Posted at 11.19.2018
Summary: Purpose of this report is to identify the business strategies of the UK's leading airways which is British airway. A British airway is the leading in operational research compared of all other airlines. In the last decade competition is increasing a lot and it divides market share which is highly affective for British airways. In the analysis all about the external and internal strategies of BA has included. Some recommendations for BA has included as well. Which field should get focused by BA to overcome all the competitive effects is also one of them research. About the level of client satisfaction and required improvement to divert more customers towards their airline is discussed.
A British airway is known as the Britain's most powerful, leading and the most significant airline. BA is dealing with both domestic and international flights. They deal in carries goods and mails as well. According to the current figures in 2008 British airways has flights to more than 300 destinations and completed more than 30 million of passengers and after all they earned more than 8. 5 billion pounds. Regarding employees BA employed around 42000 people that is why this is the biggest company of Britain. Now BA has their own terminal to create as terminal 5 at Heathrow which is the world's biggest airport. According to the future strategies of BA it is quite clear that this airline can be the world's most responsible airline.
According to the scenario of current strategies BA is applying and going to use lots of customer's friendly strategies. These strategies are going to benefit this airline nearly the same as BA applied the facility of keeping customers updates about flight through texts on mobiles but this facility is only for the business enterprise class passengers. This mobile facility make convenient for the customers to reach in line with the flight timing and delays if that flight 've got any delays. But the only drawback is this facility is not for the economy passengers and economy passengers are four time in number atlanta divorce attorneys flight. This facility is not beneficial for all the passengers. Secondly BA followed the technique to modify the aircrafts and make sure they are more comfortable and much more beautiful. By this modernisation customers are attracting more towards this airway just because of more comfortableness. They started offering more services inside the flights so that customers like it a lot. Thirdly managing cost of tickets is the most effective strategy because cost is the primary element in front of customers to choose the airline because lots of men and women can't afford such an expensive airline to visit. That is why managing prices or lowering down cost is the very best factor for the customers and for the airline as well. Lots of individuals don't look at the good facilities they only want the cheap tickets so that in low prises they can simply afford to buy a ticket. Fourthly BA tried to increase more responsibilities towards the corporate world and getting more success in market by doing some different things like the good performance of environment and by doing partnership with other big corporate giants. They are different perspective to improve the business by thinking other than the customer's benefits. By doing partnership BA can be bigger and is capable of doing much better on the market. According to the currently discussed strategies BA can do more business and they will offer more beneficial facilities for the passengers.
For the success in virtually any field external analysis of the environment is also required. Thus analysis highlighted the precise position in the complete industry in the external world. According to the external analysis BA can analyse the competitors and can analysis the exact capabilities to fulfil the upcoming challenges in future.
Analysis of political field is required to analyse to be familiar with all the regulations. Regarding airline lots of political problems is there like terrorism and smuggling. So the airlines should aware and have tight security to avoid and make everything safer. In case the security measures are sufficient than customers get ensured that they are safe during journey. Terrorist threats are the most scary thing for each airline so BA always utilize most protective functions to avoid any kind of terrorist activity.
Economic analysis is the very important to do time to time because as per the prior year records economical situation of UK is of low quality. Mainly when the pace of pounds started heading down that affected the economy a lot and it's like financial crises for the united states and different companies as well. This fluctuation in inflation effects the trading with other countries in Europe or outside Europe as well. Pounds decreased against euro and almost every other non European currency too. Fluctuation in communication prise and oil prises affect BA a lot because of rise in trade rates. On the other hand dollar started getting stronger that was more shocking for British airline market. Follow of liquidity became lesser day by day because people manipulated spending money. Prises started decreasing and competition between all the airline became more stronger.
