Business Strategy Assignment Sample

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Business Strategy Of British Airways Assignment Sample

Introduction

Business strategy is a set of plans and goals that helps in outlining the strategy of an organisation to compete within a specific market. British Airways (BA) is a reputed airline organisation of which a detailed analysis of macro and internal environment will be discussed in this study.

Mission, vision and objectives

Mission

BA generally follows a mission to provide better facilities to ensure satisfaction level ofcustomer. Anothermission of this airline organisation is to act responsibly for providing utmost safety by connecting various parts of this world (Mission-statement.com, 2021).

Vision

The vision of BA is to become the most responsible company in the airline industry by maintaining corporate responsibilities that can help achieve the business goal (Britishairways.com, 2021).

Objectives

  • To determine the present micro and internal environment influence in the business of BA
  • To identify issues of current business strategies in BA that creates barriers in business growth
  • To provide solutions of issues in business strategies of BA to improve competitive advantage

Definition and role of strategy

BA’s business strategy includes a passenger-centric facility-based strategy that can be defined as improving service for better customer satisfaction levels. The role of this strategy is to identify the actual ongoing strategy of BA and the requirement of changes that can improve the business effectively for a better competitive advantage.

Macro-environment

PESTLE analysis

Components

Descriptions

Political

Political factors increase the significance of the aviation industry. Due to this reason, British Airways is growing its business and providing beneficial services to all passengers. UK government supports all safety regulations, licensing and other traffic rights. This aviation industry is controlling future aspects with the help of the UK government (Publishing.service.gov.uk, 2021).

Economic

Economic factor effectively influences the entire UK business sector. Due to the Brexit situation, economic structure is being decreased in the UK. Un-employability has also increased. All these reasons have decreased the economic structure. It affects British Airways, so that their economic structure must be developed.

Figure 1: Economic structure of British Airways

(Source: Bbc.com, 2021)

Social

British Airways is maintaining its brand value, dealing with Covid-19 situations and many more travelling factors. These social factors are needed to maintain enhancing the aviation industry. Business profitability, social image, travelling habit, guideline maintenance, and other aspects have effectively increased this industry to maintain all social aspects (K?l?çet al. 2019). Therefore, social concerns are effectively maintained by British Airways to provide better services for all passengers.

Technology

Driving growth, customer satisfaction, all ticket checking systems and many digital systems are managed by this industry. Due to this reason, British Airways has increased their technological aspects (Qiuet al. 2021). Proper technology will influence an industry that can help to enhance economic structure.

Environment

British Airways has taken steps to maintain all environmental issues, gather sources, provide sufficient fuel and this industry effectively manages other environmental factors. Environmental issues may affect the travel services; based on this fact, this industry has developed their technological aspects to maintain environmental issues. It helps to manage brand value (Heiets, and Lam, 2021).

Legal

UK civil aviation authority is effectively managing the aviation industry in the UK. Many legal rules and regulations are included to enhance a concrete business stature and strategies. Proper license, foreign carrier requirements, passenger guidance, and other instructions are incorporated in British Airways to develop this industry for future development (Caa.co.uk, 2021).

Table 1: PESTLE analysis

SWOT analysis

Strengths

? Strong support from UK government

? Hugh revenue of 3.9 billion in the British pounds (Statista.com, 2021)

? Technology improvement

? Business sustainability

Weakness

? High dependency on the local market

? Reduced employee well-being

? Improper engine management

? Stakeholders conflict

Opportunities

? IT implementation and advancement

? Improvement of global operation

? Better and advanced initiatives in business

? Customer-centric service

Threats

? Heavy competition

? After pandemic service innovation

? Brexit issue

? Reduction in passenger number only 12.3 million (Statista.com, 2021)

Table 2: SWOT analysis

Strengths

BA is strongly supported by the British Government for the improvement of its services globally. Supportive strategy includes for BA’s growth that significantly improves the revenue value, almost 3.9 billion in British Pounds (Statista.com, 2021).

Figure 2: Revenue of BA

(Source: Statista.com, 2021)

Other strengths that are associated with BA are high technology development and maintenance of practical sustainability in business that can help BA in future.

