Global Business Strategies Report

This report analyzes the global business strategies of British Airways, focusing on environmental analysis through SWOT and PESTLE frameworks. It discusses the benefits, opportunities, and challenges of globalization for the airline, as well as the impact of international business environments on its operations. The report also addresses corporate social responsibility and ethical considerations faced by the organization in the global market.

Global Business Strategies

Table of Contents
INTRODUCTION...........................................................................................................................1
ACTIVITY: 1...................................................................................................................................1
1.1 Techniques to analyse the environment................................................................................1
1.2 Analysis for micro environment............................................................................................3
1.3 Analysis for macro environment...........................................................................................5
1.4 Impact on international business environment on British Airways......................................6
2.1 Benefits, opportunities and challenges of globalisation on British Airways........................7
2.2 The extent of globalization on organizations........................................................................9
2.3 Structures of different organizations operating in international markets..............................9
ACTIVITY 3..................................................................................................................................10
2.4 Critically evaluates the international operations of British airways...................................10

INTRODUCTION
Global strategy can be determined as a process in which business strategies are been
engaged by the organizations which operates its operation at global environment. Strategies are
been adopted in global businesses in order to meet the long a well as short term goals (Kiptoo
and Mwirigi, 2014). Long term goals and mainly related with the increment in sales, profit, etc.
of the firm. On the other hand, short term goals are related with the day to day operation which
has to be fulfilled by the management (Njeru and et.al., 2015).
Present report is about British Airways which falls under airline's industry. It provides
services for about 170 destinations in over 80 countries (British Airways Airlines, 2016). This
report covers the various techniques which help to analyse the environment. Further, it covers
benefits, opportunities and challenges of globalisation on British Airways. Lastly, it also includes
legislations and guidance related to corporate social responsibility for the firm.
ACTIVITY: 1
1.1 Techniques to analyse the environment
Environmental analysis can be determined as a process which seeks information
regarding the relationships and events within the organization. This also helps the management
of the firm to make necessary changes according to which services can be improved (Stevens
and et.al., 2013). In this context, there are many tools which are very helpful in conducting the
business operations effectively. Information regarding the organization is collected through
proper monitoring and by forecasting changes. In addition to this, these tools help in achieving
competitive advantages and in making use of different types of strategies with the help of which
firm can compete effectively (Ritter and Gemünden, 2004). Following are the different tools
which can be used in conducting environmental analysis:
SWOT analysis: This is one of the most important tools which enable the organization to
determine the all the basic areas through which firm get benefited or face barriers (Peng, Wang
and Jiang, 2008). This type of strategy is mainly used by top management and strategic planners.
Further, it is used in order to conduct market level analysis and deciding on the corporate
strategies (Thite, Wilkinson and Shah, 2012). In addition to this, it helps in identifying
framework for Weaknesses, strengths, threats and opportunities. Following are the division made
for proper analysis:
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Strength: These are the strength which firm has through their products or services. When
strength is identified, then organizations focus on adopting strategies with the help of which firm
the capabilities can be improved (Armstrong and Taylor, 2014).
Weaknesses: These are areas in which organization needs improvement. These factors which are
very helpful as firm can make appropriate through which these areas can be improved (Roome,
Raven and Martineau, 2014).
Opportunities: It is various ways which can be used so as to improve the businesses.
Opportunities can which can be used so that firm can perform much more effectively.
Threats: These are the barriers which organization face and it is very important for the firm to
take appropriate steps to overcome them.
Swot analysis is a suitable tool for analysing the environment as it aids in identification as well
as categorization of the internal factors that affect working of an organization. If used properly
for a through environmental analysis then it can aid in proper strategic planning process (van den
Brink, Fruytier and Thunnissen, 2013). It may further assist the companies in finding out as to
whether a venture or a project should be undertaken or not. Or is the new idea worthy of
investing.
PESTLE analysis: This tool is very helpful in identifying the external factors which affects the
business entity. PESTLE stands for political, economic, social, technological, legal and
environmental. These are as follows:
Political factor: These factors may have direct or indirect impact over the firm. It includes the
changes in policies which are made by government. When government make changes in their
policies like fiscal, monitory, then it has a great impact over the business operation of the
organization (Kiptoo and Mwirigi, 2014).
Economical factor: The firm highly get affected by the economic factors. Moreover, it also
effects the purchasing power of customers.
Social factors: The changes in customers taste and preference takes place frequently. It is
essential to make changes in the services or products according to their requirements. It includes
factor like lifestyle, demography, income, age, etc (Welcome to British Airways, 2016).
Technological factor: The changes in technology takers place frequently. It is very essential for
the organization to make changes accordingly so that better services can be provided.
