Business Environment of British Airways: A Value Chain Analysis Report

This report provides a comprehensive analysis of the business environment of British Airways. It begins with an introduction to the concept of the business environment, outlining both internal and external factors influencing an organization. The main body focuses on the application of the value chai...Read More

Business Environment

TABLE OF CONTENTS
INTRODUCTION...........................................................................................................................3
MAIN BODY ..................................................................................................................................3
Value chain model.......................................................................................................................3
Business description.....................................................................................................................4
Primary and supporting activities................................................................................................5
Reflection.....................................................................................................................................7
CONCLUSION................................................................................................................................8
REFERENCES................................................................................................................................9
.......................................................................................................................................................11

INTRODUCTION
The business environment refers collection of all external and internal factors called;
customers, employees, demand and supply, owners, management, strategies, and government
policies, market trends, innovations, technologies, economic changes etc. these all factors are
influence an organization in both terms positively and negatively. The combination and mixture
of these all factors in organization are known as business environment. Business environment
also refers the all activities around the business which affect the whole organizational structure
of the business, this is called business environment. There are discusses the business
environment of the British Airways.
MAIN BODY
Value chain model
Value chain refers a set of operations which operated by the management of the any
organization for the purpose of provide valuable products and services to the customers in the
market (Chan, 2015). This concept was first introduced by Michael Porter in year 1985. Value
chain model is helping to the businesses to gain huge competitive advantage in the respective
market. It is give opportunities to the companies to produce such exclusive range of the products
and services in the production period. This provides a useful framework to the upper level
management of the company to analyse all internal activities of the business environment. It is
also work a tool which is play role in reduce necessary cost and time of the business operations.
The M. Porter wrote; Competitive advantage cannot be understood by looking at the business as
a whole. It refers company's all activities like; planning, producing, promotion, marketing,
providing, and supporting need to be different from the competitors in the market to take
competitive advantage (Clinton and Whisnant, 2019). Companies also need to choose the best
ways to use value chain model in their respective business environment to gain productive results
from it. Porter divided business activities into two parts called primary and support. These
activities are discusses below;
Primary Activities
1. Inbound logistic: This is refers business and supplier relationships on the basis of such
activities; receiving, sorting, inventory management, raw material distribution which are
useful for the production procedure.

2. Operations: This stage includes the process where companies convert their raw material
into final product. Means there are products are completely ready for the customers to
buy.
3. Outbound logistics: In this the companies are start the final product distribution to the
customers in selected market segment (Wirtz, Tuzovic and Ehret, 2015). This is also a
process where companies are able to check the customer response towards product.
4. Marketing and sales: In the marketing and sales activities company need to aware the
customers about the product and inform them every aspect related to the product. In this
process company need to run many of the marketing campaigns in the selected markets.
5. Service: Company in the service term need to provide specific services to the customers
after delivered and sold the product which is related to feedback, product reviews etc.
Secondary Activities
1. Procurement: This is called inputs and resources acquisition for the company.
2. Human resource management (HRM): This is the combination of all activities which
is related to the employees and staff of the company. These all activities are recruiting,
hiring, and training etc.
3. Technological development: In this activity, company need to develop and improve
their technological aspect in the business environment.
4. Infrastructure: It includes activities like; legal, control, finance, accounting, quality
assurance, general management, and public relations etc. of the company.
Business description
British Airways; This is a United Kingdom based airline company was founded on 31st
March 1974. Headquarters of the company at waterside, Harmondsworth, and the main hub of
the airline is London Heathrow Airports (Massa, Tucci and Afuah, 2017). This is one of the most
popular airline in the United Kingdom. British Airway is the second largest company in the UK's
all airline companies based on passengers carried. Currently company working as a one of the
trusted airline brands in their home country. On a single air route in the financial year 2017-18,
British Airways become first passengers airline company which have generated approx $1
billion. The British government was established the British Airways Board to operate or manage
the two major nationalized airline companies. These two companies are British European
Airways and British Overseas Airways corporation. In year 1974 the British Airways was

created after these two and another two more regional airline companies called Northeast
Airlines and Cambrian Airways were merged. So, basically the British Airways is the
combination of these four airlines companies. Currently Alex Cruz is the chief executive officer
and chairman of the company. In other hand the CFO & director of the company is Stephen
William and Lawrence Gunning respectively. This airline is also one of the largest airlines in the
United Kingdom on the basis of international flights, passenger count, fleet size, and global
destinations. In 2018 company was generated £13,020 million revenue with net income £1,952
million. For its aircraft fleet maintenance the company use own branch of engineering
(O’Connell, 2016). This self owned branch very important asset for the British Airways to
reduce high amount of the maintenance cost. Company always believe in the implementation of
the new technologies and innovations in their flights for always stand like one of the largest
airline companies in the United Kingdom zone.
Primary and supporting activities
According to the value chain model there are activities included in the business
operations of the British Airways. Company hired some highly qualified people in their
management system which effectively operate and run these all activities in the business
environment. These all activities of the company are discusses below;
Primary activities of the British Airways
Inbound logistics: This is the first stage of the company in the form of value chain model
activities. In which company is contact to the suppliers of the airline industry to buy specific
aircraft tools, parts, and even aircraft also to run their business in the market of airlines (Vaidya,
Ambad and Bhosle, 2018). Company cover some contract formalities with the supplier which are
based on the negotiated deal between both parties. It is also indicates the relationship of British
Airways with their suppliers.
Operations: In the operations term the company is responsible to make their aircraft ready to fly
in decided paths for transfer things one place top another place. In this term company also check
their aircraft properly to find errors. This step is too necessary for the company to avoid such risk
elements during business operations.\
Outbound logistics: In the outbound logistics activity, the company is start to provide services
to the customers. Customers buy airline tickets and take flight of the company for go one place to