Analysis of social things is also very important like the population and capability of individuals to spend profit luxuries. Flights to different countries is similar to a luxury for people because don't assume all person are able these kinds of luxuries. Individuals who are getting retirement from their work and today competent to travel abroad or in various countries just for fun, this thing should be estimated by the airline company. BA should estimate the growing unemployment because unemployment affects the airlines business a lot. When unemployment increased following the downfall of the economy than every company has afflicted but the most effected industry is the leisure industry and airline industry is kind of leisure industry. Bargaining power of the customer is also a social activity and it offers increased much within the last few years of time.
Due for some recent figure airline companies came to know that more than 30% people use online ticketing system which is highly technical. In doing online ticking customers compare prises of different airline on different websites and this creates more competitive environment for BA. In the entire year of 2009 most of folks started preferring online booking and in that they can compare the prices and its own makes easier for the costumers to get cheapest price. On the other hand online check-in is a very big facility provided by the airlines which saves passengers as well as airlines time and after doing online check-in customers won't need to reach too early at the airports because that point they don't want to do much on the website. Within the high technological system individuals are getting aware day by day and that is making easier for both of them. BA ensures the clients to make more n more folks aware of these types of technologies. BA provides these online facilities on the airport as well just because lots of later years people have no idea of these technologies. They offer full assistance to older people people just to make it more comfortable for them rather than standing in the queue for an hour roughly.
Any airline company should be aware of not creating any environmental destruction. BA controls several things to save the environment like the noise pollution and the intake of energy. BA always uses the planes with the noise reduction technology so that it can't disturb the residents about the airport. Secondly the use of limited land for the airport if any company tries to extend the land section of airport that might destroy lots land area and greenery. Regarding Heathrow airport expansion is very difficult to do because London might lose lots of green area and which can cause difficulty for a host. Now a day's individuals are more aware of greenery and the impact of lack of greenery. According to the new regulations every company should work to solve some environmental operations. Within the failure of maintaining environmentally friendly maintenance can affect the BA's reputation and the gross annual income or start as well because some unsolved issues effect the trustworthiness of the company.
Regal issues are like price of the merchandise or tickets fixing and collision. On the other hand some kind of issues should get recognized preciously like regarding British airways cabin crew strike is the most serious trading union issues. BA has most serious legal issue is the restrictions applied by the government on the mergers which restriction affect the merger proposal between British airways with American airlines. Relations with the employees should be very good to avoid some unwanted interruption and commercial actions. Alternatively BA has some advantageous legalities like they can trade the aircraft between EU and US freely.
To increase the profitability of the airline company porter's five forces helps a lot to make strategic decisions. This analysis is required just due to competitive nature of the airline industry.
Competitive analysis is also necessary to stand in the market like BA is dealing with both domestic and international airlines services. In the international airline they have got lots of differentiation between BA and their competitors. In lot of differentiations some are like prices and offered services. On the other hand in domestic or short haul services market is so fragmented with lots of domestic airlines these days. Rivalry is coming so directly like virgin is opposing the strategies of British airways and American airways trough their website. Finally it is defined that the on by opponents increased competition at high rate.
Power of Supplier:
More the suppliers of the aircraft raise the power of bargaining. In BA there are several suppliers of aircraft so that BA can bargain to some extent which is more advantageous for BA because always competition is beneficial for the consumers. British airways got restricted by the suppliers of fuel to the airport at regular basis. BA contains the priority in getting landing slots because BA has some historic rights which can be used by the existing users only. Regarding employees BA employees use collective bargaining plus they use trade union to make their bargaining power stronger.
Power of Buyers:
If suppliers have low bargaining power which means the concentration is low between buyer and suppliers. By increasing awareness of internet buyers are becoming smarter because they actually search on internet and grab the best and cheapest option. That's why the energy of buyers is increasing daily. These high technological scenarios make the marketplace more competitive and increased the energy of buyers. Strength of bargaining power is medium because almost all of the people have no idea of high technology like using internet.