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Legal factor: There are many rules and regulations given by government. Organization should
follow them as it is very helpful in developing good perception among customers mind (Njeru,
Stephen and Wambui, 2014).
Environmental factor: All the products and services provided by the organization should be very
helpful for the environment. In other words, it should not harm the environment (Hill, Jones and
Schilling, 2014).
PESTLE analysis is a suitable tool which analysing the environment as an aids in orders to
categorize and identify internal factors that affect working of an organization. This is very
helpful in know the areas in which firm can make improvements.
1.2 Analysis for micro environment
In order to analysis the micro environment, SWOT analysis will be conducted. Following
are the SWOT for British Airways:
Strengths: More than 90 year of experience: It is one of the largest airlines in the world and can be
determined as one of the leading global premium airlines and it has more than 90 years of
experience (Cadez and Guilding, 2012). IAGC international airlines: This term is mainly used for revenue. In this context, it is
the 3rd largest in terms of revenue (British Airways, 2016). Strong brand name: It is high commercial value around the world. The quality of services
and price is very helpful in attracting customers and in increasing the brand image among
customers mind (Kiptoo and Mwirigi, 2014). Has its own engineering branch: Most of the organization gets material for the aircraft
for suppliers but in case of BA they have their own engineering branch who provide them
material which are requirement in developing aircraft's.
Weaknesses: High dependence on UK market: According to the data collected about BA it was found
that more than 50% of revenue which firm gets is from UK market. This is very helpful
but it is a type of risk in the globalized economy. Union for employees: Because of these types of union, collective bargaining takes place
on continuous basis. It becomes very difficult to make decision as employees do not
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corporate effectively so as to implement the policies or strategies (Hitt, Ireland and
Hoskisson, 2012). Under penetration: Even though British Airways has worldwide presence but still it has
few of the markets in which it has not reached. It includes markets like China, India, etc
(Shook and et.al., 2004). These market have high potential which will enable the
organization to increase it business effectively.
Opportunities: Market expansion: As it was stated above, there are many market in which the firm has
not expanded its business. Through developing economy and growing demand expansion
of business can be done effectively (Piercy and Lane, 2006). But expansion of business
organization will get to attract new customers and they will be able to develop new
customers base (van den Brink, Fruytier and Thunnissen, 2013). Pressure on small players: Because of government interventions and it also has a great
impact over the operations. As a result, airlines organizations are forced to exit the
market as the cost of competing is very high (Retha Snyman and Kruger, 2004).
Threats: High competition: There are many organizations which provide similar service like BA.
These firm make use of different strategies because of which customer base of BA gets
affected (Henrique and et.al., 2014). Government regulation: As the firm operated its business at different market. The
regulations and policies followed are different. It becomes difficult for the cited firm to
operate their business because of change in regulations at different markets (Ritter and
Gemünden, 2004).
 Customers preferences: The customers at different market have diverse preferences. It
becomes difficult for the organization to make provide their services to their service users
(Eden and Ackermann, 2013). Firm has to make changes in their services according to
the needs and preferences of customers or else it becomes like a threat.
1.3 Analysis for macro environment
Macro environment factors can be determined with the help of PESTLE analysis. It helps
to identify all the factors which affect the firm externally (Armstrong and Taylor, 2014).
Following are the PESTLE analysis done for British Airways:
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Political factor: This factor arises when government make changes in their policies. In
accordance with the cited organization, it provides to both international and national level. With
this respect, firm has to follow all the policies given by government of those countries (van den
Brink, Fruytier and Thunnissen, 2013). There are countries where the policies for price are very
high. Because of this organization has to provide their services at high cost and this negatively
affect the business operations (Njeru and et.al., 2015). In recent years the political environment
of UK was not stable as a result of coalition government. In this context, BA had to make
changes in their pricing and this had an inverse impact over the firm.
Economic factor: This factors mainly affect the decision and by the organization and the
also affects the business operations negatively. In this context, recession has a high impact over
BA. Recession results in decrease in number of travellers as some of the customers will shift to
train in order to travel to other countries. Other type of risk which occurs in economical factor is
raise in fuel rates (Stevens and et.al., 2013). Increase in fuel rates will also increase the cost of
production. As a result, the airlines would increase the price of tickets.
Social factor: This factor includes age, trends, lifestyle, salary, etc. In accordance with
the case, there are the older generation in UK is high as a result they have more of leisure time to
travel (Hitt, Ireland and Hoskisson, 2012). This is a type of opportunity which British Airways
gets. In most of the countries, the rate of travellers is increasing and this is very helpful for BA as
it increase the rate of business operations.
Technological factor: Changes in technology takes place frequently and it is important
for the firm to make changes accordingly. This helps to provide better services to customers.
