Notes FOR British Airways Essay (Updated) PDF

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NOTES FOR BRITISH AIRWAYS ESSAY

1. Executive Summary - The essay focuses on British Airways in the United Kingdom by focusing on its micro and macro-environmental factors. - Analysis of macro and micro-environment provides a detailed overview of the strategic approach of British Airways. - It highlights how British Airways responds to various factors with a strategic business direction and implements multiple techniques to improve itself.

2. Business Environment Analysis Various factors affect the British airways. These various factors are divided into micro and macro factors depending on their influence on the British airways. The Porters Five Forces, PESTEL analysis and SWOT analysis will help analyse the macro and micro environmental factors regarding British airways.

2.1 Porters Five Forces The Porters Five Forces explain the factors that may threaten British Airways, and the major factors are explained below. https://www.taylorfrancis.com/chapters/edit/10.4324/9781315189093-4/corporate-strategyevidence-british-airways-plc-azhdar-karami

2.1.1 Threat of New Entrants - New entrants are attracted to the industry if the business is profitable, and it is a major threat for the British airways due to the potential industry. - The existence of new entrants is also affected by the government policies such as nationalisation and merging of some airlines.

- Customer loyalty benefit many airlines in the industry. 2.1.2 Threat of Substitute Services or Products - The availability of substitute services raises the threat of substitute services or products for the British airways. - Customers looking for the quality and price in the airline industry lead British airways to focus on the substitution of services. - In the airline industry, customers with a low budget are attracted by cheaper flights with high-quality services than others. 2.1.3 Bargaining Power of Buyers - People who purchase the goods or services in a large quantity for their businesses do bargaining. - Companies ask the airline industries for cheaper lights or discounts when they pay for their staff or a bundle of flights. - Price sensitivity in the airline industry affect the bargaining power of the buyers. 2.1.4 Bargaining Power of Suppliers - Before bargaining for the price of the inputs, the suppliers in the industry look for the switching cost. - Suppliers with high demand in various companies’ demand and bargain for a better payment from the airlines. - Bargaining also affect the suppliers' competition with each other while providing services to the airline. 2.1.5 Intensity of Competitive Rivalry - British Airways has an intense competition with Easy Jet. - The competitor airline industries focus on marketing to attract more potential customers.

- Excellent and unique customer experience is a competitive advantage for the airline industries over their competitors.

2.2 PESTEL The PESTEL analysis regarding British Airways is explained below: https://papers.ssrn.com/sol3/papers.cfm?abstract_id=1947296

2.2.1 POLITICAL In the United Kingdom, political stability has played a significant role in the airline industry's advancement. - The nationalisation and tax on the airline companies by the government affected the industry’s operations. - The promotion of a favourable trading atmosphere in the UK with various countries adds value to the airline industry. 2.2.2 ECONOMIC - The airline industry in the UK was adversely affected by the financial meltdown. - Since the financial meltdown in the UK, there is no such recession in the economy that is advantageous for the airline industry. - Interest rates and exchange rates are also affecting the industry. 2.2.3 SOCIAL - In the airline industry, safety precautions are focused on because, in the past, many accidents had taken place. - Highly competent procuring safety equipment and engineers are preferred to take measures for the safety of passengers and staff. - The health of the cabin crew and pilot is properly considered before allowing them to work. 2.2.4 TECHNOLOGICAL

- Technology play a vital role for the ground staff to find the location of the aircraft. - The advanced technology is used for the communication of the cabin crew and ground staff. - Airline industry invests in technology to get innovations and a secure entry into the market. 2.2.5 ENVIRONMENTAL - Global warming, water, and climate change are major environmental factors that impact the airline industry. - Airline companies prefer to build environmentally friendly aircraft. - Flights are advised to cancel in rainy weather. 2.2.6 LEGAL - Trade unions are the major legal factor that affects the airline industry. - Regulations and licenses are important for successful airlines. - Laws of the UK influence the operations of the airline industry.

2.3. SWOT ANALYSIS http://mbajournals.in/index.php/JoCBL/article/view/309

STRENGTHS

WEAKNESSES

- High market shares in the UK and US.

- Fewer seats are sold in other countries

- Exposure to many deals is get through

than British Airways.

leisure ads.

- Less reputation in some countries.

- High-quality services.

- Limited approach towards various factors.

OPPORTUNITIES

THREATS

- Advanced and innovative technology.

- High competition among various airlines.

- Promising opportunities for British

- International standard services.

Airways in the market.

- Poor brand reputation in some countries.

- Customer loyalty due to quality services.