Weaknesses

The major weakness of BA is a relatively high dependency of this airline organisation over the local market. Issue in HR strategy and employee well-being is a severe weakness in the improvement of BA. According to Rasoolet al. (2021), employee well-being helps remove the toxic atmosphere in any organisation. Improper relationship with employees and stakeholders creates issues in maintaining service effectively sometimes. In contrast, Sakka and Ahammad (2020) have said that the well-being of the employees includes a positive emotion and effective interaction that helps an organisation grow. Therefore, BA needs to improve its relationship strategy to compete in UK and global market.

Opportunities

IT is an aspect that has provided opportunities for BA to improve business and effective planning based on customer-oriented services. The satisfaction level is based on the service performance of an organisation (Aburayyaet al. 2020). A good initiative improves service level that is an effective improvement of customer satisfaction. In contrast, Mahmoud et al. (2018) have said that satisfaction is complex and achieved by effective marketing. Therefore, the use of IT and marketing can provide opportunities to BA in achieving a better position.

Threats

Huge competition, especially after the pandemic and drop in passenger numbers, is a severe threat to BA. Brexit is another aspect for which this organisation has faced loss in its business that creates threats.

Figure 3: Passenger drop in BA

(Source: Statista.com, 2021)

Internal environment

VRIO analysis

VRIO analysis is a technique or tool to measure competencies and competitiveness based on resources. Here, VRIO analysis helps to manage resources, ability, capacity, core competencies and other relevant factors to enhance company’s' services. In this way, all customers and other passengers can easily be satisfied with the help of this analysing factor. However, it is very important to increase the ability to deal with competitors, which can enhance the development of this aviation industry. VRIO analysis included rare, valuable, imitate, and organised factors that can manage competitiveness, resources, policies, and organisational aspects (Yudionoet al. 2019). Based on this result, British Airways can enhance their resources; get competitive advantages and more consecutive facilities.

VRIO analysis

Justification

Likelihood

Valuable

British Airways is applying this VRIO analysis to increase their competencies, ability, efficiency, and capacity to develop their resources, competitiveness, and more beneficial aspects. Therefore, it is valuable.

Yes

Imitate

In this industry, proper resource management can be found. Hence, it is imitated.

Yes

Rare

All resources can be decreased in this industry, so that it is rare.

No

Organised

They are supporting all arrangements to increase business development.

Yes

Table 3: VRIO analysis

(Source: Yudiono et al. 2019)

Conclusion

It can be concluded that proper mission and vision of business strategy have critically discussed in this discussion to develop strategic growth management. PESTEL and SWOT analyses have helped to manage strengths, weaknesses, threats, and opportunities; on other hand, it helps to manage political, economic, technical, environmental, legal, and social factors. Besides this fact, VRIO analysis has discussed to understand the competencies of British Airways.

Report Part-B

Introduction

In this section, British Airways can develop their strategic management with the help of Porter’s five forces, internal and external stakeholder analysis, and Ansoff’s matrix. Proper analysis of these models is going to discuss here to understand the business development of British Airways.

Porter’s five forces

Competitive rivalry: British Airways can increase their market attractiveness to deal with competitors. Apart from this, they need to increase administrative attractiveness, profitability and other things to develop a competitive rivalry based on Song et al. 2018 statement. It helps to maintain opportunities, products and services, market shares, and many more consecutive things that can increase the profitability of this aviation industry.

Buyer power: Market demand, potential demand, consumption level and downstream monitor, and other buyer aspects effectively influence this company to develop its products and services. Cost switching, product differentiation, the manufacturing level, and other relevant aspects are the power of buyer. In this way, buyers can easily show their demand by giving essential feedback. However, it also focuses on bargaining factors.

Supplier power: Based on Pervanet al. (2018), supplier power is effectively managing the development process in different companies and organisations. Technology implementation, creation, learning, interpretation activities, and other relevant factors are the aspects of suppliers. They are focusing on buyer demand and maintaining all products and services to provide opportunities with help of proper decision-making process. In this way, this aviation company can easily manage their aviation business.

Threats of substitution: This component helps to determine the likelihood of products that can be replaced. It relied on an easy systematic process for customers to find their demanded and similar products in local and global markets. In this case, British Airways can focus on these strategic rules to provide customers-reliable products for their industry. In this way, they can get successful achievement to increase strategic business development.

Threats of entrants: In this aviation market, many small and medium companies are trying to enter this particular industry. Due to this reason, many risks have occurred, such as market risks, product risks, decreased the economic scale and many more risks can be found. This is the reason to develop the aviation environment and organisational structure to mitigate all these risks for future development. It will help to make a stable environment for new three years.

