Introduction
As world is becoming global and businesses are booming up the Airline Industry plays a lead role in convenient transport as it takes the less time for travelling. The Airline industry is booming up as the business and tourist places are increased along with countries becoming more developed. Airlines are the mainly used mode of transport as it allows a person to reach any destination at the quickest possible time with all the luxuries. Incase of emergencies , airlines are main mode of transport opted by people.
The Airline industry is divided into two sector which includes International Airlines and Domestic Airlines. International Airlines are the ones which does overseas routes and Domestic airlines mainly works along local cities within one country. Airlines companies are now a days increasing as there are domestic air fleets who are trying to grow and expanding all International Areas along with giving cheap air tickets (Low carrier flights).
In this Portfolio we will discuss about an Airline company along with all strategies used to develop along with the threats which are faced by them. The Airline which we are going to discuss further is BRITISH AIRWAYS. British Airways is an Airline which is engaged in International Market and even in Domestic Market across United Kingdom. Along with Freight and Mail Services. The Companies headquarted at Harmondsworth , Middlesex. And is having 41,494 employees as on 31st March 2011. The main Air base of British Airways is London, Gatwick and Luton Airports (Data Monitor 2011).
British Airways has huge international operation with best customer service and connects more than 455 cities of the world (Data Monitor 2011). British Airways is one of the preferred Air carrier of Local UK people as well as people all over the Globe. There are lots of other Airlines which are in Competition with British Airways. British Airways provides the cheapest possible rates along with flights with convenient timings.
British Airways provides Online Services for e-ticketing so that any customer is benefitted by booking the tickets online and can have an easy travel (Joseph Pine II 1996).
Question 1:-
Identify Micro Enviromental Analysis using Porter’s five forces and finding Most important threat of our airline
According the Porters five forces, every industry is facing some or the other threat or obstacles in their businesses. Porter’s five forces takes into consideration 5 different objectives which a companies faces and an situation analysis is found out accordingly. Porter’s Five forces helps to give the strategic decision regarding the particular business. As far as British Airways is concerned , It has High Competitive Rivalry as there are other Airlines who are willing to join and start the business. Other domestic Airlines are also engaged into Joint Ventures so that they can start there operation quickly. Competition is always present in any business and it will always remain High as there is a state of Perfect Competition (Keith Gaskell 1999).
The Power of Suppliers remain high as there are huge chances of bargaining on prices. Price should be also kept affordable or else the Airline may go into losses with less customers. The suppliers power also remain high as the priority of landing is given to frequent airlines or to the ones where the airport authority receives more money.(Strategic Report 2009)
The Power Of Buyers is Medium because they have low connection with buyers and prices can be even compared with the help of internet so there prevails a perfect competition and chances of any customer switching their airlines is possible. As there are limited availability of seat so any customer automatically has less power. All Airlines need to provide certain extra facility or services which can catch attention of customers so that the Airlines runs into profit (Strategic Report 2009).
The Threat of New Entrants is also Medium as there are Huge Capital Investment needed and more staffing required and effective planning should be made so that the Airlines runs systematically . There are certain failures in Domestic Airlines like Zoom Airlines and XL which has made new entrants to give a second thought before joining the Airline Industry. New Entrants needs proper licenses by the Authorities which may even take time and So there are Medium chances. The Quickest way to enter into this Industry is to have Mergers with an existing company so that the time of formation will be lowered.(Strategic Report 2009)
The Threat of Substitutes is marked as Low because there are very less chances in having an effective mode of transport and also international travel will be done quickly with the help of Airlines as compared to Railways and Ships. To develop such a substitute will also require decades(Strategic Report 2009).
The biggest current threat which is faced by British Airways is of Domestic Airlines because they are entering into International routes (Brian Groom 2001). There is one more threat which is of Manpower Maintenance. There was recent strike of all Cabin Crew member because there demands were not fulfilled and due to that the goodwill of the airlines was also shattered along with troubles faced by customers as all majors flights were delayed so British Airways major priority is to provide good service to its customers so as to Sustain in the competition along with Staff satisfaction. British Airways is trying its very best to see that all their activities is carried out properly and in a nice possible manner. In the times of Strike the airlines also hired volunteers and extra crew learning staff for time being when the strike was going on (Brian Groom 2011). The airline can come up with employment scheme along with the financial benefits so that the employees are satisfied which can lead to lowering of working problems.
Question 2:- Strategic Uncertainty of firms external environment along with different scenarios
British Airways faces lots of Uncertainties in their Industry as there are fluctuation among prices of Fuel along with Airport charges and taxes vary from time to time. So it is difficult to calculate. The biggest uncertainty which is faced by the Airlines are the delays which occurs due to Air traffic or due to Fog problems. These problems are inevitable but proper care can lead to effective functioning. The only solution is to keep gap in timings in take off and landing so to avoid major delays (Helen Stuart et al 2009).
British Airways also tries to provide customer services like having a speedy check-in for Senior Citizens so that they don’t have to wait in que (Air Guide Business 2010).