3. BUSINESS STRATEGY - Investment improves the financial standing of British Airways. - Expansion of services at the international level. - Exceptional customer and staff experience. https://www.sciencedirect.com/science/article/abs/pii/S0304405X96008938 https://journals.sagepub.com/doi/pdf/10.2307/41166491

3.1 RESOURCE-BASED VIEW - Improve the quality of services according to international standards. - Focus on customer experience. 3.1.1 TANGIBLE RESOURCES - Advanced technology is preferred. - Latest methods are used for communication and serving customers. - Competent engineers regulate the machinery. https://www.sciencedirect.com/science/article/abs/pii/S0024630102000365

3.1.2 INTANGIBLE RESOURCES - Registered trademark and design. - Copyrights are focused. - Advanced software is used. 3.2 VRIN/VRIO

EXAMPLE

*NEED TO DO YOUR OWN ANALYSIS

Word analysis of VRIN/VRIO (USE MONSTER.86_ONLINE2 ESSAY FORMAT FROM HERE) - Rareness of the resource, imitate risk, Value of the resource, and competence of British Airways are analysed. - VRIO help the airline industry to get a sustainable competitive advantage. - It gives a better understanding of using the resources effectively.

4. Growth Strategy 4.1 Ansoff Growth Matrix *USE DIAGRAM - Help British Airways to implement the strategic plan. - Introduce new and innovative services and products.

- In the existing markets, the primary growth strategy of British Airways in the last five years. https://itrinegy.com/itrinegy/wp-content/uploads/2021/04/BA-Case-Study5196.pdf https://api.taylorfrancis.com/content/books/mono/download? identifierName=doi&identifierValue=10.4324/9781315566436&type=googlepdf

4.2 Strategic timeline (year-year) It will focus on past years’ strategic steps taken by British Airways.

EXAMPLE

Strategic Decisions

Actions

2015

 Coca-Cola transferred

Results



 Both companies aim to expand their collective

worldwide brands: Throttle,

global distribution. 

 Secured market

smaller Monster protection and

Strategic partnership energy NOS, Full and nine brands,

strengthened its value

 Cola purchased 16.7 to

chain

% of Monster Beverage for appx. $2.15 billion



 Access to new markets

 Monster transferred its complete and Jurisdictions non-energy drink businesses to 

 Net sales grew by $200

Coca-Cola. mil achieving the milestone of $3 billion

2016

Acquisition 

 Entered private label

 American Fruits &

operations by selling

Flavours LLC (AFF)

concentrates and beverage bases to third parties



 Brought primary supplier (AFF) in house



 Protection of

Market development 

intellectual property

 Terminated bottling and

 Entered new regions-

distribution contracts with



 Revenue diversification

China

previous suppliers



 Net sales grew by $300



 Added 4 new product

 Stock repurchase of flavours 2.25 billion

Product development

mil

2017 

Product development

Sports Endorsement

 Lewis Hamilton,

 Differentiation strengthened competitive advantage

 Added 13 new flavours- incl. 

 Improved brand image



 Net sales increased by

Lewis Hamilton limited edition

Cassie Sharp, Jamie

$400 mil

Anderson, etc.

2018 

Product development

 Introduce 27 new



flavours across its monster Energy

 Differentiation- sizes, flavours, package designs



 Dropped loss-making

Sport Endorsement

 UFC Champion-



and its Strategic Brands



 Discontinued some

Tyron Woodley

brand or categories 

products due to low impact 

 Increased marketing

 Further improved brand image



 Net sales increased by

 Nascar Championbudget by 1.1%

$1 billion

Kurt Busch

 Employed 2,203 individuals Marketing Focus in sales and marketing

2019

 Product Launched USA

Market Development

Java Monster-Oats Reign Body



 Tapped in new cultures based on proven success



 Accessed to new

Fuel Europe markets via Coca-Cola

partnership

Monster Hydro Super Fuel Predator-cheaper energy



$400mil

brand

2020

 Net sales increased by

 Product Launched Israel,  Tapped in new cultures Other markets Monster

Market Development

based on proven success Energy

5. Strategic Direction - The combination of differentiation and cost leadership is used as the major business strategic direction for British Airways. - Offers low-cost quality services other than other competitive airlines. - Cost minimisation is focused on getting the lower production cost. - High quality and reliable services with advanced technology. https://onlinelibrary.wiley.com/doi/abs/10.1111/1468-0432.00055 https://www.sciencedirect.com/science/article/abs/pii/0024630196000052

5.1 BCG Matrix - British Airways can be categorised under Problem Child (Low share/High growth) and Stars (High share/High growth) case. - British Airways has a market share of 10.1% under the Spanish carrier analysis, and as an Asian carrier, it has 7.1%. - In 2015, regarding the number of passengers, the EasyJet airline beat the beating of Flybe and British Airways....