Stakeholder analysis

Internal stakeholder analysis

In British Airways, different types of stakeholders are included to provide better services for passengers. Managers, higher authorities, leaders, technicians, and ground floor staff are examples of internal stakeholders. They are focusing on their companies, so that they can enhance their profitability. Here, leaders and managers are maintaining their employees to enhance productivity, collaboration factors, and implementing strategies and many more things that can be developed in this aviation industry. In this way, all internal systems can be managed with the help of all internal stakeholders. Managers and leaders are also maintaining market management to discover new opportunities from global markets. It can increase the business management structure and create sustainability, competitive advantages, and many more beneficial aspects for organisational performance that can be found in this aviation industry. Therefore, all internal stakeholders of British Airways are maintaining hospitality with travellers or passengers (Mukhezakule, and Tefera, 2019).

Figure 4: Stakeholders’ analysis

External stakeholder analysis

British Airways also depends on external stakeholders to gain more profitability. Customers, partnership companies, suppliers, government, and many stakeholders that are more externalare incorporated in this aviation industry to increase their organisational structure. Based on Ninanet al. (2019) statement, external stakeholders are helping virtually to develop British Airways. Firstly, these stakeholders are providing knowledge, legal guidelines, secure management and many more services. Here, customers or passengers are getting proper services and obtained it from British Airways. However, they are buying tickets for each flight; in this way, financial status can be increased for organisational development. These authors have also stated that external stakeholders are helping to make megaprojects with diverse interests. Therefore, it can be said that external stakeholders are maintaining flexibility, resources, implementing technical and managerial tactics and infrastructure power.

Ansoff’s matrix

Market penetration: This matrix is a strategic planning tool that helps to maintain organisational marketing strategy with the help of general strategic direction. Here, British Airways is trying to manage their market values; due to this reason, they focus on better flight services to achieve growth in global and local market shares. It is very important to understand the deep knowledge of market analysis; due to this reason, British Airways needs to focus on different markets to penetrate their services. 

Product development: The product of this aviation industry is service management; ticket facilities, software management and many more things are needed to develop for passengers or travellers, so that they can enhance their experiences to increase product development (Loredana, 2017). 

Market development: British Airways is trying to manage its marketing to maintain all strategic development factors. In this case, a corporate strategic manager tries to develop this aviation industry by maintaining all organisational systems. It can be said that British Airways can increase its strategic functions with the help of developing the market values and market shares. It can also be said that market development can improve conflicts to evaluate new paths, so that all business members can easily enhance their profitability. 

Diversification: Diversity maintenance is also a basic function of all companies and organisations. In this way, they can manage their business developmental factors. In this case, British Airways is focusing on diversification to enhance their market values, product development, new services, advanced technology implementation, and many more things that can be included in this aviation industry. Proper diversity operations can increase more opportunities to gain enough financial growth, strategic advantages and other facilities. 

Figure 5: Ansoff’s Matrix

(Source: Loredana, 2017)

Conclusion

It can be concluded that all Porter’s five forces are effectively managing the substitutes, new entrants, buyer and supplier power and competitive rivalry to manage the competitive market and aviation facilities for all passengers. On other hand, internal and external stakeholders have effectively managed the organisational needs. Additionally, Ansoff’s matrix has included marketing diversity, product development to increase facilities in this aviation industry.

Report Part-C

Introduction

In this section, proper strategic functions are going to discuss. Porter’s generic strategy, hybrid strategy, diversifications and vertical and horizontal interactions will be discussed to understand the strategic developmental aspects. In this way, all points will help to manage business development of British Airways.

Porter’s generic strategy

This strategic function is effectively managing the strategic models and developmental factors, so that all companies and organisations can easily maintain their business for future improvement. According to Islamiet al. (2020), Porter’s generic strategies are effectively considered the management theories to maintain behaviour with competitors; it creates opportunities, provides advantages and many more facilities to gain strategic development in British Airways. This strategic development is an essential part of business plans that can include competitive strategies. Based on this model, this aviation industry is trying to enhance the competitive advantages, where cost, leadership, focus, and differentiation are incorporated. These components are the basic qualities of Porter’s generic strategy.