If we have a glance at the life cycle of British Airways then we can judge that it is in its Maturity Stage. Maturity Stage is the stage which includes growth but at a slow pace. British Airways is an airways which is running since decades in UK and even in different parts of the world. And so they are in there development stage by exploring new destinations and by even improving their services within Aircrafts (Mark Odell 2011). Rapid Growth is not possible because there are less frequent flyers with British Airways as other Airlines which are in competition, provides cheap rates for travel. Due to limited seat availability there are chances that British Airways is not able to grow quickly as there requires a huge capital requirements to expand. There are people who have less disposable income or less money in savings which may restrict them in travelling (Business Travel 2011).
British Airways focuses more on Business And First class customer as they are highly profitable. The entertainment facilities which is provided by the airlines should also be increased and changed so that there is an long term growth as there are better options available in other airlines. The biggest innovation now made by the airline is Internet facility provided on board so that any customer can have an access and can carry out its work.
British Airways is also in Cargo facilities and Freight which helps to achieve a good profit as it requires less staff and also less repairs and maintenance of the aircraft (Steven E Prokesch 2000).
British Airways faces a great competition from the low carrier fleet like Ryan Air as customers who are price sensitive will NOT choose British airways but grab tickets for the low cost carriers. Grasping the attention of children can be the best strategy to increase its customer market as there will frequent travelling (Richard Graham 1983).
British Airways provides an online training to all its Cabin Crew so that all work which is taught remains constant all over the world and it is flexible as any employee can excess it anytime. This leads to accurate work which helps the airlines a lot (Bob Little 2006).
British Airways are Cost Focused in deciding their prices. The prices vary from time to time and from season to season. British Airways has high exposure to North Atlantic areas which provides high proportion of operating profit. British Airways is having an highest network of Air cargo and has less damages of goods. British Airways is having an major competition with the Middle-east Airlines as those airlines are backed by exceedingly determined governments (Mike O’ Leary 2002). British Airways is not having any strategy to capture or take over the domestic airlines to grow whereas Lufthansa Airways is trying to have mergers and acquisition with other non-profit Airlines. British Airways main strategy is to focus on their customer satisfaction which can be done by providing a notification of the flights booked or if any delays (Tom Mitro 1998).
British Airways and Other Airlines are provided capital with Cheap Rates of Interests so they can invest more in Aircrafts, so to expand their business (Pilita Clark 2010).
Question 3 :- Assess company’s strategic position within the airline industry Assess company’s strategic position within the airline industry.
The position of British Airways is increasing at all times as better experience is been noticed. UK Airline industry is booming as there are more destination started and more Aircrafts been put up good
British Airways had a record of carrying highest cargo which was 7,60,000 kg’s. British Airways has also launched automatic check-in facility where in Boarding pass and Seat preference can be made easily so that customers time is saved and the time to be in que is lowered which was quite difference from its competitors. The staff and cabin crew members are trained well for the safety measure which they need to take care so that the passengers are highly satisfied and have least complains (Bob Little 2006).
Multi-Lateral Alliances are also formed in order to have a global connectivity which can be used for code sharing or frequent flyer programme can be streamlined (Leo-Paul Dana 1999). British Airways has also decreased the meal in the Short- haul flights so as to lower the tickets. This has led to a great competition in the Low carrier flights (Tutor2u 2011).
British Airways invest lots of their money to introduce new facilities along with training so that customer service is provided effectively. The Airways has also laid down with a strategy for Senior Citizens by offering them cheaper tickets as there is comfortable business class seats which makes an easy and less tiring travel. The Airline also tried with a new innovation of providing Wifi facilities to all the Business and first class customers on board. Internet facility provides a good benefit to frequent customer as they can complete there work. With the help of new technologies, coding system was introduced so that with the scanning of the code, a customers information can be found out immediately (Peter Crush 2011).
British Airways is certainly distinct from the other airways because it keeps attention to all small things and provides effective service to all its customers. The Airline also has an excess storage of fuel so that price changes in the fuel don’t affect the ticket prices and customers are benefited. Storing of fuels is possible as there are less damages and quality assurance as fuels have a long life (Bob Little 2011). As the Airlines is also in domestic travel, then a customer can choose to travel with the substitute available like Railways or Cars.
After looking at the strategies of British Airways there are counter strategies which are used by other airways which includes Cross Advertisement or giving similar kind of facilities. British Airways also provides more benefits to their staff with are in the long haul journey. This are the employees who work for 14-15 hours of shit are provided with better and more rewards (David Roberston 2001). Competitive Differentiation can be achieved by British Airways by providing varies services and facilities which can lead to customer satisfaction.
British Airways on the other hand also does an distinct activity of encouraging the Youth to select there carrier for The Airline Industry so that growth and expansion is possible. These strategy of British Airways is really appreciated among the people (Corporate Responsibility Report 2009).
Short haul flights are even well equipped and managed by the Airline so that proper service is given, and customers are satisfied. The strategy of giving extra care to Children and Senior Citizens are being effective in capturing the demand of all people.
Conclusion
To cut the story short, I would like to say that British Airways is running as one of the successful airlines of the world and is trying to develop more and more along with different strategies applied. Punctuality is one of the main criteria which is adopted by the Airlines so that it operates in a scheduled manner. The strategies used are very well formatted and planned so that profit is always achieved and the Airline doesn’t go in Debt. British Airlines is always distinct in some of the additional services which are provided by its customers.
Did u like my article.. Comment below.
