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British Airways (BA): Corporate Strategy - Essay Example

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British Airways (BA) is the flag carrier airline based in Waterside in the United Kingdom. In terms of international destinations, international flights and fleet size, British Airways is the largest airline in UK whereas it is ranked as the second largest UK airline based on passengers carried…
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British Airways (BA): Corporate Strategy
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Download file to see previous pages This paper will explain the products and/or services offered by the British Airways and the firm’s geographic scope of operation. The paper will also conduct a critical internal and external analysis of the British Airways using theoretic models like SWOT analysis, PESTLE analysis and Porter’s five forces model. An overview of the British Airways As mentioned in the introduction, the British Airways was actually formed to control two major nationalised airline corporations, namely BOAC and BEA. Currently, the British Airways has nearly 150 destinations, among which six are domestic destinations. The BA is one of the few airlines that have destinations in all the six inhabited continents. BA CityFlyer, the wholly owned subsidiary of BA, operates flights across 20 destinations throughout Europe. Although it has been giving particular focus to financial market, BA CityFlyer has recently gained notable achievements in leisure market too. In addition to managing domestic and international flights, the BA offers many other services such as hotel and car facilities (British Airways, n. d.). The airline also offers better entertainment experience like London Pass, Madame Tussauds and Beyond London; and BA has a range of holiday packages in order to provide its passengers with better service experiences (ibid). The British Airways’ main hub is located at London Heathrow Airport, which serves the whole United Kingdom and is the world’s third busiest airport. Hence, the advantage of geographic location contributes to BA’s scope of operations. SWOT analysis SWOT analysis is an apt tool for analysing the firm’s internal management strengths and weaknesses as well as external management opportunities and threats. Strengths Vast international operations and a strong global presence constitute the major strength of the British Airways. From a strategy standpoint, this strength would assist the organisation to spread risk elements and take advantages of emerging opportunities in the global airlines industry. Strong operating performance is another crucial strength of the company as it benefits the company to survive stiff market competition and thereby enhance market share growth. Strategically, high employee productivity greatly assists BA to dominate the UK airlines industry because employee productivity is an element directly influencing the overall organisational productivity. Weaknesses BA experiences a low rate revenue growth from its key geographic regions and this situation really threatens the long term sustainability of the company. In addition, the company struggles due to high debt burden. Undoubtedly, the recent global recession worsened the debt status of the company and impeded the company’s growth rate. Another major weakness of BA is that it faces severe competition from Cash Rich Middle Eastern Airlines. As a result of the intense competition, the company loses its market share to its competitors. As per reports, in order to improve its debt level, BA plans to cut over 4,5000 jobs, and this policy is likely to impact the operational efficiency of the firm (Thomas & Ebrahimi 2012). Opportunities The explosive growth of global travel and tourism industry over the last few decades offers potential opportunities to BA. Today, people visiting global tourist destinations are increasing tremendously and this trend would offer a prosperous future for the organisation. The growing air cargo industry would also assist BA to achieve its long term goals because the firm operates a well established air cargo subsidiary. The EU-US aviation agreement also appears to be fruitful opportunity for BA because majority of the world’ ...Download file to see next pagesRead More
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