Figure 6: Porter’s generic strategy

(Source: Islamiet al. 2020)

On the contrary, Omsaet al. (2017) stated that five competitive forces could broadly manage the strategic functions, where, buyer bargaining power, supplier power, competitive rivalry, threats of new entrants and substitutes are the part of Porter’s five forces. Here, generic strategic functions can get to recover cost, leadership, focus, and differentiation. In this way, all employees and other staff can easily maintain their organisational aspects. British Airways needs to enhance their performance with the help of strategic developmental aspects to know the perspectives of business improvement. Many competitors are trying to implement their new policies and rules to increase their best services. Based on this function, this aviation industry should be focused on their stakeholder management, low-cost budget, differentiation strategy and many more things.

Cost: In British Airways, proper strategic functions are needed to enhance product management. Customers or passengers want to get low-cost products to access flight facilities and other opportunities from this aviation industry. Apart from this, all managers and leaders are effectively managing these systems to satisfy them.

Leadership: All leaders and managers are focusing on economic states, resources, performance, and sustainable development. These factors are effectively managing the sustainability of British Airways. This is the way to maintain strategic development; here, lost-cost products can create different opportunities to increase the business management factors. All leaders and managers command to enhance productivity, maintain organisational structure, business strategies, marketing facilities and many more things.

Focus: The focus of this industry is to meet all targets and gain cost advantages (Bell et al. 2017). On other hand, it differentiates all market segments to focus on strategic development. British Airways needs to meet all special needs of buyers, so that business members can have opportunities to maintain all customers and passengers.

Differentiation: The differentiation strategy is seeking some unique dimensions that customers or buyers broadly value. This strategy selects more attributes in this industry, which is more important and uniquely maintains positions to meet all targets and needs. In this way, Porter's generic strategy can maintain the business development (Im.eng.cam.ac.uk, 2021).

Apart from this, the Focus strategy is beneficial for this aviation industry. They need to manage all targets and need to increase their productivity. While this industry is managing its targets, they can easily uplift its strategic business development.

Hybrid strategy

Hybrid strategy is effectively managing the cost, differentiations, global business strategies, and many factors that are more generic. In this way, the aviation industry can easily manage their business development. Proper implementation of hybrid strategy can develop low-cost products and leadership factors; on the other hand, it helps to develop organisational performance (Ccsenet.org, 2021). It can be said that hybrid strategy is effectively managing the lower price, competitors, offering high-quality products and many more aspects. Based on this strategy, all consumers are focusing on these development policies to get beneficial properties. Apart from this, British Airways is creating new opportunities with the help of this strategic development.

According to Yasaet al. (2019), a hybrid strategy is a merged strategic development process to maintainbusiness improvement aspects. This concept of this strategy is effectively implementing new business systems, enhancing capabilities, gathering resources, influencing the external environment and many more facilities are provided by this strategy. Due to this reason, British Airways needs to implement this strategy to enhance their business development. Economic structure might have decreased due to the Covid-19 situation and Brexit. In this case, proper implementation of this strategy can easily develop the organizational structure for future development. Now, it can be said that this progression can take this company towards success.

Figure 7: Hybrid strategy

(Source: Yasaet al. 2019)

Additionally, all employees and staff need to enhance their capabilities to find different opportunities with the help of leaders and managers. In this way, they can enhance their business development and increase the more profitability to improvise British Airways. Regarding this fact, internal and external environments can easily manage promotional aspects for marketing management. Marketing management is a basic and essential aspect of this aviation industry. However, this strategy is effectively increased the marketing segments by maintaining partnerships strategies, promotional aspects, different channels and many more things are incorporated in the marketing management. In this way, British Airways can easily develop their business management, influencing this industry for three years. On other hand, this industry needs to apply this hybrid strategy to maintain organisational performance for better productivity.

Diversification

In British Airways, diversification strategy is working with a very effective way to get beneficial results. In this case, aviation members need to follow different paths of marketing management. This is a unique process to get competitive advantages in the global and local markets. Apart from this, the corporate strategic developers must develop business diversification, so that British Airways can easily enhance its business structure. Marketing facilities, aviation performance, customer management, and other related aspects can be improved with the help of a diversification strategy. Apart from this, all targets can easily meet and find new ways to fulfil business objectives. Additionally, this strategy finds innovation techniques, economic structure development, combines open resources and many more things (Xieet al. 2021).