British Airways provides their customers with online services in which customers can book their
tickets online. In this context, BA has developed their own application in which service users can
book ticket easily.
Legal factors: There are different types of regulation which has to be followed by the
organization. Some of the basic laws like safety regulations, it is essential for the cited firm to
provider their employees with all the facilities so that workers may feel safe in performing their
job (Kiptoo and Mwirigi, 2014). In addition to this, because of terrorist attacks new security
regulations have been implemented for US and Europe. This has high negative impact over the
customers who wish to travel to other countries.
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Environmental factors: Surrounding environment has a high impact over the
organization. In this context, people in today's world have become more aware regarding the
impact over the environment. With this respect, BA should adopt strong environmental strategy
with the help of which they will be able to make better services to their customers ( Thite,
Wilkinson and Shah, 2012). In flying a flight, it has a huge impact over the environment as it
releases carbon emissions and waste which negatively affect the environment. BA should
increase their cost on operation so that they could protect the environment.
1.4 Impact on international business environment on British Airways
There are many issues or impact on the business operation which British Airways has to
face. In this context, international business environment can be determined surrounding at
diverse countries (Armstrong and Taylor, 2014). It includes the decision made on capabilities
and resources which has to be used. In addition to this it also includes factors like tax rates,
political, legal, technological, different regulations, etc. Following are the impact over the BA
because of international business environment:
Exchange rate: Different countries have diverse rates and it highly impacts the
organization. Countries in which the exchange rate is high, then firm need to pay highly. On the
other hand, the countries in which the exchange rate is low, then BA will be able to make their
business operations effective (van den Brink, Fruytier and Thunnissen, 2013).
Political factor: Government of different countries follow diverse legislation or rules.
This has a great impact over the organization. Countries have their own system related to law
and organizations have to follow all the regulation so that they may develop good perception
among customers (Ritter and Gemünden, 2004). The laws which are been followed in
international environment many be different from those of regulations which they follow at
national level. In this context, BA has to make changes in their operation so that they may not get
affected through the laws and regulations followed by them.
Competition: There are many organizations which provide similar product to their
customers. With this respect, firm has to make use of various strategies with the help of which
they will be able to attract customers (Hitt, Ireland and Hoskisson, 2012). The strategies should
be helpful enough to attain competitive advantages. People prefer to adapt those services which
are been proved to them at high quality.
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Technological environment: These include the factors which machines or the materials
which are used in manufacturing the services. It is the willingness of adopting the technology
which are been used in international environment. With this respect, organization has to make
changes in their technology according to the market environment (Thite, Wilkinson and Shah,
2012). This will help them to understand their customers and in providing them with high
quality.
Economic factor: It has a great impact over the organization in working effectively in
international business environment. The market in which the inflation rate or recession rate is
high, then BA will face huge issues in operating that market environment. Customers fail to
spend more; it affects the purchasing power of service users.
2.1 Benefits, opportunities and challenges of globalisation on British Airways
Globalization has been regarded as an economic tide that has got a potential to make the
world a better place followed by solving out some of the deep rooted problems. In this regard,
this phenomenon is beneficial for British airways and also has led to a generation of many
opportunities (Armstrong and Taylor, 2014). But on the downside it has created some challenges
for company as well. Following is the list of Benefits, opportunities and challenges that
globalization has created for British Airways.
Benefits:
With the help of globalization, British airways can provide a range of choices to
consumers. This may happen as seeing the working of other global companies British airways
can improve upon its service offerings. The strategy can further help the company to increase
global consumers (Kiptoo and Mwirigi, 2014). This happens as it is only on account of
globalization that British airways have been in a situation to provide services to consumers from
other nations. It gives a chance to British Aireys for supporting the economy by creating more
jobs for the masses (Benefits of Globalization for Companies. 2011). The employees also gain as
globalization aids in raising real value of their wages. Hence the company indirectly leads to
global economic growth due to globalization. The company can further make itself gain a
competitive advantage as well as garner greater economy of scale due to globalization (van den
Brink, Fruytier and Thunnissen, 2013).
Opportunities:
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Globalization further provides enormous opportunities in terms of successful working of
British airways. This is as globalization presents British airways with an Intercultural
marketplace which generates a larger market potential for the company (Hoejmose, Brammer
and Millington, 2013). Hence, the company gets a chance to serve diverse audiences by which it
can further offer differentiated product offering.
Challenges:
Globalisation enables the employees to move freely from one to other nation. Hence,
British airways may find it difficult to hold the best of employees. They are likely to move to
other companies if they get attracted by higher wages. The management is further required to be
aware about the best way to approach the global consumers whenever the company launches a
product or service in all nations (Hoffman and Woody, 2013). The challenge here is that all
consumers belonging to different nations have a presence of diverse taste and preferences.
