the employees and take their feedback. This helps in
indentifying requirements of employees and providing them such environment where they can
work more effectively. BA offers attractive pay scale to all its staff members as per their skills
and abilities. Apart from salaries, entity also offers incentives that boost their energy so that they
work hard to perform well at workplace.
HR manager of British Airways organises training sessions for its workers so that they
can identify their mistakes and can develop new skills (MacIntyreand et.al, 2014). These training
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programs are helpful in personal and professional development for individuals. By this way, they
can understand working practices of company effectively and can perform their responsibilities
significantly. British Airways implements 360-degree approach for measuring performance of its
all employees. All these HR practices help the business in growing well and raising operational
efficiency of an organization (Lin and et.al, 2014).
Supply Chain Management
Supply chain management is the process of managing procurement and logistic activities
of an organization. Changing requirements of consumers and advancement in technologies create
necessity for business to manage supply chain effectively. Procurement manager of British
Airways ensure that it takes right decision and buy material from the correct suppliers. It always
prefers to buy products from such suppliers, which offers high quality products at affordable
rates.
BA concentrates on its warehousing, cargo, delivery, transportation services so that
consumers can fly safely and can get amazing services. Supply chain management supports in
raising profit of a company and minimizes cost of business (Suzuki and et.al, 2018). Supply
chain management of British Airways always ensure to manage demand and inventory in
efficient manner.
BA always ensures to manage its logistic activities properly that aids in minimizing its cost
and generating more profit. Company implements effective strategies to manage its operational
activities.
External environment
Macro environmental factors of company impact on overall performance of firm to great
extent. PESTLE is tool that aids in identifying external analysis of organization.
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Political factors
British Airways operations can get affected by political situation of country. Entity is
operating its business in many locations and it has to follow regulations of each nation. If there
are unstable political conditions then it impacts negatively on operations of organization. Airline
industry faces issues due to increasing terror attacks (British Airways SWOT Analysis, USP &
Competitors, 2018).
Economic factor
It is another macro element that impacts on overall efficiency of operation of the
company. If there are poor economic conditions, inflation or deflation then an enterprise may get
trouble to run its business smoothly. As in the year 2015, fuel rates and tax rates had been
decreased in UK that has raised scope for the British Airways and raise its profitability to great
extent. Changes in economic conditions impact on consumer’s buying behaviour that impact
negatively on the profitability of organization (British Airways's Competitors, Revenue, Number
of Employees, Funding and Acquisitions, 2018).
Social factor
Changes in life style, cultural changes, education etc. are various factors that impact on
performance of BA. If people prefer to get high quality services and entity fails to meet with
their expectations then it will impact negatively on an enterprise.
Technological factor
British Airways always ensure to implement latest technologies so that it can
communicate with consumers well and can offer them luxurious services. Entity is using online
booking system where consumers can book their tickets and get all details via mobile application
of British Airways (Koopmans and et.al, 2016).
Legal factor
BA always follows legislations strictly that helps in running its business in each location
smoothly.
Environmental factor
British Airways always ensure to protect environmental conditions
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Recommendations
 British Airways should provide training to its staff members so that they can improve
their performance and can deal with consumers well. They must resolve complaints of
passengers soon. This will help BA in gaining competitive advantages.
 BA should implement latest technologies at workplace so that it can improve its
operational efficiency and can minimize errors. This will support in increasing
productivity and minimizing operational cost.
 British Airways should implement innovative ideas and must use social networking sites.
This will help in developing relationship with consumers and identifying their needs. By
this way, this company will be able to offer them satisfactory goods and services.
CONCLUSION
From the above report, it can be concluded that SWOT and PESTLE analysis tools are
considered as the most effective models that help the business in analysing their internal and
external position in the market. It is very important for the company to manage its HRM and
supply chain activities properly so that it raises its profitability to greater extent.
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REFERENCES
Books and Journals
Bunjun, R., and et.al., 2017. Effect of HIV on the Frequency and Number of Mycobacterium
tuberculosis–Specific CD4+ T Cells in Blood and Airways During Latent M. tuberculosis
Infection. The Journal of infectious diseases. 216(12). pp.1550-1560.
Kew, J. and Stredwick, J., 2016. Human resource management in a business context. Kogan
Page Publishers.
Koopmans, T. and et.al., 2016. Selective targeting of CREB‐binding protein/β‐catenin inhibits
growth of and extracellular matrix remodelling by airway smooth muscle. British journal
of pharmacology. 173(23). pp.3327-3341.
Lin, C. H. and et.al., 2014. Protective effects of the polyphenol sesamin on allergen-induced TH2
responses and airway inflammation in mice. PloS one. 9(4). pp.e96091.
MacIntyre, D. A.and et.al., 2014. Activator protein 1 is a key terminal mediator of inflammation-
induced preterm labor in mice. The FASEB Journal. 28(5). pp.2358-2368.
Suzuki, H. and et.al., 2018. Respirable powder formulation of a shortened vasoactive intestinal
peptide analog for treatment of airway inflammatory diseases. Journal of Peptide Science.
24(3). p.e3069.
Westphal, N., 2016. Analysis of the UK Package Holiday Industry and its Environment.
Online
British Airways refines its product, services and fleet. 2016. [Online]. Available through <
https://flyinginireland.com/2016/10/british-airways-refines-its-product-services-and-fleet/>
British Airways SWOT Analysis, USP & Competitors . 2018.[Online]. Available through <
https://www.mbaskool.com/brandguide/airlines/532-british-airways.html>
British Airways's Competitors, Revenue, Number of Employees, Funding and Acquisitions. 2018.
[Online]. Available through https://www.owler.com/company/ba
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