According to Shenet al. (2018), differentiation and business performance both are making relationships between themselves. In this way, aviation members easily eliminate the economic crises, organisational performance, and other relevant factors. Apart from this, British Airways can find their opportunities with the help of a diversification strategy. It helps to develop the aviation environment, employee performance and maintain all relationships with stakeholders. Therefore, it can be said that a diversification strategy can manage organisational performance, evolve new opportunities, create managerial facilities and many more things can find out with the help of this strategy.

Diversification strategy is effectively maintaining the supply management, so that British Airways can easily get profitable factors to evaluate their aviation business. Apart from this, all manager and higher authorises need to manage organisational structure, performance, and other relevant factors. In this way, this aviation industry can easily get their different resources and supplies to enhance the business management. 

Vertical/ Horizontal interactionchain

Vertical interaction

Figure 8: Vertical and horizontal interaction

(Source: Pérez-Lara et al. 2020)

Horizontal interaction

Horizontal interaction simplifies the information and workflow materials so that this aviation industry can merge this process for better development. Apart from this, horizontal interaction transferring or conducts the possible effects of new productions and market constraints. In this case, this interaction process is maintaining supply chain management, solving problems, observing proper methods to maintain all business processes (Haag, and Simon, 2019). Horizontal interaction or integration can easily develop the primary goals, economic scales, size, reduce competition and many opportunities that are more beneficial are provided by this interaction. These components are effectively increased the product identification, improve service management; operate global market analysis and many more things can be improved with the help of this interaction. Therefore, horizontal interaction can easily develop the future aspects in British Airways and enhance the profitability.

Conclusion

It can be concluded that Porter’s generic strategy is effectively developing the business developmental factors by focusing on cost, leadership, focus, and differentiation. These components are creating more paths to gain more opportunities. In this case, hybrid strategy is effectively managing the entire Porter’s generic strategies, so that this aviation industry can easily moderate their systems to achieve success. Additionally, diversification can find more paths to create innovative opportunities for this industry, which can make new ways to gain advanced facilities. Here, vertical and horizontal interactions have critically discussed, where technical process implementation, organisational structure, the relationship between information and workflow management to manage both interactions.

Reference List

Journals

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K?l?ç, M., Uyar, A. and Karaman, A.S., 2019.What impacts sustainability reporting in the global aviation industry?An institutional perspective. Transport Policy79, pp.54-65.

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Websites

Bbc.com, 2021.Business. Available at: https://www.bbc.com/news/business-49632595 [Accessed on: 29/11/2021]

Britishairways.com, 2021.About BA. Available at: https://www.britishairways.com/en-in/information/about-ba [Accessed on: 29/11/2021]

Caa.co.uk, 2021.Commercial industry Airlines Licensing Publications and legislation European and UK legislation. Available at: https://www.caa.co.uk/Commercial-industry/Airlines/Licensing/Publications-and-legislation/European-and-UK-legislation/ [Accessed on: 29/11/2021]

Ccsenet.org, 2021.Hybrid strategy. Available at: https://ccsenet.org/journal/index.php/ijbm/article/view/15016 / [Accessed on: 29/11/2021]

Ifm.eng.cam.ac.uk, 2021.Porters generic-competitive-strategies. Available at: https://www.ifm.eng.cam.ac.uk/research/dstools/porters-generic-competitive-strategies/ [Accessed on: 29/11/2021]

Mission-statement.com, 2021.British Airways mission and vision statement analysis, Available at: https://mission-statement.com/british-airways/ [Accessed on: 29/11/2021]

Publishing.service.gov.uk, 2021.Aviation strategy call for evidence. Available at: https://assets.publishing.service.gov.uk/government/uploads/system/uploads/attachment_data/file/636625/aviation-strategy-call-for-evidence.pdf [Accessed on: 29/11/2021]

Statista.com, 2021.British Airways Plc's worldwide revenue from FY 2010 to FY 2020, Available at: https://www.statista.com/statistics/264296/british-airways-worldwide-revenues-since-2006/ [Accessed on: 29/11/2021]

Statista.com, 2021.Number of passengers traveling with British Airways and its subsidiaries from 2011 to 2020, Available at: https://www.statista.com/statistics/734311/british-airways-passenger-figures/ [Accessed on: 29/11/2021]

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