Hence, this may pose as a significant issue for British airways while launching strategies related
to branding, marketing etc. (Hitt, Ireland and Hoskisson, 2012).
Creation of global market place has further escalated the expectations of consumers. For
example, British airways may face the pressure of meeting up the expectations of UK as well as
a less developed nation like India. This may not be possible every time (Globalization
Challenges for Businesses, 2016).
Globalization has led to accusations on multinational companies in terms of supporting social
injustice, creating unfair working conditions for developing and underdeveloped nations where
they operate, providing poor living and working conditions to employees and workers etc. same
issue has also been faced by British airways. For example, British airways were accused of
'endangering lives when its plane caught fire and the passengers fled from it with luggage
(Alwakeel, 2015). It was further accused in Africa for not acting over pilot abuse concerns even
when it was told twice (British Airways accused of not acting over pilot abuse concerns, 2015).
2.2 The extent of globalization on organizations
It is only on account of globalization that air travel has grown by 7 percent ion a yearly
basis. There is a stronger presence of business and leisure travellers (British Airways (BA),
2016). This has given a direct benefit to British airways by which it has been able to capture
more markets as well as consumers in a short span of time (Blackburn, Hart and Wainwright,
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2013). It has further given a chance to British airways for searching suppliers that operate on a
global basis (Armstrong and Taylor, 2014). In the same manner, globalization has further led to
developing communication and distribution channel which has led to creation of a new
phenomenon known as online booking. This has directly benefited British airways as the
company has been able to meet the existing demand of travelers followed by expectations of
consumers (Winnard and et. al., 2014).
On a negative note the company has to face competition on account of globalization. The
competition has been related to technological adaptation, meeting up consumer expectations etc.
hence British airways has been forced to provide services at lower costs, selling cheaper but not
compromising with market share and profitability (Lin, Wang and Wu, 2013). British airways
have been facing issues in this area as the consumers have got a multitude of choices in the
market. This has affected the manner by which they perceive the service provided by company
(Njeru and et.al., 2015). They wish to get the best quality service offering from the airways and
that too at lower price. This has led to decrease in sales for the airline company. They may lose
the profit and market share in long run (How globalization affects business, 2011).
2.3 Structures of different organizations operating in international markets
Organizational structure can be defined as the formal attainment of diverse roles, responsibilities
and relationships so as to aid in proper coordination and control. It further acts as a powerful tool
for implementing strategy (Longoni and Cagliano, 2015). In this regard, the organizational
structures are of varied types being;
Functional Structure Divisional Structure Matrix
Each area of company is
grouped as per the said
purpose say sales, marketing,
hr. and it department (Hitt,
Ireland and Hoskisson,
2012).
The departments rely on
skills and knowledge of staff
members (Kaustia and
This is used by large firms
that have operations in wide
geographic areas.
They further have a presence
of small firms to cover up
varied kinds of products or
market areas (Nuntamanop,
Kauranen and Igel, 2013).
It aids in rapid meeting of
This structure is a hybrid of
divisional as well as
functional structure (van den
Brink, Fruytier and
Thunnissen, 2013).
Firms gains on account of
benefits that are a part of both
functional and divisional
structures (Johnson and et.al.,
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Knüpfer, 2012) needs 2007)
British Airways is an international airline that has got the presence of flat structure. This is as
there is a presence of just one type of hierarchy that separates the managing director from bottom
line employees. There is a presence of segregated management level positions that is divided into
10 departments (Kiptoo and Mwirigi, 2014). Each department then has a presence of own
subordinates. The departments are inclusive of
Planning Investment Commerce Ground Operation
IT Finance Law Human Resource
Flight Operation Engineering
On account of the flat structure the need on part of management team at British airways is
to cooperate within all the departments (Ritter and Gemünden, 2004). It has also been ensured by
the company that board of directors take decisi9ons so as to fulfil long term objectives of firm.
More there is also a flow of information from tactical to operational level (Stevens and et.al.,
2013). This helps to ensure that message has been conveyed in a proper manner i.e. conveniently
and efficiently (Armstrong and Taylor, 2014).
ACTIVITY 2
INTRODUCTION
Corporate social responsibility (CSR) can be determined as business approach which
contributes towards the sustainable development through providing environmental, economical
and social benefits to stakeholders (Armstrong and Taylor, 2014). In addition to this,
organizations sense a responsibility towards the environment and community, with this respect
they make certain investment so that they will be able to support the environment in which they
operate. This ppt will cover the ethical issues which organizations face because of operating in
international environment. Further, it covers the conflicts among corporate strategy and ethical
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