Threat of new entrants:
Entry of new entrant can be a threat for the prevailing companies but entering in the new market is not a simple task, lots of barriers are there like competitive environment, high capital cost required to start out business and the regularity is must to do business. New entrants can copy and provide better services than existing companies, than it could make more competition in the market. On the other hand failure of some small airlines intimate new airlines to enter in this business that is certainly more helpful for the existing companies. This force has low strength which means this not much effective.
Threats of substitutes:
BA has some substitutes in short haul or short distance flights like Euro star and ferry. Substitute is a thing which can affect the original product or original company the most. On the other hand regarding long term flights there is absolutely no any substitute which is often notable so BA haven't any threat in international airline nonetheless they have to work more things out in their domestic department.
According to the analysis of customers needs are getting complex day by day. Costumer needs are getting complex because people are getting more demanding and literate as well. Than lots of change has occurred like demographics of the airlines has changed and transferred from younger to the older passengers. Connectivity of internet spread out across the world so the knowing of internet has increased a lot and which makes peoples look for more options worldwide and they can pick the best option to do or they know everything about the updates of everything they want to know. High technology makes everything far more convenient for people like in airlines they can check in online of their homes and quick details about the flight status as well. Therefore the requirement of the far more convenient things is must for the clients. Customers hold the priority of prices like in airlines they compare all the airline tickets and by the end they choose the cheap options. So all the required segments are usually more defined depend after the needs of the customer.
According to the recent figures about the client responses in fulfilling their requirement like in survey customers of BA responded that the services are going down or reduced by 60% to 58% lately. Customers suggested that the innovation is certainly going on very slow in last decade. Baggage handling not so reliable in British airway, that's why customers don't trust much upon this airline. BA has failed in approaching those customers who needs low price tickets because BA does not have any low priced airline operations.
Along with the analysis BA's weakness and strengths should be analysed as well in the inner environment of the business and upcoming threats and opportunities should be analysed in the external environment.
Strength analysis: BA has lots of internal strength like BA has a very big brand image across the world that is why this airlines runs over brand image because everybody knows it's a very good airline. Secondly partnership is a noticeable strength because with the help of partnership spreading business and getting popular in various countries is an easy task. Thirdly the stability of the business is an important thing and BA is very much stable and financially strong. Fourth and the primary strength is having individual terminal in the largest airport of the world. So BA has individual terminal 5 in Heathrow airport.
In several weaknesses some are very harmful for the business enterprise like based on the history the relationships of BA with the employees are not very good. Secondly BA is not that reliable and trustworthy based on the customers because sometimes baggage of the clients got missed out. Thirdly the pace of getting innovated is very slow because they don't do changes and innovations at very slow speed in comparison of other airlines.
In several opportunities Sky Trax Quality systems is the most promising chance of the British airways. Secondly competitor got exited forcefully by the big companies. Thirdly if the competitors got failed in delivering the reliability factor and maybe it's much more ideal for BA. Fourthly it is much more helpful to get success because of upcoming new market emerging. It is an external analysis of the business environment.
In some other external analysis threats are required to analyse like agreement of open skies. Secondly the awareness of environmental activities is must to understand just to avoid environmental threats. Thirdly economical crises 're going on globally which is the most dangerous threat for all the companies across the world. BA faced some effects of global crises like airlines industry is like a leisure industry and during global crises almost all of people started avoiding leisure pursuits like air travel. Fourthly keeping low cost due to the competition is also a huge issue because companies are attracting customers by giving cheap tickets.
In concluding both external and internal analysis of business strategies were discussed and by the end it's quite clear that the BA needs lots of improvement to do in their strategies. BA should follow the combined strategic method of make their facilities better and make their customers more satisfied. But based on the current status of the airline companies BA is considered as a market leader and Britain's largest airline company. Because of the limited usage of the company information all points couldn't come out about BA but researcher tried to analyse all the important info which is required to get success is available. If the company will go to follow some of the strategies suggested by the researcher in this report than British airways will definitely lead the airline industry of the world. Competition is growing in the market but BA have such type of facilities and reliability which couldn't affect the business enterprise of British airways.