another. Company always try to give best of best services to the customers when they choose
British Airways to travelling.
Marketing and sales: Marketing and sales activity of the company is too much effective in the
comparison of competitors airlines. Company use various marketing strategies which is help to
gain high customer's attention in the market. Company is running many marketing campaigns in
the home country United Kingdom and also in the other countries too (von den Eichen, Freiling
and Matzler, 2015). The company try to aware people about their services with the help of
promotional activities. With the support of this activity, the company able to gain high customer
base in the market.
Service: In the service term of the primary activities, the company is providing additional
services to the customers in the market. These services like; take feedbacks from those customers
which had used British Airways services before. Solve errors of customers regarding the airline,
provide some discount facility to the specific customers, etc. In the business operations of the
company this activity give huge support to build loyal customer base, because customers get
impressed by company's these services.
Supporting activities of the British Airways
Procurement: In the procurement the company consider the acquisition of important products
and services from the external sources. Company also take effective decisions of purchase such
products for the company which help to the company to increase efficiency of the business
operations.
Technological development: Technological development term is one major activities of the
company, because company working in the airline industry and all knows without technological
this industry can't run. So, the British airways use self owned engineering branch for cover the
technological development task in the organization. The company also try to use the latest
technology in their aircraft to improve work efficiency of the aircraft. Technological
development also very necessary term for gain huge competitive advantage in the market.
Human resource management: Currently British Airways has team of highly trained
employees in their business environment. Company hire employees on the basis of their skills
and abilities related to the airline industry. The pilots are also very interactive in the flights of
company (D'heur, 2015). Every year company providing special training session to their all
employees to increase their productivity at workplace.

Infrastructure: In the company's business environment, the management of the company is
carefully covering the all activities which related with the business operations, like; legal
formalities, accounting activities, tasks related to the finance, controlling, general management,
and follow government guidelines. Company is fully aware about these activities and always
make productive plan to cover all these activities.
Reflection
The value chain model is very useful in the business environment of the British Airways.
There are company able to find various important ways to run their business activities in
productive term with the help of value chain model. The biggest role of this model which I
understand is this is too important in the gain huge competitive advantage in the airline industry.
The value chain model provide systematic path for the company to run their all business
activities and actions in proper channel. With the proper channel of the activities company is able
to improve their performance in the market. After knowing all terms of the value chain model I
realize their implementation in the business environment is very necessary to stand in the front of
many competitors in the airline market. Company currently working as one of the largest airline
companies in the United Kingdom, and reason behind this achievement of the company is proper
use of the value chain model in the business environment. I learnt the customer satisfaction is
very necessary in the nay time of the businesses, because the customer is the king of market. In
which it is providing the service term in the primary activities of the value chain model that is
completely focuses on the customer satisfaction. With the help of this term the British Airways is
now able to holding large customers base in the airline industry. The marketing and sales activity
that comes under the value chain model is too much impressed me, because I very well knows
the value of marketing in any business. In this the value chain model gives great terminology of
the marketing for the British Airways. With the support of marketing and sales activity the
company is able to run their various marketing campaigns in the market to gain huge attention of
the customers. Company also use this term in their business environment to aware people about
services of the company. I analysed currently many of the people in the United Kingdom prefer
British Airways as a first choice to travelling through air transportation. I understand this is the
great achievement of the British Airways in the market of airline industry. The value chain
model is really playing great role in the current success of the company. My opinion is, company

will always use terms of this model in their business environment in the future as well to stand
like one of the largest airlines in the United Kingdom.
CONCLUSION
It can be concluded that the value chain model is too important in the business
environment of the British Airways. Currently the business environment of the company is
widely expended in the global market. In that case the implementation of the value chain model
is very necessary to the company to run their all business operations in productive way.
Management gains many of the new marketing strategies with the help of this, because model
providing useful market framework to the management of the British Airways. The company
need to use the value chain model in the future as well to gain huge competitive advantage in the
airline industry. Currently company is very successful in the British airline industry and popular
worldwide too. The major reason behind this position of the company is proper implementation
of the business strategies like value chain model in their business environment.

REFERENCES
Books and Journals
Chan, H. C., 2015. Internet of things business models. Journal of Service Science and
Management. 8(04). p.552.
Clinton, L. and Whisnant, R., 2019. Business Model Innovations for Sustainability. In Managing
Sustainable Business. (pp. 463-503). Springer, Dordrecht.
Wirtz, J., Tuzovic, S. and Ehret, M., 2015. Global business services: Increasing specialization
and integration of the world economy as drivers of economic growth. Journal of Service
Management. 26(4). pp.565-587.
Massa, L., Tucci, C. L. and Afuah, A., 2017. A critical assessment of business model research.
Academy of Management Annals. 11(1). pp.73-104.
O’Connell, J. F., 2016. Airlines: an inherently turbulent industry. In Air Transport in the 21st
Century. (pp. 109-146). Routledge.
Vaidya, S., Ambad, P. and Bhosle, S., 2018. Industry 4.0–a glimpse. Procedia Manufacturing.
20. pp.233-238.
von den Eichen, S. F., Freiling, J. and Matzler, K., 2015. Why business model innovations fail.
Journal of Business Strategy.
D'heur, M., 2015. Sustainable Value Chain Management (p. P21). Springer International
Publishing: Imprint: Springer.